Knowing the Trends
January 27, 2016
Over the course of this year, I’m going to continue sharing some insight into my approach to markets. The only way to be successful as a trader/investor is to have a very specific method of judging supply vs. demand, and nothing is more important than knowing the TREND. The very best way of accomplishing this is thru the understanding of the interaction between price and volume on a chart. Richard Wyckoff was the master of this.
Two other books to read – “Popular Delusions” and “Reminiscenses of a Stock Operator”.
Now the markets.
In my outlook from last November, for the first time in many years and with stocks right at their all time highs, I recommended shorting stocks. And yes, it’s likely stocks are going much lower.
How much lower? The Dow of 14,000 or lower. And a possible timeframe of March, 2017. However, in the short term, after one more selling wave, we are then set to have a substantial rally right into the next Fed meeting. We might even see new highs. That’s when the most serious decline so far should unfold.
After this brutal bear market in commodities over the last 5 years, there can’t be more than 10 people on this planet that are still bullish. However, over the next 60 days, I expect many commodities to have hit their major lows for this cycle. I’m becoming especially bullish on agriculture. And although I personally don’t eat grains, any selloff into the March timeframe is a tremendous buying opportunity. Food prices are set to soar beginning in 2017.
In the December outlook, when I recommended buying gold, – that was the first recommendation in 7 years. If any listeners bought some gold into weakness at $1050ish, you did well . Presently gold is near a short term top, but gold is in the process of putting in a major low. A new low below $1043 is still possible, but as of Sept. 2015, the selloffs in gold are buying opportunities.
Lastly, being a perma bull or a perma bear on any market is very dangerous, and that has been and will continue to be clear to all, as the volatility in markets continues to ratchet higher. Any one without a skill set of being able to both buy and to SELL, will not survive these markets. Especially as the biggest bubble in the world blows sky high. And that is the bubble in the confidence in central bankers. I have received some excellent correspondence from listeners. Let me know if I can help. [email protected]