"Kip's VRA financial newsletter is a MUST read for every saavy investor in this country. Disregard it at your own peril. His mantra is my mantra: Buy Gold and China. Sell short on pretty much everything else. Kip Herriage's newsletter is my financial Bible."

--Wayne Allyn Root
2008 Libertarian Vice Presidential candidate
Author, "The Conscience of a Libertarian"

Twitter: @kherriage

Karl Bessey

Mary Dee

Mike Budny 
Twitter: @kherriage

Friday
Jan192018

VRA Update: PLEASE Shut the Government Down. VRA Market and Investor Sentiment Bullish.

The VRA nailed the birth of the "global reflation trade" in January 2016. My system caught the early reversals in base/precious metals, oil and global economies, along with the explosive volume movements that are hallmarks of a signifiant reversal. Frankly, this was one of the easiest calls I've ever made...but even today, many continue to discount the power of the global economic recovery. This is why it pays to be a smart money contrarian that employs both fundamental and technical analysis.
Because the reflation theme is still in its infancy, plus the fact that we're seeing "range expansion" take place today, we must remain fully invested in our favorite positions.

Precious metals/miners update: when Apple announced they would be adding $350 billion to the US economy and creating more than 20,000 new US jobs, the short-term result was a spike in the US Dollar, which sent gold and the miners lower. I view this as a temporary set back....I still see the US dollar headed lower and PM's headed higher. This chart confirms this....a waterfall decline in the dollar. Yes, it is highly oversold, but all I expect here is a bounce...not a trend change. Talk about an ugly chart.

VRA Market update 

Wednesdays rip-roaring +320 in the Dow Jones was met with yesterdays decline of 97 points. We'll take this kind of investing success, week after week after week. The year is shaping up to give us lots more where this came from. Internals were not great, but hey, every record-setting bull market needs to take a breather from time to time.
Yesterdays decline was (supposedly) due to fears of a government shutdown. In just a minute, I'll show you exactly how wrongheaded these fears are (hint; the markets LOVE government shutdowns).

The VRA System continues to read the broad market as "highly bullish" with best-looking sectors remaining as energy, precious metals/miners, China, biotechs and special situation small cap stocks...just as we are positioned today. I encourage everyone to login to your VRA Members Site at least 1-2 times each week, to ensure you are properly positioned.

I also encourage you to resist the temptation to go "all in" on just 1-2 VRA Buy Rec's. I only recommend 10 stocks at a time for a reason (actually 11 today). Diversification is a hallmark of successful investors and reduces the risk of becoming emotional about our positions. "Loading up" can also lead to large daily/weekly swings in your portfolio...the kinds of swings that can lead to oversized losses. Emotional investors tend to "buy high and sell low", or just the inverse of what we're looking to accomplish.     
 
I've always been an aggressive investor. After 33 years of doing this, pretty sure I always will be. During the 15 years of the VRA, we've crushed the markets like a red-headed stepchild. The point being, we can be smart money investors and aggressive at the same time. I believe this is why many/most of you are with me today. If you're looking to beat the broad markets by a few percentage points each year, I'm probably not your guy. Instead, we'll keep using the VRA System to ensure we are positioned in the right sectors/stocks that can produce gains of 50% or more. We'll also stay on the right side of big market moves; higher or lower, it does not matter...we'll keep making money, regardless the direction of the stock market. This is the essence of how the VRA works. 

Investor Sentiment

Here's the latest reading from AAII. Bulls back to 54.1% with bears down to 21.4%. Remember, until this survey reads 60% bulls for weeks on end, sentiment will not be a problem (as contrarians).
FUND MANAGERS "STILL" UNDERWEIGHT US STOCKS

Take a look at the Merrill Lynch/BOA survey of fund managers. Remarkably, US stocks are still dramatically underweighted, near the very bottom of the list. There's just one explanation, as I see it; Trump Derangement Syndrome. TDS has the supposed smart money (fund managers) scared of investing in the US. As contrarians, when the US makes its way to the top of this list, this is when we'll reduce our US holdings... 

