Delinquency rates in Single Family Residential Mortgages and other Consumer
Loans began to climb through the later half of 2016 and early 2017. The timing
of this delinquency rate increase coincided almost identically with the Fed
increases in their Funds Rate. Additionally, commercial loan origination stalled
for the first time since 2008-2011 (prior to that was a stall in 2000).
As you've been likely been following our daily
video market analysis, you'll know that we believe the market is still
in a bullish trend and that we expect this upward price action to continue
for a while.
These early warning signs that the Fed rate raises may be pushing other factors
of the US economy should be viewed as just that - early warning signs. It also
means that Financial and Banking stocks may find some downward price pressure
over the next few months. And protection assets (Gold/Silver and related ETFs)
may see continued upward price movement as cash migrates from traditional financial
assets into more protectionist asset classes.
Single Family Mortgage Delinquency Rate
The two charts below show the rate of mortgages defaulting. Additionally,
real estate asset classes may start to see increased volatility as this segment
of the economy struggles and has to deal with delinquencies. The US Fed is
attempting to raise rates enough to allow for more normalized economic functions
without disrupting the stability of the global markets. It is our opinion
that these efforts by the US Fed will provide substantial rotation in certain
sectors of the US markets that skilled traders will be able to profit handsomely
from these moves.
All Other Consumer Mortgage Delinquency Rate
In particular, 3x ETFs may provide unique opportunities for profits. Let's
review a few potentials...
Throughout all of these charts, I expect you'll notice a similar setup with
regards to Financials, Oil Services and Real Estate. The Fed easing over the
past 6+ years has driven asset prices to near all-time highs (or above all-time
highs in some cases) and the recent oil price recovery has driven the oil service
industry to near term recent highs.
The examples we are illustrating today are all contingent on the US Fed continuing
to raise rates, as planned this year, which may put further pressure on these
segments of the markets as well as potentially increase delinquency rates for
residential, commercial and other consumer loans. In other words, we are expecting
some moderate price rotation in the markets over the next few months and we
are poised to take advantage of these moves if and when a setup occurs.
3x ETF: FAZ - Financial Sector Bear Fund
3x ETF: DRIP - Oil Services Bear Fund
3x ETF: DRV - Real Estate Bear Fund
We deploy our specialized Momentum
Reversal Method (MRM) trading strategy to identify exactly when to enter
and exit our trades and to find appropriate trading opportunities. The MRM
method is unique and proven. Our clients are able to take advantage of our
specialized MRM trading strategy and receive timely and accurate trading
signals from our web site, ActiveTradingPartners.com. Many of our recent
trades have resulted in tremendous gains for our clients.
We want to alert you to the large potential price rotation we are expecting
in the immediate future and to alert you to the unique opportunities this type
of price rotation will present. Remember, well over 2 months ago we warned
of a VIX SPIKE that was likely between March 15th and April 24th of this year.
Take a quick look at the VIX Daily chart to see our prediction
We urge you to consider this information in your trading decisions as well
as consider using our stock and 3x ETF trade alert service to further your
trading success. Again, the trading opportunities we are presenting today are
not trading signals. We are waiting for our MRM strategy to issue the trade
trigger, then all our clients will be alerted to the signals.
