Your Stock Market Trend & Trade Signal Of the Decade

U.S. stocks closed lower Tuesday after a failed attempt to rally from the Dow’s worst 3-day point decline. It’s something I have not seen since the 2008 GLOBAL financial crisis.

The market had its first rally of the downtrend yesterday but it would be a BIG mistake to get bullish for new long-term investments at this point. The major trend is down. The odds favor that this is to be only the first phase of the decline. Today’s rally could take us to 1965 – 2040 level on the SP500. I will be taking short positions in the US markets soon.

GLD has retraced a good portion of its move to 112 as it almost printed 107.. GLD looks as if it is just starting a new downtrend looking for a count to 100/101. It is still intermediately CONFIRMED BEARISH.  At this time, since we have new positions on, I prefer to wait till the metals hit bottom and its been CONFIRMED BULLISH before adding a new trade. Silver should have a nice pullback as well. SILVER has now turned Technical BEARISH today.

Please do not jump into the market before the time is up. As we are approaching the 7-year Jewish bear market cycle in the month of Tishrei (September-October), markets are destined to stay volatile. I will immediately inform you as to the turn date to short the US markets.

CURRENT SPX HEAT MAP

SPXLargeHEATMAPAUG26

INTERNATIONAL MARKETS ALL CONFIRMED BEARISH !

InternationalLARGEmarketAUG26

In the last week-and-a-half, the S&P 500 lost nearly $2 trillion in market capitalization, with $900 billion in this week’s two trading sessions alone.

The Dow traveled another 1,600 points during Tuesday’s trading session which added to the 4,900 points the index traveled in down and up moves on Monday.

datauri-file (2

The SPX approached the low of the first phase of distribution. This is also working cycle wise. If there is a selling climax, I could see about 1830. This should be followed by a mid-decline rally to roughly 2000, about 50% of the decline from 2133 and my automated trading strategies has profited from this market crash.

leaderboard

Should the cycle(s) interpretation be correct (bottom late September/early October), I could then work on the second phase of the correction which would take into account the next phase of distribution and its downside potential.

datauri-file

When investors first experienced the financial crisis that occurred back in 2008, they could not foresee that it would reoccur once again, now in 2015. Currently, we are experiencing the next “Great Depression”. I am referring to this specific period of time that is happening now, as the bursting of the “Asset Bubble”.  The bursting of this “Asset Bubble” will be more devastating, over time, than the total damage that had occurred during the “Great Credit Crisis of 2008”.   This will devastate and destroy what is presently left of our middle classes.

book2At the present time, we are witnessing the beginnings of the stock market crash of 2015 as discussed in my recent book.  If you have been following my analysis of the global financial markets, which I have been extensively informing you of, you would have already been prepared for this occurrence, as early as November 25th, 2014.  For my private clients, these major drops in the US Markets came to you as no great surprise, at all.  My advice to said clients was precise, informative and accurate. The key to wait for confirmation before taking action when it comes to major trend changes like this.

I issued a FLASH ALERT back on August 5th, 2015 titled “Ugly Outlook – Global Economics, Quantitative Easing And Equities“. I stated that a large broad US Equity Decline may be ready to take place NOW! I also recently posted that there was a confirmation that the Dow Jones Industrial Average had ended its BULLISH rally, and therefore, had reached its “termination pattern”, which was BEARISH. We are now witnessing a classic case of an irrational financial bubble bursting.

Without any doubt, this is what I have been posting and sharing with you, for quite some time now. Our financial markets have been primed for this “crash”.  The market’s gain and investment profits have now been eradicated for 2015 with this recent crash.

The Federal Reserve is now in uncharted waters. They are powerless and clueless as to what their next steps should be. They currently lack the knowledge and tools, at this point, to stop the severe continuing contraction within our economy. They have kept interest rates at 0% for far too many years.  I fear that our economy could start experiencing interest rates in the negative territory which has already occurred in Europe.

The VIX is a gauge of FEAR. The break out of the Volatility Index (VIX) above 53, on August 24th, 2015, is a MAJOR warning sign that the magnitude of our financial and economic troubles are just beginning. The majority of our problems are soon to be revealed thereby reflecting that we are in an “Economic Deflationary Depression”.

These markets are under heavy distribution with increased heavy volume. This is a sign that institutions are selling large blocks of stock.

