By TheTechnicalTraders – It is another blood bath in the markets with everything down, including TLT (bonds) and gold. Safe havens falling with stocks is not a good sign as people are not comfortable owning anything, even the safe havens, and this to me is a very bearish sign.
Now, with that said, this is one day one of this type of price action and one day does not constitute a new trend or change the game, but if we start seeing more of this happen, we could be on the verge of the bear market we have all been expecting to show it ugly face.
The SP500 (SPY) is down 19.5% from the all-time high we saw just three weeks ago, and the general bias for most people is once the market is down 20% that is a new bear market. I can’t entirely agree with that general rule. Still, a lot of damage is happening to the charts. If price lingers down here or trades sideways for a few months I will see it as a new bear market consolidation before it heads lower, and we start what could be very deep market selloff and test 2100 on the SP500 index (SPY $210) for the next leg down looking forward several months.
20% Stock Market Correction Are Not Bearish
Just because the markets have a deep correction of 20% does not mean its game over for stocks. Just take a look at the chart below on what happened the last time the market corrected 20%. As you can see, they were the biggest and best investor opportunities over the past 12 years. Today, my friend called and said they heard on the news that we are now officially in a bear market, and what should he do?
20% Corrections Can Turn Into a Bear Market – Be Ready
The SP500 fell 20% in 2001 and again from the 2007 high its lows, then bounce 10% – 14 over the next few months before rolling over to start its first bear market leg. I feel something similar will happen this time, which would put us a few months before the price should test these lows again and breakdown to give us optimal time to reposition our long term portfolio.
Once we do start a bear market, you will notice price moves very differently from what we have experienced over the past 12 years. How you trade now likely will be a struggle to make money. If you try to trade bonds, they are relatively tricky because of how they move during a bear market. The stock market can fall for a year, and bonds are still trading at or below the price they were when the bear market started. This different price action is what happened in 2001-2002, and again in 2008.
Bonds Go Ballistic
Bonds also take on the price action similar to how the VIX trades with violent price spikes only to fade back down again quickly, and this generally happens near the end of a bear market, or extreme selloff like we are in now. Heck bonds (TLT) jumped 30% just in the past few weeks, we caught it, but most traders missed this move. You need to understanding market sentiment and how to trade bear market type price action because that is how the market is moving this week, and trading/chart patterns become more sentiment-driven than logical trading setups and trades become counterintuitive.
I also traded GDXJ for a 9.5% gain and closed that position at open for the high tick with my followers, and we didn’t follow my proven trading rules for price targets, trailing stops, and reading the market sentiment we could be down over 30% today which I know many traders are simply because they lack control of their trading (no defined rules, fall in love with positions). I’ll be doing a detailed gold and gold miners article so stay tuned!
Be sure to opt-in to our free market trend signals before closing this page, so you don’t miss our next special report!
Concluding Thoughts:
I share this analysis, not to scare you, but let you know where we stand. The stock market is treading on thin ice, and if/when it breaks down, a new bear market will have started. Remember, we are still in a bull market, but the coronavirus is stopping businesses, which means earnings will be poor, and that is why stocks are falling. Investors know stocks are worth less money if they make less money; it is that simple.
The type of market condition I think we have entered could be here for a while, a year or three, and it’s going to be a traders market, which means you must have a trading strategy, plan your trades, and trade your plan. It’s amazing how simple a few trading rules are written down on paper can save you thousands of dollars a year from locking in gains, or cutting losses. I have this mini trading strategy mastery course if you want to take control of your trades and override your emotional issues. It’s easy to hold winners until they turn into losers, taking to large of a position, or maybe you have masted the art of buying high and selling low repeatedly? Yikes! It happens to most traders, and it can easily be overcome with a logical game plan I cover in the crash course, pun intended ?
Someone yesterday I spoke with said that in the USA alone already had 10,000 people die just from common influenza, yet here we are freaking out over 17 dead in the USA. Sure, its bad news, but the common sicknesses for older citizens makes coronavirus seems a little blown out of proportion. There are conspiracy theories out there and this could be bioweapon which is scary and I am no expert in this field but my sources are not concerned with the Conornavirus. I want to think a cure gets found soon, and if so, the markets will rebound with a vengeance, and we can relax.
In short, if you have lost money with your trading account this year, holding some big losing trades that were big winners just a couple of weeks ago, I think it’s worth joining my trading newsletter so you can stay on top of the markets. I take the loud, emotional, and complex market and deliver simple common sense commentary and a couple of winning trades each month.
My trading is nothing extreme or crazy exciting because I’m not an adrenaline trading junky. I only want to grow my entire portfolio 2-4% a month with a couple of conservative ETF trades and make a 22%-48% return on my capital without the stress of being caught up in this type of market and feeling like I always need to be in a trade.
Hong Kong economic data in the last couple of weeks were weak. The Q4 GDP final reading confirmed economy contracted 2.9% over year in the last quarter of 2019, following a 2.8% fall in the previous three months. Retail sales decline continued: sales decline accelerated to 23% over year in January after 21.1% fall in previous month. And the private sector contraction continued the 23rd straight month in February. The contraction was attributed to impact of the coronavirus outbreak in China and globally, which resulted in falling new orders and output. Deteriorating economic data are bearish for HK50.
