Mother of All Bull Markets Has Only Just Begun

The current economic landscape is changing by the day and rarely for the better.  This is from the standpoint of the middle and lower classes.

As negative rates become increasingly part of the new normal, more depositors are swept up by the creeping confiscation of their savings. I expect that the other part of the “cash trap” endgame, the actual elimination of large currency bills, will also soon accelerate. First in Europe where the ECB recently put an end to the printing of €500 bills and soon after everywhere else.

The point is that Central Banks and the FED knows this prolonged period of ZIRP (Zero Interest Rate Policy) is not only highly “irregular”, but that it is harming a healthy environment for investment and economic growth. Yet, they are paralyzed with “fear”.

Perhaps what they do not realize is that it is going to happen anyway. You cannot get back to “normalization” without incentives to save and invest. Sure, when rates go up, there will be a giant sucking sound, like the undertow of the sea after it washes to shore and then goes back out. But in time, as investors and savers get rewarded for saving their monies, they will eventually start investing those savings and that will bring the economy back after the “Great Reset”.

After this “Great Reset” all investors will see exceptional values if they have some monies, (gold), saved to capitalize on these. Right now? Everybody is afraid to take the risk with assets being so high, and savings so low. Even bankers are afraid, much like political leaders to make the necessary changes.

Investors of all levels of experience are attracted to gold as a solid, tangible and long-term “store of value” that historically has moved independently of other assets. My analysis shows that gold will be implemented to protect ‘global purchasing power’ and minimize losses during our upcoming periods of ‘market shock’. It serves as a high-quality, liquid asset to be used when selling other assets would cause losses.

 

Listen to Recent Phone Call and Gold Forecast – Click Here

 

Central Banks of the world’s largest long-term investment portfolios use gold to mitigate portfolio risk in this manner and have been net buyers of gold since 2010.

moabm

Investors should make use of golds’ lack of ‘correlation’ with other assets which makes it the best hedge against currency risk. Though we are in for a period of great financial turmoil, investors can safeguard themselves by investing smartly in gold. Do not be left behind and see your dollar assets lose value. Invest in gold!

 

Gold is the only asset which will increase value:

In todays’ negative interest rate environment, one should definitely be more concerned about the “return of one’s money, than the return on one’s money”. Considering the threat of negative interest rates, it is obvious why people are rediscovering the value of holding gold.

Gold tends to perform well in declining or negative real interest-rate environments. The deeper Central Banks move into negative rate territory, the more gold is going to be supported, as the cost of carry disappears. High real rates are bad for gold but negative real rates are quite good for it!

Gold is the only asset class, which will maintain its value during times of ‘financial crisis’. It has done so previously in the past and I observed its performance during the beginning of the year, in which its status affirms it as the preferred safe haven.

There will be times during this ‘crisis’ when different assets classes will be in focus.  I will continue to guide you as to the best profit making assets, during this period of time. If you are holding any stocks, this current rally is the last chance to liquidate your holdings; gold will give one an excellent buying opportunity within a few weeks of time and should be used to purchase this for the long-term period.

Unfortunately, I foresee very difficult economic times ahead for all.  Therefore, it is best to be prepared and take proactive measures, in advance, so as to avoid the pain rather than regret it later!

Follow both my swing trades and long-term investment positions at www.TheGoldAndOilGuy.com

 

Chris Vermeulen

Gold Looking Good and Moving on to New Record Highs

inteviewkerry

He’s highly bullish on gold and silver and sees new highs ahead once gold breaks the $1400 mark. And that’s not too far ahead. It’s been building and when it hits, there’s no telling how high it will go.

Green Bond Market Will Continue To Grow

If a bond has a negative yield, then the bondholders will lose their money on their investment. In the long run, their expectations are lower and consequently they lose the incentive to invest — which may have far-reaching repercussions.

Green Bonds Are Changing Investor Expectation’s

The rapid growth of the green bond market has sparked interest from many audiences. 

What are green bonds? Using debt capital markets to fund climate solutions. Green bonds were created to fund projects that have positive environmental and/or climate benefits. The majority of the green bonds issued are green “use of proceeds” or asset-linked bonds.