Money managers are selling their existing stocks, and locking in their profits.  This is not the same scenario which we have seen so many times in the past, in which one “Buying the dips” has been the normal pattern.  Unfortunately, those days are now a distant memory, and the markets are not coming back in their roaring fashion, any time soon.

Get My ETF Swing Trades, and ETF Investment Positions Today: www.TheGoldAndOilGuy.com – SPECIAL OFFER

Chris Vermeulen

How to approach the equities market – Audio Interview

I was just interviewed by Kerry Lutz of the Financial Survival Network and I share some critical information for both traders and investors. This is a very short interview to give it a quick listen.

Listen Now: http://financialsurvivalnetwork.com/2015/08/chris-vermeulen-market-update-from-the-gold-and-oil-guy/​

Chris Vermeulen

Global Sell Off Has Technically Begun

The crisis of the global financial markets, that so many have been fearing, looks as though it has arrived.

The importance of the Chinese devaluing their Yuan is effectively starting the process of “de-pegging” its’ relationship to the U.S. Dollar.   The change in policy is likely to have unintended consequences which are leading to new problems in todays’ currency wars;   especially, as the Federal Reserve lacks the initiative to start increasing their own rates.  Chinas’ pre-emptive currency strike complicates the process of the Federal Reserves’ long range policies in which the US Dollar would have been strengthened. The Federal Reserve has paused and believes that this is not the right time to raise rates.  Two weeks ago, the global equity markets came to the same conclusion as the global markets plunged, as equity prices accelerated.

The devaluation of the Yuan would normally be viewed as positive for Chinese businesses that will attract a greater market share of the world trade, due to the value of a lower currency.  Instead, the Chinese market plummeted last week. Their indecision to hold off raising its rate increase would usually have a bullish effect in the U.S. stock markets, but instead they fell to their lowest level of this year.  Fridays’ carnage alone being a 530 point decline in the DJIA.  The Dow Jones Industrial Average is now down 10% from its’ high of May 19th, 2015 at 18, 351.

Fed Chair Janet Yellen is currently paralyzed and is lacking the leadership and decision making ability of what the next steps should be.  I mentioned this in my column dated August 20th, 2015.  This is a preview of what to expect in mid-September, rather than the “irrational exuberance” associated with panic and hysteria.  We are approaching the 7-year bear market-cycle and the months of September and October typically are the starting months for such trend changes. At that time, markets are destined to remain volatile, with opportunities for both up and down periods which I share in my Global Financial Reset newsletter.

The Chinese devaluation of the yuan has sparked the beginning of a continued currency war, in which, many nations desire a cheaper currency in order to aid them with their exports.  The US dollar is already considered overpriced.  This places the Fed in a dilemma.  If they raise short-term rates, for the first time in six years, the dollar will become more overpriced than ever before.  Exports will suffer.

India, Russia and Thailand are now preparing for a new currency war. The rest of the world is now scrambling so that they are not the last nations standing to devalue their currencies. The Federal Reserves’ lack of leadership, by increasing interest rates, will cause other countries to devalue their currencies even further.

In terms of equity markets and geopolitical events, the next few weeks are critical.

In my forecast, last week, I stated that the Federal Reserve could not raise interest rates.  My views remain fully intact and align with my analysis that the FED has already sparked a “currency crisis”. The financial carnage which we witnessed last Thursday and Friday, was truly global in its scope.  On a percentage basis, Chinese stocks crashed even more than the U.S. stocks did.  Japanese stocks also crashed, as well as stock markets all over Europe and the emerging market currencies were impacted globally, which is causing an “asset bubble” to explode exponentially.

Our monetary expansion policy has been based on “Quantitative Easing”.  Our current resulting deflationary spiral has sucked the global economy into it a dark vortex. Wall Street is going under due to the fact that this time, the Fed is utterly powerless to reverse this trend again.

Our entire economy is currently based on the concept of a “Ponzi Scheme”.   It has been built on the expectations that should never have been assumed.  The idea that we can create real economic growth and distributed wealth using temporary artificial fixes is absurd.

I do not believe that this crisis will be over by the end of 2015.  This is just the start of the crisis.  Events will continue to unravel as we move into 2016 and beyond.  This existing crisis will continue to last for years and it is going to be very painful beyond what most people can imagine.

