Today we were stopped out of Natural Gas and BOIL. It's known as the widow-maker amongst seasoned traders as it can be hard to trade and violates cycles, patterns, technicals, and other signals from Wall Street’s best. At this point we expect an undercut low from early April low or a double bottom to form over the next 24hrs. Our cycle target high remains in force for early June. We will look to re-enter this trade 2 weeks prior to that cycle top to capture the strongest part of the rally. The short term glut will resolve into a shortage in the weeks ahead. Many rigs are shuttered and Natural Gas supply glut is no where near oils. Once economies re-open the drawdown on supply will be fast and sharp.
This type of action is necessary but is very frustrating to most traders. You can’t have markets performing large trending trades 24/7. The fuel for these strong moves are often the patterns shown above in Gold. When you encounter a sideways coil like the one shown above it produces a strong move in one direction. Our signals are clearly higher into early June. The miners will lead.
It is possible after another week or so we may switch to the junior miners for the next leg of the rally. We are waiting for GDX to tag close to $37 first which would put NUGT over $80. The next move in the miners into early June will be explosive and large gains should be harvested. The junior miners, GDXJ/JNUG have yet to break through their baby bull July 2016 highs. GDX breaking through $32 accomplished that and GDXJ will follow. There is always rotation with the metals. GLD, Miners, Silver all take turns leading. We plan to move from asset class to asset class as this occurs.
We are getting a lot of emails regarding a market top. Let us be clear. It is our opinion we will see higher post-crash prices into the June FOMC meeting, June 8/9th. The violent multi-day crash event we expect to occur, worth shorting, is close but not here just yet. One or two down days do not constitute the start of a correction. First, when we discuss shorting you must understand you are fighting the Federal Reserve. We do not have free markets anymore since 2008 when shorting financials were banned. There are several minor corrections in an overall advance which we call daily cycle lows, DCL’s. With the stock market there will be 2-3 of them embedded in an overall advance. They can last a few days or 2 weeks depending on the velocity of the correction. The larger corrections you want to be short for in the stock market occur just 1-2 times a year and we call them ICL’s or intermediate cycle lows. We just had one back in March, with our next one targeted sometime in the summer. We have witnessed more money lost trying to short the most hated bull market in US history the past 10 years. Why? Because the common trader reads headlines and figures with nothing but bad news stocks should be dropping etc. Shorting using leverage is highly risky and should only be done at certain times of the year. Markets are driven by capital flight and entry. Remember, capital always requires a home or parking spot and never disappears. So yes there is always a bull market somewhere if you know where to look. This next DCL, minor correction, has the potential to be short and sharp based on the sharp recovery rally that has take place in stocks since the March 23rd low was struck. 99% of analysts on Wall Street, CNBC, Wall Street Journal etc. said no way no how would the US markets see a V recovery. Please go back and vet our research since the crash on our briefings and blog. We have never wavered and have posted countless reports on a 40-year cycle our technology had identified leading into the crash and that would continue to show the way this market has played out. We were with the 1%, a V shape recovery followed by a flattening off period, and profited off the strongest portion of the rally. We have several calculated trades about to occur in the next 2 weeks. We will be adding back an SMS text alert system. Due to each individual cell service provider’s different filtering methods of business texts some of you will not receive these alerts, or call your provider and fix the issue if you would like to. Our advice is to use all three or at least 2 different alerts so you do not miss an update.
HFZ