GOVERNMENT SHUTDOWN FEARS

Many would like you to believe that a government shutdown will be bad news for the stock market. Uhhh...not the case! 
Check out the following table, showing all shutdowns back to 1976. Clearly, the markets love it when the government is closed for business, with an average annualized return for the S&P 500 of 27%, from the last 3 closures. 



Finally for this morning, gold/silver and the miners had a shake-out this week. Everything that I see says that we must continue to use any pause to add to positions. I first recommended gold/silver in 2003...over the years we've booked more than 3000% in net gains from this group...and I'm more bullish today than at any point in the last 10 years. Barring massive price suppression (sadly, always possible), the move higher directly in front of us will be an epic one. This is how I see it...so this is how I must report it to you. 

Lastly, Parabolic Options Program #6 is now open to new members. Like our Extreme Options Program, Parabolic is a 6 month membership, but instead of 1-2 options trades each month (as with Extreme) we have unlimited options trades....all based on the VRA System and VRA Options Signals. In addition to our options recommendations, Parabolic includes multiple email updates each week. In these updates I give you our upcoming targets, which helps to prepare you for the options trades we are about to make.
Should you have any questions about signing up, please email us at support@vrainsider.com and we will send you more info! Parabolic #6 opens today and will launch next Tuesday. As always, we limit each options program to the first 100 members.

We're off to a great start for 2018...this is my kind of market and could well be our best year ever for the VRA. Parabolic Options #6 will be the icing on the cake. We're also launching new members sites (for both Parabolic and Extreme), where all trades/returns are listed. New sites will launch next week.
Hope you can join us!

Until next time, thanks again for reading....have a good weekend.

Kip

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Thursday
Jan112018

VRA Update: 360% Gains in Just 11 Days. Next Up.

VRA Update: 360% Gains in Just 11 Days. Next Up.

Since the beginning of 2018 the VRA Portfolio ( stocks and options) has produced gains of 360%. I’ve been saying this will be my best year ever. This bull market is just getting started, and I fully intend to crush it again this year.
Market Update

Walmart announced that they would raise their starting wages, announced they are giving big cash bonuses to employees, plus something I have not seen before...a $5000 adoption benefit, for Walmart employees that adopt a child.
Wow.
Here's an AM tweet from Charles Payne...one of the rare MSM "gurus" that is actually a guru, in my book.
Since Trump's tax bill was passed into law, just 3 weeks ago, we've seen more than 80 fortune 500 companies making employee cash/benefits awards, similar to Walmarts. 
Can anyone name a single fortune 500 company that offered company wide cash & benefits packages to ALL employees, during Barack Obama's entire 8 years in office? There must be at least a few...right?
And here's a reminder tweet of mine, once we knew the tax bill had the votes to pass:
I remember the Reagan years pretty well. I was young (18-26), but I remember the news of the day...great news that went on for years on end; tens of millions, new jobs created...higher wages, year after year...and a rip roaring stock market, that more than doubled over his 8 years in office.
Under Reagan, it took 12-18 months before his polices began to make a difference in the stock market, but jobs growth was a different story...job creation began to rise quickly after just 6 months in office, with interesting rates topping out near 20%. 8 years of economic boom.
Under Trump, we've seen near immediate improvement with major employer after major employer, paying it back to their best assets...the people that work for them. Who the president is matters a great deal. 
I had people scoff at my year-end target for 25,000 for the Dow Jones, just as some are scoffing at my 30,000 target this year and my 40,000 target by 2020. But folks, this is what earnings growth of 10-15% per year works out to, assuming the P/E multiple stays around 20. It's really just math, at the end of the day.
Regardless, we'll continue to use the VRA System to ensure we are positioned correctly...whatever the future may hold.
Investing Tenets and Observations of the Day    
A few of my mentors investing lessons...
1) "Don't fight the tape, don't fight the FED". Yes, the FED has started raising rates...at some point the markets will have to deal with this...but the rising "tape" says we must be bullish.
2) "The trend is your friend". When the major averages are in confirmed bull market status (above 200 dma), we must be long. Conversely, stocks trading beneath their 200 dma pose big risks.
3) "There is no more bullish sign than an overbought market/stock that continues to rise". This is exactly what we're seeing today. Overbought markets that continue to rise. Highly bullish
4) "It's not a stock market....it's a market of stocks". One of the best investing lessons my mentors taught me. There's always an opportunity to make money, by focusing on both fundamental & technical research. This rule is at the heart of the VRA System.
I remain a bull...
...a big one...with the amount of money coming into the markets (a massively unreported story in my view), our next move should continue to be on the long side.
Remember, when inflation (and higher rates) first begin to return to the global economy, it is a highly, highly bullish event for stock prices. It's the confirmation of a strong economy and a much brighter global growth story. How could this be bearish?
It's only after a year (or even 2-3 years) of rising inflation and higher rates that we must start to become concerned. Please do not listen to the bears that tell you otherwise. It's not that they are wrong...they are just early (likely very). 
Ideally, I'd like to see the market take a breather...maybe even have a 200 point down day, just to get some fear back into the market. But frankly, we may not get anything close to this kind of decline...this bull market has too much higher to run.
Oil Powering Higher. Commodities Must Be Owned. 
Oil is breaking out to 4-year highs. Long-term readers will remember that I was bearish on oil at $100 and then turned bullish on oil at $32. Today, at $64.50/barrel, I could hardly be more bullish. ST overbought, yes... but we want to continue to own/buy.
Let me repeat; this is the beginning of the move higher...this is not the time to take profits...my $70/barrel target (WTI) for oil this year will likely be too low. Most continue to miss the power of the reflationary move in global economies. We're talking a 2-3-4 year cycle of MAJOR moves higher, in commodities across the board. 
I've been saying that the pause in gold/silver/miners would be short lived. It's likely that we've already seen the ST lows in each. $2000/oz remains my target for gold this year. Price suppression schemes may have just reversed course...in favor of higher gold and silver prices. And what a reversal that would be. Still looking for one final sign of proof....we must see buy side volume in GDX (miner ETF). Once volume confirms, look out above.
 