Any attempts by the FEDs to raise interest rates, at this time, will further exacerbate the existing economic global disaster.

If my next economic update I will share with you some sobering information one what US equities have experienced in the past 10 months and what it means for traders and investors.

Chris Vermeulen – www.TheGoldAndOilGuy.com

Week of Aug 24th Forecast – Gold, Oil, Equities

The Global Economy’s Health Is Not That Complicated

The Federal Reserve Bank has printed trillions of dollars to monetize US government debt just to keep the government afloat.  Any significant rise in interest rates will probably decimate US government finances, the fragile housing market and in the bond market it will cause a financial catastrophe through interest rate derivatives.

 

This is a solid reason why the Fed will not raise any rates in any foreseeable future.

 

The power to create money out of thin air is great!  Should we give it to politicians and secretive central bankers? Will this power be abused? Will those in charge yield to the temptation for “legalized counterfeiting?”  Apparently the answer is YES.

 

All that the Federal Reserve has done was to inflate equity markets. They never solved any of the original financial problems that lead to creating “The Credit Bubble of 2007”.  There was as well no financial resolution by our elected political officials to resolve this serious problem so that it would never occur again in the near future.   This process called “Quantitative Easing” created a shift of a tremendous amount of wealth from the middle class and the poor to the rich.

 

Inflated stock prices, usually held by the wealthy, created a clear “redistribution of wealth” which will be paid for by future generations to come. The concept by the Fed was that centralizing the wealth would help in creating new jobs and increase capital expenditures in their businesses.

 

The problem with this philosophy is that it never filtered down from the Billionaires into real economic growth within our economy. Instead, rather than experience expansion, we have been experiencing contraction which is resulting into an economic deflationary depression that will appear evident to all by the end of this year.

 

The top 1% of Americans hold 35% of the nation’s wealth. This inequality has continued to grow exponentially.

 

There are several reason that I can refer to why the Fed will NOT raise rates anytime in the near future. There are interest rate cuts and devaluations going on all around the world at the moment. Japan and the Eurozone are both implementing Quantitative Easing.  China is resorting to its alternatives to hold its financial system together and stave off a hard landing. Emerging market economies are being hammered by commodity price falls, while oil producers are being similarly hit by oil price falls.  There is no Inflation in developed countries.  The world is entering a deflationary slump.  Why would the Fed ever even think about raising interest rates???

 

The unwinding of QE will have many negative effects in a market that is already short of liquidity. So, the unwinding that must be delayed for quite some time will be welcomed by many. The unwinding of QE purchases and the normalization of bond prices would be extremely negative for the bond markets, so the tin can will be kicked down the road for quite some time still.

 

The PBOC has significant room to lower required reserve ratios on banks to encourage lending. Even after a series of cuts, the RRR remains at 18.5 percent for major banks which is among the world’s highest. Reducing the ratio by 10 percentage points would free up 13 trillion yuan ($2.1 trillion) of additional capacity for banks to lend. On the fiscal policy side, the country’s $3.69 trillion of foreign-exchange reserves and relatively low national government debt levels mean it has the ammunition for fiscal stimulus. China is planning at least 1 trillion yuan ($161 billion) in long-term bonds to fund construction projects as the economy struggles. Most of the interest payments on the bonds will be subsidized by the central government. I believe that more projects of this type will be initiated in 2015.   This is a major factor why the Federal Reserve will continue pumping liquidity in the financial system.

 

I believe that the FOMC minutes suggest that it is very far from a rate hike, the US economy is more likely to see QE4 first!

 

In short, there is no reason to believe that core inflation will rise to the 2% target any time soon and raising interest rates at the moment would jeopardize the US’s fragile recovery.

 

 

CPI Continues To Decline
CPI 2015-08-19E

 

The FOMC members gave the following reasons for caution:

  • Wages aren’t rising much
  • Prices aren’t rising much either
  • The dollar is strengthening
  • Commodity prices are falling
  • Economic growth is still pretty weak
  • The labor market isn’t as strong as the unemployment figures suggest

In Conclusion:
We continue to see the US and global economies struggle. The writing is on the wall that a collapse in equities is drawing near, but we have yet to see the broad stock markets break down. When they do, there will be a lot of money made by taking advantage of falling prices, which is what my focus will be with my trading capital and ETF trade alert newsletter: www.TheGoldAndOilGuy.com – SPECIAL OFFER

Chris Vermeulen

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Some good news and not so good news…

Since we started sharing the new and improved algorithmic trading systems (S10 and D30) a few weeks ago we have received a lot of great feedback and demand.

