Why It Feels Like the Dot Com Bubble All Over Again

By Justin Spittler

Today, we’re going to do something different. As you can imagine, we hear from our readers a lot. Some of them have nice things to say. Others…not so much. Most importantly, though, we get a lot of questions. Last week, we received a question that was so important, we’re dedicating this entire issue to it. This question might be something you’re wondering yourself…and it could have a huge impact on your money.

It comes from Joseph J., a subscriber to The Casey Report:

I read today’s newsletter (Trump Should Be Careful What He Wishes For) with great interest. In it you stated that “U.S. stocks are incredibly expensive…” But my question is: Based against what? We are in uncharted territory, and every single newsletter writer that I have asked this question of has failed to provide an answer. Perhaps you will be different.

Thank you for putting us in the hot seat, Joseph. Lucky for us, we didn’t make this claim lightly. We have plenty of facts to back it up. Before we show you the proof, you have to realize something: There are many different ways to value stocks. Everyone has their preference. A lot of folks use the price-to-earnings (P/E) ratio. Other investors look at a company’s book value or cash flow.

We prefer to use the cyclically adjusted price-to-earnings (CAPE) ratio.…
This ratio is the cousin of the popular P/E ratio. The only difference is that it uses 10 years’ worth of earnings instead of just the previous year’s. This smooths out the up and downs of the business cycle. It gives us a long-term view of the market. Right now, the CAPE ratio for companies in the S&P 500 is 28.4. That’s 70% higher than its historical average. U.S. stocks haven’t been this expensive since the dot com bubble.

This isn’t a good sign. As you may remember, the S&P 500 fell 41% from 2000–2002. The Nasdaq plunged 78% over the same period.

But the CAPE ratio is just one way to value stocks.…
To prove we’re not cherry picking, let’s look at some other metrics. First up, the price-to-sales (P/S) ratio. This ratio is just like the P/E ratio, but it uses the previous year’s sales instead of earnings. According to credit rating agency Standard & Poor’s, the S&P 500 currently trades at 2.02 times sales. That’s 40% higher than its historical average, and the highest level since at least 2000. Clearly, U.S. stocks are more expensive than normal. But that’s not even the main reason investors are nervous about them.

U.S. stocks seem to have lost touch with reality.…
As we all know, the stock market allows investors to own a piece of publicly traded companies. Most of the companies on the NYSE (New York Stock Exchange) are U.S. companies. Because of this, you would think the stock market would generally follow the health of the economy. If the economy’s booming, stocks should be soaring. If the economy’s struggling, stocks should be, too. That hasn’t been the case lately.

Since 2009, the S&P 500 has surged 239% to record highs. That makes this one of the strongest bull markets in U.S. history. During that same span, the U.S. economy has grown just 2% per year. That makes the current “recovery” one of the weakest since World War II. In short, Main Street hasn’t kept up with Wall Street.

The U.S. stock market is now clearly in “bubble territory”.…
Just look at the chart below. This chart compares the value of the U.S. stock market with the nation’s gross domestic income (GDI). GDI is like gross domestic product (GDP), but instead of measuring how much money a country spends, it measures how much money a country earns. It counts things like wages, corporate profits, and tax receipts. A high ratio means stocks are expensive relative to how much money an economy makes. You can see in the chart below that this key ratio is well above its housing bubble high. It’s now approaching the record high it hit during the dot-com bubble.

This is another serious red flag.…
But it doesn't mean stocks are going to crash next month, or next year. For this bubble to pop, something will have to prick it. We’re not sure what that will be…where it will come from…or when it will happen…
But we do know stocks don’t go up forever. Sooner or later, this bubble is going to end. When it does, many investors are going to take huge losses. Years’ worth of returns could disappear in a matter of months, even weeks.

The good news is that you can still crisis-proof your portfolio. Here are three ways to get started:

1. Set aside more cash. Holding extra cash will help you avoid big losses if stocks fall. It will also put you in a position to buy stocks when they get cheaper.
   
2. Own physical gold. Gold is the ultimate safe-haven asset. It’s survived every financial crisis in history. It will certainly survive the next one.
   
3. Close your weakest positions. Start by selling your most expensive stocks. They tend to fall the hardest during major selloffs. You should also get rid of companies that need cheap debt to make money. If problems in the bond market continue, these companies could be in trouble.
   

These simple strategies could save you tens of thousands, possibly more, when the inevitable happens.

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Chart of the Day

Miners are rallying again. Today’s chart shows the performance of the S&P/TSX Global Mining Index. This index tracks the performance of companies that mine commodities like gold, silver, aluminum, and copper. You can see that this index skyrocketed at the beginning of last year. It nearly doubled between January and July. Then, it went almost nowhere for six months.

Three weeks ago, the S&P/TSX Global Mining Index broke out of this sideways trading pattern. It’s now trading at its highest level since early 2015. This is very bullish. It tells us that mining stocks may have just entered a new phase of a bull market. If you’ve been thinking about buying mining stocks, now might be a good time to get in. But don’t worry if you don’t know what to buy.

We recently put together a presentation that talks about one of the richest gold deposits in the world. Our top gold analyst has never seen anything like this in his career. Early investors in the company that owns this deposit could make 1,000% or more. But this opportunity won’t last long. Just two months from now, this world-class mine will “go live.” When it does, this company’s stock should shoot through the roof. For more details on this incredible opportunity, click here.

The article Why It Feels Like the Dot-Com Bubble All Over Again was originally published at caseyresearch.com.

Mike Seery's Weekly Futures Recap - Crude Oil, Platinum, Silver, US Dollar, Coffee and More

Trading for the week of February 6th through February 10th ended with the S&P 500 closing higher. Posting a new record high as it renews the long term rally. The high range close sets the stage for a steady to higher opening when Monday's session begins trading. Of course that means it is time for a heads up from our trading partner Michael Seery. We've asked him to give our readers a recap of the this weeks futures markets and give us some insight on where he sees these markets headed. Mike has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil futures in the March contract settled last Friday at 53.83 a barrel while currently trading at 53.70 basically unchanged as I'm looking for a breakout above 54.34 for a bullish position to the upside as prices have gone nowhere over the last 2 months. Oil in Wednesday's trade hit a 9 week low creating a false breakout to the downside before rallying & finished higher on the trading session as prices have now traded up for the last 3 consecutive days so keep a close eye on this market as I still think higher prices are ahead. OPEC continues to hint that they might cut production in 2017 as they would like to see prices between $65/$75 a barrel and I think they will use their power to enhance prices as we are still trading above the 20 & 100 day moving average telling you that the short term trend is higher. The chart structure will start to improve later next week as a breakout is looming in my opinion as we are just not going to trade sideways forever as the commodity markets still look bullish in my opinion. If prices do break the 54.40 level, I think we could retest the double top around $56. However, we need some fresh fundamental news to push prices higher as the dollar remains stubbornly high.
Trend: Mixed
Chart Structure: Improving

