The Next Financial Crisis – Part I

Protecting Yourself with Gold, Oil and Index ETF’s

In 2009 I shared my big picture analysis, investment forecast and strategy in a book called “NEW WORLD ORDER ECONOMICS – What you can do to protect yourself”.  In January 2009 I forecasted that the Dow Jones Industrial Average was going to make a bottom within a couple months which it did. I also predicted the price of gold to start another major rally, and for crude oil to bottom and rally for years, which were also correct.

You can call it luck, skill or a mix of both… but the truth is that the markets cannot be predicted with 100% certainty. With that said, the US stock market, gold and oil look to be setting up for their NEXT BIG multi-year moves.


US Equities Bull Market Is About To End 

2014 was a tough year for small cap stocks. The Russell 2000 index which is a great barometer of what speculative money is doing as a whole. History has shown that small capitalization stocks are the first group to show weakness after a multi-year bull market.

For all of 2014 this group of stocks has been struggling to hold up. Each time it nears a previous high, sellers come out of the woodwork and unload shares in large volume. This was the first tell-tale sign that institutions are starting to rotate their positions out of these high beta stocks.

Later that year in October 2014 the S&P 500 fell 10% in just a few weeks. The speed of the selloff and the heavy volume that accompanied it are yet another warning sign that the underlying strength of the stock market is weakening. This broad market selloff included the large capitalization stocks which means the end is nearing.

If we turn our focus to the Dow Jones Industrial Average and look at the chart below you will see my prediction for 2015/2016.

I should be clear on what to expect during market tops because they differ than market bottoms. Most bottoms that occur are powered by fear. And fear has a price pattern on the chart that is much different than what we see during market tops when optimism is high.

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IB Trading 5 years ago Member's comment

Likely to happen, SDS is my only equity in the us..