Final point on PM's and miners. History tells us that PM's love higher interest rates. History also tells us that PM's and miners love higher inflation. Folks, we have both of these today. 
VRA Market Update
Congress is back in session...this is when market accidents happen. Known as the Congressional Effect, going back some 60 years, more than 90% of all stock market gains have occurred when both houses of congress are out of session. Pretty powerful statistic. While we also know that more than 90% of all gains occur during the November to May time frames, I am not getting bearish on the markets...just pointing out that if a correction is going to occur, its more likely to take place when the House and Senate have an opportunity to screw things up.
Important New Years Market Pattern
Below is a link to an article from Zero Hedge that could foretell what we can expect for 2018, along with my tweet about the piece. Bottom line; we saw the Dow begin the new year with a gain of 2% or more. In years where the first 5 days of the year saw gains of 2% +, the market went on to rise in 15 of 15 years, with an average gain of 18.6%. 
Most interesting statistical research.  
It matches well with my year-end target of DJ 30,000 (20% higher from the beginning of 2018). In April of 2017, I stated that my year-end target for the DJ was 25,000. We missed that by just two days. Frankly, I'm even more confident about my 30,000 target for this year. Range expansion meets momentum,...this is the market we appear to be in today...is highly, highly bullish. It makes sense when you think about it this way; when the markets (or individual stocks) hit all-time highs, there is no one that owns that particular investment that has a loss...meaning that there is little to no reason for that investor to sell. When there's little selling pressure, even small amounts of buying pressure can send an investment soaring. 
Today, with the largest tax reform package in US history about to be unleashed...with corporate earnings already growing their best in a decade...and then add in the coming $2 trillion infrastructure bill and up to $4 trillion that could be repatriated back into the US, you can see why I remain so bullish about the future for stock prices. 
Yes, we remain extended and overbought...but that's no reason to sell. In fact, statistical analysis also confirms for us that markets that reach overbought levels and remain overbought tend to be one of the best investment environments of the last 100 years. 
In our next VRA Update we'll cover several charts that make up the VRA Portfolio. I continue to see major moves higher in energy, biotechs, China, precious metals & miners and small caps.  
Until next time, thanks again for reading….have a great week.
Kip
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Tuesday
Jan022018

VRA New Year Update: 2018 is Here! Trump Bull Market. My Forecasts and Predictions. VRA System and Sector Analysis. Extreme Options Program

Good Tuesday morning all. Happy New Year! Are you ready for an off the charts incredible 2018?