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Platinum futures in the April contract settled last Friday in New York at $1,006 an ounce while currently trading at the same price as I am now recommending a bullish position from around the 1,008 level and if you take this trade place your stop loss under $988 as the chart structure is outstanding. Platinum prices are down $16 in early trade this Friday morning so take advantage of the price dip as prices are still trading above their 20 and 100 day moving average telling you that the short term trend remains to the upside. At present I'm also recommending bullish positions in silver and in the copper market as the precious metals, in general, continue to move higher, however, early strength from U.S dollar has put pressure on platinum, but the risk/reward is now in your favor which is what trading is all about. The next major level of resistance is yesterday’s high of $1,032 which were levels that we have not seen since the month of October and if that is broken you would have to think that the bullish trend would continue so play this to the upside while risking 2% of your account balance on any given trade.
Trend: Higher
Chart Structure: Excellent

Silver futures in the March contract settled last Friday in New York at 17.48 an ounce while currently trading at 17.77 up around $0.30 for the trading week continuing its nonvolatile bullish momentum as I've been recommending a bullish position over the last month with an average price around the 17 level and if you took the trade place your stop loss at 10 day low which now stands at 17.10 as that will improve on Tuesday at 17.26, therefore, lowering monetary risk. The next major level of resistance is Wednesday's high around 17.87 & if that is broken, I think prices will head to the $18 range as I'm also recommending a bullish position in copper which is up about 1000 points this Friday afternoon as I remain bullish the entire precious metal sector. Silver prices are now trading above their 20 and 100 day moving average telling you that the short term trend is higher as I still think prices are going to retest the $19 level that's where silver was trading right when Trump was elected, as the commodity markets are looking strong despite the fact that the U.S dollar remains firm so continue to play this to the upside.
Trend: Higher
Chart Structure: Solid - Improving

The U.S dollar in the March contract settled last Friday at 99.84 while currently trading at 100.81 up about 100 points for the trading week as I've been recommending a bearish position from around the 99.85 level & if you took the trade continue to place your stop loss above the 10 day high which was touched earlier in the trading session at 101.01 on a closing basis only. The dollar is trading higher for the 7th consecutive trading session with very low volatility as we are hanging in there by the skin of our teeth as I'm also recommending a bullish Euro currency as the commodity markets are higher across the board today despite the strength in the dollar. Prices are trading above its 20 and 100 day moving average telling you the short term trend is higher, but I will continue to place the proper stop and if we are stopped out then look at other markets that are beginning to trend as the trends are coming back mostly to the upside.
Trend: Higher
Chart Structure: Excellent

Coffee futures in the March contract settled last Friday in New York at 148.70 a pound while currently trading at 147.90 basically unchanged for the week as I was recommending a bullish position last week getting stopped out taking the loss and moving on as the chart structure was excellent at the time. However, prices continue to drift lower. Coffee prices are trading right at their 20-day but still below their 100-day moving average which stands around 152 as I am still bullish coffee prices over the longer term, but when prices hit a 2 week low its time to move on & look at other trends that are beginning. At the current time, coffee is mixed to sideways. However, that doesn't mean we won't be involved relatively soon once again so keep a close eye on this market as this is a sleeping giant which is the largest commodity contract in the world as the risk is always higher in coffee than any other market. Growing conditions in the country of Brazil are currently ideal as certain dry pockets received substantial rain over the last week sending prices lower as its a long growing season and things can change on a dime as I remain bullish the entire commodity sector.
Trend: Higher
Chart Structure: Excellent

For more calls on this week's commodity trades like Cocoa, Euro, Peso, Cotton, Wheat and more....Just Click Here!

Mike Seery's Weekly Futures Recap - Crude Oil, Natural Gas, Gold, Silver & US Dollar

Trading for the week of January 30th through February 3rd ended with the market indexes closing in their higher ranges. Does that mean that we are sure the markets continue higher from here? No, but of course that means it is time for a heads up from our trading partner Michael Seery. We've asked him to give our readers a recap of the this weeks futures markets and give us some insight on where he sees these markets headed. Mike has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil in the March contract settled last Friday in New York at 53.17 a barrel while currently trading at 53.60 up slightly for the trading week as prices have been stuck in a $2 range for the last 3 trading weeks as I've been sitting on the sidelines waiting for the trend to develop which I think might be to the upside. Oil prices are right at their 20 day but above their 100 day moving average as the chart structure is excellent at the current time as the United States released the monthly unemployment report which stated 227,000 new jobs were added which is a bullish indicator towards crude oil as there could be more demand with more people employed. The U.S dollar is still hovering around 100 which is still a longer term bearish fundamental indicator, but it seems to me that many of the commodities have already reflected that in their price so keep a close eye on this market to the upside as a 4 week high could be at hand next week. OPEC is hinting that they could possibly cut production once again in 2017 as it seems to me that they want prices back up into the $65/$75 level as that will take time, but I do think with growth coming back into the United States that is bullish stocks and commodities longer term.
Trend: Mixed
Chart Structure: Excellent

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Natural gas futures in the March contract settled last Friday in New York at 3.35 while currently trading at 3.06 down about 30 points for the trading week as I have been sitting on the sidelines in this market as it has remained choppy over the last several months. If you take a look at the daily chart there is a price gap which occurred on November 18th between 3.02/3.06 and I do think that will be filled with the possibility of retesting the contract low around 2.80, but at that level, you have to start thinking prices are getting cheap. Warmer weather in the Midwestern part of the United States is the main culprit for lower prices as the city of Chicago did not receive any snow in the month of January which is remarkable in my opinion coupled with above average temperatures, therefore, increasing supplies. Natural gas prices are still trading below their 20 and 100 day moving average telling you that the short-term trend is lower. However, I'm advising clients to avoid this market at present and look at other markets that are beginning to trend with a better risk/reward scenario.
Trend: Lower
Chart Structure: Improving

Gold futures in the April contract settled last Friday in New York at 1,191 an ounce while currently trading at 1,213 up over $20 for the trading week right near a 10 week high as I've been sitting on the sidelines in this commodity recommending bullish positions in silver and copper. Gold prices are still trading above their 20 day but below their 100 day moving average as the trend is mixed to higher in my opinion as the U.S dollar is still hovering right around the 100 level as I'm also recommending a short position in that currency at present. The monthly unemployment number was released this morning adding about 227,000 new jobs having very little impact on gold prices in today's trade. The next major level of resistance is yesterday's high around 1,227 and if that is broken, I think we could go back to around the 1,300 level right where we were before the Trump election as there is still room to run to the upside. I want to wait for better chart structure as the 10 day low is too far away at present coupled with the fact that I am already recommending two other precious metals as they all follow one another up or down, so you don't want to be too top-heavy.
Trend: Higher
Chart Structure: Improving