The Federal Reserve Bank of New York, which implements U.S. monetary policy, again raised its supply of liquidity to ensure funding markets continue to function smoothly and curb any risk that pressure on money markets will have an adverse effect on the implementation of monetary policy.
The New York Fed said it would offer at least $175 billion in daily overnight repurchase operations, up from $150 billion, and at least $45 billion in 2-week repos twice per week beginning on March 12 and continuing through April 13, the same amount as offered this week.
In addition, the Fed will be offering money through three, one-month repos of at least $50 billion, beginning on March 12.
The New York Fed had been on track to slowly trim its liquidity injections after its sudden intervention in September last year when a shortage of reserves in the banking system pushed up repo rates beyond the range set by the Federal Open Market Committee (FOMC), the Fed’s policy-setting committee.
But on March 9 the Fed switched course to ensure markets remained liquid amid tensions and boosted its offering of overnight liquidity through March 12 to $150 billion from $100 billion and the amount on offer through 2-week repos to $45 billion from $20 billion.
As on March 9, the Fed said the operations are intended to ensure that the supply of bank reserves remains ample, mitigate the risk of money market pressures adversely affect policy implementation, helping “support smooth functioning of funding markets as market participants implement business resilience plans in response to the coronavirus.”
On March 3 the FOMC cut its benchmark federal funds rate by 50 basis points to 1.0 to 1.25 percent in its first extraordinary rate cut since Oct. 8, 2008.
The FOMC is scheduled to meet again on March 17 and 18, with economists expecting another rate cut to cushion any impact on economic activity from the spreading coronavirus and the continuing plunge in stock markets.
All good things must come to an end and this remained true for the Dow Jones Industrial Average after the World Health Organisation (WHO) declared the coronavirus outbreak a pandemic.
The Dow plunged a staggering 5.9%, bringing the index to levels roughly 20% below its recent high – a threshold indicating the start of a “bear market”. No prisoners were taken as the S&P 500 and Nasdaq both fell more than 5.6% amid the growing fears surrounding the coronavirus outbreak.
Central banks across the world are pulling the trigger on monetary easing to shield their respective economies from the virus outbreak but this is clearly offering minimal support to stock markets. The BOE launched its first emergency interest rate cut since the financial crisis on Wednesday, while the Federal Reserve and other central banks turned the taps on monetary easing earlier in the month. These rate cuts are clearly symbolic, as lower interest rates are unlikely to encourage companies to invest or households to save less amid the widening health crisis. Given how the coronavirus outbreak is set to trigger more supply-side shocks, fiscal policy measures could act as a temporary pain reliever for the globaly economy before a cure is found.
Until then, risk aversion will most likely remain the name of the game which means more pain for global stocks and emerging market assets.
Gold slips despite risk-off mood
Gold struggled to exploit the risk-off mood on Wednesday with prices sinking back below $1650.
This technical correction may send the commodity towards $1635 in the short term before bulls jump back into the game. For as long as the coronavirus outbreak stimulates risk aversion and forces central banks to ease monetary policy, zero-yielding Gold is destined to shine with $1700 acting as a key point of interest.
Oil hammered by global price war
Oil will heavily remain influenced by the coronavirus outbreak and raging global price war between Russia and Saudi Arabia.
The commodity is down over 4% today and is expected to extend losses thanks to the toxic combination of falling demand and excessive supply. With Saudi Aramco announcing it will boost production to 13 million barrels a day from 12 million, Oil weakness will most likely remain a dominant theme for the rest of this this quarter.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
Hot on the heels of Torchlight Energy Resources discovering a new oil field in Texas, debt holders have elected to convert to Working Interest.
Torchlight Energy Resources Inc. (TRCH:NASDAQ), a dynamic junior oil and gas explorer, recently confirmed a major discovery. That came in the form of measured substantial Initial Potential (IP) oil and gas production from its Orogrande Basin Project.
To be sure, it’s a very big deal. Despite that there remains, for now, a sizeable short market position that’s likely weighing down shares.
Yet hot on the heels of this exciting discovery comes still more exciting news that could dramatically change the narrative.
It’s a development that might well push this oversized short position to reverse and dash for cover.
And that could mean explosive upside price action in the stock in the very near term.
Here’s what you need to know
Torchlight is Rapidly De-Risking
Torchlight debt holders of $6 million in principal and $1.5 million in accrued interest have elected to convert into Working Interest in the Orogrande, per their right of conversion when the transaction was consummated.
This is significant, and a testament to their conviction of the deep inherent value in Orogrande. That’s because the transaction instantly eliminates that debt from Torchlight’s books, while reducing the company’s working interest in the Orogrande project to 66.5.
What’s more, just two weeks ago, TRCH announced a noteworthy extension to a portion of its debt maturity. $4 million of the company’s outstanding debt of $12 million saw its maturity extended by a full year, from April 10, 2020, to April 10, 2021.