Because….I AM!

I honestly cannot remember being this positive to start a new year. Not in my 33 years in the business. At this time last year we had a new president that got elected because he said BIG things on the campaign trail that resonated with so many across the country (and the world). Those big words/ideas got him elected. But, in January of last year we had no actual proof that Trump would in fact be a man of his word. Most politicians say whatever it takes to win so that they can then line their own pockets with our money. It’s why we loathe the vast majority of elected officials.

Until Trump got into office and started governing, how could we know?

After 11 months in office, we have our answer. There’s not just evidence that Trump is a man of his word…there is 100%, unmistakable rock solid proof that Trump has been a man of his word. A few examples: Border security/immigration enforcement….destruction of business killing hyper-regulation…the largest tax reform/tax cuts package in US history…ISIS destroyed…3%+ GDP/US economic revival…70 new all-time highs in the Dow Jones…unemployment at 17 year lows. Next up, get ready for up to $4 trillion in corporate liquidity to come flowing back into the US economy (repatriation from tax reform legislation), along with a $2 trillion + infrastructure bill. Even the biggest left leaning Dems are ready to agree to a deal on infrastructure.

Just…wow.

 

The biggest driver for higher stock markets going forward? Massive amounts of retirement/pension/401k are about to come flooding into equities. Frankly, most investors are nowhere near bullish enough, based on my work and the VRA Investing System.

 

 

It’s gonna be a busy year folks…I believe a “highly” profitable year for us here at the VRA…now’s the time to get strapped in for the ride.

Lots of bases to cover this morning…I’ll use some tweets from the last couple of days to speed up the writing process:

In 2017, US markets had a banner year. The VRA did better, with a 32% gain (marking 14/15 years this has been the case):

 

 

VRA MARKET UPDATE

Based on everything I see, 2018 looks to be one of our best years ever. In 2011, the VRA put up a return of 260%. My best year on record. I repeat…my goal is to beat 260% in 2018.

The VRA System sees no signs of trouble. None. Yes, we’re still ST overbought…but nothing like we were in mid-December. Check out the latest readings from the VRA System (remember, Extreme Overbought readings on VRA System occur when an index/stock is at 90%+ overbought):

S&P 500: 75%

Dow Jones: 84%

Nasdaq: 64%

Russell 2000: 81%

The “pause” over the last week of 2017 brought the overbought readings down….just the kind of “correction” that bull markets love. Now its time for onward and upward. The markets internals continue to point to exactly this. For example, on Friday, when the DJ lost > 100 points, new 52 week highs to lows registered 504 new highs to just 70 new lows. Powerful…and not at all indicative of a market thats ready to reverse course.

VRA Sector Analysis

My favorite sectors have not changed: energy, retailers, biotech, PM’s & miners, China and small caps. Check out what China did overnight….Hong Kong +2%….meaning that our holding in YINN (3 x China ETF) will open some 8% higher.

 

 

Precious Metals and Miners: Bring on the Rate Hikes! $2000/oz Gold in 2018.

Over the weekend I saw 3 different “gurus” predicting that gold would not do well this year, due to ongoing rate hikes from the FED. Poppycock…!

 

 

And heres the chart that matters most….we want to see gold break $1340…then $1370. Then….its liftoff folks.

 

 

In this weekends Barron’s, on both the cover and in 2–3 articles, they predicted that commodities/metals/gold would have a banner year and that inflation was on the way back. Nice to see Barron’s join the party on the global reflation trade. The VRA nailed this forecast long ago:

 

 

Yes, the VRA System shows PM’s and miners at Extreme Overbought readings. We must be aware of this…just as the US dollar is flashing Extreme Oversold. No need to change course…just important to be aware of a ST pause. However, the shorts are piling into this trade now. If PM’s continue their surge (the best since 2011), the squeeze could send PM’s and miners screaming higher.