In this new financial era, how can one ensure that the necessary investments are still coming?  In addition, how can investors ensure that they are still receiving financial returns? Green bonds may very well be the solution.

The green bond market provides an innovative way to obtain both a financial return and receive a positive impact. The main characteristic of a green bond is that their proceeds are allocated exclusively to environmentally friendly projects.

According to HSBC, the green bonds market is rapidly increasing; around $80 billion worth of green bonds could be issued by the end of the year. This would represent almost a 100% year-on-year growth.

greenbonds

In this negative-yield bond era, green bonds represent quite a good deal; 82% of them are rated at investment grade and they satisfy the medium long-term preferences of institutional investors, as well as covering a broad range of sectors. Investors are drawn to both the liquid, fixed-income investments that green bonds offer and the positive impact that they can have.

Many institutional investors, such as pension funds, now have mandates for sustainable and responsible investments and are developing strategies that explicitly address climate risks and opportunities in different asset classes. Green bonds can provide the verification and impact measurement that investors need. In the case of World Bank green bonds and IFC green bonds, they also bring AAA ratings.

“Investors increasingly recognize the threats these forces create for long-term financial value and are increasingly considering it in their investment choices,” said Laura Tlaiye, a Sustainability Advisor at the World Bank, one of the first and largest issuers of green bonds with more than US $7 billion issued in 18 currencies.

Green bonds also give smaller investors a way to vote with their money. The State of Massachusetts, for example, received more than 1,000 orders from investors for a green bond that it issued last year – most of them are individual investors interested in supporting their local government’s investment in the environment.

A holistic view of where the economy is headed. Green Bonds enable capital-raising and investment for new and existing projects with environmental benefits. Recent activity indicates that the market for Green Bonds is developing rapidly. The Green Bond Principles (GBP) are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for issuance of a Green Bond. The GBP are intended for broad use by the market: they provide issuers guidance on the key components involved in launching a credible Green Bond; they aid investors by ensuring availability of information necessary to evaluate the environmental impact of their Green Bond investments and they assist underwriters by moving the market towards standard disclosures which will facilitate transactions.

To help investors evaluate green bonds, MSCI/Barclays and others have also launched green bond indexes which score issuers and check their project selection criteria and management of proceeds so as to ensure the promised use and ongoing reporting.

 

List of Green ETFs for Responsible Investing:

Green bonds have definitely become an exciting market development with demand from investors consistently outstripping supply. If this is of interest to you, take a look at these Green Bond ETFs

If you want to follow my lead as I swing trade and invest long-term using ETFs join me at www.TheGoldAndOilGuy.com

 

Chris Vermeulen

The Power of Price Spikes On Intraday Charts

Last week ended on a very positive note for those who follow and trade filtered price spikes.

What is a filtered price spike? In short, I scan pre-market, and post-market trading hours’ price charts of SPY, QQQ, IWM, GLD, and GDX for a very special odd tick in the market which creates a spike on the chart.

These spikes could be to the upside or downside, does not matter. What they tell me is the direction which the market (market makers) are going to try and move the market in then next 48 hours.

As long as you can trade 1x, 2x or 3x ETFs, futures, Binary options, spread betting, or CFD’s, then you can take full advantage of these quick and powerful moves.

These spikes generally are not huge percent movers, typically range between 0.25% – 1.1%, but they are highly accurate and when leverage is used like trading futures you can pocket $250- $1500 quickly.

I have found price spikes to work exceptionally well in predicting market-moving news before it takes place like Brexit and Friday’s FED decision.

Below you will see a chart of GLD (gold) which flashed us a with a buy signal 36 hours before gold shot up in price post the FED decision.

goldspikehit

This week (Monday Aug 29th) SPY Spike and Target Hit

On Friday after the market closed I saw a spike up on the SPY chart. You can see what happened the next trading session once the market opened – Market rallied and spike was filled for a quick $450 profit.

spikefilled

Concluding Thoughts:

In short, if you are looking for a few extra trades each month that are highly accurate and only put your money at risk for a very short period of time then you should look into getting my ETF trades and Spike Alerts.