In response to this constructive development Torchlight’s CEO, John Brda said, “This is a very positive step for the company and a vote of confidence from the noteholder. We continue to work with our creditors and other capital sources to continue shoring up our balance sheet and remain current on our debt obligations.”
But the latest news that $7.5 million has been converted into an Orogrande Working Interest packs the biggest punch.
It means those debt holders, seasoned and respected oil and gas investors, have just given a massive thumbs up to the project.
Dramatic Value Still Available For Now
Just last week, Torchlight announced it had measured substantial Initial Potential (IP) oil and gas hydrocarbon recoveries from the recently drilled and completed Cactus A35 #1H well.
To date, Torchlight’s peak 24-hour production rates are 15 barrels of oil per day (BOPD) and 110 thousand cubic feet per day, which together equal 33 barrels of oil equivalent per day (BOEPD). Equating this to a 10,000-foot lateral, the Cactus well can be extrapolated to make 1,500 BOPD and 11 million cubic feet per day potentially, or combined 3,300 BOEPD.
This type of well production has the potential to be significantly better than most Midland Basin wells from a moderate depth of only 5,700 feet.
All of this provides great reasons for debt holders to convert to a Working Interest in the Orogrande.
That prompted Torchlight CEO John Brda to comment, “The conversion terms placed a value of approximately $1,100 an acre on the 134,000-acre play. This conversion value was set prior to any drilling, science gathered, or hydrocarbon discovery from our recent work in the project. It is fair to assume the value of the acreage, in their opinion, is more than $1100 otherwise they would not have converted. We continue to make progress cleaning up the balance sheet as well as progress in the field.”
These major improvements in TRCH’s debt profile go a long way to shoring up the company’s financial health.
It’s just this type of “vote of confidence” that should help lead to a big reduction in the outsized short position as those shorts scramble to cover.
The positive confluence of all these factors, in turn, is likely to lead to much more upside in Torchlight’s share price.
And the ongoing “de-risking” of Torchlight Energy should handsomely reward early investors.
Peter Krauth is a former portfolio adviser and a 20-year veteran of the resource market, with special expertise in energy, metals and mining stocks. He has been editor of a widely circulated resource newsletter, and contributed numerous articles to Kitco.com, BNN Bloomberg and the Financial Post. Krauth holds a Master of Business Administration from McGill University and is headquartered in resource-rich Canada.
Disclosure: 1) Peter Krauth: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: Torchlight Energy. My company has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Torchlight Energy. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Torchlight Energy. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Torchlight Energy, a company mentioned in this article.
Serbia’s central bank became the fourth central bank to cut its benchmark interest rate by 50 basis points at an extraordinary session of its policy board, saying this was a response “in a timely and adequate manner to the increased uncertainty in the international environment caused by the spread of the coronavirus (Covid-19)”.
The National Bank of Serbia (NBS) cut its reference interest rate to 1.75 percent, a new record low since it adopted inflation targeting as its monetary strategy in 2009.
Since May 2013 Serbia’s central bank has been steadily lowering its policy rate amidst a stable economy and low inflation and has now cut the rate by 10 percentage points since then.
NBS’ executive board was scheduled to meet on March 12, the same day as the European Central Bank (ECB), but pulled forward its meeting by a day, adding its rate cut was in line with those of other central banks worldwide and the ECB is also expected to ease its monetary policy.
While 11 central banks from Sri Lanka to Mexico cut rates from late January through February, Australia’s central bank kicked off the easing spree in March and was quickly followed by the U.S. Federal Reserve, the first central bank to cut its rate an extraordinary meeting, followed by other emergency rate cuts by the central banks of the UK, Iceland and now Serbia.
“This should contribute to reducing uncertainty in the international financial market and maintain favorable financing conditions in the coming period,” NBS said, adding it was closely monitoring any impact on the domestic economy from international financial markets and was ready to react in a timely manner with all available instruments to minimize any possible negative impacts on the domestic economy.
In addition to the growing risks to global growth from the spread of the virus, NBS said its decision to ease its policy would support credit and economic growth, and also took into account domestic factors, including the view that inflationary pressures have eased further compared with its projection in February.
In February NBS raised its estimate of Serbia’s 2019 growth to 4.2 percent from 3.6 percent and confirmed its forecast of 2020 and 2021 growth of 4.0 percent.
After being hit by drought in 2017, Serbia’s economy has bounced back with growth last year topping the central bank’s expectation with the growth in investments and household consumption countering any weakness in exports. In the fourth quarter of 2019 gross domestic product grew 6.2 percent year-on-year while inflation rose to 2.0 percent in January, still below the bank’s target of 3.0 percent, plus/minus 1.5 percentage points.
Unlike many other central banks that have eased their policy to cushion any impact on economic activity from broken supply chains, lower trade and tourism, the NBS said its economy and financial system was “stable and strong enough to cope with the potential negative consequences of the spread of the coronavirus.”
It added Serbia’s growth prospects remain favorable, given the level of investments, while financing conditions are also favorable, factors that should continue to stimulate growth.