Extreme Options Program

The first day of the new year is not the ideal time to laugh a new options program. Look for this email with full details in the next 24–48 hours. If you want in, just send us an email a support@vraletter.com and we’ll make sure your place is reserved (first 100 only). We’ll then launch the next Parabolic Options program within a couple of weeks.

Finally, check out this video (below) of Tyler from yesterday. A wild deer kiss. What a way to start the New Year!

Again, Happy New Year everyone. Looking forward to crushing the markets together in 2018.

Until next time, thanks again for reading….have a great week.

Kip

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https://twitter.com/therriage18/status/948004235102310400

 

 

Friday
Dec292017

VRA Weekly Update 12/29/17: Happy New Year! The January Effect. VRA 2018 Game Plan.

Good Friday Morning All,

In March of this year I predicted DJ 25,000. We’re almost there. Today, I could not be more bullish. Not on the economy, not on the markets and not on the future of our great country. How weird was it that everyone was proudly saying “Merry Christmas” again this year and that we noticed the huge difference from years past?? That’s a sign of things to come that I wrote about in my book, Crashproof Prosperity: Becoming Wealthy in the Age of Trump(download here).

Market Update

US equity futures are trading higher this morning, as we get one final opportunity to crack 25,000 on the Dow Jones. Should the DJ close 163 points higher, 25K will become a reality.

In reality, DJ 25k means little. The VRA System is structured to give us maximum exposure to the groups with the highest probability for big gains, regardless of what the broad market does. Today, these opportunities lie in precious metals and miners, energy, biotech, retail and of course, small cap story stocks…

2018 Snapshot

For those that don’t follow me on Twitter, here’s a snapshot of my thoughts about the New Year.

The amount of money thats about to flood into the markets….as all of the year end bonuses and retirement/pension/401k money comes storming in….could send the DJ up 1000 points in just 2–3 weeks.

This is what I expect to see….I’ll be surprised if it does not happen. Just wanted to put this on record.

The January Effect

From my first year in the business (1985) I was taught…by two great mentors (Ted Parsons and Mike Metz, RIP both) about the investing power of the January Effect. Here’s the official definition:

“The January effect is a seasonal increase in stock prices during the month of January. Analysts generally attribute this rally to an increase in buying, which follows the drop in price that typically happens in December when investors, engaging in tax-loss harvesting to offset realized capital gains, prompt a sell-off.

The January Effect produces some of the best short term gains of the year, as stocks that were sold in December for tax purposes come roaring back in the first month of the new year. This applies even more so to small cap stocks that sell-off in December…when liquidity is low…sending the shares of small cap stocks lower, only to snap back quickly in January. In 2018, I look for the January Effect to be powerful

IWM (Russell 2000 ETF)

IWM is displaying one of the most bullish chart patterns you’ll see. A rising bullish wedge, that is compressing into a coiled spring. It’s also flashing buy signals on every important technical and at least 1 week away from reaching Extreme Overbought Levels on the VRA System. IWM is comprised of small cap stocks…with some mid caps as well…but this is the group that will benefit most from the January Effect. This is of course the sweet spot for the VRA Portfolio.

 

GOLD BACK ABOVE $1300

As I write, gold is trading at $1302/oz with silver back to $17/oz. This places both gold and silver back above every important moving average (50, 100, 200). Highly bullish (while ST overbought).

Here’s my tweet on gold’s recent trading pattern from yesterday.

 

 

This trading pattern is highly bullish. It most often occurs before major spikes higher. Our biggest concern? The return of the price suppression manipulators, the global central banks that have kept the price of gold cheap for many, many years. Will 2018 be the year that the price suppression schemes finally fail? I am most hopeful. It’s a major component of my $2000/oz price target for gold.

In this scenario, the miners will explode higher. Especially the VRA Portfolio miners. As always, I’ll be watching closely. However, there is one item that concerns me that I mentioned on Twitter this morning.

 

Volume Proceeds Price Movement

OIL

I was bearish on oil at $100/barrel and remained bearish until oil bottomed at $26 (I called the bottom at $32). Take a look at this 3 year chart of oil. Notice the volume surge? This told me that smart money was coming in…likely in a major way. My target for 2018 is now $70 (minimum) but I would not be surprised to see $75–80. The global economy is back…of this there can be no doubt. Great for oil and energy stocks.