Silver futures in the March contract settled last Friday in New York at 17.14 an ounce while currently trading at 17.50 up about $0.35 for the trading week as I have been recommending a bullish position originally from around 16.76 and now have added on 2 separate occasions as I remain bullish the precious metals and especially silver prices. If you took the original trade continue to place your stop loss under the 10 day low which stands at 16.63 as the chart structure is not very solid at present due to the run up in prices, however, it will improve but it will take 4 more trading sessions. Silver prices are now trading above their 20 and 100 day moving average telling you that the short term trend is higher as I'm also recommending a bullish position in copper which is down 500 points today & has been stuck in the mud over the last 3 weeks. At the current time I'm also recommending a bearish U.S dollar position and if that trade works out, you would have to think that would benefit silver prices as I still think historically speaking silver is very cheap and still has exceptional demand.
Trend: Higher
Chart Structure: Improving - Poor

The U.S dollar in the March contract settled last Friday at 100.52 while currently trading at 99.85 down about 75 points for the trading week as I am now recommending a bearish position from around 99.85 & if you took that trade continue to place your stop loss above the 10 day high which stands at 101.01 risking around $1,200 per contract plus slippage and commission. The chart structure will not improve for another 6 days, so you're going to have to accept the monetary risk as prices are still trading below their 20 day but right at their 100 day moving average right near major support in my opinion. The United States released its monthly unemployment number adding 227,000 new jobs having very little impact on the currency market this afternoon as prices are still right near a 6 week low, so I will continue to place the proper stop loss while risking 2% of the account balance on any given trade. Volatility in the dollar is relatively high as we are having large price swings on a daily basis so make sure place the proper amount of contracts, therefore, managing risk properly.
Trend: Lower - Mixed
Chart Structure: Excellent

For more calls on this week's commodity trades like Copper, Cocoa, Rice, Cattle, Lean Hogs and more....Just Click Here!

Forget Dow 20,000… This Indicator Tells the Real Story

By Justin Spittler

It finally happened. For the last six weeks, the Dow Jones Industrial Average has been bumping against a ceiling. Yesterday, it broke through. The Dow topped 20,000 for the first time ever. Most investors are excited about this. After all, 20,000 is a big, round number. It feels like a psychological win for the bulls.

But it’s not an invitation to dive into stocks…not yet, at least. We need to see if the Dow can hold this level.
If it closes the week above 20,000, stocks could keep rallying. If it doesn’t, nothing has really changed. It could even be a warning sign. Until then, sit tight. Don’t chase stocks higher…stick to your stop losses…and hold on to your gold.

Don’t lose sight of the big picture, either.…

Remember, U.S. stocks are still very risky:

➢ They’re expensive. The S&P 500 is trading at a cyclically adjusted price-to-earnings ratio (CAPE) of 28.4. That means large U.S. stocks are 70% more expensive than their historical average.

➢ We’re still in a profits recession. Profits for companies in the S&P 500 stopped growing in 2014.

➢ And Donald Trump is president of the United States. Trump could do wonders for the economy and stock market. But he could also unleash a major financial crisis. It's still too early to tell.

As you can see, "Dow 2,000" isn't necessarily a reason to celebrate. In fact, as we told you two weeks ago, there's something much more important you should be watching right now.

The bond market is flashing danger.…
The bond market is where companies borrow money. It’s the cornerstone of the global financial system.
It’s also bigger and more liquid than the stock market. This is why the bond market often signals danger long before it shows up in stocks.

The bond market started to unravel last summer.…
Just look at U.S. Treasury bonds. In July, the 10-year U.S. Treasury hit a record low of 1.37%. Since then, it’s nearly doubled to 2.55%. This is a serious red flag. You see, a bond’s yield rises when its price falls. In this case, yields skyrocketed because bond prices tanked. The same thing has happened in long term Treasury, municipal, and corporate bonds.

Bill Gross thinks bonds are entering a long-term bear market.…
Gross is one of the world’s top bond experts. He founded PIMCO, one of the world’s largest asset managers. He now runs a giant bond fund at Janus Capital. Two weeks ago, Gross said the bull market in bonds would come to an end when the 10-year yield tops 2.6%. Keep in mind, bonds have technically been in a bull market since the 1980s.

According to Gross, this number is far more important than Dow 20,000. And we’re only 50 basis points (0.5%) from hitting it. In other words, the nearly four-decade bull market in bonds could end any day now.
When it does, Gross says bonds will enter a secular bear market... meaning bonds could fall for years, even decades. This is why Casey Research founder Doug Casey has urged you to “sell all your bonds.”

If you haven’t already taken Doug’s advice, we encourage you to do so now.…
You should also take a good look at your other holdings. After all, problems in the bond market could soon spill over into the stock market. If this happens, utility stocks could be in big trouble. Utility companies provide electricity, gas, and water to our homes and businesses. They sell things we can’t live without. Because of this, most utility companies generate steady revenues. This helps them pay dependable dividends.

Many investors own utility stocks just for their dividends.…
That’s why a lot of people call them “bond proxies.” Utility stocks don’t just pay generous income like bonds, either. They also trade with bonds. You can see this in the chart below. It compares the performance of the Utilities Select Sector SPDR ETF (XLU) with the iShares 20+ Year Treasury Bond ETF (TLT). XLU holds 28 utility stocks. TLT holds long-term Treasury bonds. XLU has traded with TLT for the better part of the last year. Both funds crashed after the election, too. But XLU has since rebounded.

You might find this odd. After all, the two funds basically moved in lockstep until a couple months ago.
But there’s a perfectly good explanation for this.…

Utility stocks pay more than Treasury bonds.…
Right now, XLU yields 3.4%. TLT yields 2.6%. That might not sound like big deal. But those extra 80 basis points (0.8%) provide a margin of safety. You see, the annual inflation rate is currently running at about 2.1%. That means the U.S. dollar is losing 2.1% of its value every year.

That’s bad news for everyday Americans. It’s also bad for bondholders. It means investors who own TLT are earning a “real” return (its dividend yield minus inflation) of 0.5%. Meanwhile, you’d be earning a real return of 1.3% if you owned XLU. Of course, utility stocks should pay more than government bonds. They’re riskier, after all. Unlike the government, utility companies can’t print money whenever they want. If they run into financial problems, they could go out of business.