Data for the start of this year indicate last year’s positive growth trend was continuing though NBS acknowledged that the slowdown in global growth, and its trading partners, could have the effect of slowing growth in Serbia. NBS expects inflationary pressures to remain low and inflation to move around the lower bound of its tolerance band until mid-2020 before gradually approaching the midpoint. Inflationary expectations are within its tolerance band one and two years ahead.
The recent fall in commodity prices should further ease any inflationary pressures, it added.
Unlike many other central banks that have eased their policy to cushion any impact on economic activity from broken supply chains, lower trade and tourism, the NBS said its economy and financial system was “stable and strong enough to cope with the potential negative consequences of the spread of the coronavirus.”
It added Serbia’s growth prospects remain favorable, given the level of investments, while financing conditions are also favorable, factors that should continue to stimulate growth.
In addition to lowering its reference rate, NBS also narrowed its interest rate corridor to 1.0 percentage points from 1.25 points, which means the deposit rate was cut 25 points to 0.75 percent while the rate on credit facilities was lowered 75 basis points to 2.75 percent.
Aytu BioScience shares rose by more than 750% at times today after the company reported that it secured an exclusive U.S. distribution agreement for COVID-19 point-of-care Rapid Test from a Hong Kong firm.
Aytu BioScience Inc. (AYTU:NASDAQ)announced today that “it signed an exclusive distribution agreement for the right to commercialize a clinically validated and commercially used coronavirus 2019 (COVID-19) IgG/IgM Rapid Test.” The company reported that the test has been licensed from a privately held Hong Kong firm L.B. Resources Ltd., which in turn licensed North American rights from China-based product developer Zhejiang Orient Gene Biotech Co. Ltd. The agreement provides Aytu BioScience with exclusive rights to distribute the product in the U.S. for three years and allows for subsequent three-year automatic renewals.
The company advised that the Rapid Test is only intended for professional use and is a simple time saving procedure that produces results in 2-10 minutes at the point of care. The test requires only very small serum/plasma or whole blood specimens.
The firm stated that “the COVID-19 IgG/IgM Rapid Test is a solid phase immunochromatographic assay used in the rapid, qualitative and differential detection of IgG and IgM antibodies to the 2019 Novel Coronavirus in human whole blood, serum or plasma and that this point-of-care test has been validated in a 113 patient clinical trial and has received CE marking.”
Aytu advised that it expects to pursue commercial use of its qualifying test under the U.S. Food and Drug Administration’s Emergency Use Authorization. The firm expects to receive an initial product shipment in 3-4 weeks depending on the speed of regulatory, customs and importation activities.
The company’s CEO Josh Disbrow commented, “The safety and health of every American is of paramount importance to the company as we face the threat of the coronavirus. We are excited to be able to work with U.S. regulatory authorities, and we will work to make this important test available in the U.S. as soon as possible. Coronavirus is a major global health concern, and we are proud to be in a position to help clinicians address this very serious public health concern.”
Aytu BioScience is a commercial-stage specialty pharmaceutical company based in Englewood, Colo. The company markets a portfolio of prescription products addressing large primary care and pediatric markets. The primary care portfolio includes Natesto®, a nasal formulation of testosterone for men with hypogonadism, ZolpiMist, an oral spray prescription sleep aid and Tuzistra® XR, a 12-hour codeine-based antitussive syrup. The firm also markets a portfolio of pediatric medicines.
Aytu BioScience started the day with a market capitalization of around $9.7 million with approximately 27.83 million shares outstanding. AYTU shares opened nearly 275% higher today at $1.30 (+$0.952, +273.56%) over yesterday’s $0.348 closing price. The stock has traded today between $0.92 and $2.99 per share and is currently trading at $2.01 (+$1.66, +476.44%).
Disclosure: 1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. 6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
By TheTechnicalTraders – When it comes to our Adaptive Dynamic Learning (ADL) predictive modeling system, we get asked questions from our friends and followers about how it could predict a virus event or how it could predict a price event so far out into the future. The truth of the matter is the ADL predictive modeling system doesn’t predict unknown virus, banking or other types of events.
What it does do, quite well we might add, is identify historically accurate price events (almost like unique DNA markers) and attempts to identify future price events that align with recent price bar (DNA) setups. In other words, it maps the markets highest probability outcomes by studying past price activity and using a unique DNA-like mapping system. Once this analysis is complete for any chart, we can ask it what is likely to happen in the future.
On July 8, 2019, our researchers did exactly that and posted an article regarding our findings that many people continue to write us about. Some, at first, in total disbelief that Crude Oil could fall to levels below $40 ever again and others that wanted to know how we came up with these numbers. We set our ADL system to show us what is expected on a Monthly Crude Oil chart going forward and it draws the likely outcome and volatility (highs & Lows).
