Coordinated Momentum, Liquidity Breakouts Continue. VRA Market and System Update.

All eyes are on the G20 and Presidents Trump/Xi meeting on Saturday. Earlier this week, Treasury Secretary Steve Mnuchin stated that “we’re 90% of the way there”. I wished he had said nothing of the sort.

Our view is unchanged. We’ll be surprised if a trade deal is completed…but we will also be surprised if the meetings are a complete disappointment. Both sides will be heavy with the spin.

Here’s what really matters; the markets likely already have this figured out. We’re going higher…much. New all-time highs will beget more new all-time highs. And, we WILL break higher from this triple top in both the S&P 500 and DJIA.

If you’ve been with us for a while, you know that we’ve expected a full on momentum/liquidity fueled breakout in not only the equity markets (domestic & global) but also in assets like precious/base metals, oil/gas and Bitcoin. We are witnessing coordinated momentum breakouts, fueled by a staggering level of global liquidity. VRA Investing System readings (10/12 Screens bullish), along with rock solid market internals, continue to confirm our beliefs.

To crush Mr. Market, we must: a) be on the right side of major moves in the broad market, b) be in the right markets/sectors/stocks and c) be positioned for maximum leverage and exposure.

Bearish Sentiment Continues to Shock

The fact that this breakout is occurring at the same time that investors (both individual and institutional) are across the board bearish, only helps to cement our bullish, contrarian case. When everyone is going left, we want to go right.

AAII sentiment continues to be bearish. Stunning! 29.6% bulls to 32.1% bears. 7 weeks in a row that bears have outnumbered bulls. Again, highly bullish for our markets. A contrarians delight.

What’s happening now…and we see this as just the early innings…is the beginning of a multi-year move higher that will take the Dow Jones to 50,000+, gold to $3000+ and Bitcoin to ? (who knows…but much higher) by the end of Trumps second term. If Trump were to lose in 2020, the markets will crash lower…and we will quickly flip from bullish to bearish. Not hyperbole…not a political statement…just a reality of the significance of having a president that knows what it takes to grow an economy. The Trump Economic Miracle is playing out right before our eyes.

The free market capitalism/populism/nationalism movement actually started before Trump. First up, Poland and Hungary acted in defiance of the EU (saying no to forced migrant placement)…then they elected strong, country loving, populist presidents. Then Brexit…then Trump…followed by populist leaders that were elected in Italy, Czechoslovakia, Brazil…even Australia is kicking globalism to the curb.

The economic significance of the VRA’s bullish macro case continues to be underestimated. In a world driven by free market capitalism…lower taxes, less regulation and smaller government…the entrepreneurs animal spirits are unleashed. Entrepreneurs create high paying jobs. They replace the power base previously controlled by big government, globalist elites. We see this as a long term, hugely bullish global macroeconomic & geopolitical development that could result in the strongest global economy of our lifetimes.

GOLD & MINERS UPDATE

We continue to be long and strong gold and miners. As seen in both gold and GDX below, they sit at extreme overbought levels, but the breakout is very, very real. Keep buying pullbacks. We’ll add NUGT soon. Over the last month, gold is +13% and GDX is +29%. The leverage is in the miners…and the miners are leading the way higher. Again, exactly what we want to see. Over the same time frame, our top gold pick is +48%. A monster move higher is directly ahead.

Lastly, I’ve received the following story from many of you this week. Merrill Lynch caught criminally manipulating precious metals. Once the manipulation of precious metals comes to an end, parabolic moves higher await.

https://www.zerohedge.com/news/2019-06-25/merrill-lynch-caught-criminally-manipulating-precious-metals-market-thousands-times

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

Kip

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

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VRA Weekly Update. VRA Investing System Podcast Hits 20,000 Listens, Golden Crosses Abound

Good Friday Afternoon all. When Tyler came to me last year with the idea to start recording a daily podcast, my first reaction was “so you want to add to our 12 hour work days?”.