Trade With Me At: www.TheGoldAndOilGuy.com

Chris Vermeulen

How Extreme Oversold Markets Can Be Profitable

The trading week was starting to look as though it was going to end without any excitement. Wow, did that ever change on Friday!

On Wednesday Aug 24th, the stock market sold off to a level which I consider to be an extreme oversold condition for the week. While I do have several criteria as to why and how I come to the conclusion, the chart and indicator below show me when the market is oversold and ready for a bounce.

The green shaded areas on the bar chart are oversold extremes. Wed, Aug 24th the SP500 closed at this extreme. The following day the market struggled to find support but eventually did with the big pop in price on Friday.

You will also notice the red line indicator near the top of the chart. This is a little volume ratio I use to help confirm when the market is getting overbought and profits should be taken.

oversold extremes

 

Second Oversold Confirming Indicator – Price Spike

Not only was the market oversold based on my proprietary indicator above, but the market also flashed us a post-market price spike. I have talked about these many times before and how it’s the market giving us insight into where the computers are likely to run the market or at least try to run the market in the next 48 hours. In less than two days the spike was filled for us to pocket another winning momentum trade.

spikewinner1

Extreme Markets Conclusion:

In short, as traders we need to trade what see not think. It is easy to have market bias, meaning you want it to go in one direction and you favor your thinking and analysis that way. If you can completely avoid doing this, you will be highly profitable as a trader.

I see this time and time again, when the market gets oversold/overbought, or flashes us a price spike just before some news event. Its tough trading in front of pending news, but 80% of the time these moves play out just as expected.

The last big FED talk, gold flashed spike up a day before the news and it played out in a big way.  This week both the SPY and GLD spiked up a day before and both reached their spike targets Friday big fast profits. I will post the gold spike on my blog this weekend.

Follow my Analysis, Forecasts and ETF Trades at: www.TheGoldAndOilGuy.com

Chris Vermeulen

Stock Market Is Crazy and Crazy Means Opportunity

The SPX has completed its’ “Broadening Topping Pattern”
…the next trend is DOWNWARDS!

The current pattern is suggesting that a significant top is at hand. I fully believe both in patterns and indicators and right now the current pattern is suggesting that a significant top is at hand.

My cycles are suggesting a potential “Black Swan” event, in multiple indexes, which are “imminent”.  The SPX may have made its’ last challenge of the upper trend line of its’ ‘Broadening Top’. On Friday, August 19th, 2016, it closed beneath its’ ‘Cycle Top’ resistance at 2185.38.  The SPX has fulfilled all of the fractal requirements necessary for a completed “corrective” uptrend. The uptrend from 1810 has been in a “corrective phase”. The next wave down will be an impulsive wave.

The large divergences which I have been viewing, in my proprietary oscillators, are most real and accurate and once the selling begins, the momentum should quickly move to the downside.  The current market is being supported by a lack of sellers, more so than aggressive buying.  With investors still thinking that there is nowhere else to place their money, they appear to be content with leaving their money at “risk on” assets, within a market that is pushing all-time highs.  This type of “mentality” usually leads to large losses, rather than big gains.  There is just no opportunity for growth in the SPX!

Investors have become complacent with the current rally.  They listen to and believe what the FED has been saying regarding interest rates and they have come to believe that everything about this market depends upon the FED. I do not believe that to be the case.  I believe that the FED is or should I say will be irrelevant in due time!

The Bank of America Merrill Lynch reports that its’ clients (institutions, hedge funds and private clients) who have sold stock for all but 2 to 3 weeks, during all of 2016, have once again sold $1.9 billion of US stocks while the SPX was hitting new highs.  Institutional clients led the sales due to poor performance.  It has been the retail investors that have been flooding into the market while anticipating a massive breakout and rally.

The big and smart money continues to build up massive short positions. George Soros has become more bearish on equity markets, nearly doubling his short bet against the SPX, following similar moves by Jeffrey Gundlach, Carl Icahn and David Tepper. According to his 13F filing, Soros now owns roughly 4 million ‘put options’ on shares of the SPY.