This screen capture from the original July 2019 article clearly states…
If our ADL predictive modeling is correct, we will see rotation between $47 and $64 over the next 3+ months before a breakdown in price hits in November 2019. This will be followed by two fairly narrow price range months (December 2019 and January 2020) where oil prices will tighten near $45 to $50. After that tightening, we believe an extremely volatile price move will happen in February through April 2020 that could see oil prices trade as low as $22 and as high as $51 over a two to three-month span.
The most critical component of this early research is the statement we have timed perfectly with our system was “we believe an extremely volatile price move will happen in February through April 2020” and the following price predictions.
The ADL predictive modeling system provided us with a hint that volatility would skyrocket throughout this time in Crude Oil. And, as we all know, this next Daily Crude Oil chart highlights the incredible collapse from early January 2020 (near $65.00) to levels just below $50 in early February. After that, the high price level was near $54.50 and the current low price level is $27.34. We believe this downward price rotation in Crude Oil completely validates our earlier ADL predictive analysis.
Imagine having this type of forecast for our trading and investing! Be sure to opt-in to our free market trend signals newsletter before closing this page so you don’t miss our next special report!
What’s next with the price of crude oil?
Based on short-term Fibonacci price momentum targets we could see fall as low as $17 per barrel, but this price target will change dramatically over the next few days depending on if oil bounces higher from here it is now.
If our research is correct, Crude oil may find a bottom somewhere near $17 to $24, the potential rally back up to somewhere above $37~41 ppb before staging another massive selloff. The massive volatility suggested by the ADL system also suggests a broad price range over the next 60+ days.
Thus, we believe Crude Oil will attempt to form a bottom below $30, then attempt a brief rally to “fill the gap” (or partially fill the gap). After that, supply-side economics will take over and Crude Oil should begin to move back towards the to $30 price level again – just as our ADL predictive modeling system suggested.
As of today, we are getting dozens of emails asking about what we see for the US major markets and global markets with our systems. Everyone wants to know “what’s next?”. Most of that research is delivered to our active subscribers/members and you can gain access to that information simply by visiting my website. You really don’t want to miss these next huge moves.
As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for short-term swing traders.
Visit my ETF Wealth Building Newsletter and if you like what I offer, and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.
Forex trading is one of the best ways to make money from home. Its main advantage is that it is easy to get into and, if you do it right, the overall cost of entry is very low. The question that arises is, how do you keep your living and business expenses low as you get your business off the ground? Below, we will look at some tips.
Clothes
One of the areas people who commute to work spend a lot of money is in buying clothes for work. When starting a home business, that might not be necessary as you will most likely be working in casual clothes. Most people working from home only need one or two outfits in case they need to meet clients or attend conferences.
Two of the costs most people do not think about are dry cleaning as well as tailoring costs. These two costs can accumulate if you wear a different outfit to the office every day. When running your forex business from home, you do not need professional dry-cleaning services; all you have to do is toss your clothes in the washer while you work.
Food
Eating out can be expensive. This is what most people who commute to work are forced to do. For those running their forex business at home, there are so many different ways of saving on food. You could start by rationing. It might seem odd but cooking larger meals and then dividing them into small rations could save you money and time. Also, cooking at home is a lot cheaper than going to a restaurant or a hot dog stand.
If you work at home, you can also save on snacks and coffee. You have food at home, which eliminates the need for snacks, and you can brew your own coffee, which is another area where you could save a lot of money.
Get a Shared Server
Forex trading needs a lot of computing power. If you are new at forex trading, you could start by using a shared server. Shared servers are a lot cheaper than dedicated or virtual private servers. Servers can eat into your business costs and even though getting a server leans towards business expenses, it is still something that you have to consider when setting up your business.
Get a Smaller House or Apartment
Since you will be working from home and are just starting out, there is no need for a huge house or apartment. You could get a smaller house and have your work area set up on one corner. You could make it feel more like an office by decorating your work area as one and ensuring that you do not use that work area for anything else. If you do this, you could save a ton of money on your living expenses.
Transportation
Transportation is easily one of the most expensive aspects of working in an office. Every day, commuters spend countless hours and dollars commuting to and from work, spending up to a few hours stuck in traffic jams. When setting up your forex trading business at home, there is no need for all that. You could get a single car for you and your partner and use it during off-peak hours. Not only will this leave you with time to do other things, but it will also save you money on gas expenses and business and working hours are also saved.
If you go down this route, you also do not have to worry about parking fees, tolls, vehicle maintenance or any other costs associated with commuting to and from work.
Save on Electricity
People who want to get into forex trading often think that the more computers they have, the better they will perform. While this might be true for seasoned professionals, it does not usually apply to people just starting out and it could lead to huge power bills. To cut on your power bills, get just the number of computers you need.
Another idea is to switch to solar panels since electricity is expensive in many areas. Semper Solaris has solar installation options for those who need to go off-grid or cut their electricity costs. Their systems are installed by professionals to ensure you have the power you need for all your computers and appliances.
In reducing your energy costs, you might also want to get energy-efficient appliances. Making changes like using LED lights should save you a few dollars on your power bill.
