State of the Union and Markets
The U.S. stock market continues to show surprising strength as it grinds higher over the last week. Momentum is slowing but it has continued to do more than just hold on to gains from its recent strong showing. This is a good sign for more gains in the future but we are due for a temporary break in the upward trend soon. Many Marketscope recommendations have done well during this rally but some, like the solars are due for a pullback first before they follow the energy markets up.
Gold and silver have been correcting in time and have lost their upward momentum that gold and to a lesser extent silver exxhibited in the first six weeks of the year. I still believe gold and silver will roll over in the near future with gold making a move down below $1000.
The crude oïl market has also lost its strong momentum that powered it off its 11 February 2016 low for five plus weeks thereafter. For the last four weeks we have been in a trading range and digesting its previously, rapidly acquired gains. I would expect some further price consolidation before the energy market continues its upward rise.
The U.S. stock market advance has been led by energy related and other commodity related stocks including the emerging markets sector. The fact that the U.S. stock market has continued to grind higher while the oïl market has traded in a range shows you the leverage that energy related stocks have to the price of oïl and that this market is still attracting buyers in what many see as the start of a persistent trend. If those who think this trend has more room to the upside are wrong then they can always backtrack and get out. That is also one reason why I think we should see a sharp correction soon in an attempt to scare out the latecomers and those who want to hold on their recent gains without further risk. Volatility générâtes more fees for the market makers so I would expect some short term volatility soon.
The decline of the U.S. dollar has been the primary reason for oïl and other commodities to rise in price as the latter two are priced in dollars and trade inversely to the direction of the dollar. I expect the dollar to soon continue its decline after a brief rest in here. That will continue to push the oïl and commodity complexes upward. That will also continue to push those sectors of the U.S. stock market higher.
The U.S. dollar closed at 94.55 on Friday. The appearance of some sense of normalcy in the U.S will probably continue until the dollar falls below its all-time low of 71.05. So we probably have several months before the SHTF and all hell breaks loose. Do not get too comfortable in the meantime as increasingly large fissures in the declining system will become more apparent, even for a drugged, indoctrinated, and largely bought off public. The U.S. dollar is what underpins this corrupt and criminal funny money system so look to it to be your signal that the system is getting closer to collapse mode.
This rigged, economic and political system is steered by the U.S. government and its funny money agents and they want the game to continue for as long as possible. They are in the positions of power and profit that this system has been purposely designed to create for them at the expense of their controlled and manipulated public. Both sides know this system is showing serious cracks in its armour. The ruling elite know when this system does collapse it will bring a lot of unknown and uncertain conséquences that will be harmful to their economic/political positions atop the pyramid as well as very harmful to the public.
TPTB know their funny money will be worth much less in value so they will not be able to buy off the public any longer with their now fully recognizable toilet paper called the U.S. dollar. The government and its cronies have been preparing for this coming disaster for a very long time without giving the public an inkling of warning of what is to come. The government will revert to its primary and only weapon left to control the people and that is force. The U.S. government has been preparing for this by changing the laws such as the “Patriot” Act and NDAA to “legally” allow them to more forcefully control their subjects, euphemistically called citizens. They have been arming and creating new government agencies to forcefully control their citizens and trying to further indoctrinate them into thinking this is a normal state of being.
The good thing is that this corrupt and criminal edifice of a government along with its fascist economic system is all built upon and relies almost wholly on artificially created money. When the value of its currency is much less then most of its foot soldiers will no longer be possessors of good paying jobs with nice benefits. They will not be eager to risk life and limb purely for the sake of a cause that obviously has been based on a pack of lies and criminal behavior. I think you will likely see this monstrosity of a government and economic system largely self-destruct on its own. This does not mean there will not be much chaos and civil unrest along with the coming economic and political collapse. An economic and political collapse of these proportions will have very serious conséquences for all caught in its web. Forewarned is forearmed and the government is not taking any steps to inform the public, much less to allow the public to prepare for what is coming.