 

We do have more good and some not so good news…

 

The good news is that the system kick started the week once again with positive trading results within the first hour of the week. The index opened lower and it caused the market the flip and flop a little between and up and down trend. But once the intraday trend took hold the systems both reached their T1 (first target) less than an hour after the opening bell to lock in $400 profit. The systems are still long 1 contract and deep in the money as you can see below.

 

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Also, one of our improvements to the systems was our improved Risk Containment and Equity Protection features. This improvement will be explain in more detail in another email/video but in short this reduces the amount of potential gain we give back when the market rolls over and starts moving against our second contract. For example in the past we would see our positions up $800 – $1500 but when the trade was closed we only realized $150 – $400. The improved systems now lock in more profits $450 – $950 in these similar trade situations.

 

Now for the Not So Good News. To be honest this news isn’t all that bad but we want to be sure you know what is going on. In the past week the emails and phone calls have been rolling in faster than we can take them. The list of phone messages we need to listen to and call traders back is crazy long.

 

The solution, I know many of you want to speak with us before subscribing and want to join before the 30 day pre-live trading special offer is gone forever so this is what you should do and expect:

 

Emails are the best and quickest way for us to respond, but if you would like to speak with someone PLEASE leave a phone message and we will return your call within a day or two.

 

These new and improved systems will be going live for users on Sept 1st (TEN DAYS). Fastest way to get setup is to subscribe now to reserve your seat and take advantage of the special offer, then visit our broker’s page and click on a link to open a trading account and get it funded. We have direct broker support phone numbers to help you fast track the process: Open Account: http://www.algotrades.net/automated-trading-systems/

 

Hope you had a great weekend!
Talk soon
Chris Vermeulen

China’s Plunging Currency and What Impact It Left on the United States and the US Stock Market

Last Tuesday, the 11th of August, the central bank of China devalued the Chinese currency, i.e. the Renminbi (or yuan), against the US dollar by nearly 2%, making it one of the biggest moves ever since the Chinese currency announced that it was de-pegging from the US currency back in 2005.

The reason behind the Chinese government’s decision to devalue the country’s currency last Tuesday had a considerable lot to do with a significant number of factors regarding the global currency markets over the need to aid Chinese exporters craft their goods for lesser prices on the global market.

 ChinaNEWDevChart1

What Does It Actually Mean for a Nation to Devalue Its Currency?

In global regards, devaluation is a decision carried out by the government in order to readjust the value of their currency downward, as compared to another standard or any other country’s currency.  In the case of China, the central bank of the country had adjusted their daily trading brand for their currency. As per the regulations of the People’s Bank of China, the yuan is allowed to have a fluctuation of only 2% (either upwards or downwards) in accordance with a rate that is set by the authorities.

How the Chinese Government Played It Smart

If the Chinese government had devalued its currency, by, for example, 20%, it would have clearly been an effort to help increase exports for the country’s own benefit. On the contrary, however, a mere 2% devaluation is rather different; it largely keeps the Chinese currency at par with the currencies of its trading partners, keeping in mind that those currencies have lost their values against the US dollar.

In the rest of this article, we will be looking at what effects this plunge would have had on the United States and the US Stock Market, as well as some other major areas of concern that should be brought to light.

China’s Overall Impact on U.S. Growth Would Have Been Small

The action that was taken on Tuesday was not major enough to counter the Chinese currency’s appreciation over the span of the previous year, so it is unlikely that the growth rate of the country would have been effected all of a sudden on its own, or so were the assumptions made by some of the skeptics.

The People’s Bank of China presented a change in policy which shifted the government’s procedure for valuing the country’s currency to provide more importance to market prices within a system that is both a combination of market and state control. As such, currently we are still unsure as to what the 2% drop was all about and whether or not it is a part of a bigger picture that is being anticipated by the Chinese government. With that being said, the 5% drop would have never meaningfully influenced the Chinese exports.

