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Phoenix Capital Research

Founded in 2009, Phoenix Capital Investment Research is an investment strategy firm offering innovative investment research products to investors. We publish research. We don’t broker deals. We don’t manage assets. Our success has been based on the fact that our ideas make our clients money. See our Products page to find out more about how we can help you with your investment goals.

Articles by Phoenix Capital Research

Stocks Are Now At #2, Next Up #3 (the Big Breakdown?)

3 hours ago

As we expected, the market is now turning in a big way. When markets peak and begin to break down, they never simply collapse. Instead they first break through support and then stage a bounce. The reason for this is due to investor psychology: the bulls don’t initially throw in the towel, but instead “buy …

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The Bulls Need to Ramp This Thing To New Highs on Heavy Volume

1 day ago

Stocks need to go parabolic today or it’s game over for the bulls. While CNBC and other media outlets continue to buy into the narrative that we’re in some kind of economic utopia, the reality is that the market senses a truly MASSIVE move is about to come. The below formation is called a Rising …

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The “Smart Money” Is Sensing a BREXIT-Type Event.

3 days ago

The “smart money” is flashing a signal that the US economy and ultimately the financial system, are in serious trouble. CNBC and other media outlets like to focus on stocks because they tend to be more volatile and therefore more exciting. But BONDS are the “smart money” for the financial system. The Bond market is …

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Sub-Prime 2.0: What the Big Three’s Charts Tell Us About the Coming Crisis

22 days ago

Our article regarding Sub-Prime 2.0 garnered a lot of attention.
After all, we’re talking about a $1.2 trillion credit bubble in auto-loans, with roughly 1 in 3 new loans going to sub-prime borrowers.
Today we’re building on that theme with some chart analysis.
One of the best means of wrapping your ahead around an industry is to examine the charts of its 3 biggest players.
Those charts represent the collective understanding of millions of investors looking at the same industry. As such it can paint a very clear picture, quickly, of what the investment world thinks of an industry and its prospects.
With that in mind, today we’re looking at the charts of the Big Three US Automakers.
General Motors (GM).

GM emerged from bankruptcy and went public again in 2010. And while things are not as bad as they were in 2011-2012, the company has basically been treading water since 2013. Even the Trump hype has faded here and we’re back in the doldrums.
Put simply, this chart says “no growth, and internal struggles continue.”
Fiat Chrysler (FCAU):

Here again the company disappeared for a while (this time when Fiat bought Chrysler, NOT through bankruptcy like General Motors). However, once again, we see a company that is gyrating in a large range, NOT growing or breaking to new highs. Again momentum is rolling over and we’re facing a LARGE drop.
Again, “zero growth, and big issues afoot.

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Will the Democrats Trigger Another 2011 Debt Ceiling Crisis Just to Stop the Wall?

April 24, 2017

Do you remember when GOP Senators and Representatives were portrayed as literal monsters for forcing the Government to shut down?
We were told back in 2013 that if GOP-lead Congress didn’t keep the Government open… we would face literal Armageddon.
A few headlines from that time period:
Republicans Shutdown the Government for Nothing (the Atlantic)
Like Dr. Frankenstein, the GOP is trapped in a burning windmill with a monster of their own making (Charleston City Paper)
Ted Cruz: the GOP’s Self-Made Monster (The Guardian)
And of course…
They actually did it. A group of Republicans in the House just forced a government shutdown over Obamacare instead of passing a real budget.
~tweeted by then-President Barack Obama
We mention all of the above because in one of the greatest ironies of politics… Democrat leadership (Nancy Pelosi and Charles Schumer) is now advocating a Government shutdown in order to stop funding for a wall on the Mexico-US border.
Yep, the same crowd that claimed a Government shutdown mean the end of the world and those who are would shut down the Government over budgetary differences are monsters… now wants to employ pursue that exact outcome in order to stop the US having a border wall.
We don't particularly care for either side in this argument. But the irony is absurd.