Today, investors don’t seem to mind taking on extra risk for more income. But that could soon change…

Inflation could skyrocket under Donald Trump.…
If you’ve been reading the Dispatch, you know why. For one, Trump wants to spend $1 trillion on infrastructure projects. While this could help the economy in the short run, the U.S. government will have to borrow money to fix the country’s decrepit roads, bridges, and power lines. This would likely produce a lot more inflation. If that happens, real returns could shrink even more. And that could trigger a selloff in utility stocks and other "bond proxies," like telecom and real estate stocks. In short, if you own these types of stocks just for their dividends, you might want to consider selling them now.

We recommend sticking to dividend-paying stocks that meet the following criteria.…
The company should be growing. If it isn’t, you probably own the stock just for its dividend. That’s a bad strategy right now. It should have a low payout ratio. A payout ratio can tell us if a company’s dividend is sustainable or not. A payout ratio above 100% means a company is paying out more in dividends than it earns in income. Avoid these companies whenever possible.

It shouldn’t depend on cheap credit. After the 2008 financial crisis, a lot of companies borrowed money at rock-bottom rates to pay out dividends. If rates keep rising, these companies could have a tough time paying those dividends. If you own stocks that check these boxes, your income stream should be in good shape for now.

Chart of the Day

“Trump Years” stocks are on a tear. We all know U.S. stocks took off after the election. But some stocks did better than others. Bank stocks spiked on hopes that Trump would deregulate the financial sector. Oil and gas stocks rallied because Trump is pro-energy. Industrial stocks have also surged since Election Day.

Industrial companies manufacture and distribute goods. They include construction companies and equipment makers. E.B. Tucker, editor of The Casey Report, thinks these companies will stay very busy while Trump rebuilds America’s hollowed out economy.

He’s so sure of it that he recommended four “Trump Years” stocks last month. One of those stocks is up 11% in just six weeks. Yesterday, it spiked 8% after the company crushed its fourth quarter earnings report.
The company announced higher sales, fatter profits, and lower taxes. It raised its guidance for the year. In other words, it expects to make a lot more money this year…now that Trump’s in charge.

You can learn about this company and E.B.’s other “Trump Years” stocks by signing up for The Casey Report. Click here to begin your free trial.

The article Forget Dow 20,000… This Indicator Tells the Real Story was originally published at caseyresearch.com.

Why You Should Avoid These Four Blue Chip Stocks

By Justin Spittler

Tech stocks are shattering records. You’ve probably noticed that Donald Trump has had a huge impact on global financial markets. Since Election Day, bonds have tanked. The U.S. dollar has spiked to a 15 year high. And U.S. stocks have broken out to record highs.

Lately, however, the “Trump Rally” has lost some steam. The S&P 500, for example, is trading almost exactly where it was four weeks ago. Technology stocks are still on a roll, though. The Nasdaq Composite Index, which tracks major U.S. tech stocks, is off to its best start in over a decade. MarketWatch reported yesterday:

The Nasdaq Composite has gained 2.76% in its first five trading days of 2017, marking the gauge’s best start to a year since 2006, when it jumped 5.14%.

Yesterday, the Nasdaq jumped another 0.4% to a new record high.

The Nasdaq is now the year’s top performing major U.S. index…
FANG stocks are a big reason why. FANG is a popular investing acronym. It stands for Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Google (GOOG), which now goes by Alphabet. In 2015, FANG stocks were market darlings. Netflix was that year’s top performing stock in the S&P 500. It surged 134%. Amazon, the year’s second best performing stock, gained 118%. Google and Facebook also had great years. They gained 46% and 34%, respectively.

Last year, FANG stocks did just OK…
They climbed 7.8% on average. That’s less than the 9.5% gain by the S&P 500. Trump’s upset victory was a big reason why FANG stocks underperformed the market.

Netflix dropped 5.90% in the three weeks after Election Day…
Amazon and Facebook both dropped 4.7% over the same period. Google fell 4.1%. Like many post election moves, these caught many investors by surprise. But the pullback in FANG stocks actually makes a lot of sense.

Investor’s Business Daily wrote a week after the election:

The big techs had all fallen since the surprise election of Donald Trump as the next president. Trump has championed coal, U.S. manufacturing, a get-tough policy on immigration and other issues that don't favor Silicon Valley, a region that heavily favored his opponent, Hillary Clinton. Trump also has specifically criticized Apple and FANG company Amazon.com (AMZN).

In other words, Trump’s policies should favor other sectors more than technology companies. That’s why investors moved money outside of FANG stocks when Trump won. Investor’s Business Daily added:

"Megacap tech stocks where hedge fund clients were broadly overweight appear to have been viewed as 'safe' and are being used as a source of funds for the rotation into financials, health care and industrials, where investors were not positioned," Morgan Stanley said in a research note Monday.

Of course, the election was more than two months ago. The market has had plenty of time to adjust to the strange new world we find ourselves in.

FANG stocks are rallying again…
So far, they’ve gained 6% on average this year. That’s four times better than the 1.5% gain by the S&P 500. Strong performances by these stocks have helped lift the Nasdaq, which is weighted by market capitalization. This means big companies, like the FANG stocks, impact it more than small companies.

Many mainstream investors are now itching to get back into tech stocks…
After all, most investors like to buy stocks that are rising. It’s much harder for people to buy something that’s falling or down big. Plus, all four companies are household names. They seem like “no brainer” investments.
But you have to understand something about FANG stocks. They’re all very expensive according to popular valuation metrics.

Netflix, for instance, has a price to earnings (P/E) ratio of 350. This means investors are paying $350 for every dollar of earnings Netflix generates. That’s off the charts. The S&P 500, for comparison, currently has a P/E ratio of 26. This means Netflix’s stock is almost 13 times more expensive than your average large U.S. stock.

The other FANG stocks aren’t cheap, either…
Amazon trades at 182 times earnings. Facebook has a P/E ratio of 60. And Google has a P/E ratio of 29.
Now, we understand that these are some of the most dominant companies on the planet. Their shares deserve to trade at a premium. But that doesn’t mean you should buy them. After all, the U.S. stock market has been rising for nearly eight years. This makes the current bull market the second longest in U.S. history.

If the market changes course, expensive stocks like FANG could fall hard and fast…
Even if the market keeps rising, these stocks won’t likely generate huge gains. Again, that’s because they’re incredibly expensive. If you really want to make life-changing gains in tech stocks, you have to invest in companies before they’re household names. In other words, you want to look for the next Google or Facebook.