But Tyler is relentless. Would not take no for an answer. So I agreed. I honestly believed that with countless thousands of podcasts already in existence, this might be a short lived project.

But the numbers continued to build. Now, with hundreds listening to our end of market podcast, we’re locked in and having a blast with it.

Tyler shared the following with me yesterday. We’ve reached 20,000 total listens…

Thanks to everyone thats been listening! And Tyler, thanks for being relentless.

Give us a listen at VRAInsider.com/podcast

Market Action

Futures pointed to a lower open as we had weak futures trading overnight leading up to this morning’s economic reports where we had a bit of a mixed bag.

On the top line non farm payrolls missed big on estimates coming back with only 20,000 job gains compared to estimates of 173,000. However, wages beat expectations coming back at .4% compared to .3% estimates, and a very important indicator, the unemployment rate came in today at 3.8%, continuing the strongest job market in over 50 years, beating estimates of 3.9%

Futures are further under pressure after the news this morning, but there were more positive numbers to look at as housing starts for January came back strong with gains of 18.6% v. the estimates of 9.5%

Housing has been on a great run as well since the 12/24 capitulation, and similar to our markets has taken a pause in the last weeks after reaching overbought conditions. However, we continue to see strength in this sector, as it is now at approaches oversold levels, we fully expect to see this rally higher continuing.

Golden Crosses abound

As Kip mentioned in Yesterday’s Podcast all four of our major indexes are approaching what is called a golden cross, and I wanted to take you through a few very bullish examples of this we are seeing right now.

A Golden Cross occurs when a shorter term moving average moves above a longer-term moving average. In this case for our indexes, the golden cross is happening with the 50 day moving average about to cross the 100 day moving average. While this may not the most bullish golden cross that we could see, that would be the 50 day crossing the 200 day, in this scenario we are still seeing a highly bullish pattern, confirming the strength of the current uptrend.

I’ll spare you from having to look at each chart of our major indexes, as once you see one you will always know what to look for, and right now all four of our major indexes are in very similar patterns. What we are looking for here is the blue 50 Day MA crossing above the red 100 day MA.

For an example of a true golden cross take a look at the Emerging Markets ETF (EEM) as we are about to get the most bullish golden cross with the 50 day crossing the 200 day… more on China and emerging markets in a second.

I also wanted to show an example of how the golden cross can have an impact. This is one of the highest probability trading signals because so many people watch it, and since so many people trade it, it becomes a self-fulfilling prophecy. This chart is particularly relevant as we have been pounding the table that now is the time to own Gold and the miners for weeks now.

GDX had a true golden cross in earlier February and take a look at how it jumped once crossing this important technical indicator. Important note, on the poor jobs report, gold is +$13/oz with GDX up another 1.75%, on top of yesterdays 1.25%

Going back to Emerging markets and China, we have one last golden cross chart, FXI, which is right at a golden cross as we write. Continue to aggressively add to positions here as, similar to GDX, we expect to see a big move higher once we get through this golden cross.

I will say quickly here we did see some poor performance overnight from Asian Markets as the Shanghai composite fell 4.4%, it’s biggest single day loss since October. The Hang Seng was also down 1.91%, but it’s important to remember, Asian markets have been red hot to start the year, actually up higher than U.S. markets, so to see a pause in action is not terribly concerning yet.

U.S. Dollar

Changing gears here to a more fundamental factor, which had a big day yesterday, the U.S. Dollar. This is important for many reasons, but most relevant right now is that a strong U.S. dollar is a major headwind for trade and commodities. We have seen a pull back in Gold and Silver partially in part due to the strength of the dollar.

President Trump has been speaking against the over performance of the Dollar for months now. Not that he wants the dollar to crash but rather have a stable currency. Here is what he had to say just this past weekend, “I want a dollar that’s great for our country but not a dollar that’s prohibitive for us to be doing business with other countries.”

So called “experts” are saying there isn’t much that Trump can do about the currency value, however, I will point out that this is exactly what the “experts” said about Trump influencing Interest Rate hikes. What happened when Trump began harping on the FED? The FED held off of Interest Rates.

