Showing posts with label forecast. Show all posts
Showing posts with label forecast. Show all posts

Thursday, December 24, 2015

Closed Another Winning Trade And New Forecast

Our trading partner Chris Vermeulen just sent over an email detailing his last trade of this holiday shortened week. Make sure to sign up for Chris' holiday special.....
Yesterday December 23rd we closed out a nice winning trade in XLE energy sector. If you have not yet closed the trade can should do so today and will locking an even larger gain of 4-5% return in only three days. The stock market closes early today at 1 pm ET. Today volume will be light and its not worth sitting around watching or trying to trade in my opinion. The best trade for today is to spend quality time with your family and friends.
Attached are couple charts that show where the market is currently trading with my short term analysis and why XLE position was closed yesterday. The market is primed for a sharp correction which may start Monday and if possible, we will take action, but volume will likely remain light for the rest of the year and first couple days of January, so the top may drag out a few more days. Let’s wait for a technical breakdown first before buying inverse ETFs.
overbought 1
Overbought3
overbought2

I would like to thank all my followers and subscribers for their support and kind words throughout the year. It has been an extremely difficult market to trade with the broad market trading in a Stage 3 Distribution pattern. Hedge funds, mutual funds and those who hold individual stocks in their portfolio are all down sharply for reasons I have explained and warned about all year.

Early in 2015 I published a short book talking about how the US stock market was showing significant signs of a topping along with many timing cycles and events that were also unfolding and pointed to a new bear market that will likely last through 2016 and into 2017. Thus far, everything has unfolded as expected and once this Stage 3 Distribution pattern breaks down a new bear market will have confirmed and all kinds of huge trades will start to unfold. It will be a VERY DIFFERENT year than 2014 and 2015.
Chris Vermeulen – www.The Gold & Oil Guy.com

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Saturday, May 9, 2015

Mike Seerys Weekly Crude Oil, Gold, Coffee and Corn Markets Recap

Our trading partner Michael Seery is back this week to give our readers a weekly recap of the futures market. Mike has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil futures in the June contract are trading below their 20 and 100 day moving average as I have been sitting on the sidelines for the last several months in this market but if have a long futures position I would continue place your stop loss above the 10 day low which stands at 56.00 however in my opinion I think prices have topped out.

Strong demand and a very weak U.S dollar have pushed crude oil prices up from a contract low around $46 a barrel to around $63 in Wednesdays trade which has been a remarkable rally in my opinion but I think this market is overextended so I’m still going to remain sitting on the sidelines waiting for better chart structure to develop as this market will remain volatile for the rest of 2015 in my opinion giving you many trading opportunities.

Many of the commodity markets rallied in recent weeks as the U.S dollar is hitting a 3 month low which has been very supportive, however with record supplies overhanging that should keep a lid on prices at this point in time but I just don’t know where short term prices are headed so I’m looking at other markets that are beginning to trend.
Trend: Higher
Chart Structure: Solid

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Gold futures settled last Friday at 1,174 an ounce while currently trading at 1,185 in a relatively quiet trading week while still trading below its 20 and 100 day moving average continuing its lower to choppy trend as the true breakout does not occur on the upside until 1,225 is broken or on the downside at 1,170 as I remain neutral at the current time.

The chart structure is starting to improve as gold prices have gone sideways for the last six weeks consolidating the recent down move as the U.S dollar is hitting a three month low and has been supporting gold and silver in recent weeks so be patient and keep an eye on this market at the current time. The monthly unemployment came out strong stating that the unemployment rate is 5.4% sending the stock market sharply higher as I’m surprised that gold futures are not lower this afternoon as the interest rates in the United States have been on the rise sending volatility into the commodity markets as I still see no reason to own gold at the current time but currently this market is stuck in a consolidation and in my opinion it’s very difficult to make money when a trend is not in sight.
Trend: Mixed
Chart Structure: Improving

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Coffee futures in the July contract are higher by 300 points this Friday afternoon currently trading at 134.70 a pound after settling last Friday at 134.20 in a very nonvolatile trading week. I have been recommending a short position when prices broke 135 in last week’s trade and if you took that recommendation place your stop loss above the 10 day high which currently stands at 144 risking around 1000 points or $3,800 per contract plus slippage and commission.

The chart structure will improve dramatically next week helping lower monetary risk as prices are still trading below their 20 and 100 day moving average telling you that the trend is to the downside as big production could come out of Brazil which could send prices in my opinion as low as 100 a pound as the Brazilian Real has strengthened against the U.S dollar in recent weeks, but still remains in a long-term bear market which is negative for anything grown in Brazil.

The next level of support is Wednesdays low around 130 as many of the soft commodities were higher this Friday afternoon so continue to play this to the downside in my opinion as I think the risk/reward is in your favor.
Trend: Lower
Chart Structure: Excellent

This Chart Must Be Broken Before a Bear Market Can Be Confirmed

Corn futures in the December contract are trading below their 20 and 100 day moving average after settling last Friday in Chicago at 3.80 a bushel while currently trading at 3.79 down slightly for the trading week as 55% of the crop has already been planted with expectations for this Monday’s crop report as high as 85% as the weather in the Midwestern part of the United States is excellent and especially in the state of Illinois. I have been recommending a short position when corn prices broke 3.95 a bushel and if you took that trade place your stop loss above the 10 day high which currently stands at 3.87 risking around $.8 or $400 from today’s price level plus slippage and commission as the chart structure remains outstanding.