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Why the Big Banks Are Terrified of Le Pen Winning in France (but not BREXIT or Trump)

April 21, 2017

France holds the first round of its Presidential election this weekend.
The big worry for the markets is the fact that anti-Euro candidate Marin Le Pen could potentially win.
Now, the polls show Le Pen as having NO chance of becoming Prime Minister. 
Of course, the polls also showed that BREXIT would not happen and Hillary Clinton had a 98% of becoming President.
We all know how those turned out.
“So what?” one might ask, “why would a Le Pen victory matter? Both BREXIT and Trump’s Presidential election ignited massive stock market rallies… why wouldn’t France leaving the Euro do the same?”
One word…
Collateral.
The big problem for EU members from is debt.
Yes, we all know that EU countries are saturated in debt… but the key issue here WHO owns this debt and WHAT it represents to them.
To citizens of a nation, sovereign debt represents payment of social entitlements in exchange for long-term debt servitude as a nation.
To politicians of a nation, sovereign debt represents a means of paying for welfare schemes promised on the campaign trail.
For banks… sovereign debt represents the senior-most collateral backstopping their massive derivatives portfolios.
The derivatives markets, the same markets that triggered the 2008 meltdown, were never properly dealt with.
Today, at the time of this writing, there are over $700 TRILLION worth of derivatives in the financial system.

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The US vs Emerging Market Chart is Flashing a Key Signal

April 19, 2017

A major shift is taking place in global stock markets.
Let me explain…
Below is a chart of the S&P 500 priced in Emerging Market Stocks.
When the black line falls Emerging Markets are outperforming US stocks. When the black line rises, US stocks are outperforming Emerging markets.

As you can see, from 1999 until roughly 2010, Emerging markets demolished stocks by a wide margin.
This trend then reversed in 2011, with the S&P 500 dramatically outperforming Emerging markets.
However, that trend now appears to be reversing. The chart has failed to break out to new highs and is now in danger of breaking its bull market trendline.
When this happens, we will once again be entering a period in which Emerging markets outperform US stocks.
Take note, that’s when the opportunity for larger opportunities outside the US will take flight.
We outline this and two other major investment themes in our Special Report detailing the impact President Trump’s policies will have on the markets (hint, Trump is a WEAK Dollar guy… and it’s going to create opportunities in unique asset classes).
It’s titled How to Profit From the Trump Trade and we are giving away just 1,000 copies for free.
Today there are a mere 19 left.
To pick up one of the remaining copies, swing by
http://phoenixcapitalmarketing.com/trump.

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Stocks Are Completely Mispricing the Risk of a Another Debt Ceiling Screw Up

April 14, 2017

While everyone continues to focus on Trump and his policies, a much larger issue looms.
That issue is the US debt ceiling.
The US Government hit its debt ceiling on March 16, 2017. The Government employed “extraordinary measures” to keep the Government open. At that time, Congress had a little over three weeks to deal with this issue.
Given how divided Congress has become, it’s no surprise this has gone nowhere. Congress left for its spring recess without fixing this.
Congress returns on April 21st and will have just a handful of sessions to resolve this issue before its deadline. (April 28 2017).
In order to resolve this issue, Congress will have to resolve the budget… which includes issues that are EXTREMELY contentious (the US/Mexico border wall for one).
Put simply… in order to avoid a Government shutdown and potential repeat of the 2013 Debt Ceiling Crisis, the same Congress that cannot even get an Obamacare Repeal off the ground (one of the most sought after pieces of legislation in over a decade)… is supposed to somehow work out a budget including VERY contentious issues… in a HANDFUL of sessions.
Good. Luck. With. That…… particularly at a time when it is clear certain groups in Congress are all too happy to blow up deals in order to sabotage the Trump administration’s agenda.
This is an absolute mess.

