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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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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VRA Update: Tax Bill Volatility. FED Rate Hike. Fresh All Time Highs fro 2018. Gold v Bitcoin

Good Friday morning all.

Busy week with Tax Reform and the FED Rate Hike, I will get right to it.

The FED acted just as we expected, hiking rates by .25%, the 5th rate hike since December 2015. Yellen had a number of interesting comments at her presser as well.

 

1) We remain perplexed about what's happening with inflation (not me...its everywhere we look).

 

2) Bitcoin/cryptos are not under our purview. We cannot regulate it. It's also not large enough to be a systemic risk (as I've predicted, I see no harmful regulation here until the combined market cap of all cryptos reaches $1 trillion...we're about 34% of the way there).

 

3) The economy is picking up steam (duh), but they only raise their growth forecasts modestly (they're wrong again...its now likely that we will have 3.5% GDP...or higher...in 2018).

Tax Reform

Mid-day yesterday the rumor began to float that Florida Senator Marco Rubio "may not" support the tax bill. The 125 point reversal in the DJ and the 1.1% decline in the Russell 2000 gives us an idea of what might happen should tax reform fail...we could easily see a drop of 1000 points in the DJ...maybe more. This morning, a reversal from Rubio...he says he's voting yes...but its a paper thin margin headed in to next week. 

US futures are sharply higher this morning, pointing to a +100 point open on the DJ. I put the odds at 90% that tax reform passes. The markets have been telling us that it will. But in 2017 politics, we know that anything can happen. Hedging with some deep out of the money index puts or VIX calls might not be such a bad idea. You'll most likely lose your entire investment...but should the bill fail, you'd make 5-10 x your money (again, I see the bill passing).

Yesterdays internals were not good. Weakest in 3 weeks. Should we have 3 straight days of readings like this, the VRA System would flip to "short term neutral" from "ST bullish". Watching closely...but as we've seen throughout this entire move higher for 2017, these negative readings do not tend to last long. 

Weekly AAII Investor Sentiment Survey

Here are the weekly AAII Investor Sentiment Survey readings from late yesterday. Bulls now sit at 45%, bears at 28.1% and neutral investors at 26.9%. This weeks bullish readings match the 2017 highs from last month. Yes, investors are beginning to get excitedly positive about the stock market...but still nowhere near the 60% levels that will force us to think like a contrarian (and become concerned about being part of the majority). 

Going forward you'll hear me discuss this concept more, but I see the move in cryptos as LT bullish for growth stocks...just like the ones that we own. 

Gold and Miners

With a couple of weeks left in the year, gold has gains of 9% and silver is down slightly. Not the worst year ever...but you wouldn't know it from the sentiment surrounding precious metals and miners. The crypto currency action has drained the excitement from PM's...theres little doubt about this...while price suppression from bankers has continued. Gold, silver and the miners continue to trade below their most important moving averages, but as we've covered here, based on the last 4 FED rate hikes we should have a powerful move higher directly in front of us. 

Take a look at my Twitter Pole from earlier this week

Which asset will perform better in 2018....gold or Bitcoin? 

You know I'm a contrarian. Hence, you know how I believe 2018 will turn out (Gold wins).

VRA Portfolio 

Lastly, a quick recap of 2017, the VRA Portfolio has a net gain of 411% on all Buy Recommended stocks (including the '17 profits we've already locked in). This puts us at an average return per stock of right at 30%. 

To our new Members, please make sure to log to your VRA Members Site at least 1-2 x each week. Make sure you are positioned correctly...we're going to have some fresh trades here by year end. 

To become a new member sign up today at VRAinsider.com to receive 2 Free Weeks!

 

Until next time, thanks again for reading..

 

Kip  

VRA Weekly Recap 12/8/17: Market internals and the Fed Rate Hike

Good Friday Morning All,

After running VRA System scans I can report that last weeks wild trading (from last Fridays flash crash, the market has been volatile) has significantly reduced the overbought status of each US major equity index. Again, we are in the most seasonally bullish time of the year and the (likely) passage of the tax bill is not priced into the market yet. In addition, the mega deal between CVS and Aetna Insurance…$69 billion in size…is almost certainly a sign of things to come.

