12/31/2017: Markets had a historic up move this year, with the Major Indices up more than 20%! Historically, Investment results are better if you “Buy & Hold” during a strong up move, instead of Trading the move.
But If you are expecting the Markets to have another 20 + % gain in 2018, you could easily be disappointed. However it could be a great Trading year, and the Green Line Trading System could do very well. Trading works best with both Emotions (Fear & Greed) kicking in.
Since Nov 2016, there has been little FEAR, as the Markets have not Returned to the Green Line since then. Markets have not corrected well, so the Money Wave Buy Pops have been small… This will eventually change, as the liquidity of 8 years of FED Printing is gone, and now the FED is Raising Interest Rates.
Historically with a Strong Economy there will be Rising Interest Rates and Inflation. There are many Investments (ETF’s & Stocks) that should do very well with this environment.
Many Sectors such as Copper, Coal, Oil, Rare Earth & Steel have started up now from long Bear or Down Markets. But the Volume has not been there to confirm good Break Outs (most do not Believe). We want to see how these hold up when the Major Markets return to their Green Lines. Money eventually Flows to better Value (to where Tammy is not).
Markets are now in a “Goldilocks” Economy (Low Interest Rates, Low Inflation & Growing Earnings)… Many (or most) are “hoping” for more years of growing Earnings. We will see. When most agree…
LONG TERM TRADES
The Funds below are currently out of favor, but historically these could possibly Double or more from these lower levels. We are looking for a good Entry Point for these, but need the entire Economy & Inflation to pick up speed:
DBC COMMODITY FUND Relative Strength is back Below 90.
GRPN GROUPON INC. Wait for Break Out above $5.99 on High Volume.
JJC COPPER FUND Wait for the next Green Zone Buy on the Daily Chart.
KOL COAL FUND Wait for the next Green Zone Buy on the Daily Chart.
LL LUMBER LIQUIDATORS Relative Strength is Below 90.
REMX RARE EARTH FUND Wait for Green Zone Buy on the Daily Chart.
TWTR TWITTER INC. Wait on Break Out Above $25.25.
UGA US GASOLINE FUND Volume is too low… Break Out Above $33.07.
VALE VALE DE RIO Wait for the next Green Zone Buy on the Daily Chart.
Alert! Market Risk is HIGH (Red Zone). The probability of successful Short Term Trades is lower, when the S&P 500 is Way Above the Green Line. Even the Strongest Funds can get chopped up. Either take quick gains from Money Wave Pops, or STAY IN CASH & WAIT for a larger correction.
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