The market is EXTREMELY oversold and is not yet in the Trending Mode!  Therefore, with NO CONFIRMED Trend and oversold momentum oscillators, the market should bounce back, early this week.  The SPX was in a Bollinger Band Squeeze for 5-6 weeks, but finally broke down, last Friday, September 9^th, 2016.  Every asset class was down.  This is NOT “buy the bounce” situation.

In the medium term, there should be a sizeable decline.

I would not use this bounce back, if one does occur, to establish new long positions.  I must view any bounce back, that may occur, as an opportunity to get out of stocks and prepare to go short.  The markets’ decline could be a long way to the downside.

However, the Expanding Top Pattern that the SPX has been forming for the past few months, suggests that it could easily test the 1810 area. That low is over 350 points from its’ current levels.

With a presidential election that is scheduled for November 8^th, 2016, it is difficult for me to believe that the Presidents’ “Plunge Protection Team” or the FED will not step in so as to keep the markets from experiencing a dramatic plunge, before the said election. After the election, anything is indeed possible!

Friday, September 9^th’s decline was mostly driven by fear of a potential interest rate increase occurring in September of 2016.  As GDP growth is at only 1.1%, I do not believe we will get a rate increase at the time of the next meeting. The FED realizes just how vulnerable the market is which is why there was talk of a rate increase, last Friday.  If they have learned anything, after Fridays’ decline, they will almost certainly keep silent, until after the election.

For the past few weeks, I have been speaking about how the upside potential for this market is limited and that the downside appears to be very profitable.  I still believe this to be true, regardless if the market does indeed bounce back, this week.

However, I would still be cautious about getting short, too soon, despite Fridays’ strong decline. Therefore, please be patient!

If the market does bounce back, this week, and the momentum oscillators become overbought, that is when I will start looking to put on a few shorts.

Over the next few days, I will carefully monitor the markets and keep a very close watch over them.  If I do start to establish short positions, I will do so at higher levels.

If you would like to know exactly what I am trading next follow me at www.TheGoldAndOilGuy.com

Chris Vermeulen

Awesome Week For Trading Price Spikes!

Subscribers just locked in another $450 on yesterday’s SpikeAlert for the SP500 Index!

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Wednesday’s Spike Target Hit:

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Deutsche Bank and Commerzbank are presently in the process of merger talks. The fact that these meetings are occurring is a signal that Germany’s banking troubles are indeed accelerating.

Deutsche Bank to Initiate the Next Financial Crisis – Click Here

They are desperately seeking ways to cut costs and improve profitability. These plans include restructuring and job cuts using highly unconventional measures. Last June (2016), Reuters cited anonymous sources as saying that Commerzbank was exploring the option of hoarding billions of euros in vaults as a way of avoiding paying a penalty to the European Central Bank, which is due because of negative interest rates.

Their main problems are derived mostly from both low and negative interest rates. These lenders are used to depending on interest rate margins for income, while offering some services to depositors at either low or no cost. Low interest rates have significantly eroded these banks’ abilities to make money. It has become difficult for German banks to give incentives to their customers to encourage customers to keep money in their financial institutions. These inefficiencies, and the intense competition within the German banking sector, have already led to serious financial difficulties. If one combines these factors with the new challenge of declining interest rates, what possible positive impact can they expect to incur?

Interestingly, rates are not just low within the context of American history, but they also happen to be at their lowest levels – ever – in over 5,000 years of civilization.

5,000 Years Of Interest Rates – Rates Lower Than 1930’s Depression Era

Deutsche Bank is not merely Germany’s biggest bank, but the political role that it plays in Germany is unique when compared to other countries. Deutsche Bank’s importance to Germany is many times greater than that of an investment bank like Lehman Brothers was to the U.S. in 2008. Deutsche Bank is technically a private bank, however, it is informally tied to the government and formally tied to most major German corporations. The bank’s fate will have an impact on all of Germany.

The Italian banking crisis is not only Italy’s problem!

Italy’s non-performing loan issues have now become common knowledge. Who will be forced into dealing with the repercussions of settling Italy’s impaired debt? That is a political question, and the answer depends, in large measure, on who holds Italian bank debt.

The U.S banks are not shielded from these European Continental banking problems. There is a substantial amount of uncertainty and risk.

The consequences of these failures pyramid the crisis due to the European Unions’ regulations. The European Central Bank (ECB) and the Central Banks of member countries cannot bail out failing banks by recapitalizing them. The bail-in strategy is, in theory, a mechanism for ensuring fair competition and stability within the financial sector across the Eurozone.

The bail-in process can potentially apply to any liabilities of the institution that are not backed by assets or collateral. The first 100,000 euros ($111,000) in deposits are protected in the sense that they cannot be seized, whereas, any money above that amount can be.

Germany insisted that the bail-in process should prevail.

The Bank for International Settlements stated that German banks are the second most exposed to Italy, after France, with a total exposure of $92.7 billion. Demand for gold has increased!

Italy’s ongoing banking crisis is presenting yet another threat to the stability of the ECB.

Commerzbank’s financial statements revealed that their Italian sovereign debt exposure was 10.8 billion euros ($12.1 billion).

Deutsche Bank’s net credit risk exposure to Italy is 13.3 billion euros as of the end of December 2015. Its gross position in Italy is 35.4 billion euros. Deutsche Bank is sitting on $41.9 trillion worth of derivatives.

Consequences of large bank failures are going to be significant.

Gold Is The Only Safe Haven Left In The World

Gold has remained as a form of currency for many centuries. Whenever countries followed a strict gold standard and used it as their currency, those economies were very stable. But, governments have always surpassed their means with their costly spending and have to leave their gold standard so as to fund their inefficiencies. Currently, gold is now beginning its’ multi-year “BULL MARKET”. Gold is the only asset class which will maintain its store of value during the impending crisis which is on the near horizon. The gold mania is about to be unleashed. While global central banks are now implementing negative interest rates, this is the perfect scenario for gold to surge much higher.

Gold does have historical store of value characteristics. It is held by central banks and institutions as a reserve. They do not want to sell it; on the contrary, many of them want to buy still more and accumulate it. Therefore, gold’s characteristic role, with regard to sovereign reserves, is still intact, even amid the fascinating evolution of central banking and institutional finance that we are witness to today.

This week I shared a detailed video for my newsletter subscribers talking about the big picture trends and price targets for gold, silver, mining stocks, oil, natural gas, the S&P 500 index, coffee, and sugar. We have some huge opportunities unfolding on the monthly charts. If you are looking for some easy, big trading opportunities, then follow my analysis and trades at: www.TheGoldAndOilGuy.com

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.

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