Remember, the tax bill will bring $2 trillion + back into the US. Repatriation makes a great deal of sense to US multinationals when its taxed at 20% compared to 35%. While I expect most of the incoming cash to be spent on mergers and acquisitions…plus share repurchase programs…without question, a good chunk will also go towards hiring and wage increases.

But there’s also a larger macro point that gets lost in the weeds. Since 1995, the US has lost 55% of all public companies to M&A activity…buyouts and taking companies private. The other culprit of late has been the Dodd-Frank act of 2010. It’s design may have been to minimize future risks from the 2008–2009 financial crisis, but its overly burdensome regulatory effect destroyed the IPO market in the US.

Take a look at the chart below. IPO’s topped out in 1999 at 486. Last year, the number of IPO’s fell to just 105. Going forward, we can expect a sharp increase in IPO’s…its another of Trumps goals.

The larger point here is that the 55% drop in publicly traded US co’s has resulted in a supply/demand imbalance. The investment markets are approaching $100 trillion in total size (globally), meaning that we have far more money chasing far fewer public co’s. HIGHLY bullish for stock prices going forward…it also helps to make sense of todays higher P/E multiples.

You know my thoughts. DJ 25,000 by year end. DJ 35,000 by end of 2020.

Market Internals

The rotation out of tech and into value continues. The tech heavy Nasdaq has been weak, but no, I do not expect the weakness to turn into a sharp sell-off. The markets internals are holding up just fine. Take a look at yesterdays closing numbers. While New Highs & Lows volume were mixed, the number of Advance/ Declines was very bullish.

For this market hiccup to evolve into a more serious pullback (even in stocks being rotated out of), these kinds of powerful market internals will have to begin weakening…quickly…I simply do not see this in the cards.

Markets that refuse to demonstrate weak internals, even during negative news like both of this past weeks “fake news driven declines”, are telling us that they want to continue moving higher still. Here are yesterdays closing internals, on what was a flattish day.

2–1 positives across the board. I’ll be as clear as I can; these are not the internals that we would expect to see in a market that wants to go lower. Add in the fact that we are in a highly bullish seasonal period…in fact the most bullish of all…and its highly likely that last Fridays flash crash lows will be the lows for some time.

We’re also seeing new all-time highs in housing, financials and the transports. Just not at all the kinds of market action that we would expect to see in a market (or economy) that is about to change direction.

AAII Investor Sentiment Survey

Below is Wednesday’s weekly AAII update. Bulls at 36.9%, bears at 34.2% and neutral investors at 28.9%. Bull markets end when bulls are hitting 60% and for weeks on end. Until we have the final ‘lift-off” stage in the stock market…the same one that I believe will take the DJ to 35,000 or more…I see no significant top in the stock market.

FED Meeting and Rate Hike

The FED meets next Tuesday and Wednesday…they’ll then announce their rate hike on Wednesday at 2PM EST. And yes, the FED is going to raise rates, barring a major surprise. In fact, if the FED does not raise rates, I would expect the market to sell-off a good deal. The markets do not like surprises…as we’ve seen in the last weeks trading sessions with TWO fake news stories about the Trump administration (ABC news fake news on Friday and the fake news that Mueller has subpoenaed Tumps bank records…also fake news).

IMPORTANT: the action we are seeing in the markets…which features what I can only call bizarre trading anomalies…is taking place in front of the FED’s expected rate hike next Wednesday. Emerging markets, like China, are being taken to the woodshed. We’re seeing the same in precious metals, miners, industrial metals, energy, etc….the global relation/inflation themed names.

Because we have seen this exact action take place before the last 4 rate hikes, we also know what the outcome will almost certainly be resolved higher. IF NOT, then this would represent a pattern change…I see a 90% probability that there will be NO pattern change (because at this point the markets, especially rates and bonds, are hinting at a slowing global economy…possibly even a recession). I see the odds of this as tine, meaning that the current correction in global relation themed names is giving us a gift here

I also expect the current sell-off in PM’s and miners to end within the next 48–72 hours or so….in the next 2–3 trading sessions.