Chris Wood, our chief technology expert, knows how to find great tech stocks…
And, just as important, he knows when to invest in them. You see, Chris has a proprietary system that tells him when to buy stocks and when to sell them. According to Chris, the key time to buy is when a tech stock is in one of two “Sweet Spots.” If you do this right, you can make huge profits without risking much money.

Over the past year, Chris used this unique method to generate gains of 89%, 51%, 34%, and 33% for his subscribers. Most investors would kill for those kinds of returns. But Chris thinks his readers will reap even bigger gains this year. That’s because several stocks in the Extraordinary Technology portfolio are in their Sweet Spots right now. In other words, they’re sitting on the launchpad.

You can learn about Chris’ top moneymaking opportunity for 2017 by watching this new presentation. As you’ll see, he’s hoping to cash in big on a promising technology that could eventually put the global oil industry out of business. Investors who ignore this technology will likely suffer huge loses. But, if you act soon, you could easily make 100% or more over the next two or three years.

To see why, watch this FREE video.

The article Why You Should Avoid These Four Blue-Chip Stocks was originally published at caseyresearch.com.

Mike Seery's Weekly Futures Recap - Crude Oil, Gold, Dollar, Coffee and Sugar

It's been a crazy end to the week of January 9th through January 13th with the recent wild ride up we had in crude oil going through a calming period you might say it is time for a heads up from our trading partner Michael Seery. We've asked him to give our readers a recap of the this weeks futures markets and give us some insight on where he sees these markets headed. Mike has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil futures in the March contract settled last Friday at 54.87 a barrel while currently trading at 53.24 down about $1.50 for the trading week as I'm sitting on the sidelines looking at a possible short position as prices are right near a 4 week low. The chart structure will start to improve later next week therefore lowering monetary risk as we enter the long holiday Martin Luther King weekend as trading does not continue until Tuesday as prices are now trading below their 20 day but still above their 100 day moving average telling you that the short term trend is mixed so avoid this commodity at present. Oil prices have rallied significantly over the last several months due to the fact that OPEC has cut production and are certainly trying to prop up prices. However I'm a technical trader, and when the risk/reward becomes in your favor I will take that trade, but at this point in time, your going to have to wait until next week before pulling the trigger. Major support is around Tuesday's low of 51.59 as that would also be the 4 week low as that would be the entry point so keep a close eye on this market as the trends are starting to come back in many commodity sectors.
Trend: Mixed
Chart Structure: Improving

Gold futures in the April contract settled last Friday in New York at 1,176 an ounce while currently trading at 1,196 up $20 for the trading week continuing its bullish momentum right at a 7 week high. I have been sitting on the sidelines in this market looking at entering into a bullish position as I do think the precious metal sector has bottomed, however, the chart structure needs to improve as the 10 day low stands at 1,149 which is too far away, in my opinion, risking too much money so be patient as we could be in a bullish position in several of the precious metals later next week. Gold prices are still trading above their 20 day but below their 100 day moving average telling you that the shorter term trend is mixed as the U.S dollar is also near a 4 week low as gold prices have been hit over the last year as all the interest remains in the S&P 500 which is right near another all time high. Trading is all about risk/reward & its not in your favor at the present time, but could be later next week or on a significant price decline as I'm looking at buying this market around the 1,180 level which could happen on any given day so be nimble and quick as trading does not resume until Tuesday afternoon because of the holiday weekend in the United States.
Trend: Higher
Chart Structure: Poor - Improving

The U.S dollar in the March contract is trading lower for the 2nd consecutive session at 101.20 hitting a 4 week low as prices may have topped out on January 3rd at 103.81 as I'm looking at entering into a possible short position, however the monetary risk is too high at the present time as the 10 day high stands at 103.81 risking around $2,600 per contract plus slippage and commission which is too high for this commodity which generally is a lower volatility market. The U.S dollar is trading below its 20 day but still above its 100 day moving average which stands at 99.52 as the rally in the bond market has stalled out as the yield on the 10 year note is around 2.39% as we wait for the Trump administration to take place next week as that certainly will add some clarity to a lot of situations as volatility certainly will increase in my opinion. The chart structure will improve next week so keep a close eye on this market & look to sell on some type of relief rally. Trend: Lower - Mixed
Chart Structure: Poor

Coffee futures in the March contract settled last Friday in New York at 144.20 a pound while currently trading at 148.75 hitting a 6 week high as I'm currently sitting on the sidelines waiting for the chart structure to improve therefore lowering monetary risk as I am bullish coffee as I do think prices are headed higher. Dry weather conditions in the country of Brazil is starting to concern investors pushing up prices here over the last several weeks coupled with the fact of very strong demand despite estimates of nearly 55 billion bags being produced, however the tide has turned in the coffee market, so you want to play this to the upside in my opinion. Coffee prices are trading above their 20 & 100 day moving averages telling you that the trend is higher as the commodity markets, in general, are starting to perk up in early 2017 as I do think the giant bearish trends are over with. The chart structure is terrible at present as the 10 day low is way too far away so I will have to be patient as 3/5 days have to come off the calendar therefore improving monetary risk, but I'm certainly not recommending any type of short position.
Trend: Higher
Chart Structure: Poor

Sugar futures in the March contract settled last Friday in New York at 20.75 a pound while currently trading at 20.82 in a relatively nonvolatile trading week still digesting the sharp rally that we experienced over the last 4 weeks. Sugar prices are trading above their 20 and 100 day moving average telling you that the short term trend is higher as I'm currently sitting on the sidelines, but could be involved in a bullish position next week as the chart structure will turn outstanding therefore lowering monetary risk which then meets my criteria. The commodity markets, in general, look bullish almost across the board as dry weather conditions in Brazil are pushing prices up in coffee and sugar in recent weeks coupled with the fact that the U.S dollar has also hit a 4 week low helping support prices. I trade the sugar market quite often actually & had a short position last month before getting stopped out right around Christmas as this commodity is very trendy and now the trend, in my opinion, is to the upside.
Trend: Higher
Chart Structure: Excellent

Get additional commodity calls from Mike Seery on Cocoa, Soybean, Corn and more....Just Click Here

Why Gold Could Soar Another 353%

By Justin Spittler

Gold is on the rise again. It’s climbed for two straight weeks, and it’s now up nearly 5% since December 15. Many precious metals investors couldn’t be happier about this. You see, gold stormed out of the gate last year. It had its strongest first quarter since 1986. By the end of June, it had risen 25%. Things were looking up. Then, the market changed course. Gold plunged 18% in just four months. Last month, it hit its lowest level since last February.

• The sharp pullback spooked precious metals investors….
But regular Dispatch readers knew that gold would rebound. After such an explosive start to 2016, it was only natural for gold to “take a breather.” We urged you to not lose sight of the big picture. As we often remind you, gold’s a safe-haven asset. Investors buy it when they’re worried about the economy, financial system, or politics. And right now, investors have plenty of reasons to be worried, even if some are still enjoying the “Trump Honeymoon” phase.