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The Last Three Times This Happened, Stocks Dropped 5%-10% Shortly Thereafter

April 12, 2017

The S&P 500’s weekly MACD indicator has triggered a “sell signal.”
For those of you who like technical analysis, this indicator is formed by two interweaving lines.
The first line (usually black on the chart) is formed by subtracting the 26-week exponential moving average (EMA) from the 12-week EMA.  
So if the 26-week EMA is 12 and 12- week EMA is 10, the black line would be at 2 for that particular day.
The second line (usually red on the chart) is formed by the 9- week exponential moving average.
The “signals” come when the two lines connect:
1.Anytime the black line breaks above the red line, it triggers a “buy” signal.
2.Anytime the black line breaks below the red line, it triggers a “sell” signal.
The market has triggered four such readings in the last two years. Two of them preceded sharp corrections of 9+% in the span of a week or so. A third resulted in a gradual 5% grind lower. The fourth just hit.

Where does this lead us?
A 4.7% decline would bring stocks to stub-2250 on the S&P 500. A more vicious and severe decline such as the ones that occurred in January ’15 and August ’16 would bring us to 2,125 on the S&P 500.

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Warning: This Metric is Flashing “DANGER” For Stock Investors

April 10, 2017

Stocks are weak, tired, and ready to go.
The market has been increasingly relying on just a handful of large cap Tech Names (AAPL, AMZN, etc.) to prop it up. Without these key plays, the overall market is in fact DOWN.
If you want to get a sense of where stocks are heading, consider the number of S&P 500 companies that are trading above their 50-day moving averages. In the past two years, when this blue line spikes, it’s “pulled” the overall market higher.

As you can see, this is no longer the case. In fact the blue line is rolling over aggressively, telling us that “internally” the market is very weak.
This is a major warning to stock investors to be extra careful. Now more than ever is a time to be nimble and preparing to make money from a market “event.” The Election rally has broken its trendline (blue line). We’re ready to for the red line to hit by June.

This is a major warning to stock investors to be extra careful. Now more than ever is a time to be nimble and preparing to make money from a market “event.” If you're looking for strategies to do this, we oultine several ways to our readers.
Get our daily research sent to your inbox here:
www.gainspainscapital.

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Dear $USD Bulls and US Stock Bulls… You’re About to Get Taken to the Cleaners

March 28, 2017

Everywhere I look I see talk of a major $USD bull market being underway. I see this coming from CNBC as well as so-called "investment gurus."
This is odd… because the $USD is DOWN against every major currency thus far in 2017.
I'm not making this up. The $USD is DOWN against the Yen, the Euro, the Swiss Franc, even the British pound.

And what asset class does well when the $USD falls?
Gold.
Indeed, thus far in 2017 Gold has DOUBLED the performance of the S&P 500. Don't tell this to the stock bulls, but they, like the $USD bulls, are in for a RUDE awakening.

You can ignore this if you want… but smart investors are taking a hard look at what’s really happening in the markets… and they’re positioning themselves accordingly.
Here’s a hint…

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.
In it, we outline the coming collapse will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.
We’ve extended our offer to download this report for FREE by 24 hours due to demand.
But this is it… no more extensions. After midnight tonight this report will no longer be available to the public.
To pick up one of the remaining copies, swing by:
https://www.phoenixcapitalmarketing.com/stockmarketcrash.

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Here’s a Reality Check For the People Losing Their Minds on Social Media

March 24, 2017

This needs to be said. The following is not a Pro-Trump article; it is an article to gain some perspective.
The people losing their minds on social media over Trump as President are some of the most lost/spoiled people on the planet.
And they don’t even know it.
These people have obviously never faced a real problem in their lives, which is why they are so worked up about a non-issue. 
Let me be clear… anything that you can address by sitting at home whining on your expensive computer on a social media platform is NOT a REAL problem.  You are just playing a team sport like fantasy football.
Access to running water/ food… THOSE are real problems.
Right now, as I write this, there are children in developing countries who just arrived at school after starting a 5-HOUR journey at 3AM.
I am not writing that metaphorically. I personally know people who work with these children. Again… these are CHILDREN who wake up at 3AM, walk 5 hours to school because there isn’t another school closer…and then walk back home again.
Do you have a 10-hour commute?
Do you have to walk those 10 hours through mountains or jungle where there are people who could kill or rape you any day of the week?
There are well over 1 billion people in the world who have REAL problems and could use help. The people losing their minds on social media all have resources/ talent/ and energy to help solve these problems.