Get the Internet Option You Need
Even though trading needs fast internet, you do not need to get the highest tier, which is usually the most expensive. The most important metric is ping. This is the amount of time it takes for a server to receive a request and send a response back. A low ping, usually below 5 milliseconds is best, even if your internet speed is in the 10-15mbps range.
Conclusion
There are so many areas where you can save money when starting a forex trading business at home. The most important thing is to align potential savings with your ability to do your work rather than starving yourself to save a few dollars.
Maurice Jackson of Proven and Probable speaks to Bob Moriarty of 321gold about his thoughts on the current financial markets and investment opportunities.
Maurice Jackson: Welcome to Proven and Probable. Today, we will discuss the Fed, the coronavirus and your investment portfolio.
Joining us for a conversation is Bob Moriarty, a world-renowned, best-selling author and founder of the websites 321Gold and 321Energy.com.
In our last interview: “You Can Take This To The Bank,” we discussed Bursting Bubbles. Since then, we’ve had two significant developments. The first, by the Federal Reserve, implementing an emergency haircut of 50 basis points. And the second is the outbreak of the coronavirus.
Bob, the Fed is saying to the citizens, “We had to reduce rates because of the coronavirus.” Was a Fed haircut warranted because of the coronavirus, or because something else that they’re not telling us?
Bob Moriarty: Well, I’ve said in three or four articles recently, governments lie, and they lie about everything. Anybody wants to go back to my site, go to the archives, and on the first of January, I put out a piece saying, “Beware of the stock market,” and I said the bubble was going to burst.
We have the highest measure in the Fear and Greed Index that we’ve ever had, and all you had to do is look at that one indicator and say the Everything Bubble was going to pop soon. The Fed has painted themselves into a corner, and they’re trying to pump up the stock market, using interest rates. It’s always worked in the past. I’ve said, multiple times, these things work right up until the time they don’t. Clearly now, it hasn’t worked, and things are going to get far worse. We’re just starting the crash, we’re not at the end of the crash.
Maurice Jackson: You know, speaking of that crash, now how does the coronavirus fit into the narrative here?
Bob Moriarty: It’s the biggest Black Swan in history, far more dangerous than the governments are telling you. Let me give you some numbers I just pulled up.
On February 29th, the U.S. has 68 confirmed cases. Now, they have 338, that’s 4.9 times, in one week. Germany had 79, now they have 670, that’s an increase of 8.5 times in one week. France had 100 then, they have 653 now. The best estimates that I’ve seen indicate the lowest number of deaths will be around 15 million, and that’s on the low side. This thing is twice as deadly as the Spanish Flu of 1918, and that killed somewhere between 40 and 100 million people.
Maurice Jackson: What kind of impact will this have on the global economy, basically?
Bob Moriarty: Well, the global economy, as I just said, was a bubble searching for a pin, and it just ran into a giant pin, but it was going to burst anyway. We’re going to go through a crash that’s far worse than 2008, and that would be true if there was a coronavirus or there wasn’t a coronavirus.
Some of the things that are right in front of us and everybody’s ignoring is 80 to 90% of medications come from China. And China’s going to be shut down for the next three to six months. This is staggering, it’s going to be the most significant geopolitical event in history.
Maurice Jackson: That’s a very bold statement, sir. We’re going to discuss some investment opportunities in a moment. But, what are some common sense, precautionary actions that you’re taking, should things turn for the worse?
Bob Moriarty: Well, that’s really funny, okay? It’s already turned for the worst. I’m over 70, and I’m in a very high risk category. My solution is to stay off the grid for three to six months. I’ve spent the last months preparing, and I can stay off the grid for three to six months. But things as simple as toilet paper, hand sanitizer, medication, these are all things that should be available now, but in a week they won’t be.
Maurice Jackson: Of the two, I’m assuming, here, from a global economic standpoint, which one as a bigger impact right now, the coronavirus or the Fed?
Bob Moriarty: Oh, the Fed’s meaningless. The Fed’s pissing up a rope. The Fed’s totally impotent.
Maurice Jackson: Well, moving onto investment opportunities, let’s begin with TriStar Gold Inc. (TSG:TSX.V). You had boots on the ground, there, on a site visit on Para State, Brazil. I know you have some exciting intel to share with us. Sir, please introduce us to Tri-Star Gold?
Bob Moriarty: Well, in some ways you know more about it than I do. We all flew into Sao Paulo, and then we took a two hour jet to somewhere, literally I never did figure out where we went. Then, we took an hour and a half flight on a small airplane, so you know it’s in Para State. If you asked me to locate it, on a map of Brazil within 500 miles, I really couldn’t do it. I mean I feel totally ignorant.
But, it’s a really interesting deposit. It’s a conglomerate deposit, which Quinton Hennigh is easily the world’s best expert on. It’s interesting to me, because I thought I had a pretty good clue as to how conglomerate systems worked. And basically, they got a big plateau, and every creek running off the plateau had been mined by alluvial miners. Barrick Gold came in and said, “Look, there’s got to be some gold up there.” So, they drilled, and proved up a resource, and determined that was gold and the recovery was economic, but interestingly Barrick walked away.
