The equity markets continue to grind higher, with all major stock indices hitting fresh all-time highs this week. The catalyst driving stocks is little more than high-hopes about Trump’s tax-cut proposal, which are still a mystery.
My AI models are still indicating that a short-term correction for stocks is just ahead, which could send stocks right back down again into the April/May timeframe, so continue to hold your position in ProShares UltraShort Dow 30 (DXD) and Direxion Daily Financial Bear 3x (FAZ). You’re underwater for the time being, but both will benefit nicely when the markets finally roll-over.
The good news: You should have bagged nice gains last week: Up to 8.74% on half your shares of ProShares Ultra Gold (UGL) and up to 18.96% profits on half your Velocity Shares 3x long Silver (USLV) position. Nice work!
Continue to hold the second half of your positions, there are more potential profits where these came from. And if we get another pullback in gold and silver I will be looking to reload and buy more shares. I am also looking at adding some exposure to the miners on the next decent pullback as well.
Meanwhile, oil continues its resilience and has managed to trade in a range between the $56 to $52 a barrel. Remain patient for now. The OPEC agreement has artificially inflated oil prices, but again, my models tell me that lower oil prices are just around the corner, so continue to hold your positions in ProShares UltraShort Crude Oil (SCO). I may consider adding to it if market conditions warrant
Also, continue to hold you positions in ProShares UltraShort Euro (EUO) and Direxion 20 Year Treasury Bull 3x (TMF), both are around breakeven and I expect more to come. I’ll be sure to alert you when it’s time to make your next move.
Best wishes,
Larry
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