Weekly Market Update 1-24-18 · 2018. 1. 24. · Weekly Market Update 1-24-18 ... Halliburton HAL...
Transcript of Weekly Market Update 1-24-18 · 2018. 1. 24. · Weekly Market Update 1-24-18 ... Halliburton HAL...
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Weekly Market Update 1-24-18
©2018·PhoenixCapitalResearch,PhoenixCapitalManagementInc.AllRightsReserved.Protectedbycopyright laws of the United States and international treaties. This newsletter may only be usedpursuanttothesubscriptionagreementandanyreproduction,copying,orredistribution(electronicorotherwise, including on theworld wideweb), inwhole or in part, is strictly prohibited without theexpresswrittenpermissionofPhoenixCapitalManagementInc.·AllRightsReserved.
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Disclaimer: The informationcontainedon thisnewsletter is formarketingpurposesonly. Nothing contained in thisnewsletter isintendedtobe,norshallitbeconstruedas,investmentadvicebyPhoenixCapitalResearchoranyofitsaffiliates,norisittoberelieduponinmakinganyinvestmentorotherdecision.Neithertheinformationnoranyopinionexpressedonthisnewsletterconstitutesandoffertobuyorsellanysecurityorinstrumentorparticipateinanyparticulartradingstrategy.Theinformationinthenewsletterisnotacompletedescriptionofthesecurities,marketsordevelopmentsdiscussed.Informationandopinionsregardingindividualsecuritiesdonotmeanthatasecurityisrecommendedorsuitableforaparticularinvestor.Priortomakinganyinvestmentdecision,youareadvisedtoconsultwithyourbroker,investmentadvisororotherappropriatetaxorfinancialprofessionaltodeterminethesuitabilityofanyinvestment.OpinionsandestimatesexpressedonthisnewsletterconstitutePhoenixCapitalResearch'sjudgmentasofthedateappearingontheopinionorestimateandaresubjecttochangewithoutnotice.Thisinformationmaynotreflecteventsoccurringafterthedateortimeofpublication.PhoenixCapitalResearchisnotobligatedtocontinuetoofferinformationoropinionsregardinganysecurity,instrumentorservice.Informationhasbeenobtainedfromsourcesconsideredreliable,butitsaccuracyandcompletenessarenotguaranteed.PhoenixCapitalResearchanditsofficers,directors,employees,agentsand/oraffiliatesmayhaveexecuted, or may in the future execute, transactions in any of the securities or derivatives of any securities discussed on thisnewsletter. Past performance is not necessarily a guide to future performance and is no guarantee of future results. SecuritiesproductsarenotFDICinsured,arenotguaranteedbyanybankandinvolveinvestmentrisk,includingpossiblelossofentirevalue.Phoenix Capital Research, OmniSans Publishing LLC and Graham Summers shall not be responsible or have any liability forinvestment decisions based upon, or the results obtained from, the information provided. Phoenix Capital Research is notresponsibleforthecontentofothernewsletterstowhichthisonemaybelinkedandreservestherighttoremovesuchlinks.OmniSansPublishingLLCandthePhoenixCapitalResearchLogoareregisteredtrademarksofPhoenixCapitalResearch.OmniSansPublishingLLC-POBOX2912,Alexandria,VA22301
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TRACK RECORD: RECENTLY CLOSED POSITIONS
Toviewthefulltrackrecordofallclosedpositionsrunningbacktoearly-2015,visit:http://phoenixcapitalresearch.com/privatewealthadvisory/track-record/Toviewourcurrentopenpositions,scrolltothebottomofthisissueofPrivateWealthAdvisory.