Expectations of this year’s crop are around 13.6 billion bushels which is 500 million bushels less than last year, however carry over levels are very large coupled with a strengthening dollar compared to last year as I still remain bearish especially as the weather remains ideal, however it’s an extremely long growing season as we usually do get some type of weather scare to the upside due to hot and dry weather forecasts, however the trend is your friend and the weather forecasts are bearish.

Traders await next week’s USDA crop report which definitely can send volatility back into this market but weather is the main focus at this time as we head into the hot and dry summer season which can send volatility into this market as we suffered a drought in 2012 sending prices to a record high of around $8.50 so make sure you place the proper amount of contracts while also placing the proper stop loss.
Trend: Lower
Chart Structure: Excellent

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Thursday, April 17, 2014

How to Momentum Trade Gold & Silver Stocks

Back on April 9th I posted a short tutorial on how to momentum trade gold along with my short term gold forecast.

Today I wanted to do a follow up video for my gold market traders for three reasons:


1. I had lots of great feedback from traders taking advantage of what I showed to profit in the past week.
2. To show you how and why this strategy works better with gold stocks and silver stocks.
3. To provide my short term gold forecast so you are on the right side of the market for next week.
4. Also you should see my major long term Gold Forecast



 

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See you in the markets!
Chris Vermeulen


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Wednesday, April 16, 2014

Gold Forecast – This Is Going To Be Exciting

Gold Forecast: During the past year there has been very little talk about gold, silver or gold stocks in the media. Yet the year before it was all the media could talk about and they even had the price of gold streaming live all day in the corner of the TV monitor.

I am always amazed how the masses and media can be so off in their timing of the stock market and commodities in general. For example when Greece was having issues in 2012 and everyone was avoiding investments in that country like it was the plague. Looking back now, Greece is up huge and only recently investors are confident enough to put money into the Greek stock market again.

But the truth is that big move has already happend, and the US and global markets are in rotation (changing trends). Money is slowly shifting from what has been hot during the past year or two, to new investments which have a lot more room to rise in value. And this is leads us back to my gold forecast.

If you are at all familiar with Stan Weinstein’s work, then you understand the four market stages. If not, you can learn these four stages on my Stan Weinstein page. Through stage analysis we can predict the type of price action we should expected and have a rough idea just how long a move (new trend) is likely to last. It is important to know that Stan Weinstein’s stage analysis works on any time frame from a one minute chart to a monthly chart. If you do not know this then you are trading almost blind without a doubt.

Current stage analysis looks as though the US stock market may be starting to form a stage three top. There are several indicators and market behaviors which are screaming, telling us to trade with caution to the long side. But the masses do not see this or hear what is unfolding in front of their very own eyes, and that I fine. It actually reminds me of a funny old movie called “hear no evil, see no evil”.

In short, the market is showing some signs of distribution selling in stocks, and the once market leaders are now getting completely crushed with heavy selling volume like the biotech stocks, social media stocks and other momentum stocks and this is bad.

Gold on the other had has been forming a stage one basing pattern. This provides a very bullish long term gold forecast that investors could ride for several years.

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Q: Where Will Investment Capital Go During The Next Bear Market In stocks?

 

A: One of the places will be precious metals. Click here for my gold forecast which shows the main reason why

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Gold Forecast Coles Notes:

 

1. The U.S. dollar index has setup a massive stage 3 topping pattern on the weekly chart. A falling dollar will send the price of gold higher naturally.

2. Bullish gold forecasts by the media have dropped substantially, meaning everyone is bearish on gold.

3. Gold stocks are already showing signs of massive accumulation. I always use the price and volume action of gold stocks to help create and time my gold forecasts which it starting to look bullish.

Gold Forecast Conclusion:

 

Gold market traders should understand that precious metals in general are still months away from breaking out to the upside and starting a new bull market. Do not be in a rush to buy gold or gold stocks yet. There will be plenty of time folks.

See you in the markets!
Chris Vermeulen 

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Wednesday, February 19, 2014

99 Problems… And Crude Oil Ain’t One of Them

By Marin Katusa, Chief Energy Investment Strategist

America has some serious problems.


Despite the fact that the United States spends $15,171 per student—more than any other country in the world—American students consistently trail their foreign counterparts, ranking 23rd in science and 31st in math.

The US also spends more than twice as much on health care per capita than the average developed country, yet underperforms most of the developed world in infant mortality and life expectancy. The U.S. rate of premature births, for example, resembles that of sub-Saharan Africa, rather than a First World country. And if you think Obamacare is going to change that… I have a bridge to sell you.

K Street has a bigger influence on American politics now than Main Street, and economic key players like the TBTF banks, the insurance industry, etc., have nearly carte blanche to act in whichever way they see fit, with no negative consequences.

The US government is spending more money to spy on Americans and foreigners than ever before. Since August 2011, the NSA has recorded 1.8 billion phone calls per day (!)—with the goal of creating a metadata repository capable of taking in 20 billion "record events" daily.

More than one in seven Americans are on the Supplemental Nutrition Assistance Program (SNAP)—better known as "food stamps."