Final point on precious metals and miners; increasingly I am increasingly hearing from clients and traders that they have been selling their gold and buying Bitcoin. Frankly, who can blame them? Bitcoin is trading at $15,896 as I write this morning. The manipulators have yet to find a way to manipulate cryptos…of course they’ve been doing this to gold/silver for decades. GOLD SHOULD BE DOING WHAT BITCOIN IS DOING…and it should be over $5000/oz today.

For my subscribers(click here to receive 2 free weeks), in our next update, as we get closer to the FED’s hike, I will show you exactly what I am talking about. The price suppression in PM’s is criminal. It’s robbed us of bitcoin-like gains…of this I am beyond certain. But this suppression is about to end. 2018 will tell the tale…and its this final pre-rate hike selloff that will remove the final weak hands in precious metals and miners.

As to Bitcoin, its in parabolic mode right now. This is when huge moves higher take place, almost universally followed by sharp selloffs. But bubbles can take on a life of their own…this one could take bitcoin higher still. Also know this; the public is now rushing in to buy Bitcoin…this typically marks the beginning of the end of the current move. I have no idea where that top may be…as long as investors are properly diversified, Bitcoin still has a place in a portfolio. But gold is a far smarter investment today…especially with the post rate hike recovery move higher that I see happening.

Until next time, thanks for reading… have a good weekend

Kip

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VRA Weekly Recap: VRA System/Market Update, Important Mega-Bull Market Rotation. Energy, Biotechs, Retailers, Precious Metals/Miners and Bitcoin

Good Friday morning all. November went out like a lion….big 331 point move higher in the Dow Jones (DJ), with a solid recovery move higher in the nasdaq, which was destroyed on Wednesday. Exactly what we want to see….as stock market bulls.

If you’re watching the news of the Flynn guilty plea, you know that this is why the Dow dropped 300 points. If this was not a Friday (I don’t buy on Fridays typically) I would probably be recommending that we take action….

We’ll wait til Monday and see whats what.

But I see this as an absolute nothingburger. The bigger risk is that this delays or derails the tax deal. I’ll be surprised if this amounts to anything more than a 1/2 day sell-off.

For our newer VRA Readers, know that in January of 2013 the VRA went bullish on the markets (after buying the exact lows in March 2009…turning bearish in mid 2012…then back to fully invested 1/13.

For those that follow me on Twitter, you’ve seen me make this statement many times over the last (nearly) 5 years; “if you’re not long, you’re wrong”. Yesterdays melt-up like move higher is just the beginning…rather than the end of this mega bull market move higher. When/if the VRA flips back to bearish, you’ll be the first to know. We’ll get an advance heads up from the internals…but today, there are just no signs of worry.

Having said that, also know this; in the short term, each US equity index is trading at Extreme Overbought Levels on the VRA System. Does not mean a correction is imminent…but we should not be surprised if we have a few down days….but candidly, this bull market looks like its ready to go parabolic. I will touch on this again at the end of this post.

VRA Market and Portfolio Comments/Charts

We finally got the breakout I have been looking for in the biotech’s. Check out this BEAUTIFUL chart of XBI.

The VRA System nailed the lows in this group in Q1 2016. Since then, check out this bullish channel! It looks certain to me that the lows are in place. This bullish channel is incredibly well defined…

OIL.

The VRA was bearish oil at $100 + and then flipped to bullish at $32/barrel in February 2016. Again, check out this gorgeous chart as well. With the high volume breakout we’re seeing, we could have a monster move for oil in 2018 as well. I expect just that. Next up we want to see a strong move higher through $59….then its $62 pretty quickly.

Even as oil was soft earlier this week, we saw XLE and OIH (energy ETF’s) move higher pretty powerfully. This is exactly the divergence we want to see…it is telling us that oil will likely follow.

It’s time for us to get paid

GOLD

Here’s another chart that is telling us higher prices are in our near future. Check out the volume expansion and rising RSI and MFI over the last 6 months or so. Yes, gold has been weak of late….we expected this going into the FED meeting and rate hike in less than 2 weeks.

But, while gold was down .80% yesterday, the miners were down just .20%. Again, this is the positive divergence we want to see. Beginning next week I will walk you through our exact strategy for PM’s and the miners, into year end. Let me repeat; we are going to have a YUGE move higher in PMs and the miners in 2018. My gold target remains $2000/oz. This will produce the biggest mining stock gains in more than a decade. Let me tell you, now is the time to become a VRA Member!