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The Unwind of the Trump Trade Has Begun (Markets Wake Up to GDP of 2% for 2017)

March 22, 2017

The technical damage from yesterday has been severe.
Does this mean that stocks won’t bounce? No. But it is a major wake up call to investors that the market is in danger of going lower. MUCH lower.
The Russell 2000 leads the overall market. It is right at support today. If it breaks this line, the market could crash, unwinding the ENTIRE move from November 6 in a matter of days.

The economically sensitive Dow Jones Transportation Index (DJTA) has already taken out critical support.

This is a major wake up call, I hope you’re paying attention.
On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.
In it, we outline the coming collapse will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.
We are giving away just 99 copies of this report for FREE to the public.
There are currently 15 left.
To pick up yours, swing by:
https://www.phoenixcapitalmarketing.com/stockmarketcrash.

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Weekly Market Forecast (Inside Days and a Flight to Safety)

March 20, 2017

The word for this week is "caution."
We’ve now had two inside days (days in which the high and low for the day were within the boundaries of the previous day’s high and low). This indicates traders are unwilling to commit to either long or short… and the market is preparing for a violent move.

Meanwhile, a “flight to safety” is underway "behind the scenes" with investors pouring into bonds while moving out of stocks. The long bond ETF (TLT) rallied last week, while stocks ended the week rolling over.

This is NOT what you usually expect during options expiration week. And it would suggest that stocks are at risk of a sharp sell-off.
Originally posted on www.gainspainscapital.

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Everyone is Talking About the Wrong Central Bank and the Wrong Rate Hike

March 13, 2017

The Fed meets this week on Tuesday and Wednesday.
The market believes that there is an 86% chance the Fed will be hiking rates during this meeting. The Fed has been broadcasting this for a month straight. It is possibly THE most expected rate hike in years. The consensus is that we will see a 0.25% rate hike bringing the Federal Funds Target rate to 0.75%-1.00%.
BORING.
No one makes money by trading the most expected thing. With that in mind, what the Fed does or doesn’t do is largely irrelevant as far as I’m concerned.
The far more important development for the markets comes from the ECB,which revealed that it discussed a “rate hike” before the end of QE during its meeting last week.
Bear in mind, this is the ECB… which has cut rates into NEGATIVE four times; the same Central Bank that is currently engaged in a €60 billion per month QE program.
And it is talking about RAISING RATES.
THIS is something few in the markets are anticipating. And it has set the stage for a RAGING Euro rally (and $USD Collapse).
The Euro comprises 56% of the basket of currencies against which the $USD trades. So if the Euro begins to rally based on the ECB tightening, the $USD will drop hard. You can see the two currencies “mirroring” one another in the chart below. You can also see the Euro bottoming out and preparing to rally hard.

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These Four Charts Are Issuing a Warning on Stocks

March 11, 2017

While CNBC and the financial media continue to rave about stocks being near their all-time highs, beneath the surface of the market we are seeing signs of big trouble.
Consider the following…
As Michael Batnick noted last week, the S&P 500 as a whole is just 1.6% off its all time highs, but the average stock is down 9.6% from its 52-week high.
Put another way, while the overall index is being held up by a few names, a significant number of companies are already in full blown corrections.
Note the large divergence between the S&P 500 and the number of S&P 500 companies above their 50-DMAs. Momentum is clearly rolling over here.

Speaking of which…
US Steel (X), which has been a poster child for the “Trump economic utopia” trade has taken out critical support (red line) as well as its election night rally trendline (blue line). The momentum here is gone.

Another economically sensitive company, copper producer Freeport McMoRan (FCX), has not only taken out critical support but has already erased virtually all of its “election” rally.

Finally, high yield credit (HYG), which usually leads stocks, has completely collapsed.