We are presently living on borrowed time and vast amounts of borrowed moneys. This is a period of time of “unprecedented economic upheaval” which was caused by ‘financial engineering’ by governments and their Central Banks. It’s a slow-motion catastrophe, where as we are living today at the expense of tomorrow. The FEDs’ balance sheet has more than quadrupled since the Crash of 2008.  This is unprecedented:

Keep in mind, that most of these highly successful investors mentioned above also predicted other major market moves if you look back through the years. Their huge bets and called typically play out, but I do find most of them jump the gun a little early (many months in most cases). Reason being, they understand how and why the markets move, and because they do, they know when various markets are nearing a major turning point.

The catch, with trying to time these major multiyear market reversals is that all investors around the world (all market participants) buying/selling habits need to stall out and reverse direction for the new trend to take hold. This always seems to take longer than we expect, but these highly successful investors along with myself feel this bull market in stocks is about to come to an end.

Conclusion:

The next stage will become a vicious deflationary cycle in which prices and growth “crash and burn”. Prepare for another massive wave poor earnings, job layoffs, and falling stock prices.

Over the past 500 years, or more, whenever deflation emerged, price of gold gained and always gained big, in terms of purchasing power and I don’t feel this time will be any different.

There will be many ways to profit from all of this, precious metals is just one of many awesome opportunities unfolding for myself and subscribers to enjoy.

My ETF Trades: www.TheGoldAndOilGuy.com

Chris Vermeulen

Black Friday Anniversary In The Markets

The World’s Monetary System Is Broken & Costing Overseas Business

Low and negative yields mean that no one has the confidence to invest in real capital projects. Investors would much rather lose money over a 10-year horizon than invest in building dams, repairing pipes, creating better grids, starting new businesses, etc. A new monetary order must replace the existing one, and as soon as possible. It will likely be one that China is determined to dominate this time around.

The Bank of Ireland is set to become the first domestic financial institution to pass on the ECB’s negative rates to customers for placing their money on deposit with the bank. I have learned that the Bank of Ireland, which is 14% owned by the State, has informed its large corporate and institutional customers that it plans to charge them a negative rate of -0.1% for deposits of €10 million or more starting in October 2016.

Ulster Bank, which is owned by UK lender Royal Bank of Scotland, has already introduced negative interest rates for a small number of large corporate clients. Ulster Bank has products priced off the back of Euribor, a European interbank lending rate, which is at an all-time low and had turned negative last year. These interest fees being charged by the bank do not apply to SMEs or to personal customers.

Additionally, as Bloomberg reports, The Royal Bank of Scotland, which is Great Britain’s largest taxpayer-owned lender, stated that some of its biggest trading clients must pay interest on collateral as a consequence of low central bank interest rates. Some of the bank’s institutional clients will need to pay interest on funds pledged as collateral when trading futures contracts.  The changes for sterling and euro futures and options trading will probably affect about 60 large clients. “Due to the sustained low interest rate environment, RBS will now be passing the cost of holding such deposits onto a limited number of our institutional clients,” the bank said in the statement. RBS said it had previously applied a zero percent floor to the overnight rate charged for collateral required by clearinghouses for future traders.

This is the first indication that the Bank of England’s decision to cut rates to historic lows is forcing lenders to collect negative interest from deposit holders.

Ironically, unlike Europe, the U.K.’s rates are (still) positive, even though the BOE recently cut the interest rate to an all-time low of 0.25% as it unveiled that it would resume monetizing government and corporate bonds. It may soon cut rates to negatives.

While the RBS move affects only a subset of business customers, some lenders in Europe, where both the European Central Bank and the Swiss National Bank have kept interest rates below zero for months, have been charging a wider array of customers in order to hold their deposits.

“What you’re seeing is there have been a few banks in Germany and a couple in Switzerland which have started to charge for deposits; importantly, it’s to corporate customers, or very wealthy people,” said Andrew Lowe, an analyst at Berenberg, as quoted by the FT. “You are likely to see the UK banks follow suit, in particular if rates fall further,” he added. “Everything that applies to Europe applies to UK banks as well.