POSITION SYMBOL BUYDATE
BUYPRICE
SELLDATE
SELLPRICE
GAIN/ LOSS
FreeportMcMoRan FCX 10/4/17 $14.53 12/13/17 $16.32 12%Russell2000ETF(SHORT) IWM 12/14/16 $135.37 12/21/17 $153.75 -14%HomebuilderETF XHB 8/10/17 $37.94 12/21/17 $44.26 -17%OilServices OIH 11/30/17 $24.12 12/22/17 $25.86 7%MetalsandMiningETF XME 12/6/17 $31.83 12/22/17 $35.25 11% PioneerNaturalResources PXD 6/15/17 $158.02 12/27/17 $171.12 8% Halliburton HAL 10/11/17 $45.37 12/27/17 $48.01 6% BiotechETF IBB 11/15/17 $102.08 1/2/18 $108.87 7% WheatonPreciousMetals WPM 10/5/16 $20.83 1/2/18 $22.42 8% HelixEnergySolutions HLX 10/11/17 $7.75 1/9/18 $8.29 7% ExxonMobil XOM 12/13/17 $83.12 1/9/18 $87.08 5% EnterpriseProductsPartners EPD 8/10/17 $26.08 1/9/18 $28.16 8%
DBCommodityETF DBC 9/13/17 $15.26 1/12/18 $16.97 11% GoldMinerETF GDX 9/20/17 $23.50 1/17/18 $24.44 4% GoldMiningJuniorsETF GDXJ 9/20/17 $34.11 1/17/18 $35.67 5%
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Twomajoritemshitinthelast24hours.Andbothofthempointtothesameissue.
1) TheheadoftheBankofJapan(BoJ)HaruhikoKurodaimpliedpublicly,thattheBOJdoesn’tvaluetheYen.
2) UStreasurySecretarySteveMnuchintrashedthe$USDattheDavoseconomicforum.Regarding#1,here’sthekeyquote:
Inhisnewsconference,Kurodareiteratedthatchangestothebond-buyingoperationsdon’timplyshiftstoitspolicystance,addingthattheBOJ’sprimaryobjectiveistheyieldcurveonJapanesegovernmentbonds,notthevolumeofitsassetpurchases.Kurodaalsosuggestedtheyen’srecentmovemayhaveresultedfrombroaddollarweakness,particularlyagainsttheeuro.https://www.bloomberg.com/news/articles/2018-01-23/boj-keeps-stimulus-unchanged-maintains-inflation-outlook
HereistheheadoftheBoJstatingthatthe“volumeofitsassetpurchases”(read:theamountofYenitprintstobuyassetsviaQE)isallbutirrelevantprovidedJapanesegovernmentbondyieldsareattheBoJ’starget.Inthesimplestofterms,theheadofamajorcentralbankadmittedthathedoesn’tcarehowmuchcurrencyheprints.It’ssimplyastonishing.Remember,we’renottalkingaboutarandomeconomistatafinancialfirm…thisistheHEADofoneoftheMAJORCentralBanksstatingthis.Again,it’sincredible.Regarding#2,earliertodayUSTreasurySecretarySteveMnuchinstatedthefollowing:
"Obviouslyaweakerdollarisgoodforusasitrelatestotradeandopportunities,”MnuchintoldreportersinDavos.Thecurrency’sshorttermvalueis"notaconcernofoursatall,”hesaid.https://www.bloomberg.com/news/articles/2018-01-24/mnuchin-says-weaker-dollar-is-good-for-u-s-due-to-trade
Weekly Market Update (1-24-18)
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Toprovidesomeperspectivehere,theUSDollarhadalreadystageditsworststarttoayearsince1987BEFOREMnuchin’scomments.Giventhepaceofthecollapse,onewouldhavethoughtMnuchinwouldprovidesomekindofsupportfortheUScurrency!
Again,thesearenotthesortsofstatementsoneexpectsfromindividualsattheselevelsofGovernment/finance.Iwanttobeclearhere…it’snotthatKurodanorMnuchinsaidanythingthatwasincorrect…it’sthatCentralBankersandTreasurySecretariesareusuallynotthisexplicitwhenitcomestotrashingtheircurrencies!Regardless,thekeyitemhereisthatwe’vehadtwoofthemostimportantfinancialfiguresintheworldadmittingthatcurrencydevaluationisthenameofthegamegoingforward.Thistiesinwithmyprimarytheme:inflationishere,andCentralBankerswantMOREofit.However,thispresentsuswithaproblem.IfeveryCentralBankisattemptingtodevalueitscurrency,inevitablytheywillbeworkingagainsteachother.Inafiatworldinwhichcurrenciestradeagainstoneanotherwithnobacking,anydropbyonecurrencywillhaveacontraryeffectonothers.