• Louis James thinks gold will keep rising….
Louis is our chief resource expert. He is the editor of International Speculator and Casey Resource Investor, our advisories dedicated to resource stocks with big upside. According to Louis, gold has struggled recently because investors expect interest rates to rise. They have good reason to think this, too. After all, the Federal Reserve just raised its key interest rate… but for only the second time since 2006. It also said that it plans to lift rates three more times this year. Conventional wisdom tells us that this is bad for gold. Since gold doesn’t pay interest like a bond, most investors don’t want to own it when rates are rising or are likely to rise.

• According to Louis, the market has already “priced in” higher interest rates….
This means gold shouldn’t fall if the Fed sticks to its plan and raises rates three more times this year. Of course, that’s a big “if.” Heading into last year, the Fed said it wanted to raise rates four times. But it only raised rates once last year, and it waited until the eleventh hour to pull the trigger. We wouldn’t be surprised if the Fed sits on its hands again. If that happens, investors will know something is very wrong with the economy. Many folks will start buying gold hand over fist.

• But that’s not the only reason Louis is bullish on gold.…
Last week, he gave his subscribers several reasons why gold should keep rising:

➢ Rumors of new gold curbs in India have not panned out.
➢ Fear of the fall of New Rome [the EU] is driving Europeans into [U.S.] dollars and gold.
➢ The escalation of the “other” Cold War with China increases uncertainty in global markets.
➢ Even Trump’s best ideas (cuts in taxes and regulations) will cause disruptions that will have to work through the economy before things can improve.

• Gold is incredibly cheap, too.…
Louis explains:

Gold needs to rise another US$900 or so to hit a new inflation-adjusted high. Given the trillions and trillions of new dollars, euros, yen, yuan, and so forth printed over the last 45 years, it should do much more than that.

Right now, gold is trading for about $1,180. In other words, it would have to climb about 75% to reach its previous inflation-adjusted high.
But Louis thinks gold could race well past that in the coming years:

Many analysts see the current market as analogous to the great gold bull of the 1970s, only bigger and longer. Adjusted for inflation, gold rose about 353% from its mid-1970s trough to its 1980 peak. If that pattern repeats itself, gold would have to rise from its December 2015 low to just above US$5,200 per ounce by October 2022.

If gold does anything close to what it did during the ’70s, precious metals investors could see explosive gains in the very near future. Just take a look at the chart below.

• Louis is so convinced that gold’s headed higher, he just made a giant bet on it…

He wrote last week:

I’m so sure, I put my money where my mouth is last week. As advised last month, I entered the market during the peak of Tax Loss Season. I’m not allowed to buy the same stocks I recommend (to avoid possible conflicts of interest), so I bought ETFs instead. In fact, I put about twice as much of my own cash into these proxies for gold stocks than I ever put into gold stocks before.

Louis also plans to buy more gold at the first chance he gets:

I think that 2016 was an overture for what’s ahead. I intend to profit from it. And I’m not worried about any fluctuations in the near term. If prices drop, I’ll hope to buy more. If prices rise, it’s off to the races.

• You, too, can make huge profits from rising gold prices.…
The key is to buy gold mining stocks. Gold miners are leveraged to the price of gold. This means gold doesn’t have to rise much for them to take off. During the 2000–2003 gold bull market, the average gold stock gained 602%. The best ones soared 1,000% or more. Of course, not every gold company is a winner. In fact, many gold stocks are total duds. That’s because gold mining is an incredibly difficult business. To protect your capital and make monster gains, you have to own the right gold stocks. Unfortunately, most folks have no clue what to look for in a gold stock.

That’s where we can help.…

You see, Louis is a true industry insider. He’s visited mining projects all around the world. He’s on a first name basis with many of the world’s top mining CEOs. And he understands the geology inside and out. Louis also has a proprietary system for finding the best gold stocks. Casey Research founder Doug Casey actually taught Louis this system… after he spent decades perfecting it.

You can learn more about Louis’ system by clicking here. As you’ll see, it’s delivered giant gains over and over again. Just don’t wait too long. Gold probably won’t stay cheap for much longer… meaning you’ll want to take action soon to have a shot at truly life changing gains. Click here to learn more.

Chart of the Day

Gold stocks are dirt cheap, too.

Today’s chart compares the NYSE Arca Gold BUGS Index (HUI), which tracks large gold stocks, with the price of gold. The lower the ratio, the cheaper gold stocks are relative to gold. According to this ratio, gold stocks are cheaper today than they ever were during the dot com bubble. They’re also cheaper than they ever were during the last housing bubble.

Keep in mind, stocks were trading near record highs during these periods. Most investors were extremely bullish. They owned too many mainstream stocks and not enough gold stocks. Right now, this key ratio is lower than it was during either period. This tells us that today could be one of the best times to buy gold stocks since the turn of the century.

If you would like to add gold stocks to your portfolio, we encourage you to sign up for International Speculator. As we said earlier, this is our publication dedicated to gold stocks with the most upside. 

Click here to begin your risk-free trial.

The article Why Gold Could Soar Another 353% was originally published at caseyresearch.com.

Five Easy Ways to Make Your Finances Less Fragile

By Justin Spittler

A few days ago, we sat down with E.B. Tucker, editor of The Casey Report, to talk shop. The conversation was so good, we just had to share it with you. In the following interview, E.B. talks about how he manages his own money. As you’ll see, he has a unique, yet intuitive approach to investing, especially when it comes to asset allocation. We hope you find this conversation as useful as we did. Also, make sure you read until the end to learn about one of E.B.’s top speculations.

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Justin Spittler: I want to talk investment strategy. Could you tell us how you manage your own money?

E.B. Tucker: I like to break up my investments into buckets. I have about five of them. I have one for gold, one for permanent life insurance, one for real estate, and two for stocks. I don’t limit myself to a certain number of buckets. But I’ve had very good results looking at asset allocation this way.

J.S.: Can you tell us a little more about your “buckets”? Why do you break them up this way? What kind of assets go into each?

E.B.: First of all, the buckets change with life and market conditions. For example, I put most of my capital into a real estate bucket in 2009–2010. As you know, the U.S. housing market had just crashed. If you had the capital, you could buy some houses for next to nothing. And that’s exactly what I did.…

During that period, I bought six single-family homes. I bought one of them for just $10 per square foot. I spent another $10 per square foot fixing the place up, so I put about $20 per square foot all in. The guy before me paid $160 per square foot and ended up in foreclosure. He bought near the peak of the housing bubble. My timing was much better. Today, I’m not adding to my real estate bucket. There just aren’t that many great deals out there. This is key to how I invest. Rather than fight the market, I let it determine how I allocate my money.