As you know, we’re highly bullish on precious metals and miners. For the parabolic bull market that we envision, the US dollar will need to reverse lower.

Here’s Kip’s tweet from yesterday.

Now, take a look at this chart of UUP (US Dollar Index). Again, we believe this could be a false breakout.

Volume has been incredibly light (and getting lighter), versus its strong move higher last year (which interestingly, did not hurt gold/miners….in fact thats when their breakout above the 200 dma kicked in)

UUP is now at extreme overbought (RSI) and heavily overbought on stochastics. And MFI (money flows) have reversed lower, even as the USD moved higher.

Again, this looks to be a false breakout. Here’s why a weaker USD is important. Foreign currencies (Europe, EM, China) have been crushed. This attracts short sellers in equity markets as well. 
And just as importantly to US investors, a strong USD is not welcome news to US multinationals, which in many cases do 50% of their business abroad. Dollar strength makes those sales more difficult.
And finally, as I mentioned, we know that President Trump wants a lower USD. He got his way with the FED and rate hikes….we expect a similar outcome with the USD.

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

VRA

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

So far in 2019, our average gain per position is over 35%, nearly tripling the S&P 500! Come join us at vrainsider.com for more details.

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VRA Update: Markets Look to Finish the Week Strong. Big $19 Billion Dollar Hostile Takeover in the Mining Sector. W.A.R. NOW Interview.

Good Friday morning all,

It is shaping up to be an exciting end to what has been a relatively dull week for our markets. We have seen small trading ranges for our indexes this week as the market and investors were looking for a clearer outlook from the fed and potential resolutions to China trade discussions. We look for these conflicts to be resolved and as we have said here often, never short a dull market, therefore, we must be long.

We received confirmation of the Fed’s pause this week in their February minutes, as the FOMC voted to keep its benchmark interest rate target at 2.25 percent to 2.5 percent, and indicating it will take a “patient” approach to further policy moves. Five more Fed officials are due to speak today, but should follow the report we received on Wednesday.

As for the trade talks, Trump is scheduled to meet today with China’s top trade official, Liu He, with only one week left to the March 1st deadline it is looking positive that both sides will make concessions that will at least continue the truce on tariffs so that further negotiations may continue after this deadline. As we have said for over a year, this was never a trade war.

The Shanghai (+1.91%) and Hang Seng (+.65%) are both up overnight here, pointing to a positive outlook from Asian investors. Our China buys are up over 4%.

All four U.S. indexes are also trading higher as I write, and this is an important day for our markets, as you can see from the chart below of the S&P 500, we remain at overbought conditions in nearly every category, but as we have said here long and often, there are few more bullish signals than a market that continues to head higher despite overbought conditions.

It is our continued belief that these are the pauses that need to be bought and these brief breaks are just what we need to keep our markets fresh, while also keeping the Fed from aggressively raising rates.

As you may have heard on Kip’s podcast yesterday (link), we did see our first day of negative Volume and Advance/Declines in our internals from some time now, but new highs to new lows still finished positive, and take a look at the internal charts below and they will tell you just how far we have come in such a short period of time since the December 24th lows.

As you can see here, Advance declines just hit a new all-time high on Wednesday, a key that we see as an important market tell which is, new highs begets new highs.

Percentage of S&P 500 stocks hitting new highs to new lows also now back rallying big back from the December 24th lows. This is the exact chart we looked at following the Decemebr 24th lows that told us the lows were in.

Bottom line: No one knows what is going to happen in the short-term, but we will continue to shout it from the rooftops, if you are not long, you are almost certainly wrong.

Gold

Big news from the mining sector as Canadian based Barrick Gold announces hostile plans to buy U.S. based Newmont Mining Corp for $19 Billion in one of the largest-ever mining deals.

