Issue #83
Dear Member,
| Recommendation: For very $25,000 you are trading in this service …
1. Buy 30 additional shares of the VelocityShares 3X Inverse Gold ETN (DGLD) at the market. Place a protective sell order at $73.65, stop, $72.88 limit — good till cancelled. This protective sell stop is only for your new shares of DGLD. Be sure to maintain your stop on your existing DGLD shares at $68.99 stop on a good till cancelled basis. 2. Buy 30 shares of the ProShares UltraShort Silver ETF (ZSL) at the market. Place a protective sell order at $82.43 stop, limit $81.00 — good till cancelled. |
A quick update here on yesterday’s Fed taper decision. As far as I’m concerned, it’s hardly surprising. The economic stats in the U.S. have improved over the last several months, and although the economy is still fragile, the Fed has realized it’s time to back off on the pedal a bit.
But keep in mind that Fed money printing, in the scheme of things, is essentially meaningless. Most of the money printed is still sitting at the Fed in the form of excess reserves. It is not circulating through the economy.
That’s one of the reasons disinflation still has the upper hand, here and in Europe. U.S consumer price inflation is running at a meager 1.2% while in Europe it’s 0.9%.
In addition to money printing not stoking inflation in either the U.S. or Europe, the rising tensions of geo-politics (cycles of war) … rising taxes … and confiscatory policies in Europe are deflationary, offsetting any inflation threat from money-printing.
All this is precisely why gold and silver got hit hard yesterday, and ever harder this morning, with gold down another $30 and cracking major support at $1,210 and sitting on critical support at the $1,203 level.
Silver is down $0.79 cents this morning and about to crack the $19.18 support level.
If the above levels give way on a closing basis today or tomorrow, we will have the opportunity to get even more aggressive as gold makes a beeline to below $1,100 heading into January and silver to below $16.00
Right now however, in anticipation of additional sell signals, I recommend adding to your position in DGLD and opening a new bearish position in silver via ZSL, via the instructions in the above table.
Our recommended positions are surging nicely, as mining shares are also getting hit hard. Hold all positions and keep your protective stops in place.
Lastly, as I mentioned at our webinar on Tuesday, Bitcoin doesn’t stand a chance at surviving. There isn’t a government on the planet that will allow it to flourish. Yesterday, Beijing all but spelled the death knell for Bitcoin as it banned using yuan to buy or sell the digital currency.
Bitcoin prices immediately plunged as much as 38% and are now down 50% in the last two weeks. Digital currencies will not survive. Governments want that turf for themselves. They want to eventually get rid of cash and introduce a digital monetary system, so they can further track everything you do.
As for the stock market, I have been warning how strong that market is, and yesterday’s huge rally is testament to that. Nevertheless, there is still a chance for a major correction to unfold in stocks any day now, so I would be wary of jumping into any further equity rally at this time.
Stay tuned and best wishes,
Larry