What could change my mind, in the near term? A big move lower in gold….through the 200 dma, on heavy volume. I’ll be shocked if this happens. We will soon be rewarded.

In all modesty, I know of no one who has produced more profits in this space than I have…going back to 2003 when I issued my buy rec on gold/silver/miners in my second ever VRA Update. Now its time for the most explosive bull market in the history of precious metals. Think “bitcoin-like”….for the highly leveraged miners.

Speaking of Bitcoin

As I write this, Bitcoin is back above it’s $10,000 level. I’ve written about Bitcoin on a handful of occasions and have owned it personally since $600, but trust me, I did not buy enough…you never own enough of something that goes parabolically parabolic.

The chart below is of 2017 Bitcoin trading, featuring important market cap milestones, including the incredible move from $1000 to near $10,000…again, in just this year. Remarkably, since just October, Bitcoin has soared from “just” 4k.

Check out this chart of the ride Bitcoin has taken us on.

My Thoughts on Bitcoin:

1) In my last Bitcoin note I said that it’s likely the entire market cap for all “cryptos” would ultimately reach $1 trillion (again, for all cryptos…Ethereum, Litecoin and the near 1000 others). Today, the total market cap for all cryptos sits at approx. $300 billion. Based on this, I would not be surprised to see Bitcoin hit $30,000 (or 3 x higher than today)

2) Once Bitcoin hit $9000, it was almost certain it would hit $10,000. The same track record exists for stocks that hit $90…or $900…its a high probability trade that it will hit the “10” mark.

3) We have a number of VRA Members that are actively invested in this space. First, congratulations! Your feedback and research has been most helpful and appreciated. Second, just based on feedback and sentiment, I would say that there are very few among us that have “large” exposure to cryptos. As we know with investor sentiment, bubbles do not tend to burst until the public is “all in”…and I do not get that sense at all, from my research.

4) The biggest risk in cryptos today? Its the same as its been for a long while…government/central bank intervention. In my view, until the combined market cap hits $1 trillion for all cryptos, it is likely that they will not be viewed as a “systemic risk” by our global powers that be. In other words, smooth sailing on the intervention front for at least a while longer.

5) Finally, now that futures have been approved for crypto trading, institutional investors now have the ability to get involved…from a legalistic framework. In the short term, this adds new buyers and fresh liquidity. In the longer term, it could also bring about new hedging and shorting strategies. AKA, price suppression/manipulation.

6) Finally, in early 2018 I continue to hear that there will be 2–3 IPO’s that we will take a close look at. Companies like Coinbase (wallets that hold cryptos) rushing to capitalize on the frenzy. I will be watching these closely. This is where the first official VRA Buy Rec in this space will come from. Please continue to send me your research.

2018 Bitcoin-Like Moves

Should Bitcoin hit $30,000 next year, thats another 300% move higher…but again, Bitcoin has gained 1000% in 2017. To duplicate that move in ’18, Bitcoin would have to hit $100,000. Anything is possible…but the odds of back to back 1000% years would be remarkable…also highly unlikely in my view.

Instead of “buying high” we want to “buy low”. The VRA Portfolio has 4 holdings that have the potential to have their own 1000% moves…over the next 12–24 months.

BIG Market Rotation

As we move into December, I see nothing that says our global bull market will slow down. In fact, I see far more signs that it is about to speed up. My favorite sectors, based on both fundamentals and technicals, continue to be energy, precious metals/miners, biotechs, retailers and small cap, special situation growth stocks.

Here’s my tweet on the major market rotation from Wednesday It sent the DJ up another 103 points while sending the tech heavy Nasdaq a big 1.3%.

VRA Members are positioned perfectly for this rotation….and next up, coming out of the FED rate hike in 2 weeks, we’ll see big moves higher in PM’s and miners as well. I’ll get into all of this in more detail in coming updates. I love energy, biotechs, retail here…value stocks are now being rotated into.

AAII investor Sentiment Survey

Bulls at 35.9%, bears at 31.6%…again, in no way do these readings indicate a market top is close. My targets remains DJ 25,000 by year end and 35,000 by year end 2020. Both could be low….

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

Kip

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