 

COPPER

Or Dr Copper as its commonly referred to, one of the best all-time indicators for economic growth. In this 3 year chart we see a major increase in volume. I called the global reflation trade here, in these pages, at the beginning of 2017. Copper is now on its best run in close to 3 decades.

 

 

Volume precedes price movement. A most important lesson from my mentors….some 30 years ago.

AAII Investor Sentiment Survey

Here’s the latest from AAII from Wednesday. Well folks, its finally happening. Investors are getting bullish. This reading shows bulls at 52.6% and bears at 20.6%. I see no real reason for caution here….but once we start approaching 60% readings we will be forced to be more cautious on the broad market. But…its happening just as we expected…just as we cover here weekly.

I’ll close this holiday trading week VRA Update with a final macro thought; in my estimation, few are prepared for the move that is about to take place in the markets. An absolute flood of fresh money is about to come into the market…from early January retirement plan/401k/pension contributions…to investors that are deciding its finally time to get back into stocks.

I look for a 1000+ point move higher in the Dow Jones…in January…and it may even happen inside of a single week. Yes…I remain highly bullish. My system says we have no choice.

Until NEXT YEAR….thanks again for reading…have a very Happy New Year! See you again in 2018 (and on Twitter, much sooner).

Kip

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Friday
Dec222017

VRA Weekly Update 12/22/17: Merry Christmas! 2017 in Review. Big Happenings in Mining Stocks and Bitcoin.

If you had a chance to listen in last night, you know that Wayne and I covered a lot of territory. 2017 has been nothing short of remarkable…alternate universe kind of stuff. The gurus and pundits, once again, got just about everything wrong:

If Trump wins the market will crash.

If Trump wins, the world will burn (and not just from global warming/global cooling/climate change)

The market is wildly overvalued and cannot keep going higher.

Cryptocurrencies are a scam.

The oversupply of oil will send it crashing back below $40

And my personal favorite; Trump won’t last a year….Russia, Russia, Russia!

But I saw things differently. I even wrote a book about it. The Trump bull market is very real…and its just getting started.

At the end of the first quarter, I first stated in writing that DJ 25,000 was likely. We’re almost there. As you may have heard last night, my 2020 target is being raised to DJ 40,000 (and that may be low).

Of course, no one knows for certain. But I do believe I know this for certain; our current bull market will not end until we have a “blow off phase”. The phase where investor euphoria takes hold and sends stocks screaming higher. We’re simply nowhere near this today.

When everyone starts talking about DJ 40,000….maybe even DJ 50,000…we’ll know that its time to be concerned about a top. Major bull markets do not end until we reach the mania phase. At the soonest, this kind of a top is at least 1 year away…likely 2–3 years away.

Market Internals Solid

My mentors taught me, way back in the mid-late 1980’s, that if you listen to the market, it will tell you what it is about to do. The single best way to do this? Charts, technicals and especially the market internals.

Take a look at yesterdays figures. When we see 2–1 positives across the board, as we saw again yesterday, the markets telling us that it almost certainly wants to go higher still. Once again, we see new highs to new lows at close to a 10–1 ratio. Highly bullish.

 

2017 — The Trump Bull Market

During the last year we’ve seen more than 75 new all-time highs and a record 5000 point Dow Jones advance (the first in history), as the country is reminded of what a pro-growth, business friendly economy is supposed to look like. We’ve also seen a multitude of highly burdensome regulations slashed…allowing entrepreneurs to do what they do best…grow their businesses.

Remarkable. And yes, who the President is matters a great deal.

But folks, “literally” everything that I see, using the VRA System and my 32 years of experience, tells me that we are nowhere near the end of this rally, certainly not after passage of Trumps massive tax reform bill.

Here are the some of the most important markers that I follow:

1) Sentiment; yes…investors have become much more bullish (as you’d expect with this kind of a move higher), but the most important sentiment survey that I follow…the same one that I’ve followed since the late 80's…shows bullish percentage still at just 50%. While its beginning to elevate, yours truly will not become concerned about this market reaching dangerously overbought levels until bullish percentage reaches 60%…and for weeks on end. We’re nowhere near this.