The Aftereffect on the US Stock Market

Investors are still critical regarding the slow growth that China has been witnessing lately and what this could possibly portray for the world markets. As the Chinese currency plunged this week, so did the US stock prices. The primary area of concern for the consumer investors from now onward is the perception of Beijing’s apparent tactic for unexpected interventions in the currency markets.

According to Beijing, the move China made last week resulted due to a switch the country was trying to implement. This was the adaptation of a more market-oriented approach of the daily reference rate calculation. This rate is known for setting the value of the Chinese currency, the yuan (also called the Renminbi, or RMB).

Before this move, the authorities had based the rate in accordance with a poll which consisted of market makers. However, after the move was made, the authorities also considered taking into account the close of the day before this move. Other factors that were included were the rates of other major currencies, along with foreign exchange demand and supply.

With everything said and done, the important thing to note is the fact after the recent turn of events of the entire previous week, is that the yuan (RMB) is still only allowed a fluctuation of 2% either up or down as per the reference rate set by the People’s Bank of China.

Focusing on the “Now”

As events turned out on Friday, the 14th of August the Chinese central bank raised the value of its currency by 0.05% against the US dollar. This ended the three-day fall in an unexpected turn of events that consisted of a series of devaluations.

Regardless of this, however, there are still concerns regarding the slow growth in the country’s economy. The particular area of focus in this regard is China’s exports, as they require a serious stimulus which is only possible from additional cuts in the country’s exchange rate. Moreover, a swerve in recent figures also portrays that growth in a number of critical areas has further slowed down to a crawl in answer to contracting global trade. For example, the demand for one of the key measures of activity in China, i.e. oil, fell in tandem due to yet another drop in car sales. The event occurred this June when the exports took a tumble by 8.3%.

The most alarming point is the fact that China’s slump isn’t alone, as it is possibly spreading all across the Asian region. A perfect example is the shrinking of the Japanese economy back in April-June when the country’s exports dropped while the consumers also cut back on spending. Elsewhere, South Korea also went through its weakest growth in the last six years during the second quarter of the current year.

All in all, the devaluation of the yuan may have been a smart move for China, but for the rest of Asia, it does pose a rather disturbing outcome. Only time will reveal what’s next.

Let us share with you more interesting news, analysis and our trade alerts so you can be in control of your financial future.

Chris Vermeulen – www.TheGoldAndOilGuy.com – SPECIAL OFFER!

Global Markets and Dow Jones Fire Warning Shot Across Investors Bow!

Last week, the global equity markets were quite undecided. China’s and Japan’s equity prices have been moving higher. The Japanese Nikkei reached its highest level since 1996 on Tuesday, August 11th, but then pulled back at the end of the week. Hong Kong’s Hang Seng made a new monthly low and the Australian Market fell to a new 6-month low.

Europe was more decisive. Traders mostly sold stocks.  The German DAX, London FTSE, and Zurich SMI all fell to monthly lows by mid-week and did not recover much by Friday August 14th’s close. In Russia, it was much different. Moscow’s MICEX index rallied to its highest mark in 3 months.

In the US Markets, the selling was even more intense.  On May 19th,2015, the DJIA topped out at 18,351.  The DJIA has failed to make a new high since then and continues to sell off. The decline, so far, has been over 1,220 points which is its’ greatest loss of the year.  Last week, began very strong, with the DJIA up 245 points on Monday, August 10th; Tuesday was down 212 points, and by Wednesday, the DJIA had fallen all the way to 17,125, its’  lowest level since February 2nd, 2015. We had a CONFIRMED BEARISH/SELL signal on August 4th, when the Dow Jones was at 17,596.  Before I can take any BEARISH positions in the US Markets, this signal needs to be CONFIRMED by the SPX and the NDX-100 as BEARISH, which are currently NEUTRAL/TRENDLESS.

