Issue #197
Dear Member,
There’s been much ado about nothing when it comes to the Fed. As I expected all along, the Fed is not going to raise rates anytime soon.
For one thing, the U.S. economy is still fragile.
For another, the Fed is acutely aware of deflation.
And for yet another reason, the Fed is also aware that if it were to raise rates now or in the foreseeable future, it would strengthen the dollar even more, worsening deflation, and derailing the economy. Not to mention that raising rates here would completely annihilate Europe!
So please, don’t focus on all the rookie machinations and mental gymnastics going on about what the Fed says. Simply put, it’s a waste of your time and anyone with half a brain or any experience at all in the markets knows that ultimately, the Fed, or any other central bank for that matter, does NOT control the markets. Period. Central banks don’t even control interest rates. The free markets do!
That’s precisely why deflation is now picking up steam here in the U.S. and in the commodity markets. Deflation has much more room to go before commodities finally bottom.
That said, short-term, bounces are overdue. And indeed, gold has started to bounce a bit and gold shares have moved higher. Your two long gold mining ETFs Direxion Daily Junior Gold Miners Bull 3X ETF (JNUG) and Direxion Daily Gold Miners Bull 3X (NUGT) now show open gains of 5.5% and 6.5%, respectively.
Hold, with your protective stops in place.
Meanwhile, the equity markets have not retreated as I had expected. You are under water on both your ProShares UltraShort Dow30 (DXD) and iPath S&P 500 VIX Short Term Futures (VXX) positions. But volatility is picking up. So hold both positions with their related stops.
Now, to a new trade. Oil, like other commodities, should bounce in the short-term. The rebound should be strong enough to profit on the long side.
So, I now recommend you buy 200 shares of ProShares Ultra Bloomberg Crude Oil ETF (UCO) at the market. And don’t forget to place your protective sell stop order as well.
Here are the details:
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NEW TRADE: For all members, for each $25,000 in equity you are trading: 1. Buy 200 shares of ProShares Ultra Bloomberg Crude Oil ETF, symbol UCO, at the market, and place a protective sell stop at $5.00 stop, good till cancelled. |
Lastly, watch your inbox for details on the members-only, live Q&A event on Tuesday, March 24 at 12 p.m. Eastern Time.
I review the key markets from a big picture point of view, including how I plan to capture what I believe will be ENORMOUS profit potential on the next leg down in commodities!
Best wishes and stay tuned,
Larry
