Earlier this week, you should have added new positions in Direxion Daily 20 Year Plus Treasury Bull 3x Shares (TMF) and ProShares UltraShort Euro (EUO). Both, great moves!
The Trump rally “honeymoon” period is over, and it’s back to reality for this overbought stock market. No surprise the rally is beginning to show cracks, which I expect will trigger a steeper correction in stocks.
That should likewise give Treasuries a lift as some safe-haven demand builds. I expect bond prices to move higher and yields to head lower – temporarily – over the next several weeks. So, continue to hold TMF with a stop at $17.10.
The euro appears to be topping out, right on cue, as it gets turned back by overhead resistance around the 1.08 level. Look, Europe is a basket case. The euro could bounce a tad higher, but thereafter I expect a sharp drop, perhaps to parity before the year is out.
The upcoming elections throughout Europe and the further fallout expected from Brexit will only add more fuel to a fire that’s already burning out of control. I’m anticipating the euro will head lower from here. So, hold EUO with a stop at $24.14.
Meanwhile, yesterday’s Fed meeting was a yawner as expected. A whole lot of nothing. Gold and silver rallied following the meeting and should continue moving higher into April. The trend in precious metals is right on the money with my AI forecast models. Mind you, a strong reading in tomorrow’s U.S. jobs report has the potential to cause a temporary setback for gold, but the models still point higher into April.
As I said earlier, the Trump rally is reversing and the stock market finally appears to be rolling over. So continue to hold both of your positions in DXD and FAZ. Your stop-loss for FAZ is $18.89. Remember however, for DXD, I am monitoring the stop for you.
Finally, crude oil is still holding in a short-term topping pattern, now trading near the top end of its trading range. I expect oil to head lower soon. Continue to hold SCO with a protective stop-loss at $29.37.
Stay tuned for more updates coming your way soon!
Best Wishes,
Larry
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