The list goes on and on.

But there is one problem that America doesn't have......getting oil out of the ground.

After decades of declining domestic production, U.S. producers finally figured out how to extract oil from difficult locations, whether that's the shale formations or deposits under thousands of feet of water… and they've kept going ever since.

Today, the U.S. is one of the few countries in the world that have seen double digit growth in oil production over the past five years.


This presents some great investment opportunities for the discerning investor.

The oil industry's new treasure trove, the legendary Bakken formation, has turned formerly sleepy North Dakota into one of the hottest places in the United States. According to the Minneapolis Fed, "the Bakken oil boom is five times larger than the oil boom in the 1980s."

Unemployment in the state with 2.7% is the lowest in the nation; in Dickinson, ND, even the local McDonald's offers a $300 signing bonus to new hires, on top of an hourly wage of $15.
Here are some more fun facts, courtesy of the Fiscal Times:

  • There are now an estimated 40,856 oil industry jobs in North Dakota, plus an additional 18,000 jobs supporting the industry. Between 2010 and 2012, Williston, ND, a town with a population of only 16,000, produced 14,000 new jobs.
  • While other US states are struggling, some even being close to bankruptcy, North Dakota now has a billion-dollar budget surplus.
  • The number of ND taxpayers reporting income of more than $1 million nearly tripled between 2005 and 2011—and that in a state with a total population of 700,000.
  • The low population numbers will soon be a thing of the past, though: the population in the oil-producing region is expected to climb over 50% in the next 20 years.
  • 2,000-3,000 new housing units are built every year in Williston, ND, but it's still not enough to fill the need. Rents have gone from a pre-boom $350 per month for a two-bedroom apartment to over $2,000 today… the equivalent of a studio apartment in New York's rich Upper East Side.
The entire "energy map" of the United States has been altered by the Bakken: the Midwest, rather than the Gulf, is now the go-to area.

And who profits the most? The pipeline companies that can quickly adapt to this new situation and the refinery companies that can use this readily available domestic oil.

Though the rest of the world is trying to catch up, the United States has a huge head start over everyone else. The advancements it holds in hydraulic fracturing and horizontal drilling had been built on the back of one and a half centuries of oil and gas exploration and the thousands of firms that service the drillers and producers.

So far, other countries simply lack the experience and the infrastructure to even compete.

In fact, American companies have spent 50% more money on energy research and development (R&D) than companies anywhere else in the world. What's more, they are exporting this technology across the globe, enabling other countries to unlock their own hydrocarbon reserves.

Obviously, they're not doing this out of philanthropy; there is a lot of money to be made by licensing out their technology and "lending a helping hand."

The biggest winners, hands down, are the energy-service companies that already know how to get oil out of US fields… and that apply these methods to other fields worldwide to boost production and reduce decline rates.

As the easy-to-extract oil depletes in the U.S. and abroad, oil companies and governments are beginning to look at past-producing oil fields. As it turns out, the producing wells drilled in the 1970s and '80s weren't very good at getting every drop of oil out of the ground. With modern technology, however, it is now possible to access previously out-of-reach deposits. Even a mere 5% or 10% improvement in oil recovery rates means billions, if not trillions, more in revenues.

Rediscovering previously overlooked fields was what started the boom in the Bakken as well as the Eagle Ford formations… and other countries are beginning to catch on.

We believe that this new trend of applying new technologies to old oil fields is not a fad but here to stay. That's why our energy portfolios are stocked with companies doing just that in Europe, Oceania, and even South America.

As it's becoming clear that the era of cheap, light, sweet crude is nearing its end, the industry is adapting to this new reality of oil becoming more difficult to access. And if investors want to make profits in today's energy markets, they, too, must learn to adapt.

Read our 2014 Energy Forecast for more details on what's hot and what's not in this year's energy markets. This free special report tells you about the 3 sectors we are most bullish on for this year, and which sectors to avoid in 2014. Read it now.


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Monday, January 13, 2014

Forecast 2014: The Killer D’s

By John Mauldin


It seems I'm in a constant dialogue about the markets and the economy everywhere I go. Comes with the territory. Everyone wants to have some idea of what the future holds and how they can shape their own personal version of the future within the Big Picture. This weekly letter is a large part of that dialogue, and it's one that I get to share directly with you. Last week we started a conversation looking at what I think is the most positive and dynamic aspect of our collective future: The Human Transformation Revolution. By that term I mean the age of accelerating change in all manner of technologies and services that is unfolding before us. It is truly exhilarating to contemplate. Combine that revolution with the growing demand for a middle class lifestyle in the emerging world, and you get a powerful engine for growth. In a simpler world we could just focus on those positives and ignore the fumbling of governments and central banks. Alas, the world is too complex for that.

We'll continue our three part 2014 forecast series this week by looking at the significant economic macrotrends that have to be understood, as always, as the context for any short term forecast. These are the forces that are going to inexorably shift and shape our portfolios and businesses. Each of the nine macrotrends I'll mention deserves its own book (and I've written books about two of them and numerous letters on most of them), but we'll pause to gaze briefly at each as we scan the horizon.

The Killer D's
The first five of our nine macro-forces can be called the Killer D's: Demographics, Deficit, Debt, Deleveraging, and Deflation. And while I will talk about them separately, I am really talking threads that are part of a tapestry. At times it will be difficult to say where one thread ends and the others begin.

