What A Long, Strange Road It’s Been

December 19, 2016 - 5:23pm

 by Gary Wagner

With the Christmas holiday, just days away, and New Year’s just around the corner, I am amazed at how quickly this year has passed. I am even more amazed at the events that have unfolded over this last year. 2016 is turning out to be not only a transitional year, but also a transformative year.

Think of it this way: if you had been told at the beginning of the year that this year’s presidential election would result in Donald Trump being elected as the 45th president of the United States, you would have probably filed that statement in a folder labeled, “obscure and highly improbable beliefs”.

If you were told that this outcome would fuel one of the greatest US equities rally in history, taking the Dow Jones Industrial Average, the Standard & Poor’s 500, and the NASDAQ indexes to new, all-time record highs, you would probably have filed that statement in the same folder.

Furthermore, if you were told that within hours of President-elect Donald Trump winning the election, safe haven assets, specifically gold, would go into a free-fall, losing about $200 in value from its high achieved the evening of the election, to current pricing, you would probably have filed that statement under, “conspiracy theories or absolute quackery.”

Sometimes the truth does ring stranger than fiction, and that statement can certainly apply to the events that have occurred this year.

Uncharted Territory

The truth of the matter is that the above-mentioned facts did occur this year and we are now faced with some undeniable facts

First, it is not business as usual. 2017 promises to bring about transformative change. What that change will look like is the real question we must ask ourselves. We should be intensely cognizant of the fact that we are in uncharted territory.

It is that uncharted territory, and potential outcome, that causes many analysts to be alarmed as they ponder the possibilities of events that could arise from President-elect Trump’s unique style of leadership.

Our President-elect certainly has the ability to initiate policies that could greatly enhance and benefit its citizens. But, he also has the ability to put the global geopolitical outlook in pure crisis mode.

Even before his inauguration, his quick, unfiltered twitter responses to global events gained attention.

He still continues to tweet petty and vindictive statements about those he believes have wronged him. He continues to disregard intelligence reports about Russian hacking, probably viewing this as a partisan move to discredit the recent election results.

Even more alarming is his recent, and contradictory, tweets in regard to the seizing of a US Navy drone in international waters.  While it is one thing to go after individuals, it is quite another thing to go after a sovereign nation.

It is my hope that next year will bring about incredible prosperity, renewed economic growth, and less geopolitical confrontation. But more so, it is my hope that, come January 20, as President-elect Trump takes the oath of office, the magnitude of his new position transforms his underlying mindset so that he can effectively do the job he was elected to do.

Inasmuch as 2016 could be remembered as an extremely transitional and transformative year, next year promises to be more interesting as we enter a new era in uncharted territory.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Gold Forecast: Proper Action
We are currently flat with no active trades in gold or silver on record.
However, we have been strongly bearish over the last month.
Last week we laid out our current trading strategy, and traders who want to maintain active positions over the holidays have implemented short positions in gold.
Gold Market Forecast

Although we are currently bearish on the precious metals markets as a whole, today we witnessed gold react as a true safe haven asset.

In reaction to events in Turkey, traders witnessed a moderate gain in gold pricing today. However it should be noted that this gain occurred in conjunction with a strong US dollar, which tapered it gains.

We do not believe that this current safe haven play will be a long-lasting one, and expect precious metals to continue to trade lower throughout the holiday season.

Trending Markets Forecast

In light of events overseas last night, we have seen a flight to safe haven investments including US treasuries and the US dollar.

US equities continue to trade higher with both the Dow Jones industrial average and the Standard & Poor’s 500 gaining approximately 2/10 of a percent.

The most the stellar performance today in US equities was seen in the NASDAQ index which gained approximately half percent on the day.

We are still under the umbrella of short-term optimism created by dynamic change in Washington, and because his optimism is based upon hope rather than real actions we could expect it to continue through the holiday season.