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Weekly Market Update 11-25-16

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DearSubscribersFirstlyIwanttowishthoseofyouintheUSaveryHappyThanksgiving.ForthoseofyououtsideoftheUS,Isendyoubestholidaywishesasweentertheholidayseason.Regardingthemarkets…Thesinglebiggestitemtonoteisthatthe$USDismoreoverboughtthanatanypointrunningbacktoearly2015.The$USDisaboveitsweeklyBollingerband(bluecircle),withanRSIthathasjustpokedinto“severelyoverbought”territory(redcircle).

What’sincredibleisthatthismoveisentirelybasedonexpectations,NOTpolicychanges.

WEEKLY MARKET UPDATE 11-25-16

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AsI’venotedpreviously,thesinglelargestdriverofcurrenciespost-2008hasbeentheemploymentoforendingofQEprograms.Lessthan1%ofinvestorsrealizethis.Nearlyeveryonebelievesthatinterestratesarewhatdeterminecurrencylevels.Thisisamythasthemarketshaveshownus.The$USDstageditsbiggestdropswhenQE1andQE2wereunveiledin2009and2010respectively.Anditstageditsbiggestrallyin2014leadingintotheendofQE3.Indeed,theonlytimeaQEprogramdidn’timpactthe$USDdramaticallywasin2012withtheannouncementofQE3.ThiswasbecauseboththeBankofJapan(BoJ)andtheEuropeanCentralBank(ECB)wereengagingorabouttoengageinmassiveQEprogramsoftheirown.SotheannouncementofQE3wascanceledout.

SimilarlyfortheYen,thelargestdropsweretheresultoftheannouncementoflarge-scaleQEprograms.

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AswasthecasefortheEuro.

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Withthatinmind,considernowtherecentmoveinthe$USD.NeithertheFed,northeBoJ,northeECBhavemadeanyannouncementsregardingaQEprogram.ThismoveisentirelybasedonthemarketsbelievingatradewariscomingviatheTrumpPresidency.Asaresult,the$USDisseverelyoverboughtwhiletheYenandtheEuroareseverelyoversoldallbasedonexpectations,nottheannouncementofnewmonetarypolicy.

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Thismoveisoverdoneandthe$USDshouldbegintocrashsoon.ItmightholdupintotheFedmeetingDecember13-14th,butbasedpurelyontechnicalsthe$USDcouldcrashrightnowWhenthishappensitwillopenthedoorforthenextmajorlegupininflationaryassets,particularly,Gold,Silver,preciousmetalsminersandEmergingMarketstocks.RegardingGold,sentimentisatnegativeextremesI’verarelyencountered.ThemediaandsocialmediaspacearerifewithclaimsthatGold’srallyisoverandthatGoldisgoingtoplungetonewlows,possiblyeven$1,000perounce.TheseclaimsarebeingmadewhenGoldisstill13%offitslowsANDoutperformingstocksyeartodate!

Goldisnowsharplyoversoldatatimewhenitiscominguponnumerousbandsofsupport.

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Theminutethe$USDrallyrollsover,Goldwillbeshootingupsharply.Myintermediate-termtargetforGoldonthismovewillbe$1600orhigherbythistimenextyear.Andifwegetaconfirmedlong-termbullishcrossover(whenthe50-weekmovingaveragebreaksabovethe200-weekmovingaverage)itwillsignalthatthenextMAJORlegupforGoldisbeginning.Thelastsuchoccurrencehitin2002attheverybeginningofthiscurrentbullmarketinGold(redcirclebelow).Asecondlong-termbullishcrossoverherewouldmeanwe’resetforasimilarmove.

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DuringthelastGoldmajorbullmarketinthe1970s,Goldrose550%duringitsfirstlegupfrom1970to1974.Itthencorrected50%beforebeginningitsnextlegup.However,itwastheSECONDmovehigherthanwastheBIGone=a900%increaseinvalue.Usingthisasaproxy,combinedwithmybeliefthatCentralBanksaregoingtobeunleashingtrulyNUCLEARlevelQEprogramswithinthenext18-24months,IexpectGoldtomovetoatleast$5,000perounceifnot$10,000perounceduringitsnextmajorlegup.SoIamnotworriedaboutGoldatall.Long-termifthatbullishcrossoverhitsagain,we’regoingtoseeastronomicalgainsinthenext2-3years.ThestoryisidenticalforSilver:sharplyoversoldwithmultiplebandsofresistancehere,andalong-termbullishcrossoverinthenearfuture.

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AndthestoryisevenmoreextremeforGoldminers,wherealong-tembullishcrossoverhasalreadyhit.

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ThesamegoesforJuniorGoldMiners.

Bottomline:Donotworryaboutthepreciousmetalsspace.ThisisanEXTREMELYvolatilesector.ButthemacroandtechnicalpicturesherearethebestI’veseeninyears.TheONLYthingholdingbackthenextmassivelegupis$USDstrengthwhichwillbeendingshortly.OutsideofPreciousMetalsandPreciousMetalsMiners,EmergingMarketsarelookingverypromising.The$USDrallyhasabsolutelyannihilatedEmergingmarkets.ButtheEmergingMarketETF(EEM)appearstobeputtinginabottomnow.

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ThisisthebuysignalI’vebeenlookingfor.ActiontoTake:BuytheEmergingMarketETF(EEM).Intermsofindividualplays,BrazilianbrewingcompanyAmbev(ABEV)hasbeenabsolutelycrushedbythe$USD’sstrength.Ithinkwe’reputtinginabottomhere,withapotentialsnapbackrallyto$5.50ifnotnewhighs.