Here’s the latest AAII Survey readings from Wednesday, presented in graph form that shows bullish sentiment readings from the market lows of 2009 (exactly when the VRA switched from bearish to bullish….we actually called the stock market bottom within 5 minutes of it occurring).

As you can see, bullish sentiment is finally picking up steam, back to 50%, however we’re still quite a ways from the 60% readings that could begin to signal euphoria. The highest bullish reading over this time frame was 63% (late 2010).

As a contrarian, the odds are slim to none that I will become worried about sentiment becoming too bullish before the end of Q1, 2018 (at the earliest).

2) Seasonality: in what may be the most important statistical investing fact that exists, over the last 50 years more than 90% of all stock market gains have occurred from November to May. Again, 90% folks.

We barely had a single whiff of a sell-off during the historically volatile September/October risk filled months, which told us that we must be positioned aggressively for higher stock prices. My year target of Dow Jones 25,000 is 275 points away. 30,000 in 2018 is not a stretch.

3) My mentors taught me, at the young age of about 24, that you can track markets by the success in the following areas: income tax receipts, health of the housing markets and health of financial stocks. We see all-time highs in all 3 areas today. Highly, highly bullish.

Also, by following the Nasdaq (the best barometer for excitement in the markets), we get a great feel of what the future holds. Remember, since the election, the nasdaq is up a big 30%.

Final point on the markets and the economy: the stock market has always served as a discounting mechanism for the future. It tells us, roughly 6 months in advance, what we can expect economically going forward. Today, I believe the stock market is telling us that both the US and global economy will continue to surge.

In my book “CrashProof Prosperity, Becoming Wealthy in the Age of Trump” I laid out two investing scenarios. In one, I said that “if” we were going to have a bear market and sluggish economy, that it would come early on in Trumps first term (lots of historical precedence for this, during the first year of a new presidency).

That did not happen.

In my second scenario, I laid out the more likely probability that Trump would take the markets to all-time highs, based on economic growth that finally got back to the 4–5% GDP growth of years past. Remember, in not a single year of Obama’s 8 years did US GDP hit 2%. Today, we’re already back to 3% +.

Imagine what Trump might be able to accomplish in years 2–3–4.

I am “all-in”. The DJ is headed to 35,000….possibly even 40,000…over the next 3 years. If that sounds impossible, consider this; a move to 40,000 would mean that the market would need to average a 20% return over the next 3 years. Not impossible at all.

BITCOIN

I first bought bitcoin at $600. When it crossed $2000, I began writing publicly about it in these pages, saying “Bitcoin is breaking out…higher prices are on the way”. Bitcoin rose to $20,000….but today its going through another big drawdown (correction).

Here are the big drawdowns for 2017:

For those interested, Bitcoin at $12,000 represents a Fibanacci retracement of 38.2%. If this level does not hold (and its breaking through it as I write), then we can likely expect a move to $9500 (or so). Just some basic technical analysis for those interested.

GOLD and MINERS

Wayne and I covered this last night as well. Here’s my tweet from the trading action in the miners over the last 2 days. Back to back days of 4:1 ratio, GDX (miner ETF) to gold. First time we’ve seen back to back 4:1 days in more than 18 months.

 

There is no more bullish sign for the future price of PM’s and the miners than this kind of outperformance. Now, we want to see GDX break though their most important moving averages…and we want to see it take place on heavy trading volumes. This morning, gold, silver and GDX are knocking on the door for this most important breakout. Here are the levels we want to see surpassed:

Gold: $1288/oz ($1273 now)

Silver: $17/oz ($16.29 now)

GDX: $23 (22.70 now)

My target for 2018 remains $2000/oz gold. We will make an absolute killing in the miners (which move 3–5x faster than the underlying metals).

Finally, the markets are quite this morning. I wish you a very Merry Christmas and a great holiday season. The markets are closed on Monday, so I’ll see you back here first thing Tuesday morning.

Thank you for making the decision to join the VRA. Every bone in my body says we are going to absolutely crush the markets in 2018.

Until next time, thanks again for reading…

Kip

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