Demographics – An Upside Down World
One of the most basic human drives is the desire to live longer. And there is a school of economics that points out that increased human lifespans is one of the most basic and positive outcomes of economic growth. I occasionally get into an intense conversation in which someone decries the costs of the older generation refusing to shuffle off this mortal coil. Typically, this discussion ensues after I have commented that we are all going to live much longer lives than we once expected due to the biotechnological revolution. Their protests sometimes make me smile and suggest that if they are really worried about the situation, they can volunteer to die early. So far I haven't had any takers.

Most people would agree that growth of the economy is good. It is the driver of our financial returns. But older people spend less money and produce far less than younger, more active generations do. Until recently this dynamic has not been a problem, because there were far more young people in the world than there were old. But the balance has been shifting for the last few decades, especially in Japan and Europe.

An aging population is almost by definition deflationary. We can see the results in Japan. An aging, conservative population spends less. An interesting story in the European Wall Street Journal this week discusses the significant amount of cash that aging Japanese horde. In Japan there is almost three times as much cash in circulation, per person, as there is in the US. Though Japan is a country where you can buy a soft drink by swiping your cell phone over a vending machine data pad, the amount of cash in circulation is rising every year, and there are actually proposals to tax cash so as to force it back into circulation.

A skeptic might note that 38% of Japanese transactions are in cash and as such might be difficult to tax. But I'm sure that Japanese businesses report all of their cash income and pay their full share of taxes, unlike their American and European counterparts.

Sidebar: It is sometimes difficult for those of us in the West to understand Japanese culture. This was made glaringly obvious to me recently when I watched the movie 47 Ronin. In the West we may think of Sparta or the Alamo when we think of legends involving heroic sacrifice. The Japanese think of the 47 Ronin. From Wikipedia:

The revenge of the Forty-seven Ronin (Shi-jū-shichi-shi, forty-seven samurai) took place in Japan at the start of the 18th century. One noted Japanese scholar described the tale, the most famous example of the samurai code of honor, bushidō, as the country's "national legend."
The story tells of a group of samurai who were left leaderless (becoming ronin) after their daimyo (feudal lord) Asano Naganori was compelled to commit seppuku (ritual suicide) for assaulting a court official named Kira Yoshinaka, whose title was Kōzuke no suke. The ronin avenged their master's honor by killing Kira, after waiting and planning for almost two years. In turn, the ronin were themselves obliged to commit seppuku for committing the crime of murder. With much embellishment, this true story was popularized in Japanese culture as emblematic of the loyalty, sacrifice, persistence, and honor that people should preserve in their daily lives. The popularity of the tale grew during the Meiji era of Japanese history, in which Japan underwent rapid modernization, and the legend became subsumed within discourses of national heritage and identity.

The point of my sidebar (aside from talking about cool guys with swords) is that, while Japan may be tottering, the strong social fabric of the country, woven from qualities like loyalty, sacrifice, and diligence, should keep us from being too quick to write Japan off.

"Old Europe" is not far behind Japan when it comes to demographic challenges, and the United States sees its population growing only because of immigration. Russia's population figures do not bode well for a country that wants to view itself as a superpower. Even Iran is no longer producing children at replacement rates. At 1.2 children per woman, Korea's birth rates are even lower than Japan's. Indeed, they are the lowest in the World Bank database.

A basic equation says that growth of GDP is equal to the rate of productivity growth times the rate of population growth. When you break it down, it is really the working-age population that matters. If one part of the equation, the size of the working-age population, is flat or falling, productivity must rise even faster to offset it. Frankly, developed nations are simply not seeing the rise in productivity that is needed.
As a practical matter, when you are evaluating a business as a potential investment, you need to understand whether its success is tied to the growth rate of the economy and the population it serves.

In our book Endgame Jonathan Tepper and I went to great lengths to describe the coming crisis in sovereign debt, especially in Europe, which shortly began to play itself out. In the most simple terms, there can come a point when a sovereign government runs up against its ability to borrow money at reasonable rates. That point is different for every country. When a country reaches the Bang! moment, the market simply starts demanding higher rates, which sooner or later become unsustainable. Right up until the fateful moment, everyone says there is no problem and that the government in question will be able to control the situation.

If you or I have a debt issue, the solution is very simple: balance our family budget. But it is manifestly more difficult, politically and otherwise, for a major developed country to balance its budget than it is for your average household to do so. There are no easy answers. Cutting spending is a short-term drag on the economy and is unpopular with those who lose their government funding. Raising taxes is both a short term and a long-term drag on the economy.

The best way to get out of debt is to simply hold spending nominally flat and eventually grow your way out of the deficit, as the United States did in the 1990s. Who knew that 15 years later we would be nostalgic for Clinton and Gingrich? But governments almost never take that course, and eventually there is a crisis. As we will see in a moment, Japan elected to deal with its deficit and debt issues by monetizing the debt.

Meanwhile, in Europe, the ECB had to step in to save Italy and Spain; Greece, Ireland, and Portugal were forced into serious austerities; and Cyprus was just plain kicked over the side of the boat.