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ActiontoTake:BuyAmbev(ABEV).MexicancementGiantCemex(CX)isanothercompanythatisputtinginabaseandpreparingforitsnextlegup.

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ActiontoTake:BuyCemex(CX).Intermsofwhat’stocomeinafewweeks,oneareathatreallyinterestsmerightnowisCoal.FewassetclassesareasbombedoutasCoal.MostUS-basedcoalcompanieshavebeenbankruptedbyregulationsinthelasteightyears.However,thingsbegantoturnacornerinearly2016withtheCoalETF(KOL)bottomingandrallyinghard.

AsIwritethis,theCoalETFismassivelyoverboughtandhasslammedintooverheadresistance.However,onceweshakeoutsomeofthehotmoneyhere,wecouldeasilygoto$25.I’mwatchingthissectorclosely.OnceitcoolsdownabitI’llhavesomecoalplaystoyou.Finally,regardingUSstocks,theentiremarketisseverelyoverbought.Withthe$USDabove100,4Q16corporateprofitsaretoast.Iexpectwe’regoingtoseeasharpcorrectionto2170oreven2150ontheS&P500withinthenexttwoweeks.

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Thiswouldberoughlyaroundbreakoutsupportonthemonthlychart(upperredline).

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Oncethatcorrectioniscompleted,providedthe$USDfallsandcontinuesfalling,theS&P500willbegoingto2,300orso.

That’smybasecasefornowthoughit’ssubjecttochangedependingonwhatthe$USDdoes.PersonallyIbelievetherewillbebiggeropportunitiesinpreciousmetalsandemergingmarketstocksthaninUSstocksgoingforward.Thisconcludesthisweek’smarketupdateforPrivateWealthAdvisory.The$USDrallylookssharplyoverdoneandshouldreverseshortly.Whenitdoes,itwillkickoffthenextlegupinriskassetsofwhichpreciousmetalsandemergingmarketstockswillbethetopperformers.I’mwatchingthemarketscloselyandwillissueupdatesasneeded.Barringanynewdevelopmentsyou’llnexthearfrommenextWednesdayinourlongermonthlyissueofPrivateWealthAdvisory.Untilthen…

ChiefMarketStrategistPhoenixCapitalResearch

BestRegards,

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OPEN POSITIONS

STOCKS PORTFOLIO POSITION SYMBOL BUY

DATE BUY

PRICE CURRENT

PRICE GAIN/ LOSS

Exxon XOM 9/24/14 $95.82 $87.12 -2% RPXCorp RPXC 8/5/15 $15.48 $10.71 -31%

ChinaETF ASHR 11/7/16 $24.80 $25.70 4% EmergingMarketsETF EEM 11/25/16 $35.25 NEW!

BUY!

Ambev ABEV 11/25/16 $4.96 NEW! BUY!

Cemex CX 11/25/16 $8.07 NEW! BUY!

BONDS PORTFOLIO

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT

PRICE

GAIN/ LOSS

NuveenMuni.Fund NVG 1/2/14 $13.12 $14.04 27% EmergingMarketBonds EMB 11/21/16

$109.82$109.31 0%

LongUSTreasuries TLT 11/21/16 $121.05 $120.82 0%

Pricesasofmarket’scloseon11/25/16atmarket’sclosePriceincludedividends*Averagepriceof$17.50and$14.97

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POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT

PRICE

GAIN/ LOSS

Gold 3/17/10 $1,120 $1,183.00 6% Silver* 3/17/10 $16.23 $16.52 2%

UraniumETF URA 6/8/16 $15.49 $12.36 -20%

GoldMinersETF GDX 10/5/16 $22.83 $20.61 -10% GoldMiningJuniorsETF GDXJ 10/5/16 $37.52 $33.80

-10%

SilverWheaton SLW 10/5/16 $22.59 $18.07 -20% SilverStandardResources SSRI 10/5/16 $10.30 $9.59

-7%

BarrickGold ABX 10/5/16 $15.54 $14.76 -5%

NewGold NGD 10/5/16 $3.88 $3.59 -7%

NaturalGasTrust UNG 10/5/16 $8.71 $8.08 -7%

PRECIOUS METALS/ MINERS PORTFOLIO

Pricesasofmarket’scloseon11/25/16atmarket’scloseReturnsincludedividends

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SPECIAL SITUATIONS/HEDGES/SHORTS PORTFOLIO

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT PRICE

GAIN/ LOSS

Santander(SHORT) SAN 2/3/16 $4.13 $4.50 -9% Barclays(SHORT) BCS 7/5/16 $7.92 $10.68 -35% FranceETF(SHORT) EWQ 9/16/16 $23.38 $23.37 0% ItalyETF(SHORT) EWI 9/16/16 $21.56 $21.29 1% AmericanEagleOutfitters(SHORT) AEO 5/26/16 $15.36 $18.34 -19%

Pricesasofmarket’scloseon11/25/16atmarket’sclosePriceincludedividends

CASH/ CURRENCIES PORTFOLIO

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT

PRICE

GAIN/ LOSS

EuroTrust FXE 10/5/16 $108.80 $103.03 -5%

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RECENTLY CLOSED POSITIONS

POSITION SYMBOL BUY DATE

BUY PRICE

SELL DATE

SELL PRICE

GAIN/

LOSS

Gerdau GGB 11/7/16 $3.36 11/22/16 $4.18 24%CopperMinersETF COPX 11/7/16 $17.90 11/22/16 $21.10

18%

Conoco-Phillips COP 11/2/16 $43.46 11/25/16 $45.38

4%

Schlumberger SLB 11/2/16 $77.93 11/25/16 $80.96 4%Chevron CVX 11/2/16 $105.53 11/25/16 $110.76 6%