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Onthatnote,today’sdropinthe$USDduetoMnuchin’sstatementtriggeredasharprallyintheYenandtheEuro…adevelopmentthatneithertheBoJ,northeEuropeanCentralBank(ECB)willbetoopleasedabout.
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Indeed,thesemovestriggeredanastyselloffinGermanandJapanesestocks.
However,thatproblemspalesincomparisontowhatTreasurySecretaryMnuchin’sstatementsdidtobondprices.AcrosstheentireTreasurycomplex,bondpricesCOLLAPSEDtoday.
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InfightingbetweenCentralBanksisaproblem,butnotonethatleadstoimmediatesystemicrisk.Incontrast,foraworldinwhichGlobalDebttoGDPisnorthof300%andsome$60trillionindebtwasissuedbasedonabubbleinbonds,acollapseinbondpricesISasystemicproblem.
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Indeed,themarketsquicklyrealizedwhatMnuchindidwasamassivemistake.Theyieldonthe10-YearTreasuryroaredhigher.Yieldswerealreadyup9%inJanuary(meaningthecostofissuingdebtfortheUSis10%moreexpensive).I’vebeentrackingthischartforawhile.It’saseriousproblemfortheUSdebtbubble.Andit’sonlygettingworse.
Thisaloneiscauseforconcern.Butwearegettingasimilardevelopmentinthelong-endoftheTreasurycurve.Thelong-termTreasuryETFisnow4.5%offitsrecenthighsandformingtherightshoulderofamassiveHeadandShoulderspattern.Itisjusthangingontosupport(blueline).Butifthatbreaksit’saveryshortwaystotheneckline(redline).
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Putsimply,bondyieldsarerisingonboththeshortandlongendoftheyieldcurve.Thisisseriousstuff.I’vebeenwarningwe’dexperienceaninflationaryshockthisyear.ButitiscomingfasterthanIexpected.Indeed,theTIP:TLTratiohasnowofficiallybrokenoutofits10-yeardeflationarychannel.Ifthisdoesn’treverserightnowthentheinflationaryshockiscomingNOW,notlater.
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Theflipsideofallofthisisthatthe$USDsimplycannotcatchabidhere.BelowiswhatIcallthe$USD“channelofdeath.”
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Ifthisbottomlineofsupport(bottomblueline)doesn’thold,we’regoingtothemid’80sNOW.
ThisisanEXTREMELYprecarioussituation.Asyouknow,Ithoughtthe$USDwouldbouncepriortothis.TheUScurrencywasalreadysharplyoversoldBEFOREMnuchin’sstatementstoday.Nowit’sevenMOREseverelyoversold.ThisiscomingatthesametimewhenmostinflationaryhedgesofSEVERELYoverbought.AndwhileIthinkGold,Silver,andthelikewillallbeMUCHhigherinthemid-tolong-term(3+monthsfromnow),Iremainveryconcernedthatallofthemareprimedforasignificantpullbackhere.Forinstance,duringinflationarybreakouts,SilvertypicallyleadsGold.Rightnow,theexactoppositeishappening.
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However,ontheflipside,theGoldMinerstoGoldratiohasbrokenoutofamassivetrianglepattern.ThissuggeststhattheinflationaryshockiscomingNOW.