The SPX landed at support levels and found its’ footing, once again. We are getting closer to the cycle lows in September/October when the downward pressure will push it through its’ support trend lines.  We are still into a sideways direction. It is a little too early to tell if it will continue the sideways motion or decline in some downward momentum, next week. SPX is undergoing a consolidation in a downtrend trend using the 200- Day Moving Average as support. A daily close below 2076, which does not hold, should bring about the next challenge to the 2040 major support level. The current declining patterns are represented in those of the DJIA,, NYSE and the Dow Jones Transportation Indexes.

spxsupport

The Dow Jones Transportation Index and the Dow Jones Industrial Average are leading the US Markets down during this topping process   They are declining further than the other indexes, and the other indexes should be establishing their downtrends, in the near future. With the exception of a monumental one-day market crash, that happens once in a blue moon, bull markets that are topping undergo a drawn-out process that usually takes, at least, many months before bearish momentum finally takes over and a new downtrend emerges.

DJTASPXAUG14

Considering that US stocks have been in a 7-year bull market, it would be unreasonable to expect such bullish momentum to change overnight.

Therefore, even though price momentum has been favoring the bulls lately, it is still my belief, that it is dangerous to be invested on the long side of these markets, as of November 25th, 2014.

The stock market is undergoing a big trend change and most of the analysts are missing it, which is normal. They lack the access to “The Predictive Trend System Analytic’s” of a Financial Forecasting Model. My clients have the access to this knowledge from our subscription service that we provide.  This knowledge provides you, the client, with THE EDGE that other professional investment firm’s lack.

U.S. equity markets have been fueled by cheap dollars and cheaper interest rates. The combination of the stock market crash from 2008 – 2009, along with a declining U.S. Dollar, has been destroyed by the Federal Reserve Bank (FRB), which has helped US Equities to become a bargain on the global market. This allowed foreign buyers to come in and purchase US Equities, at both a nominal value, based on the markets’ decline, as well as, a relative value based on their home currency. Foreign investors have capitalized on the rise in the US equity market

On November 25th, 2014 my **Global Sentiment Model signaled the “EXCESSIVE EXTREME OPTIMISM”, which provided an exit point on all long US Market positions .  Those traders and investors, that remained in long positions, who were not subscribers to our service, at that time,  have just been channeling, without any new break outs into new highs.

There is a huge disconnect between the popular sentiment, among the  “talking heads” on the news, regarding how these events will affect the September 2015 meeting of the Federal Reserve Bank. The general consensus, that I feel currently exists, is that this could very well push any increase in interest rates, out into the year, 2016. The Federal Reserve Board of Governors has been decidedly dovish, regarding this aspect, and has continued its’ quantitative financial engineering.

 

INVESTOR SENTIMENT READINGS

High bullish readings in the sentiment stock index usually are signs of Market tops; low ones, market bottoms.

Last Week

 2 Weeks Ago 3 Weeks Ago
AAII Index
Bullish 30.5% 24.3% 21.1%
Bearish 36.1 31.7 40.7
Neutral 33.4 44.0 38.2
Source: American Association of Individual Investors,

Our current sentiment and technical features are consistent with a major stock market top.  This model uses the market sentiment composite which is a measure of investor sentiment. This metric tracks the mood of investors, which is then translated into a probability whether the markets will advance or decline, within the near term, as well as, an undisclosed period of time. It is a contrarian indicator that produces a bullish signal, when market sentiment is overwhelmingly negative, and a bearish signal when markets are overwhelmingly bullish.

We have not disclosed these models’ methodology, and its statistical data, as it is proprietary.  We have also not disclosed the correlation coefficient that is used to measure the strength of the linear dependence and its’ algorithms between the market sentiment composite and the 12-month forward return. A trading friend of mine developed this model thirty years ago.  For the period of time that it has been implemented, which is now 25 years, it has been predicatively accurate, 100% of the time, prior to any major changes within the US Markets. The last signal that was generated was on November 25th, 2014, which registered   “EXCESSIVE EXTREME OPTIMISM” and the broad market had been trading sideways since.

Learn how to read the market and make the same trades we do: www.TheGoldAndOilGuy.com

Chris Vermeulen

Tired Of Gold & Silver Mining Stocks? What about Magnesite!

Over the recent months I have shared my precious metals, miners and commodity sector forecasts. Also I have shared some of the hidden gem stocks which I am starting to accumulate positions in as the resource market start to carve out a bottom.

These stocks each have a very unique opportunity and provide slightly different exposure to my portfolio. These stocks cover gold, silver, graphene, technology, oil, and today I want to share another company that will produce magnesite, which I think has tremendous upside potential that trumps most other opportunities I have come across because the life expectancy of the mine is 100+ years, its location, the high grade of their mineral, and just as importantly their management team and vision.

