With a brand new website (three were consolidated into one) and hundreds of new viewers in recent days, I would like to give a short update on my market and economic observations.
Being bearish these days on general equities here in the U.S. and many places around the world, makes you feel like Chuck Norris is non-stop punching you in the face.
If you ever played craps (there was a time when I found myself at a table or two), it was all too rare (but a fantasy every time at the table) to be playing when a shooter “held” the dice for an exceptional long-time and making numbers and points seemed “automatic”. It became such a frenzy that you thought this number being thrown was now impossible:
That’s how most feel right now with the stock market. It doesn’t matter that:
It appears that those at the crap table are ignoring America’s developing worst-ever political and social divide (where there’s no middle ground and either a love or hate attitude across a wide spectrum of issues that any one or all) that can cause great harm to the economy; and in-turn (God forbid), actually see equity prices decline.
Me? 34 years in and around the financial arena strongly suggests one should have dneo what this man did and have been reducing equity holdings dramatically (as previously discussed) these past few weeks:
Up until this past December, I had no real worries about Bitcoin and cryptocurrencies in general, but when Bitcoin was approaching $20,000, I commented that the whole play had become severely frothy and a 50% to 90% correction was near. I suggested many plays would fall and not get up again; but after a period of consolidation similar to what the surviving internet plays managed at the start of the new millennium, this play would go from pure gambling to actual investing (but not before). The bounce off of $10,000 was weak for Bitcoin and it appears it wants to test major support in the $8,000 area. What it and others end up doing has a lot to do what the general equity market does or doesn’t do in the next few months. A sharp correction is likely to cause funding to dry up for many of the cryptocurrency hopefuls. If not, the eventual survivor’s list could grow larger. At this point, I find the play too late to “speculate” (remember, the word speculate was created by Wall Street so they don’t have to call it what it really is – gambling) on, and far too early to “invest” in.
Gold – It’s the one investment vehicle that appears to have nothing but green lights in front of it.
Having made a series of higher lows throughout much of 2017, gold finds itself working off another recent overbought condition. While a rather large speculative position is currently held on the CME, which usually leads to a quick bashing to chase the speculators out, gold has shown resilience in the face of this. The overall strength in the gold market, IMHO, is “when” and not “if”, gold overcomes the resistance and challenges the gold bear’s last stronghold – the $1400 area. When we get above that level, buckle up, as the mega bull market in gold (which I believe has already been born) will be off to the races.
Venezuela is sadly in total chaos. Oil production continues to fall sharply and is helping to support world oil prices. Let’s not forget that oil was much lower when the stock market went “gaga” over tax cuts. The rise in energy prices is sapping a significant part of the supposed increase to the average American’s pocketbook.
Finally, the U.S. Dollar continues to greatly underperform the views held by the “Talking Heads” on Wall Street, who claim that it should be a lot higher. Me?