There is currently a lull in the level of concern about government debt, but given that most developed countries have not yet gotten their houses in order, this is a temporary condition. Debt will rear its ugly head again in the not too distant future. This year? Next year? 2016? Always we pray the prayer of St. Augustine: "Lord, make me chaste, but not today."

Deleveraging and Deflation – They Are Just No Fun
At some point, when you have accumulated too much debt, you just have to deal with it. My associate Worth Wray forwarded the following chart to me today. There is no better explanation as to why the current recovery is the weakest in recent history. Deleveraging is a b*tch. It is absolutely no fun. Looking at this chart, I find it rather remarkable and somewhat encouraging that the US has done as well as it has the past few years.



As I've outlined at length in other letters and in Code Red, central banks can print far more money than any of us can imagine during periods of deleveraging and deflation. For the record, I said the same thing back in 2010 when certain hysterical types were predicting hyperinflation and the end of the dollar due to the quantitative easing of the Federal Reserve. I remain actively opposed to the current level of quantitative easing, not because I'm worried about hyperinflation but for other reasons I have discussed in past letters. As long as the velocity of money keeps falling, central banks will be able to print more money than we would have thought possible in the '70s or '80s. And seemingly they can get away with it – in the short term. Of course, payback is a b*tch. When the velocity of money begins to rise again for whatever unknown reason, central banks had better have their ducks in a row!

Deflationary conditions make debt worse. If you borrow money at a fixed rate, a little inflation – or even a lot of inflation – helps a great deal. To think that even conservative Republican leaders don't get that is naïve. Certainly it is understood in Japan, which is why the success of Abenomics is dependent upon producing inflation. More on that below.

For governments, there is more than one way to deleverage. You can default on your payments, like Greece. We're going to see a lot more of that in the next five years – count on it. Or you can get your central bank to monetize the debt, as Japan is doing. Or get the central bank to convert your debt into 40-year bonds, as Ireland did. (Brilliant move, by the way, for tiny Ireland – you have to stand back and applaud the audacity. I wonder how much good Irish whiskey it took to get the ECB to agree to that deal?)

Inflation is falling almost everywhere today, even as central banks are as accommodative as they have ever been. Deflation is the default condition in a deleveraging world. It can even create an economic singularity.
Singularity was originally just a mathematical term for a point at which an equation has no solution. Then, in astrophysics, it was proven that a large enough collapsing star would become a black hole so dense that its own gravity would cause a singularity in the fabric of space time, a point where many standard physics equations suddenly have no solution.

Beyond the "event horizon" of the black hole, the physics models no longer work. In terms of general relativity, an event horizon is a boundary in space time beyond which events cannot affect an outside observer. In a black hole it is "the point of no return," i.e., the point at which the gravitational force becomes so large that nothing can escape.

Deflation and collapsing debt can create their own sort of black hole, an economic singularity. At that point, the economic models that we have grown comfortable with no longer work. As we approach a potential event horizon in a deflationary/deleveraging world, it can be a meaningless (and extremely frustrating) exercise to try to picture a future that is a simple extension of past economic reality. Any short term forecast (less than one or two years) has to bear that fact in mind.

We Are in a Code Red World
We need to understand that there has been a complete bureaucratic and academic capture of central banks. They are all run by neo-Keynesians. (Yes, I know there are some central bankers who disavow the prevailing paradigm, but they don't have the votes.) The default response of any present day central banker faced with a crisis will be massive liquidity injections. We can argue with the tide, but we need to recognize that it is coming in.

When there is a recession and interest rates are at or close to the zero bound, there will be massive quantitative easing and other, even more creative injections of liquidity into the system. That is a reality we have learned to count on and to factor into our projections of future economic possibilities. But as to what set of econometric equations we should employ in coming up with accurate, dependable projections, no one, least of all central bankers, has a clue. We are in unknown territory, on an economic Star Trek, with Captain Bernanke about to turn the helm over to Captain Yellen, going where no reserve currency printing central bank has gone before. This is not Argentina or Zimbabwe we are talking about. The Federal Reserve is setting its course based on economic theories created by people whose models are demonstrably terrible.

Will we have an outright recession in the US this year? I currently think that is unlikely unless there is some kind of external shock. But short term interest rates will stay artificially low due to financial repression by the Fed, and there will be an increased risk of further monetary creativity from a Yellen led Fed going forward. Stay tuned.
 
To continue reading this article from Thoughts from the Frontline – a free weekly publication by John Mauldin, renowned financial expert, best-selling author, and Chairman of Mauldin Economics – please click here.
© 2013 Mauldin Economics. All Rights Reserved.


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Wednesday, November 27, 2013

Elliott Wave Forecast: Bull Market Nearing Interim Peak on SP500

Back on September 12th with the SP 500 at 1689 we forecasted a run in the SP 500 to 1829, a very specific number. We use Elliott Wave Theory and Analysis in part to come up with projected pivots for the SP 500 and this was our projection.

Elliott Wave Analysis is based largely on Human Behavioral patterns that repeat over and over again throughout time. It’s really crowd behavior or herd mentality as applied to the broader stock markets. This can also apply to individual stocks, precious metals and more. At the end of the day, an individual stock is worth what investors believe it is worth, and it won’t necessarily reflect what a private valuation may accord it.