Tri-Star picked up the property; they have a resource. They know exactly how to drill. It’s one of the best teams that I’ve seen in a company for a long time. They have Brazilian geologists that have strong commercial and technical skill sets, and I was really impressed with the company. Interestingly enough, I was equally impressed with Dr. Quinton Hennigh, because I thought I knew conglomerate systems. He sat down and gave us a 30-minute briefing. I learned a lot of things that I, frankly, didn’t know. I participated in the private placement, and I really liked the value proposition of Tristar Gold.
Maurice Jackson: Now, in your opinion, talk to us about the potential size and scale of the project?
Bob Moriarty: Probably 2 to 3 million ounces.
Maurice Jackson: That big?
Bob Moriarty: Yes.
Maurice Jackson: Don’t take Bob’s word for it. Royal Gold is a stakeholder in Tri-Star (Press Release), which speaks volumes on the opportunity, potential and scale before us. We had an opportunity to interview CEO Nick Appleyard, back in August. It’s a really compelling story. You can find the interview on our website, under exclusive interviews, entitled, “Tri-Star Gold Project in Brazil Offers Simplicity, and Potential Scale.”
Staying in the Southern Hemisphere, let’s visit the Congo, where you just introduced Loncor Resources (TSX:LN). Sir, who is Loncor Resources, and what is the opportunity they present to the market?
Bob Moriarty: Here’s what’s absolutely amazing, I’m glad you brought that up. Loncor Resources approached me, I had never even heard a whisper of the name, I had no clue as to who they were. I went looking into it, they have an incredibly massive land position, in the Democratic Republic of Congo, the DRC.
Barrick Gold has several gold mines there, in the Greenstone Belt, and across the border in Tanzania. Barrick Gold has some of their other really giant mines. Loncor has, in their wholly owned properties, resources of about 2.4 million ounces. They’ve got joint venture with Barrack, on a big piece of their property, like 3000 square kilometers, which is a really big project. Barrick is funding it to feasibility, they’re paying everything. Barrick runs the project, and Barrick spends the money. There are no particular limits on what Barrick can spend, they can spend anything they want to. They’ve got a drill program that’s literally starting right now.
If you look at any stock, you want to figure out what the basement is, what is the lowest price the stock can go to? If you ignored the JV with Barrick, which would be a foolish thing to do, but if you ignored it, you’re buying ounces of gold, in the ground, for $19 an ounce, U.S. So, I don’t think there’s any downside to it. Approximately 70% of shares are in the top three or four shareholders. I think Loncor Resources is a great stock, because if you like gold, and I think after all of the things that I’ve said over the last 15 years, anybody who doesn’t like gold right now is economically illiterate.
Maurice Jackson: You know, you said that lightly, $19 an ounce.
Bob Moriarty: Yeah, yeah. How can you go wrong? At the stage they’re operating, they should be getting $50 or $60 bucks an ounce.
Now, one of the things that we haven’t gotten into, and we need to get into is, one, the T-bond, and, two, what I see happening to gold and gold shares. The T-bond Daily Sentiment Index (DSI), on Friday, hit 98. That is the highest rating I’ve seen, on the Daily Sentiment Indicator for any commodity, ever. Therefore, the T-bond’s going to crash, it’s probably going to take gold with it. Gold had a DSI of 96 a couple of weeks ago.
Everybody hates it. They act like, “Oh my God, you say that gold’s going down. My God, I hate you!” The corrections are perfectly normal, and we’re going to have a correction in gold, and we’re going to have a correction in palladium, and we’re going to have a correction in rhodium. We’re going to go into the biggest financial crash in world history, and most asset classes are going to get sold off. That’s not a bad thing, that creates opportunity, but you’ve got to be flexible, and hopefully liquid.
Now, I am not saying, “Go out and sell everything you’ve got.” Every time I say we’re going to have a correction, “Oh my God, you told me to sell everything.” Well, that’s not what I said, not at all. I said we’re going to have a correction. At the end of the correction, gold and silver and platinum are going to be a lot more valuable. We’re going to do exactly what we did in 2008. A lot of stocks were down 70% or 80%. Most of the big ones, the ones that I like, Lion One Metals, Novo Resources, Irving Resources, Barksdale Capital, these stocks are down 30 or 40% since the first of the year, when I said, “Beware of the stock market.”
I’m not saying something’s going to change on Monday with gold shares, gold shares have been going down for two months.
Maurice Jackson: You referenced Jake Bernstein’s work on the Daily Sentiment Index. What are the parameters that you referenced regarding buy and sell indicators?
Bob Moriarty: The DSI measures sentiment. Most investor look at fundamentals, technicals, worry about the interest rates, worry about the Fed. That’s all bull. People buy stocks because of emotions, and they sell stocks because of emotions. If you can measure those emotions accurately, you’d make a lot of money.
When 98 out of 100 people say something is going to go up, and it doesn’t make any difference what it is, or what the fundamentals are, or what the Fed does, or what the economy does, or what interest rates do, when 98 out of 100 people say something is going to go up, the next move is down. That is the highest number I’ve ever seen. Anything above 90 says the top is near, and anything below 10 says the bottom is near. 98 is such an extreme measure, that I’m perfectly comfortable saying that, you and I are talking on Saturday, and on Monday, T-bonds are going to go down.
