Full destruction of the middle class ahead

When the Federal Reserve bank chooses to keep assets artificially inflated, it is in effect destroying the middle class.  Seems like a pretty outrageous claim?   Think of anyone age 18 through 35 right now, all things to 'invest' in is at lifetime high prices, including housing, education, medical, stocks and lowest ever returns for fixed savings.

Who benefits? Why the 60 and over club, for they have invested their lifetime of savings and want it to remain high for the next 20 years as they live their life of retirement.

Put this in contrast to 50 million under or unemployed who are facing high cost of living (food prices rising) and a stock market valued with 10 years of flat to negative returns based on the price per share vs profit. 

Assuming this feat can continue for years ahead, we will have successfully terminated the middle class story in America, not allowing the young to get a reasonable foothold in savings that can materially increase in value over time.

It is this action that will sow the seeds of disgust, turning people to a new fiscal system, be that Bitcoin, Gold, or barter to improve their quality of living.  The young should simply drop out of this race and live dirt cheap, and not participate in this one sided scheme.


The FED in effect is saying , everyone should put their money in the market and demand they protect them from any market decline.  For after all, they have the power to stop any market downturn simply by direct asset purchases.  I don't see any stomach to do different.  In 2008 FED had less than 1 trillion in assets, now sitting at 7 trillion, why not 100 trillion?  I say lets go for it, see what happens, can't be any worse for the under 35 crowd.

Market, Miners, and Cannabis

On Thursday the 21st, Gold miners started a new down trend.  A trend lasts 1-4 weeks, I suspect this trend maybe closer to the 4 weeks.  As I stated in post  Up Up and Away  the bulls have won the market valuation war, successfully putting the market at the most over-valued market ever when looking at corporate valuations vs expected future returns.

Since the market momentum is NOT about fundamentals, I expect this to terminate between SPX 3100 and 3450.  Meaning we either lose steam or make a new high.  I suspect this gets popped once there is material second waves either in USA or elsewhere to bring a dose of reality back.

For the market plays, GDX (gold miners) i expect to under-perform in this euphoria rally.  GDXJ may fair a little better as there are more silver mining in that ETF.  Smaller miners I expect to do OK.
I moved into these stocks Thursday and Friday am.  MJ, OGI, ACRGF, CGC, MRMD, HTBX, and TGODF.  I maintain small positions in bitcoin miners HTBX, HVBTF, GBTC, BLOK, and RIOT.

I still have optimistic view  in short term for miners SVM, EXK, IAG, KGC, AG,  and potentially GOLD.


I posted History lesson, Great Depression then and now .The difference now is the FED and world banks are poised to end capitalism by directly printing money to buy market assets.  Therefore it is impossible to play this market materially to the down side.  Do I think we achieve the lows of March? Yes.  Beyond that its pretty hard to tell with market interference.

Good luck!

Up Up and Away

On Friday I posted we had a Bi-Polar market and I expected 1-2 days pullback with a reversal higher as a potential.    Other is a market breakdown below 2790.   Today is positioned we have an answer, we need to close above the fibonocci line below (SPX ~2350) to have a definitive answer up , up and away!

I expect the end of this run is a failed new 2020 high OR a new high followed by a failure.  My gut says now we will make a new high, and once the bulls win, the question is, what now?   Do we go higher now that the negative (bear) investors lost?   What is there to look forward to for PE ratios and earnings?

Right now this market is basically a battle of people who short/bet against the market and the bulls, with the market.   As the bulls 'win' bears cover.  I see potential back draft as the year drags on.

First, as people are granted delaying paying bills, financial, real estate, etc, those companies will have less to re-invest into assets as the 'cover' for people under financial hardship. 

Second as the FED Chairman himself said, we are causing long-term damage to the market and this won't get repaired until end of 2021.

Third, COVID-19 odds are, will not be solved until at earliest spring 2021.   Yes. we have a potential to solve sooner, but the history and odds tell us it won't be here that quick.  As I write this Brazil is reporting 17,000 new cases a day, and reality is probably 4x higher.  Most governments face political backlash and do under-report.   Afghanistan is reporting a rise in cases and thats a warm country.   So I do expect some new bad news to hit the scene one of these days to question the worst is behind us.

Fourth the free money from the FED will run out, and congress will need to issue new free money.   Here is a critical piece that may dictate the market will never see the lows in March.  All that is required is we never stop deficit spending in the trillions, and keep doing this until the spring of 2021.  Then we can face the consequences of the spending spree, hence my doubling down on gold miners, bitcoin miners.  These are companies that have earnings, and will provide higher earnings as people react to the big spending.


So keep nimble! The market is about to enter into a dangerous climb from here to a new high.  I'll be trading in and out without updates as I have no faith this will sustain through end of 2020.

BiPolar Market

Yesterday I went in big on puts/calls all over the map, mainly due to advise of https://www.technicalindicatorindex.com/ I pay for.

Also I am long hard RIOT (bitcoin mining) and miners all over the place.

Yesterday was very good, and today is looking just as good of a setup.

I am not convinced we will see new market lows, I think a lower market is next day or two, with counter rally.

The key resistance levels are "around" 2932, 2790, and 2648.   If we go lower, I would expect a reversal around 2650 back up.  This will be a slow down trend with wiggles sideways as people 'accept' that the economy is changed materially for the next few years.

Greed VS Fear

I am pretty sure the market will break down substantially, the only other alternative is worse, which is a break up.  A break up would mean the start of the end of the US Dollar as world reserve.  It would indicate to the world the USA will use its currency in anyway possible to prop up assets, that is what failed currencies do.

I am banking on America isn't ready to flush the dollar down, but as a hedge about 50% of my assets are in gold miners, bitcoin miners, and actual bitcoins.

What I am looking for to bet on a 'flush up' is to see the DOW crack 26000 in chart below.  The long term trend lines drawn indicate support and resistance points, that when cross act as an indicator.

Good luck!

I can't hold it

Things exploded up from just couple of days ago.
As such I am already lightening some stocks.
I am in about 60% long down from 100%

I'll rethink Monday EOD next steps.

Investing in the next two weeks and beyond.

These markets are dicey, and I am in 50% cash.  The other 50% is in many different companies in this post, the latest sheet is here:

I plan to simply load up on some of these, and walk away.  My goal is to be 75% into these companies .  This sector starts reporting this week into next, so I expect with high gold prices, brisk sales, and low energy costs these companies may give good forward looking guidance.

If I am correct, it will be very difficult to buy higher, another reason I want to be positioned now.

It is possible that it goes down if the overall market goes down too.  But I believe that this sector will be very fast to recover.  For this sector is driven by inter-country fear, and the financial system started in 1913.  I don't see that fear going away until the Fed can stop their extreme actions.


"For the record" I put what the prices/targets are as of today.

BiPolar trading

So I went cash a week or so back, about 50%, then got in, as of yesterday back to 50% cash.
I think Gold miners will have a short pullback, and the market will too.

No one knows if the market will accelerate and begin the 40% decline I think is ahead.
But my gut tells me not yet.  So I expect to nibble on miners once I see a decline that looks like could be a short-term bottom.

Best trade this year percent wise was APA, I didn't post it here, I just got lucky.
I think there is upside to it in the weeks ahead.

Fyi about Thursday...

Business Insider: Warren Buffett's favorite stock-market indicator hits record high, signaling a crash could be coming.
https://www.businessinsider.com/buffett-indicator-surges-record-high-signaling-potential-crash-2020-4