Stocks & Equities

Seasonality Super Cycle: January Barometer In The 4th Year Of The Presidential Cycle

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Summary

The negative January closes on U.S. equity indexes is an ominous sign for 2016.

In addition, equities traditionally struggle in election years.

We created seasonal indicators which give high-probability glide paths for trading 2016.

…read more HERE

 

Financial expert Peter Schiff gives a gold update and says, “The price of gold is going to skyrocket, and it’s going to go up so much more than this because we are just getting started. What is really going to power the rise is not only are we going into a recession in the U.S., but it’s going to be an inflationary recession. When the dollar tanks, because the Fed doesn’t raise rates, then consumer prices are going to take off, and they’re going to rise so rapidly there is going to be no way the government is going to be able to hide them. . . . We are going to start to see inflation rates, annual inflation rates well north of the Fed’s 2% target level. They are not going to do anything to rein in inflation because it’s impossible. Gold is going to sense this. It’s going to smell blood. You’ve got a lot of people who are shorting the gold market. They are going to get crushed.”

On CNBC and his guest appearances, Schiff says, “CNBC used to have me on all the time before the 2008 financial crisis. Even though they thought I was saying all kinds of things they thought were crazy, they had me on just to be balanced. No one knew who I was, and I was saying all these outrageous things, but ever since all the outrageous things came true, they barely have me on—ever. I make their other guests look like fools. I make the announcers look like fools, and that’s the problem. . . .

You would think they would care about their audience, but I think they care more about their advertisers and their other guests that want to shill Wall Street products.”

Bull Rallies In Bear Markets

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In last week’s missives, I discussed the potential for an oversold, short-covering bounce which was to be used to further rebalance portfolios and reduce equity risk. The target zone was 1940 to allow for the completion of the “risk reduction” process.

“That rally could take the markets back to the previous resistance of 1940 (about a 4% push) from current levels. Such a rally would be enough to suck many of the “bulls” back into the markets pushing markets back into overbought territory and setting up the next decline.”

The good news is that the market was able to break above 1940, and the 50-dma, which now clears the way for a push to the 1970-1990 where the next levels of resistance will be found.

The bad news is that the markets are once again extremely overbought and still confined inside of an overall downtrend.

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This is ‘The Bubble’ which 2008 was ‘The Warm Up’!

… It is going to take longer to unfold then people think!

Japan’s NIRP announcement & the US$

Japan is at the forefront of the Keynesian central planning that has been in the markets for the past few decades. The federal reserve first went to ZIRP and launched quantitative easing in 2008. The European central bank went to ZIRP and they launched QE in 2015. The bank of Japan first went to ZIRP in 1999, in which they then launched quantitative easing in 2000. They’re much more experienced in seeing what these sorts of policies can accomplish.

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….read more HERE

 

It Has Begun!

The S&P 500 Index (chart below) shows a top in May 2015, a correction into August, and a deeper fall this month – February 2016.  Look out below.

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The Shanghai Composite Index looks grim.

….read more HERE