Maurice Jackson: Mark the words, there. Which metals have your attention, and why?
Bob Moriarty: Silver and platinum, strange enough, you sent me some information (click here). There was a fire, an explosion at a platinum processing place in South Africa, and the real story is the price of platinum is so far below the cost of production, they’ve got to shut production.
Nobody wants to admit this, everybody’s got their own pet theory, but the fact is supply and demand does work. You cannot have the price of any commodity below the cost of production for very long, or things are going to happen. People are going to shut down production whether it’s wheat, whether it’s gold, or anything else. The silver gold ratio got above 100 to 1, that’s the highest it’s ever been. I think it got up to 102, intraday, a week ago. Silver was very cheap, relative to gold, but that doesn’t mean silver couldn’t correct. I own a lot of silver, and I own a lot of platinum, and a little bit of gold.
Maurice Jackson: Just as a reminder for our readers, I’m a licensed representative for Miles Franklin Precious Metals Investments, so for your next bouillon purchase, please give me a call. That’s going to be at 855-505-1900. Or, you may email me at [email protected].
In closing, sir, what keeps you up at night, that we don’t know about?
Bob Moriarty: Actually you’re going to hate me for saying this. I was a fighter pilot when I was 20 years old, I’m really good in emergencies, and nothing keeps me up at night because I can see things clearly in advance. I am going to take credit, I saw the stock market crashing, I said it was going to crash on January 1st.
On January 27th, I said the coronavirus was going to be a nuclear explosion to the world’s economy. On February 27th, I repeated that, and said the greatest depression is here, this is no drill. I am going to take credit, I absolutely called it correctly, and anyone who is not prepared better get prepared, now. I’m prepared, so I sleep really well.
Maurice Jackson: Likewise, you and I have been having a lot of correspondence in between interviews, as we always do. We’ve had a lot of discussions in reference to preparation, and it makes a lot of sense. I think you said it best. “It’s best to panic early.”
Bob Moriarty: Here’s the deal. If you’re inclined to panic, you always want to panic early.
Maurice Jackson: All right, sir, last question. What did I forget to ask?
Bob Moriarty: I don’t think so, I think that was pretty comprehensive.
Maurice Jackson: All right, sir. Bob, for someone listening that wants to get more information on your books, and your work, please share the website addresses?
Bob Moriarty:321Gold.com and 321Energy.com. All you have to do is go to Amazon, and feed in Bob Moriarty, and six of my books are listed there.
I will say, in hindsight, there are some things in life that should improve with age. Wine is one, good women is one, and good books. Books that I wrote two and three years ago are incredibly timely now, because much of what’s happening today is stuff I was telling people how they could prepare for years ago. I’m quite proud of that. I mean, if somebody can’t afford $15 bucks for one of the books, they should go buy something valuable like marijuana stocks, or Tesla, or “Bitcon.”
Maurice Jackson: One of the inquiries I receive often, after our interviews is, “Why do you always reference Bob’s books?” My response is, “You obviously haven’t read them.” “No, I haven’t.” When they take the initiative to get one of your books, and then they’re like, “I get it! This man is brilliant, he’s a genius!
Bob Moriarty: Don’t say that, because I don’t actually believe that’s true. Okay? I have the ability to think for myself, and I have the ability to take my thoughts, and put them into very clear terms. Now, I will challenge anyone whose going to waste their valuable time listening to this, go to Amazon, pull up the reviews on Basic Investing in Resource Stocks, it has the highest reviews of any book that I’ve ever seen on Amazon. Now, it doesn’t make a rat’s ass what I think of the book, it doesn’t make a rat’s ass what you think of the book, what makes a rat’s ass is what do readers think of the book, and they all say, “This is the best book I’ve ever read on investing.”
To that extent, I certainly do not need the two or three bucks I get from a book, that’s absolutely meaningless. But, those are valuable books, and they will help you either make money, or save money.
Maurice Jackson: There you have it, folks.
As a reminder, I am a licensed representative for Miles Franklin Precious Metals Investments, where we provide a number of options to expand your precious metals portfolio, from physical delivery, offshore depositories, precious metal IRAs, and private blockchain distributed ledger technology. Call me directly at 855-505-1900, or you may email [email protected].
Finally, please subscribe to www.ProvenandProbable.com, where we provide mining insights and bouillon sales. Subscription is free.
Bob Moriarty of 321Gold, and 321Energy, thank you for joining us today on Proven and Probable.
Bob Moriarty: Anytime, Maurice. Thank you for the time.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
Disclosure: 1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Proven and Probable disclosures are listed below. 2) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: All. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: All of the companies mentioned are sponsors of 321gold. 3) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Lion One. Click here for important disclosures about sponsor fees. 4) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 5) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Irving Resources, Barksdale Capital and Royal Gold, companies mentioned in this article.
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