With that in mind, the stock market as a basket of 500 stocks can pretty easily be patterned out and then we can apply our Elliott Wave Theory to that pattern and predict outcomes. Back in mid-September, we believed we were in a 3rd wave up of the bull market as part of what we call Primary wave 3. The primary waves are 1-5 and Primary 3 is usually the most bullish of the 5 primary waves with 2 and 4 being corrective. Well, within Primary wave 3 you have 5 major waves… and we projected that Major wave 3 would be running to about 1829.

This projection was based on the 1267 pivot for Major wave 2 of Primary Wave Pattern 3 which was a corrective wave. We then simply applied a Fibonacci ratio to the Major wave 1 and assumed that Major wave 3 would be 161% of Major 1. That brings us to about 1822-1829… and here we are a few months later heading into Thanksgiving with the SP 500 hitting 1807 and getting close to our projection.

What will happen afterwards should be a Major wave 4 correction. We expect this to be about 130 points on the shallow side of corrections, and as much as 212 points.

So the Bull Market is not over, but Major Wave Pattern 3 of Primary 3 is coming to an end as we are in a seasonally strong period for the market. We would not be shocked to see a strong January 2014 correction in the markets as part of Major wave 4.

Here is our September 14th elliott wave forecast chart we sent to our subscribers and you can see we continue now along the same path.....Read "Elliott Wave Forecast: Bull Market Nearing Interim Peak on SP500"


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Wednesday, August 28, 2013

Precious Metals & Miners Flash Short-Sell Signal

It has been a bumpy ride for precious metal investors over the past couple of years and unfortunately we do not think its over just yet. But we feel fortunate to have our trading partner Chris Vermeulen on our team walking us through this.

Today Chris is telling us that the good news is that the bottom has likely been put in for gold, silver and gold miners BUT the recent rally in these metals and miner looks to be coming to an end. While we could see another pop in price over the next week or so the price, volume and momentum seem to be stalling out.

What does this mean? It means we should expect short term weakness and lower prices over the next month or two.

Here are three charts Chris posted several months. Their forecast were based off simple technical analysis using cycles, Fibonacci and price patterns. As you can see we are not trading at our key pivot level which we expect selling pressure to start to increase and eventually overpower the buyers sending the prices lower.....Click here to see Chris' complete chart work and article.



Tuesday, July 3, 2012

Gold still at risk of a large downward move before the rally

Gold has been busy consolidating in what I believe will be a 13 Fibonacci month Primary wave 4 correction. The Gold bull market I’ve been following since 2001 is a likely 13 year bull cycle that will end in 2013 or 2014 depending on how you count. This current correction pattern is working off a 34 Fibonacci month rally that took Gold from 681 to 1923 at its ultimate highs. Last fall I warned about the parabolic run likely ending in the 1908 ranges and for investors to position themselves accordingly.

Today we have Gold trading around 1600 and our recent forecast in May was for a rally into Mid June topping around 1620-1650 ranges in US Dollars. The intermediate forecast still calls for a possible drop to 1445-1455 ranges this summer, the same figures I gave out on TheStreet.Com interview last September for a Primary wave 4 low.....Read the entire article and charts.


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Thursday, June 28, 2012

Annual Energy Outlook 2012.....Three Cases for the Future of World Oil Prices

The Annual Energy Outlook 2012 (AEO2012) presents three alternative paths for world oil prices based on different production and economic assumptions. Among these cases, the real (constant 2010 dollars) oil price in 2035 ranges from $62 per barrel in the Low Oil Price case to $200 per barrel in the High Oil Price case, with the Reference case at $145 per barrel.

The oil price in AEO2012 is defined as the average price of light, low-sulfur crude oil delivered to Cushing, Oklahoma, which is similar to the price for light, sweet crude oil traded on the New York Mercantile Exchange (West Texas Intermediate, or WTI).

graph of Average annual world oil prices in three cases, as described in the article text

Factors considered in AEO2012 that affect supply, demand, and prices for petroleum in the long term are:

* World demand for petroleum and other liquids

* Organization of the Petroleum Exporting Countries (OPEC) investment and production decisions

* The economics of non OPEC petroleum supply

* The economics of other liquids supply

The Reference case of AEO2012 indicates a short term increase in oil price, returning to price parity with the Brent oil price by 2016, as current constraints on pipeline capacity between Cushing and the Gulf of Mexico are moderated.

The Low Oil Price case results in a projected oil price of $62 per barrel in 2035. The Low Oil Price case assumes that economic growth and demand for petroleum and other liquids in developing economies (which account for nearly all of the projected growth in world oil consumption in the Reference case) is reduced.

Specifically, the annual gross domestic product (GDP) growth for the world, excluding the mature market economies that are members of the Organization for Economic Cooperation and Development (OECD), is assumed to be 1.5 percentage points lower than that of the Reference case in 2035 (only a 3.5% annual increase from 2010 to 2035), which reduces their projected oil consumption in 2035 by 8 million barrels from the Reference case projection.

While non OECD oil consumption is more responsive to lower economic growth than to prices, oil use in the OECD region increases modestly in the Low Oil Price case. In this lower price case, the market power of OPEC producers is weakened, and they lose the ability to control prices and to limit production.

