VRA Update: PLEASE Shut the Government Down. VRA Market and Investor Sentiment Bullish.
/The VRA nailed the birth of the "global reflation trade" in January 2016. My system caught the early reversals in base/precious metals, oil and global economies, along with the explosive volume movements that are hallmarks of a signifiant reversal. Frankly, this was one of the easiest calls I've ever made...but even today, many continue to discount the power of the global economic recovery. This is why it pays to be a smart money contrarian that employs both fundamental and technical analysis.
Because the reflation theme is still in its infancy, plus the fact that we're seeing "range expansion" take place today, we must remain fully invested in our favorite positions.
Precious metals/miners update: when Apple announced they would be adding $350 billion to the US economy and creating more than 20,000 new US jobs, the short-term result was a spike in the US Dollar, which sent gold and the miners lower. I view this as a temporary set back....I still see the US dollar headed lower and PM's headed higher. This chart confirms this....a waterfall decline in the dollar. Yes, it is highly oversold, but all I expect here is a bounce...not a trend change. Talk about an ugly chart.
VRA Market update
Wednesdays rip-roaring +320 in the Dow Jones was met with yesterdays decline of 97 points. We'll take this kind of investing success, week after week after week. The year is shaping up to give us lots more where this came from. Internals were not great, but hey, every record-setting bull market needs to take a breather from time to time.
Yesterdays decline was (supposedly) due to fears of a government shutdown. In just a minute, I'll show you exactly how wrongheaded these fears are (hint; the markets LOVE government shutdowns).
The VRA System continues to read the broad market as "highly bullish" with best-looking sectors remaining as energy, precious metals/miners, China, biotechs and special situation small cap stocks...just as we are positioned today. I encourage everyone to login to your VRA Members Site at least 1-2 times each week, to ensure you are properly positioned.
I also encourage you to resist the temptation to go "all in" on just 1-2 VRA Buy Rec's. I only recommend 10 stocks at a time for a reason (actually 11 today). Diversification is a hallmark of successful investors and reduces the risk of becoming emotional about our positions. "Loading up" can also lead to large daily/weekly swings in your portfolio...the kinds of swings that can lead to oversized losses. Emotional investors tend to "buy high and sell low", or just the inverse of what we're looking to accomplish.
I've always been an aggressive investor. After 33 years of doing this, pretty sure I always will be. During the 15 years of the VRA, we've crushed the markets like a red-headed stepchild. The point being, we can be smart money investors and aggressive at the same time. I believe this is why many/most of you are with me today. If you're looking to beat the broad markets by a few percentage points each year, I'm probably not your guy. Instead, we'll keep using the VRA System to ensure we are positioned in the right sectors/stocks that can produce gains of 50% or more. We'll also stay on the right side of big market moves; higher or lower, it does not matter...we'll keep making money, regardless the direction of the stock market. This is the essence of how the VRA works.
Investor Sentiment
Here's the latest reading from AAII. Bulls back to 54.1% with bears down to 21.4%. Remember, until this survey reads 60% bulls for weeks on end, sentiment will not be a problem (as contrarians).
FUND MANAGERS "STILL" UNDERWEIGHT US STOCKS
Take a look at the Merrill Lynch/BOA survey of fund managers. Remarkably, US stocks are still dramatically underweighted, near the very bottom of the list. There's just one explanation, as I see it; Trump Derangement Syndrome. TDS has the supposed smart money (fund managers) scared of investing in the US. As contrarians, when the US makes its way to the top of this list, this is when we'll reduce our US holdings...
GOVERNMENT SHUTDOWN FEARS
Many would like you to believe that a government shutdown will be bad news for the stock market. Uhhh...not the case!
Check out the following table, showing all shutdowns back to 1976. Clearly, the markets love it when the government is closed for business, with an average annualized return for the S&P 500 of 27%, from the last 3 closures.
Finally for this morning, gold/silver and the miners had a shake-out this week. Everything that I see says that we must continue to use any pause to add to positions. I first recommended gold/silver in 2003...over the years we've booked more than 3000% in net gains from this group...and I'm more bullish today than at any point in the last 10 years. Barring massive price suppression (sadly, always possible), the move higher directly in front of us will be an epic one. This is how I see it...so this is how I must report it to you.
Lastly, Parabolic Options Program #6 is now open to new members. Like our Extreme Options Program, Parabolic is a 6 month membership, but instead of 1-2 options trades each month (as with Extreme) we have unlimited options trades....all based on the VRA System and VRA Options Signals. In addition to our options recommendations, Parabolic includes multiple email updates each week. In these updates I give you our upcoming targets, which helps to prepare you for the options trades we are about to make.
Should you have any questions about signing up, please email us at
support@vrainsider.com
and we will send you more info! Parabolic #6 opens today and will launch next Tuesday. As always, we limit each options program to the first 100 members.
We're off to a great start for 2018...this is my kind of market and could well be our best year ever for the VRA. Parabolic Options #6 will be the icing on the cake. We're also launching new members sites (for both Parabolic and Extreme), where all trades/returns are listed. New sites will launch next week.
Hope you can join us!
Until next time, thanks again for reading....have a good weekend.
Kip
Sign up to receive two free weeks of Daily updates from the VRA at