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Again,thereisalotofconfusionintheinflationaryhedgesspace.Someassetsaresuggestingtheinflationaryshockiscomingnow,othersaresuggestingthatwemightgetasharpcorrection.Perhapsthesinglemostimportantinvestingadageis“whenindoubt,stayout.”Rightnow,thereistoomuchconfusioninthemarketsforustoputmorecapitaltowork.Withthatinmind,we’renottakinganynewpositionsthisweek.I’dratherwatchthemarketsoverthenextfewdaystodeterminewhatthenextstepis.Thegoodnewsisthatwe’realreadywellpositionedforwhicheveroutcomehits.Ifinflationspikesnow,wehaveplentyofexposureviaourpreciousmetalspositionsandourlong-termInflationPortfolio.Conversely,ifthecorrectionininflationaryassetsthatI’vebeenforecastinghits,wehaveourhedgesinplace.(USOandZSL)Sowe’regoodtogoeitherway.There’snoneedtorushintoanynewpositions.Thisconcludesthisweek’smarketupdateforPrivateWealthAdvisory.I’mwatchingthemarketscloselyandwillissueupdatesasneeded.Butbarringanynewdevelopmentsyou’llnexthearfrommenextWednesdayinourlongermonthlyissueofPrivateWealthAdvisory.Untilthen…
GrahamSummersChiefMarketStrategistPhoenixCapitalResearch
BestRegards,
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OPEN POSITIONS
STOCKS PORTFOLIO
Pricesasofmarket’scloseon1/24/18.Gainsincludedividends
POSITION SYMBOL BUY DATE
BUY PRICE
CURRENT PRICE
GAIN/ LOSS
RPXCorp RPXC 8/5/15 $15.48 $13.93 -10% AgriculturalCommoditiesETF RJA 1/12/17 $6.46 $6.14
-5%
PublicStorage PSA 3/23/17 $225.92 $194.96 -12% EnergyTransferPartners ETP 8/2/17 $21.00 $20.31 -1%
LONG-TERM INFLATION PORTFOLIO
POSITION SYMBOL BUYDATE
BUYPRICE
CURRENTPRICE
GAIN/ LOSS
CopperMinersETF COPX 12/21/17 $26.55 $28.74 8%
ArcelorMittal MT 12/21/17 $32.77 $36.12 10%
CorsaCoal CRSXF 12/21/17 $1.20 $1.61 34%
DiamondOffshoreDrilling DO 1/3/18 $19.77 $19.00 -4%
UraniumETF URA 1/17/18 $14.93 $14.84 -1%
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POSITION SYMBOL BUY DATE
BUY PRICE
CURRENT
PRICE
GAIN/ LOSS
Gold 3/17/10 $1,120 $1,357.00 21% Silver* 3/17/10 $16.23 $17.57 8%
FirstMajesticSilver*** AG 5/12/17 $7.91 $7.09 -10%
KlondexMines KLDX 9/20/17 $3.61 $2.29 -37%
WesdomeGoldMines WDO.TO 9/20/17 $2.21 $2.15 -3%
Iamgold IAG 9/28/17 $6.40 $6.36 -1%
SilverMiningETF SIL 10/4/17 $33.96 $33.90 0% SilverMiningJuniorsETF SILJ 10/4/17 $12.22 $12.25 0%
PRECIOUS METALS/ MINERS PORTFOLIO
Pricesasofmarket’scloseon1/24/18.Gainsincludedividends*Averagepriceof$17.50and$14.97***Averagepriceof$7.11and$8.70
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SPECIAL SITUATIONS/HEDGES/SHORTS PORTFOLIO
CASH/ CURRENCIES PORTFOLIO
POSITION SYMBOL BUYDATE
BUYPRICE
CURRENTPRICE
GAIN/ LOSS
EuroTrust FXE 10/5/16 $114.05 $119.42 5%
Pricesasofmarket’scloseon1/24/18.Gainsincludedividends
POSITION SYMBOL BUY DATE
BUY PRICE
CURRENT PRICE
GAIN/ LOSS
FranceETF(SHORT) EWQ 9/16/16 $23.38 $33.38 -43% ItalyETF(SHORT) EWI 9/16/16 $21.56 $33.92 -57% Apple(SHORT) AAPL 3/23/17 $140.92 $174.22 -24% Facebook FB 5/31/17 $151.63 $186.55 -23% Alphabet GOOGL 5/31/17 $987.72 $1,171.29 -19% UltraShortSilverETF ZSL 1/10/18 $31.27 $29.17 -7% UltraShortOilETF SCO 1/17/18 $21.72 $20.29 -7%