After this gold rally which started in October, which has gold up nearly 12% since October 9th. This move has flown under the radar of most, but the movement in miners is even more impressive as GDX is up more than 26% in the same time period. Leverage is always 3–5 times higher in the miner

This piece of news makes it official, the mining sector is now red-hot! If you haven’t seen our research from earlier this week on gold and the miners, I encourage you to go back to our February 19th update and check out the incredible chart patterns we have seen in this sector. Gold is up marginally higher this morning, it has moved up right along with our markets over the last two months, and similar to our markets, we could see a little sideways action but this will be a precious metals break out.

Investor Sentiment

Investors continue to be on the fence about this market, take a look at the past few months of investor sentiment. Bullish sentiment is reaching the high end of the last few months worth of surveys, but we are nowhere near euphoric highs with bears/neutral investors still at 60%, while bullish investor sit at only 39%. We will say it again, this is just not how bull runs end, and it is our belief that sooner rather than later will be the time to break out of the sideways movement we have seen since the October highs and will send our markets back to new all time high territory

Finally, a big thank you to our great friend Wayne Allyn Root…aka WAR…for having me back on this week. In the segment prior to mine, Wayne was getting into his theory that the Mexican drug cartel has been a major source of funding for the Democrat Party.

The man is fearless. Always has been.

If you were with us here at the VRA in the days/weeks following the Las Vegas massacre, Wayne and I tag teamed the attack, exposing both the financial profits from 10/1 as well as the HIGH likelihood that ISIS was behind the attack.

But folks, I do not live in Las Vegas like Wayne does. Day after day, Wayne exposed the corruption that took place at MGM (owner of Mandalay Bay). Corruption at the very top of MGM, from both the CEO and Chairman. He did it in print (he writes a 2 x weekly column for the largest paper in Vegas) and on air (he has the #1 radio show in Vegas).

In fact, fearless is not a strong enough word to describe Wayne. Balls of steel and a possible death wish? Thats more accurate… :)

WAR is the freaking man. If you don’t already watch his nightly show on NewsMax or listen on radio, I can promise you he is far more interesting and accurate than anything you’ll see/hear on the networks.

You can find my complete interview here: https://soundcloud.com/user-640389393/kip-herriage-live-on-war-now-with-wayne-allyn-root-1

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

Kip Herriage

So far in 2019, our average gain per postion is over 40%, nearly tripling the S&P 500! Come join us at the Vertical Research Advisory free for 2 weeks!! For a limited time we are offering a 2 week free trial to the Vertical Research Advisory, visit vrainsider.com for more details.

Since 2014 the VRA Portfolio has net profits of more than 2400% and we have beaten the S&P 500 in 15/16 years.

Also, Find us on Twitter and Facebook

The Importance of Relative Strength. EM, China, GDX. VRA Market, System Update.

Good Friday morning all. Parabolic Options #8 closes today. This will be our largest options program we've done to date. Cannot wait to crush Mr Market with you. We'll close signups today and send out our first test email and texts early Saturday morning. Any questions, we're always here.  To learn more about the program visit : Parabolic Options Program

Yesterdays trading brought our first back to back negative days for VRA Market Internals since the 12/24 Christmas Eve massacre. Still, even with a -220 Dow Jones, new 52 week highs outnumbered new 52 week lows by 187-132. Watching closely as always but this looks very much like an overbought pause, in an otherwise powerful, continuing uptrend. 

Hockey great Wayne Gretzky famously said "skate to where the puck is going, not where its been".

If you watch MSM financial news much, its impossible not to hear about the global slowdown occurring in Europe and China. Please, tell us something we don't already know. Could it be that this is why global markets fell 25-50% in 2018? Could it be that the slowdown is already priced into some of these badly beaten up markets?

This is why we place so much importance in tracking relative strength. Its a unique look at where the puck is going, yet few seem to use this most valuable investing tool today. Thanks again to my mentors from the 80's and 90's (RIP Ted Parsons and Michael Metz). 

Lets look at a few examples this morning (my relative strength charts are versus the S&P 500, the worlds largest and most important equity index):

1) EMERGING MARKETS (EEM).

