This "distortion" between "risk" and "return" has created a "bubble" effect
in all global equity classes. I informed my subscribers to exit the SPX on
November 25th, 2014 and to enter cash. Their equity risk exposure was reduced
to zero. Momentum oscillators are now extremely overbought and are very clearly
trending bearish. I wait for confirmation before entering any
new long SDS and long VXX positions.
This week (Tuesday) there is another FOMC meeting. The news of this monetary
policy will be released on Wednesday, June 16th, 2016. Expect choppier price
going into the meeting and shortly thereafter.
The Only Chart You Need to Read!
The U.S. markets failed to break out!
Daily Chart Of Bonds
The bond rally set a record high in the rush to a new "safe haven". We are
now experiencing a global rally in government bonds which broke out last Friday,
June 10th, 2016, while equities declined. We entered this new long term trade
on for bonds.
Daily Chart Of Gold
Nothing will stop this new bull market in gold and silver. We entered this
new long term trade on June 8th, 2016. Now there is a stampede into this much
talked about "asset class". Just take a look as the chart of gold below
In short, the major trends of all asset classes which have been in place for
several years are coming to an end. The majority of investors have no idea
what is starting to take place and will do what the masses do every time a
new bear market takes place. They will hold their positions, watch the value
of their nest egg get cut 30-60% in size, and then give up and exit equities
near the bear market lows 6-18 months from now. It is unfortunate, but technically
we need the masses to do what they always in order for things to unfold in
a controlled fashion. In a recent post I showed where
the financial markets and sectors are within this major economic cycle.
There are some new trades I will be taking very soon with my money and subscribers.