After a certain period of time passes, it will also apply to less than “very wealthy people.”

The RBS charges would apply to clients who trade futures and options and, therefore, hold cash on deposit as collateral. He said customers were being encouraged to put their cash into bonds, instead, so as to avoid the cost.

Conclusion:

In short, customers who hold money at banks are slowly beginning to get squeezed and charged fees. What does this mean? To me, I feel it’s going to be negative on the banks and their share prices as investor slowly move away from those banks and/or spread their money to other asset classes to avoid paying interest to a bank to hold their money.

Banks have it really bad, if you ask me. They are not making much interest on the capital they hold for clients, and charging customers to hold money is a sure way to lose some of their biggest clients and income.

The financial sector has never recovered from the 2008-09 bear market in stocks, and with, potentially, another bear market just around the corner, bank stocks could be in for a massive bout of selling.

Where could a large chunk of investors’ capital flow? Precious metals is one of the places, though many other greater opportunities are slowly unfolding, and its just a matter of time before we take advantage of them.

Join Me at www.TheGoldAndOilGuy.com and see my exact trades and prosper during these interesting times.

Chris Vermeulen

How to Spot an Oversold Stock Market

All traders have found their own mix of technical analysis indicators and price action which they feel provides them with a good feel for when the stock market is oversold and overbought. Let’s face it, as traders, we see the market is a different way and its limitless as to how we can trade each and every situation.

Here I would like to share with you a couple of my tools and tricks for timing short term stock market bottoms. Over the years I have refined my analysis to just a handful of tools and analysis that work consistently for me. I have also learned that I trade and analyze the markets best if I don’t read other people’s opinions and analysis as it has a way of altering my thinking and thus I start to second guess where the market is headed.

The indicators/tools I prefer are the 20-day simple moving average for trend direction, support and resistance levels. I watch the Bollinger bands during times when they pinch/narrow as that is when the price is likely to explode in either direction. Also, I watch two volume ratios of the NYSE which you will see on two of the charts below. This indicator tells me when the majority of market participants are running to buy more shares or panicking and hitting the sell button. The 30 minute and 3-minute charts are my favorite for trading and identifying chart patterns.

 

Last week of July – first week of Aug VES Signals

VES is a special indicator I have been developing to help identify intraday oversold levels and overbought levels. The level which big money steps back into, or out of the market when these extreme levels are reached.

Notice in the chart below the lime green areas which price reversed from for quick and steady returns.

Intraday-bottoms-recent

 

Last Week’s VES Extreme Levels Signaled Including Overbought

Here you will see the both extreme overbought and oversold levels on the chart. I didn’t highlight it on the chart but take a look at Aug 11th. You will notice the red NYSE indicator at the top moved above the blue threshold line indicating everyone was buying. This happened again on the 15th. The general rule is, when everyone is doing the same thing, you best take the other side of the trade.

VES-1

 

 

Monday, Aug 22nd – This Weeks VES Signal

What you want to look at on this chart is Monday, Aug 22nd. This is something I can see unfolding before it happens based on other market characteristics and I notified subscribers of my ETF trading newsletter about this during pre-market trading and for them to expect an extreme pivot low today in the morning.

VES-Reversal

 

Concluding Thoughts:

In short, these trade may look little at first glance only being a fraction of a percent move each signal. But keep in mind, the shorter the time frame you trade, and the more accurate a trade setup is, the more capital you can put at risk.

My focus on these trade setups are 3x ETFs or better yet ES mini futures contracts. With one futures contract these 5 – 20 point moves allow you to pocket $250 – $1000 within a few hours in most cases.

Trade with me at: www.TheGoldAndOilGuy.com

Chris Vermeulen

China Announces New Loan In International Reserve Asset…Which May Affect Gold Price

The People’s Bank of China (PBOC) has received approval from the World Bank allowing its’ issuance of bonds which are denominated in Special Drawing Rights (SDRs). The World Bank is the first entity to approve of it and consequently marks the launch of the SDR bond market of the worlds’ second-largest economy.