Again, if you listen to the news you'd probably want to short EM/China. But look at this dramatic, 4 month outperformance of EM to the S&P 500. As much as the S&P 500 has soared from those 12/24 lows, EEM has outperformed by 12%. Thats some serious alpha. But the "gurus" want little to do with EM/China. Their loss....again.  

2) CHINA

 

Looking specifically at China (to S&P 500), we see an almost identical pattern. What would you say that the actual smart money is doing here? Shorting China or buying China? Note: Chinese markets are closed all week for New Year celebrations. My best advice is to ignore the Chinese perma bears. I've been among China's hardest critics...but I also believe they have read their history books about the Japan/US battles from the late 80's and 90's. Once Japan got our attention, as they made their own attempt to take over the world, the US reminded Japan of exactly who the boss was. The end result was a 19 year bear market in Japanese real estate and 75% collapse in the Nikkei Dow. Today, China has debt/GDP of 270%...they know they cannot afford to make the same mistakes that Japan did. I remain confident that China is in the process of caving to the willpower of one Donald J Trump. This chart tells us that the worst is likely over in China. Keep buying. 

 

 

3) MINERS (GDX)

Talk about stark relative strength and outperformance, check out GDX vs SPX over the last 5 months. What we see below is a massive 36% outperformance from GDX. The key to making money in gold/silver equities is exactly what we see below. The leverage is always in the miners (3-5 x). In addition, GDX has traded above its 200 dma for 10 days, with a golden cross buy signal generated earlier this week (50 dma crossing over 200 dma).

VRA Market and System Update

The January barometer is another piece of important analytics that long time market watchers have used for decades. Check it out; we know that we just had the best January since 1997, with S&P 500 gains of 5.62%. What does this mean for us?

As goes January, so goes the year....this is the heart of the January barometer. 

Between 1950 and 2017, the January barometer has been correct 58 of 67 times, or 87% of the time. Powerful statistical analysis. 

Lets also remember that in years following mid-term elections, since 1946, the markets have been higher 18 of 18 times, with an average gain of 15%.

Folks, and forgive my repetitiveness here, but we must continue to ignore the permabears and negative Nancy's. No, we are not headed into recession. No, the sky is not falling. And yes, we remain in a super bull market that will take the Dow Jones past 35,000 by the end of next year and past 50,000 by the end of Trumps second term. 

While we remain short term overbought, the time to aggressively buy was in mid-late December, but also know this; we continue to expect that any pullback will be merely an overbought pause. We see it in the data and we see it in VRA internal tracking metrics. US stocks are building momentum. Much higher prices await. 

If you've been able to listen to our end of market daily podcasts, each day you hear us get into the mechanics of the markets. The backbone of the VRA Investing System. We're big believers in the KISS principal. With all of the insane attempts by todays day trading technicians, who think they can time the markets from day to day, we take a bit longer term view. Watching the internals and the VRA System Screens have kept us on the right side of big moves. 

Please join us daily at vrainsider.com/podcast   

While we remain at 8/12 screens bullish, I look for this to jump to 9/12 in the near future. Remember, anything above 6/12 bullish screens and we're still buyers. The Dow Jones is back above its all important 200 dma, with the S&P 500 and Nasdaq hot on its tail.

Check out this excellent work from our friend Troy Bombardia, master of market analytics. What we see below is what happens to the S&P 500 when it closes above its 200 dma after being more than 14% below its 200 dma for the previous 3 months. Stunning figures here, including an S&P 500 that is higher 100% of the time over the next 3-6-9-12 months, with an average gain of 17.36% a full one year later. 

Long and strong...don't let the bears convince you of anything else. 

Until next time, thanks again for reading...

Kip  

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

Experience the Vertical Research Advisory free for 2 weeks!! For a limited time we are offering a 2 week free trial to the Vertical Research Advisory, visit vrainsider.com for more details.