In contrast, the High Oil Price case assumes prices rise to $186 per barrel by 2017 (in 2010 dollars) and then increase to $200 per barrel by 2035. These higher prices result from higher demand for petroleum and other liquid fuels in non OECD regions than projected for the Reference case. In particular, the projected GDP growth rates for China and India are 1.0 percentage point higher in 2012 and 0.3 points higher in 2035 than the rates in the Reference Case.

Overall, in 2035 it is projected that 4 million barrels per day will be produced above the Reference Case level, even though projected oil consumption in the mature, industrialized economies is reduced.

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Tuesday, February 14, 2012

EIA: Natural Gas and Renewable Shares of Electricity Generation to Grow

Over the next 25 years, natural gas and renewable fuels gain a larger share of the United States generating mix of electricity, according to the Annual Energy Outlook 2012 (AEO2012) early release reference case. Coal remains the dominant source of electricity, but its share drops from 45% in 2010 to 39% in 2035.

graph of U.S. electricity net generation by fuel, 1990-2035, as described in the article text


These results are from the AEO2012 Reference case, which assumes no changes in current laws and regulations. The full report will include additional cases measuring the impacts of alternative policies and different paths for prices and technologies on the electric power sector.
  • Annual generation from natural gas increases by 39% from 2010 to 2035. Eighty-five gigawatts of new gas capacity is added through 2035, as stable capital costs and low fuel prices make it the most attractive source of new capacity.
  • Renewable energy generation grows 33% from 2010 to 2035. Non-hydro renewables account for a majority of this growth, with wind, solar, biomass, and geothermal generation all significantly larger at the end of the projection horizon.
  • Coal's share of the electricity generation mix drops from 45% to 39% between 2010 and 2035. Thirty-three gigawatts of coal capacity are retired and only 14 gigawatts of new coal capacity already under construction are completed. A few factors disadvantage the relative economics of coal-fired capacity: projected low natural gas prices, the continued rise of new coal-fired plants' construction costs, and concerns over potential greenhouse gas emissions policies.
  • Annual generation from nuclear power plants grows by 11% from 2010 to 2035, but its share of the generation mix declines. A total of 10 gigawatts of new nuclear capacity are projected through 2035, as well as an increase of 7 gigawatts achieved from uprates to existing nuclear units. About 6 gigawatts of existing nuclear capacity are retired, primarily in the last few years of the projection.

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Friday, November 11, 2011

Phil Flynn: The Great Energy Divide

There is a growing gap is this country between the haves and have nots. This is what I call the great energy divide. If you heat with natural gas you are the fortunate and if you heat with heating oil, well boy, you are in trouble. Once again heating oil soars as US supply is dangerously low and strong demand elsewhere around the globe is keeping our supply tight.

The good news is that as refiners ramp up production to meet heating oil demand, the beneficiary will be gasoline as supply should surge because demand is still weak. This of course opens up a host of spread opportunities whether you are talking about the " Widow Maker", heating oil versus gasoline spread or even the Brent versus WTI spread and the gasoline vs crack could fall while the heat vs crack could rise. The best part is that volatility, the mother's milk of the oil speculators, will continue to run high.

This of shortage has been building for weeks. We wrote about how the heat oil gasoline spread had widened. At the same time we have seen the gas crack tank and the Brent versus WTI spread come back in. At the same time US refiners expected strong demand for WTI crude is one of the reasons that this market may just kiss $100 a barrel. Heat oil is probably headed to above $3.20 so other than worrying about Italy's bond yields or whether the next Greek Prime Minister is going to be Papademos or Popinfresh, oil traders have to watch the supplies of distillates closely as they are the tightest they have been in about four years.

Of course natural gas users are in heaven. While natural gas storage is down 0.2 percent from last year, record supply natural gas stocks should set a new record because of above average temperatures that are being forecast. The EIA said that the week ending Nov. 4, the country's natural gas stockpiles fell 6 billion cubic feet from last year at this time, coming in at 3,831 bcf and increased by a more than expected 37 bcf increase from last week. Stocks are now a whopping 215 bcf above the 5 year average.

Traders are going long heat short natural gas and nat gas prices for the strip are near historic lows for this time of year......Read the entire article.


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Monday, August 1, 2011

Gold and the QE3 Ship – Are Both About to Sail?


Back in Mid-May of this year we had a big rally in the Dollar and Gold was correcting hard. There was a bit of Dollar Bull hysteria at the time which I felt was quite unfounded. I wrote an article entitled, “The Dollar Bull Monkey Dance Will Soon End Badly, QE3 Next?” You see, the collective herd psychology at that time, just a short ten weeks ago, was that Gold would drop hard at the end of QE2, and The Dollar would of course rally as high as 82, maybe more against the weighted index.

The dollar has dropped hard since mid-May as I expected and Gold has continued to rally as well. I had forecasted $1627 for Gold back when we were under $1,500 and last Friday we closed at $1627 on the nose! During the mid May time, most disagreed with my QE3 forecast, and probably still do but I think the ships is soon leaving port. This could blast Gold up to a target of $1805 on the high end and certainly into the low 1700’s to the $1730 per ounce range.

Gold has had a powerful 5 wave rally (Elliott Wave Theory) since the October 2008 lows of $681 per ounce, and certainly one could argue that a correction would make sense fairly soon. However, the fundamentals for Gold are only getting stronger as we have inflation climbing at an 8-9% real rate and interest rates continuing to drop. This is creating a “negative” real interest rate environment amidst a continuing weaker US dollar. Hence it is hard fundamentally to argue against Gold at this time, creating difficulty in forecasting the intermediate highs and lows.