All of these charts are warning that the market is susceptible to a sharp correction at best and possibly even a meltdown.
On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

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The Smartest Money In Finance Isn’t Buying This Rally.

March 10, 2017

The market is looking increasingly ugly.
Stocks are a lot like a body of water. Anyone can see where the surface level is… but what’s occurring underneath is much more difficult to observe.
Well, today the “surface” stock level looks great: the S&P 500 is a mere 1.9% off its all-time record high. The world has gone stock crazy with retail investors POURING money into the markets like it’s 1999 all over again.

Unfortunately for them, some truly nasty stuff is going on underneath the surface of the market.
The average stock in the S&P 500 is down nearly 10% off its highs.
Put another way, only a small group of stocks are holding up the entire market.  Most companies are in fact already in correction mode. Indeed, the number of S&P 500 companies above their 50-day moving averages has rolled over and is collapsing hard.
Put simply, internal momentum is quickly leaving the markets.

This is being confirmed by corporate insiders, the people who know more about the true state of their business than anyone. FEWER insiders are buying stocks today than at any point in nearly 30 years.
So while stocks look enticing on the surface, but what’s lurking underneath is going to lead to a bloodbath.
On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

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Oil Just Puked All Over the “Growth Miracle” Trade

March 9, 2017

The market is finally awaking to the fact that the ENTIRE move from November 8 2016 was based on hype and little else.
Yesterday, Oil imploded more than 5% wiping out more than half or its “election” move in a matter of hours.

The rest of the market will soon be following. Already anything related to economic growth is combing unhinged.
Industrial metals have taken out critical support. They will be following Oil shortly.

Buckle up, because this could get VERY nasty very fast. Stocks could easily crater to 2,200 on the S&P 500 in a matter of a few sessions. And if we overshoot, the red circle could be in play.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.
In it, we outline the coming collapse will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.
We are giving away just 99 copies of this report for FREE to the public.
To pick up yours, swing by:
https://www.phoenixcapitalmarketing.com/stockmarketcrash.

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Graham Summers’ Weekly Market Forecast (Inflation Edition)

March 6, 2017

The simplest outline for this week concerns inflation.
Stocks have erupted higher in the last month based on the belief that the economy is roaring once again. However, this is all about sentiment, not reality. The Fed’s own real-time GDP tracking tools has collapsed from predicting growth of 3.5% in early February to just 1.9% last week.

While “growth” isn’t coming anytime soon… INFLATION is.
Globally, inflation metrics are going through the roof. In the US, inflation is now well above the Fed’s target rate of 2%. If you were looking at this chart as if it were a stock, you’d say that was a seriously bullish breakout.

The story is the same in Europe as well, where inflation is staging a bullish breakout to the upside. Two years ago, the EU was in a deflationary nightmare. Today, inflation is roaring having risen 3.5% in the last 18 months.

Inflation has even appeared in Japan for the first time in years.
THIS, not growth, is the big story for 2017: after maintaining interest rates at ZERO if not negative for 7 years, and printing over $14 trillion, Central Banks have unleashed an inflationary tsunami.
Those who invest appropriately will make serious money from this trend.
We just published a Special Investment Report concerning a secret back-door play on Gold that gives you access to 25 million ounces of Gold that the market is currently valuing at just $273 per ounce.

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Why Is Trump Tweeting About Stocks So Much?

March 3, 2017

The stock market is now officially a political tool.
The Trump White House has made it clear that it views the stock market as a “report card” on Trump’s policies.
Regardless of whether or not you like Trump is irrelevant. The reality is that INDIVIDUAL investors have voted with their money and in massive way, piling into stocks at a pace we’ve not seen since 2014.