J.S.: Can you tell us about some of your other buckets?

E.B.: Well, I have a bucket for gold. But I don’t view gold as an investment designed to make money. I see it as a key long term asset. When gold is cheap, I pour money into this asset. I don’t think about this bucket often. I just get the gold, vault it, and move on.

I also have a permanent life insurance bucket. This bucket is important because I have a few people that depend on me. If I die, they’re out of luck. So, I need to have life insurance. Specifically, I own a couple dividend-paying life insurance policies. A lot of people consider these terrible investments, but that’s because they don’t understand them.

You see, any extra money that I put in this bucket on top of the minimum annual premium grows 6% to 7% per year, tax free. If I don’t use the policy, over time I’ll have a fairly large amount of cash in that bucket that I spend, borrow from, or use to buy more life insurance. And, of course, if the worst does happen, my dependents receive a large death benefit. This money will help them get by in my absence.

J.S.: Interesting, it sounds like this bucket protects you and gives you flexibility.

E.B.: Exactly. The reason I invest this way is because it makes me less “fragile." Now, I still have plenty of exposure to rising asset prices in other buckets. But, if you’re smart about when and how much you add to each bucket, your “boring” buckets will eventually balance out your more speculative buckets. The result is a more stable financial situation without giving up the quest for profits. I like investing this way because I no longer worry about trying to maximize my profit on every trade or every time the market changes course.

J.S.: Let’s talk about your stock buckets next. I’m sure our readers would love to know what’s in your portfolio. 

E.B.: Sure. As I said earlier, I have two of them. One is for stocks I plan to hold for the long haul. I don’t trade these stocks often. I’m only a seller if something happens that changes the business landscape for one of the companies. I typically own between six and eight of these companies at any given time. One of my favorite long term holdings is a company that make crackers you buy at the gas station and pretzels that go well with beer. Last year, the company acquired a business that sells almonds and other nuts. It’s a great company. And it now pays me a decent yield of 3%, since I’ve owned the stock for a few years.

J.S.: What are some of your other long term stock holdings?

E.B.: I also have shares of one of the country’s best regional banks. And I own shares of one of America’s most iconic companies. This company is basically a drug dealer, peddling sugar and caffeine from small rented stores. You get the picture. Now, these aren’t the most exciting investments in the world but, over time, you see the value of owning rock solid American businesses.

You end up with companies that slowly capture market share from their competitors, invest money back into their businesses, and pay dividends. I don’t see how you can get hurt having this bucket represent 20% of your net worth. It’s also worth mentioning that I like to own these stocks in company sponsored dividend reinvestment plans.

Since these are long-term investments, I don’t want to log into a brokerage account and see them next to my trading positions every day. Holding them directly on the company’s books means all my dividends get reinvested into additional shares, usually at no cost. The final benefit is I don’t have to worry about my broker going bust. Holding shares directly registered with a company means there’s nobody standing between you and your investment.

J.S.: That leaves us with your speculation bucket. Can you tell us a little bit about this one?

E.B.: Ah, my favorite. I’ve done fairly well speculating. The key here is separating good speculations from bad ones. As a professional investor, a lot of opportunities come across my desk. Most of them aren’t worth my time. You have to pass on a lot of bad speculations before you find a great one.

J.S.: Can you tell us about one of your better speculations?

E.B.: At a lunch meeting with my banker in 2009, he told me about a company in town that invented a hurricane simulation machine. They placed a few in malls, shopping centers, arcades, and museums and charged $2 per customer. The test machines took in $4,000 to $5,000 per month. The company built each machine for around $12,000. The company had trouble getting a bank to lend it money. It was right after the financial crisis, after all.

I met with the company, saw the machine, and looked at their business plan. A few other investors and I funded the company. We bought preferred shares that paid a 20% dividend. We also received a portion of the company’s profits for the first two years, which boosted our initial returns. Seven and a half years later, I’m still collecting monthly checks from the company. I’ve more than doubled my money, and I could sell the shares anytime I want.

J.S.: Have you done any other speculations like this recently?

E.B.: Yes. Before I got into this business, I ran a gold fund for a few years. My former business partner from that fund just took his gold streaming and royalty company public. Our company policy does not allow me to share the name of the stock, since I own shares. I’m involved in that deal to the tune of about 1% of the company. I think there’s a realistic shot that I’ll make 5–10 times my money.

J.S.: Most people would kill to make that much on a single investment. Why are you so optimistic?

E.B.: I think it’s a good time to speculate on small gold and silver stocks. I especially like royalty and streaming companies like this one. They avoid the tremendous financial burdens that mining companies face.
I also look for companies that have a winning strategy but that are overlooked by the market. If these companies execute, my odds of success go up.

But you need to have cash on hand, or what some people call dry powder, to take advantage of these opportunities. That’s because great deals usually require quick action. When one of my speculations is a winner, I’ll take profits and put them into other buckets, depending on what looks good at the time. I almost never leave the entire profit in the bucket it came from.

J.S.: Got it. So, do you like to keep a certain percentage in each bucket at any given time? What rules, if any, do you follow?

E.B.: I don’t really follow a set of rules when it comes to asset allocation. That makes it hard to take advantage of huge opportunities when they appear. For example, I wouldn’t have invested in the Florida rental real estate market in 2009 and 2010 if I stuck to strict rules. When in doubt, you can divide new money equally between buckets. You can also sit on cash and wait for buying opportunities to present themselves.

J.S.: What kind of investments do you focus on in The Casey Report?

E.B.: That’s your most valuable question so far. In The Casey Report, we fill the long-term stock and speculative stock buckets. We try to predict what the investing world will be like one to two years down the road. We then buy stocks that will benefit most as the world changes. In stock investing, that’s the sweet spot where you find the most value in the shortest period of time.

Our goal is to beat the S&P 500 every year. We want our readers to have enough success to irritate their wealth manager. Hopefully, they can use that success and the lessons learned in The Casey Report to beat the market in their asset buckets.

J.S.: Thank you for your time, E.B.

E.B.: You’re welcome.

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In August, E.B. told his readers to buy a small North American mining company. At the time, few investors knew about the company. Its stock traded for less than $1. But E.B. said the stock wouldn’t fly under the radar for much longer…and he was exactly right.

In just four months, this stock has soared 115%. Normally, we wouldn’t encourage you to buy a stock after an explosive run like this. But E.B. recently went on record and said, “the stock doubled, it will double again.” To see why, watch this brand-new presentation. It talks about an event that E.B. says will take place exactly one month from today. If the event goes as expected, this stock should skyrocket again.