With that said, assuming QE3 or some form takes place soon then my $1805 target is quite likely to be hit before we can look for any meaningful correction in the precious metal complex. With the ISM manufacturing index turning down sharply as reported this morning and other economic indicators and GDP report rolling over, a QE3 ship horn is likely to sound soon. Below is my latest chart dated July 22nd with Gold at $1599 at the time, outlining the likely interim moves in Gold using my crowd behavioral methodology that I employ at my forecasting service.


The combination of crowd behavior and fundamental analysis often delivers stunningly accurate forecasts in advance on the SP 500, Gold and Silver at TMTF. Consider signing up for our regular updates and use our 72 hour coupon code at Market Trend Forecast


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Monday, November 29, 2010

Commodity Corner: Crude Oil Begins Week Much Higher

A weaker equities market and a stronger dollar failed to place downward pressure on crude oil Monday. Crude oil for January delivery gained $1.97 to settle at $85.75 a barrel during a trading day influenced by factors ranging from oil products demand to the release of politically sensitive information attributed to U.S. State Department officials. In the latter case, ongoing fallout from the widespread leaks has heightened perceived geopolitical risks.

Exacerbating the geopolitical situation have been escalating tensions between North and South Korea as well as continued speculation about Europe's debt crises. Although the European Union approved a EUR85 billion bailout for Ireland over the weekend, there are fears that other heavily indebted countries such as Spain and Portugal will be next in line for massive financial aid packages. In addition, tightening inventories of gasoline contributed to oil's rally Monday. December gasoline ended the day seven cents higher at $2.28 a gallon

Oil traded within a range from $83.59 to $85.54. Gasoline, meanwhile, peaked at $2.29 and bottomed out at $2.21. Despite a chillier than normal forecast for the Northeast, January natural gas fell 19 cents to settle at $4.21 per thousand cubic feet. The natural gas futures price fluctuated from $4.17 to $4.49.

Posted courtesy of Rigzone.Com


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Friday, October 29, 2010

Total Profits Soar on Higher Oil, Refining

French oil company Total posted a 54 percent profit rise on Friday as higher oil and gas prices and strong refining margins lift industry earnings worldwide. Finnish refiner Neste Oil also reported improved profits after similarly strong performances from sector heavyweights Exxon Mobil and Shell on Thursday. Total said net income, excluding unrealized gains related to changes in the value of inventories, was 2.875 billion euros in the third quarter, boosted by gains from selling oil fields.

Stripping out one offs, the result was up 32 percent and in line with analysts' average forecasts. Neste said fatter refining margins lifted its operating profit, excluding inventory gains or losses, by 36 percent to 57 million euros ($79 million), in line with a mean forecast in a Reuters poll. The world's largest non government controlled oil company by market value, Dallas based ExxonMobil, reported a 55 percent jump in net income on Thursday, while industry No. 2, Royal Dutch Shell reported an 18 percent rise, which would have been higher but for non cash charges......Read the entire Reuters article.


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Thursday, September 9, 2010

EIA Cuts OPEC Oil Earnings Forecast $21 Billion in 2010, $16 in 2011

The US Energy Information Administration has slashed its forecast of oil producer club OPEC's oil export earnings by $21 billion this year and by $16 billion in 2011. The agency now sees OPEC earning $731 billion in 2010 compared with its previous forecast of $752 billion a month ago. For 2011, it is forecasting that OPEC will earn $805 billion compared with the $821 billion projected a month ago.

The EIA, statistics arm of the Department of Energy, bases its forecasts on price and production projections from its monthly Short Term Energy Outlook. The agency forecast on Wednesday in its latest STEO that the price of US West Texas Intermediate crude would average $77.37/barrel in 2010 and $82/b in 2011. In its previous Outlook, released in August, the EIA projected an average WTI price of $79.13/b in 2010 and $83.50/b in 2011.

At the same time, the EIA lowered its forecasts of OPEC crude production in both 2010 and 2011. It sees the 12 member group producing 29.37 million b/d this year, 110,000 b/d less than previously forecast, and 29.89 million b/d in 2011, 140,000 b/d less than previously forecast.
The EIA estimated OPEC's 2009 earnings at $571 billion. OPEC's Vienna secretariat said in its annual statistical bulletin in July that the group collectively earned $575.3 billion from crude exports in 2009, down 43% from $1.002 trillion in 2008.

From Platts .Com

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Wednesday, September 16, 2009

Oil Trades Near $72 After Supplies Drop to Lowest Since January


Oil traded near $72 a barrel in New York after the U.S. Energy Department reported that crude stockpiles in the biggest energy consuming nation dropped to the lowest level since January. Crude inventories fell 4.73 million barrels, the weekly report showed yesterday, more than the 2.5 million barrel decline forecast in a Bloomberg News analyst survey.

Prices also gained as the dollar declined to the weakest level in almost a year and as global equities advanced, spurring expectations of improving fuel demand.“The gains in equities support optimism for the economic recovery that would drive oil demand and lead to supply tightness,” said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore.....Read the entire article
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