Source:ZeroHedge
Since election night, investors have put MORE money into stocks than they did throughout ALL of 2015. A whopping $8.2 billion piled into stocks in a single day just last week.
This means that stocks are now a “mom and pop” investor item in ways we’ve not seen since 1999. CNBC and friends like to talk about stocks as it everyone owns them, the reality is that the American public only gets heavily and directly involved in the stock market on RARE occasions (most Americans own stocks indirectly via retirement funds, only rarely do they actually move their own money into a brokerage account and then buy stocks themselves).
Indeed, the last time that individual Americans got involved in stocks in the manner in which they have since election night was in the late ‘90s during the Tech Bubble.
What does this mean?
The stock market is now a massive political tool. Any collapse in stock prices will be seen as directly impacted Americans who committed to an investment class (albeit at nosebleed valuations).

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Trump’s Top Econ Guy Just ANNIHILATED the Market’s Growth Fantasy

February 23, 2017

The single biggest story this morning is Treasury Secretary Steve Mnuchin pouring ice-cold water on the market’s mania.
Since Trump was elected November 8th 2016, the market has gone almost straight up on the notion that an economic utopia has arrived and that GDP growth of 5% (yes, CNBC ran numerous stories on this) was just around the corner.

The mania has been incredible. The last time the market had a 1% down day was OCTOBER 11! From a daily RSI reading the S&P 500 is more overbought today than at any point since the 2009 bottom.
But not for much longer.
Treasury Secretary Steve Mnuchin appeared on numerous media outlets this morning. And NOTHING he had to say supported stocks’ current lofty levels.
First and foremost, Mnunchin stated point blank that the Trump administration HOPES to implement tax reform by August.
Not two weeks from now. Not even two months from now. But AUGUST.
And that is their hope, not a hard deadline.
Then Mnunchin announced that there was “not much administration can do to affect growth in short term".
Wait, what?
For weeks we’ve been told by the financial media that 5% GDP growth is just around the corner… that the US has already entered an economic utopia… and that stocks are correct to be rallying to all –time highs based on this belief.

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The Trump Trade is Ending… A Correction Beckons

February 8, 2017

The Trump trade is ending, as expected.
The markets completely overreacted to the Trump Presidential win. As I noted previously Trump’s policies will begin to impact the economy 12 months from now at the earliest.
Meanwhile, the financial media and investors have bought into the belief that 5% GDP growth is just a few weeks away!
The sad truth is that the next few weeks are likely to be VERY negative as far as economic announcements are concerned.
First and foremost, while everyone is trumpeting that 3Q16 GDP growth was revised up to 3.5% (not surprising given how important it was to show strong GDP growth for political reasons) 4Q16 GDP estimates have already been revised downward from 3.4% to 2.7%.
And I expect we’ll be seeing it revised even lower in the coming weeks.

The fact is that even if the US were to record a solid 4Q16 GDP growth number, TOTAL 2016 GDP growth is likely to be a measly 1.6%.
Put simply, 2016 was a terrible year for GDP growth. Those who believe GDP growth of 5% is just around the corner are going to get annihilated.
This is particularly true considering the impact of the $USD.
The $USD is already impacting 4Q16 results as I predicted.

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Bad News For Stock Bulls.. the US is Sliding Into Recession

February 6, 2017

While the financial media was applauding last week’s jobs number, those of us who actually look into the details can tell you that the report was complete fiction.
The headline number of 227,000 was largely crafted through seasonal adjustments, NOT actual job creation. At a minimum 170,000 of those jobs were created in an excel spreadsheet by bean counters, NOT by businesses hiring.
Indeed, a non-massaged metric, average weekly hours fell by the largest percentage since the 2008 recession.
 
There is simply no way to spin this as a positive.
The fact is that the GDP growth of 4%-5% is not just around the corner. The US most likely slid into recession in the last three months. GDP growth collapsed in 4Q16, with a large portion of the “growth” coming from accounting gimmicks.
Consider the following:
1)   Tax receipts indicate the US is in recession.
2)   Gross private domestic investment indicates were are in a recession.
3)   Retailers are showing that the US consumer is tapped out (see AMZN’s recent miss).
4)   UPS, another economic bellweather, dramatically lowered 2017 forecasts.
Put simply, the REAL economy is rolling over. But stocks are holding up as if we’re about toe enter an economic utopia.
THAT IS NOT GOING TO HAPPEN. And if you’re investing based on it, you’re in for a LOT of pain.