You can learn more about this event, including how to take advantage of it, by watching this FREE video.

The article Five Easy Ways to Make Your Finances Less Fragile was originally published at caseyresearch.com.

How to Use the New Market Manipulation to Your Advantage

It's time for another one of Don Kaufman's wildly popular webinars. Don’t miss this live online seminar, How to Use the New Market Manipulation to Your Advantage, with Don Kaufman this Tuesday December 6th. at 8:00 PM New York, 7:00 PM Central or 5:00 PM Pacific.

During this free webinar you will learn:

• How scarcely used recent additions in market structure have forever changed how we view price movement and volatility.
• What weekly strategy you can use to take minimal risk and produce astonishing returns surrounding predictable or manipulated movements in any stock, ETF, or index.
• The one product that has become statistically significant in determining the next market move so whether you're a long term investor, swing trader, or intra-day trader you can get tuned into what's driving today's marketplace.
• How you can use market efficiency to your advantage in all aspects of your investments, retirement accounts, stock and options trading accounts, futures trading and more.
• How you can trade up to several times per week without having to continually monitor your positions, "set it and forget it" with this low risk high reward trade.

      Don's Webinars have an attendance limit that we always hit. This one will be no exception.

      Visit Here to Register Now!

      See you Tuesday night!
      Ray C. Parrish
      aka the Crude Oil Trader

Mike Seery's Weekly Futures Recap - Crude Oil, Natural Gas, Gold, Silver, Coffee and Sugar

It's been a crazy end to the week of November 28th through December 2nd with the wild ride up we had in crude oil and that means it is time for a heads up from our trading partner Michael Seery. We've asked him to give our readers a recap of the this weeks futures markets and give us some insight on where he sees these markets headed. Mike has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil futures in the January contract settled last Friday in New York at 46.06 a barrel while currently trading at 50.55 up about $4.50 for the trading week all due to the fact of OPEC cutting 4.5% of production sending prices in Wednesdays and Thursdays trade sharply higher now hitting a 5 week high. Prices bottomed out around November 14th at 42.74 & now has rallied about $8 as this market remains extremely choppy and has gone nowhere over the last 6 months as I am currently sitting on the sidelines as the chart structure is poor therefore the monetary risk is too high to enter in my opinion. The energy sector has caught fire including natural gas as winter is now upon us which is the high demand for heating oil as well, however I still think this market remains choppy for the rest of 2016 as a strong U.S dollar could limit prices to the upside in my opinion so look at other markets that are beginning to trend with less risk. Crude oil is now trading above its 20 and 100 day moving average with major resistance around the $52 level which was hit in the month of October on a couple of different occasions and if that level is broken you have to think that the bullish trend would continue, but at present I'm recommending no position. 
Trend: Higher 
Chart Structure: Poor

Natural gas futures in the January contract settled last Friday in New York at 3.20 while currently trading at 3.46 up significantly for the trading week hitting a 5 week high. At the current time, I'm sitting on the sidelines as I wrote about this market 2 weeks ago as I was looking to get into a bullish position. However, the chart structure did not meet my criteria as the monetary risk was too high at the time. Natural gas prices are trading above their 20 and 100 day moving average telling you that the short term trend is higher as prices look to retest the contract high which was hit on October 18th at 3.67 as we enter the extremely volatile winter season which can cause tremendous price spikes due to very cold weather in the Midwestern part of the United States. Natural gas has been on a wild roller coaster bottoming out on November 9th at 2.72 as I'm looking for a consolidation before entering as the entire energy sector has caught fire over the last several weeks. There is a price gap between 3.22/3.25 and that makes me nervous if you have a bullish position as I do think that gap will be closed within the next week so let's keep a close eye on that price level. 
Trend: Higher 
Chart Structure: Poor

Gold futures in the February contract settled last Friday in New York at 1,181 an ounce while now trading at 1,175 hitting a fresh 8 month low as prices continue to move southward on a weekly basis as I am kicking myself as I am not short, however, I have not been picking a bottom either. At present, I'm telling investors to avoid this market, but certainly, do not be buying this commodity as I do believe lower prices are ahead as I'm still very bullish the U.S dollar and the stock market as a whole since both of those are negative towards gold prices. The 10 year note today broke 2.40% which is the highest yield since January and I do believe interest rates are going higher which is not another negative influence towards gold prices. Gold futures continue to move lower despite the fact that crude oil is about $6 in the last 2 trading sessions which generally is very bullish most inflationary commodities, however, that shows you how weak gold is at present as demand is lacking. 
Trend: Lower 
Chart Structure: Poor

Silver futures in the March contract settled last Friday in New York at 16.55 an ounce while currently trading at 16.53 basically unchanged with the week trading in a very nonvolatile manner as prices are stuck in a two week consolidation after hitting a 5 month low. Silver prices are trading below their 20 and 100 day moving average telling you that the short term trend is lower as I'm currently sitting on the sidelines waiting for another trend to occur which could develop in the next couple of weeks as the chart structure is improving on a daily basis, therefore, lowering monetary risk. Gold prices have been falling rather dramatically ever since the Trump election as that has put severe pressure on silver prices ,however if we are going to expand the economy & do huge infrastructure stimulus I would think that silver prices look cheap as copper prices are still right near recent highs and sharply higher from their 2016 lows. Trading is all about risk/reward and at present I just don't see a trade in this commodity as trading to trade is a very dangerous over the course of time as you must be patient and wait for probabilities to improve in your favor. 
Trend: Lower - Mixed 
Chart Structure: Improving

Coffee futures in the March contract settled last Friday in New York at 155.0 a pound while currently trading at 145.60 down about 900 points from trading week with prices not seen since mid August as prices topped out last month around the 1.80 level, but at the current time I'm sitting on the sidelines as the chart structure has been poor in this market for months. Coffee prices are trading below their 20 and 100 day moving average for the 1st time in months & that tells you that the short term trend is lower with the next major level of support around the 140 level as I do believe coffee prices are getting cheap. A strong U.S dollar is certainly keeping a lid on many agricultural products including coffee, but my only short position in the soft commodities is a short sugar position which also continues to move lower. However, the volatility will be to the upside in coffee as were starting to enter the very volatile and critical winter growing season in the country of Brazil. Many of the commodity markets have been very choppy over the last several months, and that's why I only have 1 trade recommendation as I'm waiting for better chart structure to develop across many different sectors as that might take some time. 
Trend: Lower 
Chart Structure: Poor

Get additional commodity calls from Mike Seery on Cocoa, Sugar, Soybean, Cotton and more....Just Click Here