If you have followed me for any length of time, then you know I like to keep things short and simple. Here is a detailed report by a third party talking about the company’s story, and opportunity.

mgxlogo

FULL REPORT – CLICK HERE

 

I don’t need to get into the details as that is available in the report link above but let me recap the core points from the meeting I had with the MGX recently.

COMPANY KEY POINTS

  • Canadian resource company – resource bull market is near
  • 100+ year mine life expectancy – potential to become huge operation
  • Advanced holistic extraction and processing of mineral
  • Extremely high grade Magnesite mineral – Demand top dollar for material
  • Magnesite: 75% lighter than steel, 33% lighter than aluminum – Rising Demand
  • Multi-Uses: Abrasives, fertilizers, animal feed, water treatment, automotive etc.
  • China supplies 80% of production and its low grade, high shipping costs
  • MGX’s location has lower shipping costs with consistent high grade Magnesite
  • Company could start small producing in near term – generate cash flow/profits
  • Management Team – Jared Lazerson has incredible passion, energy and vision
  • Company is outside of the gold/silver sector

 

MGX JARED LAZERSON INTERVIEW

mgxvideo

 

 

MGX MINERALS INC. SHARE PRICE ANALYSIS

Let take a look at the share price and see where price and volume are telling us. This in a fairly new company and its name and shares remain unknown by the masses at this point. Hence the reason I call it hidden gem.

There are several great things about investing in stocks that are trading at all-time new highs. Main reason is that there isn’t any overhead resistance in share price from previous owners looking to sell. In fact, buying stocks at new highs is a well-known strategy investor’s use.

The type of price action that typically happens with stocks like this, are small pauses and pullbacks as investor’s become satisfied with gains and slowly sell a few shares to lock in gains. It’s a trickle of selling vs heavy volume distribution which takes place in beaten up stock prices with unhappy shareholders.

If you look at the chart below you will notice at the bottom the green volume spikes. I call these “Get Ready Spikes”. It means some big investors are getting positioned for more upside potential.

Also, notice the bullish cup and handle pattern. These are actually one of the strongest chart patterns that I know of. Many times I see 3-5X the move in share price based on the depth of the pattern from the low to the high for the first initial major rally. This means we should see $0.925 cents a share in the not so distant future.

See live Quote/Chart: http://www.stockhouse.com/companies/quote/c.xmg/mgx-minerals-inc

mgx

I should warn that there are drawbacks to trading these small unknown stocks. Because they are unknown they lack volume/liquidity/market depth. What does that mean?  It means it is hard to get any sizable position quickly. I recently bought shares above the 60 cent level. The way I go about things is to buy some at market price, then place another buy order where I am willing to pay for the rest and hope I get filled over the next week or two.

Shares like this can move quickly because there are not many sellers so once the ask price is bought up price jumps up to the next level where there is a seller.

 

MY HIDDEN GEM RESOURCE PLAY CONCLUSION:

Technical analysis and trading is my passion and getting involved in new companies which have a quality product, proven management, and have the right timing for entering a market which is close to starting a new bull market is one of the most exciting types of long term investments to watch unfold.

Don’t get me wrong, investments are just that… long term, and take months if not years to unfold, but if you are positioned with the right company at the right time returns can be life changing 3-5 years down the road.

This company could be a world class open-pit mine for Magnesite because of its high-grade mineral, location and potentially lowest processing and shipping costs. This is not a 2-3 year mine that will be out of material like most gold and silver mines, this a 100+ year operation just getting started.

Get My Next Investment at: www.TheGoldAndOilGuy.com

Chris Vermeulen

 

Disclosure of Interest and Advisory Cautions: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by MGX Minerals Inc. In addition, the author owns shares of MGX Minerals Inc. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Ugly Outlook – Global Economics, Quantitative Easing and Equities

A take on the global economy and equities markets that paints a simple and clear pictures I think.

The DJIA index has recorded seven consecutive down days in a row!  These 7 distribution days are a sign that many institutions are taking profits or establishing losses.