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The Next Economic Trend Has Hit the US: STAGFLATION

February 1, 2017

While the mainstream media is losing its mind about Trump policies, the US economy just flashed yet another major warning sign of recession.
Scratch that, this was worse than recession; this was a recession with inflation or stagflation.
Yesterday, the Chicago PMI scored a reading of 50.3.
A 50= stagnation or the beginning of a recession.
PMI in of itself is bad news. But the new orders component (the component that shows growth) came in at 49.1.
This is WELL into recession territory.
Now let’s add the worst part… Price Paid (what manufacturers are having to pay for items) SOARED to 61.4.
So you’ve got growth collapsing… and prices soaring.
This. Is. Stagflation.
Those who are ignoring these warning signs are walking into a market bloodbath. Stocks are acting like an economic renaissance has just started… but the REAL data is showing us a recession and even worse, a recession coupled with higher inflation.
Indeed, 2016 GDP growth was the worst since 2011… while inflation expectations have shot higher. Looking at a chart of the two, it’s easy to see which direction each is heading.

The reality is that the Trump administration is inheriting an inflationary recession. The markets have yet to fully discount this fact, which is why stocks are holding up for now.
This will not continue much longer.

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The $USD Bulls Are Going to Get Taken to The Cleaners

January 31, 2017

The $USD is about to collapse.
This is not fear mongering, nor is it just a bold statement. The $USD has peaked and is about to breakdown in a BIG way.
See for yourself, the greenback has taken out critical support. The spike higher that occurred starting election night is looking more and more like a bullish headfake.
This means the $USD will reverse this entire move and THEN some.

Why is this?
Inflation is about to hit in a big way. Globally inflation measures are spiking up. And the $USD will be collapsing as a result.
Anyone who bought into the $USD bull story has failed to realize, that they were not in fact $USD bulls, but Yen bears.
The entire rally in the $USD has been driven by the Bank of Japan using the brief window of time between Trump winning the election and Obama leaving the Whitehouse to devalue the yen by an incredible 18%.

This is a once in a decade type intervention. And it is now over. The Trump Administration has sent out numerous warning shots that the $USD is too high.
Those who are betting on a Trump $USD bull market are going to be getting ANNHILITED in the coming weeks and months.

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The Simple Reason Why the Global War on Cash Will Continue

January 24, 2017

India’s cash ban continues to create problems…
Here are a few of the headlines regarding this issue:
In Its Third Month, India's Cash Shortage Begins to Bite (NY Times)
Cash-ban distress leaves scant room for India budget giveaways (Times of India)
Indian Bank's World-Beating Profit Growth at Risk on Cash Ban (Bloomberg)
A normal would see these developments and think “the cash ban will probably be reversed… after all, it’s having a negative impact on the economy.”
The only problem is that the political class is not comprised of normal people. And they don’t care about the economy. All they care about is remaining in power.
Put another way, unless a policy results in getting kicked out of office, it’s not considered a problem.
Just look at India, despite the clear evidence that banning some 86% of cash in circulation has been an economic disaster, the country is pushing forward by… banning more cash.
A high-level committee on digital payments has suggested a tax to discourage cash transactions, a cap on the maximum allowable limit for large-size cash transactions and a complete abolition of charges on card payments to incentivise digital transactions.
Some of these recommendations of the Chandrababu Naidu-headed committee of state chief ministers could find a mention in the upcoming Union Budget on February 1.

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The Yellen Fed Just Declared War on Trump

January 19, 2017

Before starting this article, I want to stress the following:
I HATE politics.
However, in todays’ highly politicized world, you cannot ignore some moves.
On that note, on Tuesday night, President-Elect Donald Trump stated in an interview with the WSJ that the “USD was too strong.”
Less than 24 hours later, Fed Chair Janet Yellen, openly defied Trump, talking up the $USD and claiming the Fed was worried about inflation and needed to hike interest rates.
THIS IS ASTOUNDING.
For 8 years the Fed has engaged in some of the most profligate monetary policy in history. The Fed has expanded its balance sheet by $4 trillion, employed ZIRP for seven years, and openly talked down the $USD anytime it broke above 98.
Then, suddenly, after the November 8th Presidential election, the $USD spiked to above 100 and the Fed didn’t say a word.