Precious Metals and Miners: The Move of a Lifetime is Beginning

Good Friday afternoon. If you’ve been with us a while you know our views on gold/silver and the miners. Fundamentally, they MUST be owned. Precious metals are the antidote to fiat currency. The world is awash in debt that can NEVER be repaid. Governments and central banks have done the rest of the damage, printing our currencies into oblivion, as evidenced by the 97% depreciation of the USD since the creation of the FED in 1913…another financial Frankenstein from the worst president in US history, Woodrow Wilson (he also brought us the 16th Amendment/income tax).

If you’ve ever wondered “what the hell happened to our financial way of life”, aka, why is it that both spouses have to work to bring home the same benefits that a single income produced just 30–40 years ago, now you know the answer. Currency debasement. Currency inflation. US dollar destruction.

USD currency destruction lies at the heart of most all our financial issues. Period.

As a side note, this also explains todays manufactured culture wars, aka 99% of the “news” we’re force fed today. The powers that be do not want us talking about currency destruction or the dangers of a runaway, unregulated FED. They do not want us talking about soaring inflation (which sits at 10%+ today). They do not want us talking about The Patriot Act. They do not want us talking about multiple 6 figure college costs. And they don’t want us owning precious metals.

I committed numerous chapters to these subjects in both of my CrashProof Prosperity books. Nows a good time to go back and read them. Inflation is coming…on a global and massive scale. As inflation first returns (and its happening now…those 2% CPI reports are full of deception), it will be a major positive for global equity markets. Again, at first. This view is at the heart of my DJ 35,000+ call by end of 2020. Early inflationary breakouts are HIGHLY bullish for equities, as history has demonstrated often.

To be crystal clear, we should own “physical” gold and silver (not hypothecated gold/silver ETFs). And we should own mining stocks….thats where the real leverage lies. Leverage of 3–5 times historically, meaning that in PM bull markets, the miners actually outperform gold by 3–5 times.

The VRA has been bullish on PM’s (and miners) from 2003, where in my second-ever buy rec I recommended gold and silver. Gold was below $400/oz. Silver was below $5/oz. We’ve also locked in well over 2000% in net gains from our recommended miners.

I know this sector. I know this fundamental story. I love PM’s and miners, particularly in todays climate.

Let me also remind that our VRA 10 x Buy Rec Fortem Resources (FTMR) has a significant stake in “City of Gold”, a massive 465 square mile concession in Myanmar. I’ll have more on this soon, just know that Fortem CEO Marc Bruner and COO Mike Caetano have BIG plans for City of Gold. Just another reason to own Fortem. Here’s the link:

http://www.fortemresources.com/resources/mining/city-of-gold/

And folks, something big is taking place right now in PM’s. The technicals are flashing all kinds of buy signals. MAJOR buy signals. Lets take a closer look. First up, here’s the chart comparing the miners (GDX, miner ETF) to gold itself. In big bull markets, the underlying equities outperform the commodity.

We see it clearly in this chart, as GDX has “significantly” outperformed gold since early September. This is a most important indicator, one that few are talking about today. But we see it…we love what it’s telling us.

Gold has just broken out as well. Gold is now above its 200 dma with a golden cross occurring this week (50 dma crossing 200 dma). Big technical buy signals here.

 

We see the same in GDX. Back above its 200 dma with a golden cross nearing. We have yet to see volume confirm the move, but with the breakout that I expect, ramping volume in the miners is near. Once GDX breaks $25, look out above.

 

Now is the time to have your positions in place. Gold, silver, and the miners. To learn more sign up for our Free 14 day trial at VRAInsider.com and you will receive a copy of our report on investing with Precious Metals & Miners.

The move of a lifetime, for precious metals and miners, is beginning.

Until next time, thanks again for reading…

Kip

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

Experience the Vertical Research Advisory free for 2 weeks!! For a limited time we are offering a 2 week free trial to the Vertical Research Advisory, visit vrainsider.com for more details.

Also, Find us on Twitter and Facebook