We have not had Chris Vermeulen on show for a number of weeks but he will be back next week to discuss in more depth his take on the Us markets, gold and oil. In the meantime here is a recent post on the US markets where, as you can tell from the title, Chris thinks the market is set up for a drop. In the second chart below Chris shows that the recent top put in by the S&P was significant.
There is clearly fear in the markets. All one has to do is look at the VIX to see that investors are taking insurance on their long bets. The divergence is that these investors who are betting on the VIX do not seem to be fleeing the market. Currently it is more of a hedge against their long bets. That can all change very quickly though and possibly the Brexit vote will be the kick in the pants.
Here is Chris’s take on it…
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.
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. If you want to be in tune with the markets and profit during chaos, then you should think about joining my morning daily video newsletter and ETF trade alerts service: www.TheGoldAndOilGuy.com