Midweek Market Update

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Crude Oil – Headed Lower

An excerpt from this past weekend member report. 

Ordinarily, Crude should currently be screaming higher. The Dollar is down sharply, and equities have been on a tear.  Yet, Crude has struggled to hold recent gains while risk markets have exploded upward. This is not a positive development for Crude’s upside. 

I believe the weakness in this Daily Cycle foreshadows what lies directly ahead. As Crude continues to knock on the lower resistance area around the $100-$102 level, it is threatening a fall through that floor.  Because the current Daily Cycle has already failed, a continued decline into a Daily Cycle Low is a fairly sure thing. The Investor Cycle is 27 weeks deep, well into its final decline into an Investor Cycle Low. As both the Daily and Investor Cycles are in decline, I firmly expect a break-down below $100 to begin next week.   

10-19 Crude DailyCrude is the most important of all raw materials, so whenever the economy is doing well, higher demand generally drives higher Crude prices. But the world economy is not growing, at least not at a meaningful rate. So demand should remain slack at a time when supply is concurrently increasing. Demand and supply do not impact day-to-day price swings significantly, but they do impact the longer term Cycles.     

At 27 weeks, the current Investor Cycle is running long. It’s also approaching oversold levels, so the current Daily Cycle is almost certainly going to be the last of the current Investor Cycle. Crude has another 20+ days to find its next major low, more than enough time for a volatile asset to fall significantly.  A move of $10-$15 in just 4 weeks may sound implausible, but prior Investor Cycle’s highlight just how capable Crude is of large moves.

10-19 Crude Weekly

The Financial Tap publishes two member reports per week, a weekly premium report and a midweek market update report.  The reports cover the movements and trading opportunities of the Gold, S&P, Oil, and $USD Cycles.  Along with these reports, members enjoy access to three different portfolios and trade alerts.  As these portfolios trade on varying timeframes (from days, weeks, to months), there is a portfolio to suit all member preferences.

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Breaking Out Party

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Morning Coffee

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Midweek Market Update

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Daily Cycle Trader

The Daily Cycle Trader portfolio went live 3 months ago and we’ve now closed out the first quarter.  It’s been a hugely successful launch to this portfolio and I wanted to share some of the specific results of the portfolio with you:

Total Portfolio Return (3 months): 15.56% 

Total Trades:  26

Winning Trades:  16

Winning Trade %:  61.5%

Avg Winning Trade Profit: 6.4%

Avg Losing Trade Loss: -3.1%

The Daily Cycle Trader portfolio is a consolidation of our shortest duration trades. With the Daily Cycle Trader, we expect to trade at Daily Cycle highs and lows. These Cycles generally occur every 18-25 days, so there will be relatively frequent trading. Daily Cycle trades will generally utilize ETFs and leveraged ETFs. 

SPECIAL OFFER: If you would like to take advantage of this new Portfolio, please consider a membership; we now have Monthly, Quarterly, and Yearly options.  To celebrate the launch of this new portfolio, we’re offering a $28.95 off coupon which could be used against any of the membership options.  Apply it to a monthly membership, making the first month just $1.  Or use it against our already discounted Quarterly and Yearly memberships. 

To sign up, go to:

Membership Page

Use COUPON CODE:  Trader   (code is case sensitive).  This will drop the price by $28.95.

Fearless

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Midweek Market Update Report

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Showdown Edition

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A Market Peak

When we look at the current bull market in the context of prior bull markets, we’re immediately struck by the sheer size and strength of this move. Part of the strength comes from the deep generational selling event of 2008; just getting back to a reasonable valuation from such oversold levels represents a significant portion of the current bull market. The other driving force has been the FED, as its accommodative support has provided liquidity to the markets, and its Zero Interest Rate Policy has pushed yield-seeking money into equities from savings accounts and bonds.

At present, there are significant questions about the effectiveness of a continuation of the FED’s policies…at a time when the current bull market is “long in the tooth”.  Although the lower and middle classes are generally much worse off than they were prior to the financial crisis, U.S corporations have rebounded and are now much leaner, with balance sheets that are in better shape than they were prior to the crisis.

But significant questions about future growth have emerged at a time when equity markets are pricing in a substantial macroeconomic recovery, including a return to blistering, double-digit growth. Although markets have climbed higher, mainstream consumers have been unable to participate in the “recovery”, so corporate earnings have languished at low single digit growth rates. In the face of tepid growth, already-rich market valuations have continued to rise. It’s these types of overbought, overextended, and overvalued conditions that have presaged the end of the great bull markets of the past.

Below are the top 5 performing bull markets in history. Interestingly, and surprisingly, the current bull market is number 4 on the list.  Upon closer examination, we see that the top 3 bull markets occurred as part of a general secular bull market.  Meaning they were part of a period of true economic expansion, a period of real income growth and wealth creation. The current cyclical bull market, however, appears within a greater secular bear market, which makes this the best performing bull market (in terms of performance, not time) of any secular bear period in history. From a timing perspective, the 1970’s bull market (within a Bear Market) ran for 70+ months, while the 2002-2007 bull market (again within a Bear Market) was 55 months in duration.             

9-28_Top_5_Bull_marketsThe point is, simply, that the current cyclical bull market, or 4 Year Cycle, is now extremely over-extended from both a performance and time standpoint. With an economy that continues to languish and a Yearly Cycle that is overdue for a significant decline, it’s difficult to expect that the current bull market will continue higher for another Yearly Cycle.    

Courtesy of a very accommodative FED, we have two back-to-back extended 4 Year Cycles.  Both cyclical bull markets were in the top 4 of the longest and best performing in history, but 13 years since the 2000 peak, the S&P is still only barely positive. From a real (inflation-adjusted) perspective, the markets are down over this 13 year period, and that’s at the end of the current bull with a peaking 4 Year Cycle.

9-28 Equities Yearly

The Financial Tap publishes two member reports per week, a weekly premium report and a midweek market update report.  The reports cover the movements and trading opportunities of the Gold, S&P, Oil, and $USD Cycles.  Along with these reports, members enjoy access to three different portfolios and trade alerts.  As these portfolios trade on varying timeframes (from days, weeks, to months), there is a portfolio to suit all member preferences.

You're just 1 minute away from profitable trades!  If you’re interested in learning more about The Financial Tap and the services offered, please visit https://thefinancialtap.com/landing/try#        

Free Report – Complete the form below