As we are entering the second half of 2015, financial panic is occurring globally. Currently, this tremendous financial devastation is happening throughout the world.  Stock prices are crashing in China, Europe and soon I feel the United States. Puerto Rico has now defaulted on their debts. Quantitative Easing has been masking the symptom of this endemic disease. The Greek Banks are still frozen and will continue to stay this way; however, the mainstream media is not reporting on this current situation in Greece. There is a limit on weekly withdrawals of 420 Euro per (around US $455).

The corporate leaders of the major banks were left in place back in 2008/2009 and were allowed to continue receiving their huge bonuses. Their banks only existed because of the unprecedented taxpayer subsidy.  The system is still essentially the same as it was before, due to any lack of meaningful reforms that have been required.  It is this lack of change in all the required global fiscal policies that I am warning you of the coming collapse of this new “Asset Bubble”. This is where “profits” are Privatized and “losses” are Socialized.

The printing of limitless sums of virtually free money under various “Quantitative Easing” programs and simultaneously slashing interest rates to their lowest levels in history has created stock markets that have been artificially “levitated” for many years now.  This growth is based on virtually “free money”. I am  warning you that the current business valuations and calculations are NOT accurate and even NON-sustainable.  Our previous “Credit Bubble” has now been leveraged and replaced by an even larger and more dangerous “Asset Bubble”.

The Federal Reserves easy money policies have left stocks and bonds on the verge of a massive collapse. Their “Financial Engineering” has created such a “horrendous bubble” that  it will lead to the largest historical economic deflationary depression that we have ever experienced. This bubble, when it finally implodes,  is going to be absolutely devastating to the global economies.  All irrational bubbles eventually burst.

bearmarket-chart

What is actually required today is a universally respected reserve asset capable of filling our current void with a reliable presence that serves as a “store of value”.  We do not require a complex international committee to solve this new future problem.  This “store of value” asset is already in existence and currently held by some central bankers and prudent individuals around the world.  It is known as gold.  From the ruins of our chaotic financial crisis, a degree of sanity will prevail.  Gold, as a freely floating asset, will arise in stature as the only element of global monetary reserves. The floating aspect is the vital evolutionary improvement over all previous structural monetary failures which tried to use a gold standard at a fixed price (i.e: unit of account).

When the global financial crisis hit in 2008, U.S.Dollar liquidity dried up and international financial markets experienced widespread paralysis. First to the scene was the U.S. Federal Reserve Board, pumping liquidity into the system and establishing a series of large-scale bilateral swap agreements with major central banks. This included several countries in the major emerging markets. The International Monetary Fund (IMF) followed with a number of programs for countries hit by the crisis and it adapted its financing toolkit to meet the demands of the crisis. For the first time, policy makers looked to the Special Drawing Rights (SDR) to provide much-needed liquidity throughout the international monetary system.

SDR is an artificial “basket” of currency used by the International Monetary Fund (IMF) for internal accounting purposes. The SDR is also used by some countries as a peg for their own currency and is used as an international reserve asset. The SDR was created by the countries participating in this system who needed official reserves (government or central bank holdings of widely accepted foreign currencies) that could be used to purchase the domestic currency in foreign exchange markets where it is required to maintain its exchange rate. It is a potential claim on the freely usable currencies of IMF members. The Special Drawing Rights was created by the IMF in 1969 to support a fixed exchange rate system.

The SDR is neither a currency nor a claim on the IMF. It is a potential claim on the freely usable currencies of IMF members. Holders of SDR can obtain these currencies in exchange for their SDR.  The SDR is primarily a unit of account for the purpose of accounting.

It is my view point that the SDR, which is a “Virtual Reserve Currency”, will never come close to achieving a status anywhere near that of “the principal reserve asset in the international monetary system” as envisioned by The International Monetary Fund for a future global reserve currency!

Gold has been declining sharply since its all-time high of  $1,920/ounce on September 2011. It is experiencing a historical correction that we forecasted years ago. I am expecting much lower prices over the next few months.   My predictive trend and cycle strategy will inform us when we have roughly hit the bottom of these two markets (gold & silver).

Today, the majority of investors now believe gold is dead and no longer relevant and that cash and the U.S. dollar is King.  With this type of “herd mentality”, investors will mostly likely miss the next historical buying opportunity for metals, and miss the ultimate short-sell trade on US equities.

Chris Vermeulen
TheGoldAndOilGuy.com – ETF Trade Alerts
Algorithmic Trading Strategies Developer & Trader