More than that… the Fed has repeatedly stated that it wants to hike rates THREE times in 2017.
THREE rate hikes in a single year… after the Fed has only raise rates TWICE in the last TEN.
Let’s be clear… the Fed is now an actively political organization. We knew the Yellen Fed was a left-leaning group, but this is truly incredible from an organization that claims to be neutral.
Originally published at: http://gainspainscapital.

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The Last Time This Happened, We Saw Gains of 429%.

January 11, 2017

While CNBC and the financial media are pushing investors to buy into the “Stocks going to the moon” narrative, another asset class as just staged a once in a decade breakout.
That asset is Gold. The breakout is a bullish cross over in which the 50-WMA breaking about the 200-WMA.

This has only happened ONE other time in the last 16 years: in 2002.
That was the start of the last MAJOR bull market in Gold.

Over the next nine years, Gold rose an incredible 429%.

On that note, we just published a Special Investment Report to our clients concerning a unique play on Gold that less than 1% of investors know about.
This gives you exposure to 25 million ounces of Gold. The market is completely mispricing the value here, valuing the entire resource at just $273 per ounce.
Our report is titled The Gold Mountain: How to Buy Gold at $273 Per Ounce…
To pick up yours, swing by:
http://www.phoenixcapitalmarketing.com/GM1.

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The Market Is Ripe for a Correction (Everyone is “All In”)

January 9, 2017

The market has become one giant trade.
That trade is:
1)   Long US stocks
2)   Long the $USD
3)   Short Treasuries
4)   Short Gold
In terms of speculative positioning, as Hedgopia has noted hedge funds are net positioned in precisely these positions with the exception of Gold (net long 96.6 futures contracts).
Moreover, investment advisors are piling their clients into precisely these positions.

H/T Josh Brown
So Hedge Funds and investment advisors are positioning their clients in precisely the same trades (except Gold). All we need now are individual investors to follow suit of their own volition and we’ve got one gigantic lopsided market.
Guess, what?
According to Trimtabs since the Presidential election on November 8th, individual investors have put $93 BILLION into stock-based ETFs.
This is more than 150% of the money investors put into those same ETFs during the ENTIRE year of 2015.
This kind of extreme buying is only seen during market tops. With investors now “all in” who is left to buy?
Stocks are already broadcasting what’s coming next.

Another Crisis is brewing… the time to prepare is now.

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China Will Stop the Trump Rally Dead In Its Tracks

January 7, 2017

The market reaction to the Trump Presidency win has been excessive to say the least.
Trump won’t take office until January 20th 2017. And he will likely not be able to engage in any of his proposed reforms until this time next year (it’s possible he might be able to ram through a few bills via “reconciliation” in Congress, but the odds are likely that any major reforms will take a year).
And yet, the financial media are abuzz with the idea that somehow GDP growth of 5% is going to hit in January. And investors are acting as if they believe this!
Let’s run through Trump’s proposals quickly.
1)   Tax Reform: Trump wants to simplify the tax code, lower the corporate tax rate and offer multinationals the ability to repatriate their offshore cash with a one-time tax charge of 10%.
Long-term, all of these moves are positive for the US economy. They will increase competitiveness and will allow large firms to put more money to work in the US.
However, NONE of these items will have a major impact on the markets. Yes, a lower tax rate opens the door to greater corporate profits… but:
a.     As Tom Lee noted on CNBC, NO ONE gets excited about investing in a company because said company is going to be paying less in taxes.
b.     Any benefits from tax reform would take at a minimum six months and possibly a year to really begin trickling into corporate results.
c.

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