Jim Yong Kim, The World Bank Group President, said “this is a landmark development for China’s bond market and for the SDR as an international reserve asset. We are very pleased to support China’s growing role in global financial markets. World Bank issuance of SDR bonds in China will support the G-20’s objective of expanding the use of SDRs and help promote the development of China’s domestic capital market. It will also increase Chinese investors’ access to foreign currencies in the domestic bond market, while opening up new opportunities for international investors seeking high-quality investment products in the country.”

This new bond issuance is 2 billion SDRs which is equivalent to $2.8 billion. The bonds will be denominated in SDRs and payable in Chinese renminbi (RMB). The precise timing of issue and individual bond terms will be based on favorable market conditions, at the time of issuance.

The World Bank approval of China, as being the first issuer of SDR-denominated bonds, is a further step in the “internationalization” of the Chinese capital markets. It shows the vital role of the World Bank and how it assists in opening new markets as well as developing local capital markets. The World Bank SDR-denominated bonds in the Chinese market are a fantastic opportunity for Chinese investors to support the World Bank’s sustainable development activities via a new product. These bonds will also be attractive to international investors who are seeking SDR products to hedge SDR liabilities.

The World Bank raises $50-$60 billion, in the international capital markets, each year. The new SDR program in China is part of the World Banks’ strategy to open and support the development of new markets and will therefore expand World Banks’ product offerings which attract new domestic and international investors to World Bank bonds.

Officially, as of October 1st, 2016, the new mix of the SDR will include the Yuan. It now joins the dollar, euro, pound and yen in an exclusive club of currencies that have special drawing rights. The yuan will be weighted at 10.92%. This is the first change in the SDR basket since 1999.   In the past, the IMF rejected the yuan in 2010.

 

For many in the markets, this has been the year of the yuan. When China suddenly devalued its’ currency, earlier this year, it sent the global markets into a tailspin.  Currently, the yuan is depreciating even further since traders believe that the Chinese government will step down from its’ intervention in the currency. Being included in the exclusive club is a sign that the currency has ‘grown up’, in a manner of speaking.

This story began in 2009 with the global financial crisis. The People’s Bank of China said that the economic shocks were due to the financial system being overly reliant on a single currency – the US dollar. It has been pushing for inclusion, ever since.

But what effect will this have on both the Chinese economy and other currencies in the basket? The Euro, for example, will surely be affected by this decision. The currency shared by 19 nations within the Eurozone has had a terrible decade and now it appears that things could get worse.

Check this out: This One Bank Could Take Down Entire Countries Overnight

When it comes to this special basket, the weighting of the currency is the most important aspect. If a new currency is introduced, then all of the others have to give up their share. Therefore, the yuan will be weighted at 10.97%, which means that the share of the euro will drop from 37.4% to 30.93%.

As for China, this announcement is nothing but good news. This move by the IMF is more than just ‘symbolic’. Being counted as a reserve currency mainly means that the government has taken the right steps to free up its’ economy. It has reined in intervention and has allowed the currency to be more ‘free’ within the international markets.

Central Banks, around the world, which hold SDRs in reserve, have this new currency as an option to convert into. This means that a lot more Chinese bonds (maybe a trillion dollars’ worth) will now be able to find their way into the market.

Additionally, there is no indication that Central Banks have a lot of demand for the Yuan. This decision gives them the option to convert into the currency, but whether or not they will is a question yet to be answered. The US dollar is still the worlds’ reserve currency.

I question how the SDR will maintain any value if all of its’ underlying currencies, that it has been composed of, have become worthless.

If this is what does occur, then they will be forced to back these fiat currencies with a tangible asset in order to accept this standard. The only money that has lasted for over 5,000 years is gold. I would not be surprised to see a new gold standard set in some way, but that is still a long way away and some serious catastrophes have to happen first.

 

With that said, the markets tend to move before major events happen, so as things worsen globally, it only makes sense for precious metals (physical currency) to strengthen over time.

There are several big moves likely to happen in the coming month from indices, commodities, currencies and bonds. If you want to be positioned to profit from these next major moves be sure you join my premium newsletter at www.TheGoldAndOilGuy.com

Chris Vermeulen