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U.S. Market: 4 Month Forecast – Gold, Oil, Stocks & Bonds

April 10th, 2015 · Chris Vermeulen · 5 Comments

Everyone is looking for the holy grail of the financial market which will tell what will happen next in stocks, commodities, bonds etc… Knowing that the holy grail of trading does not exist I am going to step out on a limb and share my four month stock market forecast along with commodities and bonds.

It is vital that you understand this is a 2-4 month forecast only and as the market evolves my outlook will change as I follow price action as closely as possible.

Here are some key points you need to know:

  1. Bonds should perform well for a few months and possibly a long time until the bear market in US stocks takes hold and is well under way. BUT, the bond bubble will burst eventually when rates start to climb. This could be June, or much later in the year but until then I expect them to rise as the safe haven.
  2. Commodities typically outperform equities during the late staged of the bull market which is what I feel the US stock market is. Resource stocks and resource rich countries like Canada should hold up well, and possibly make new highs going into summer.
  3. Notice how gold and oil have moved from opposite corners of the chart compared to the US and Canadian stock indexes.
  4. During the 2000 and 2008 bear market we saw gold, silver, oil and mining stocks get hit very hard in the second half of the bear market. Will this happen again? I do not think it will because this time rates are at zero and there is only one way to go when they are at the bottom… Up!. This means stocks and bonds will likely both enter a bear market, maybe not at the same time, but they will eventually. This means the only places to protect your capital will be commodities, resource based investments, or simply cash CAD & USD.

Forecast2

 

Take a look at this 10 year bond price overlaid on the S&P 500 index. So far this year bonds have popped and rallied above short term resistance which we have seen in the past. Big money is rotating into bonds for the time being and this is a warning sign of a stock market top.

If you want to learn more about the technical and fundamentals in motion about what is about to happen, why, and when read my ebook “The Global Economic Collapse Of 2015

treasury-bear

Market Forecast Conclusion:

In short, safe havens for investor’s capital will be more of a dance during the next bear market in US equities.

With many countries devaluing their currencies and a potential bull market in commodities I expect the Canadian Loonie and US Green Back to hold the value if not rise over the next year or two.


5 responses so far ↓

  • 1 lachlan // Apr 11, 2015 at 4:37 pm

    No doubt commods deserve a little time in the sun or even a holiday on the moon.

  • 2 Greg Atkinson // Apr 12, 2015 at 11:03 am

    Lachlan I am trying to estimate (guess) what will be higher in 3-5 years & commodities seem like a reasonable bet in that regard.

    I’m also keen on the big diversified low cost miners such as BHP and RIO who should be able to ride out the commodities price slump & still pay reasonable dividends.

    As for gold – I am still sitting on the fence.

  • 3 lachlan // May 1, 2015 at 5:49 am

    if you’re still short Greg…maybe they’ll sell in May and go away. A bearish price signal was on the market yesterday but I’ll err on the 100-200 point target for further downside and then my bias is bullish again. Best of luck though of course. When a sell off comes it could well be sudden/unexpected anyhow. If I remember rightly too I think a lot of us were thinking towards the end of this year or next for some bigger trouble.The market watchers will wait and see.

  • 4 Greg Atkinson // May 1, 2015 at 9:22 am

    Lachlan I am still short via ASX:BEAR and reckon that might be a good place to see during May at least.

    If we scratch beneath the surface there is a lot to be concerned about & not a lot which fundamentally supports the ASX 200 being near or above 6000.

    I still like oil at current prices though but I am sitting on the fence regarding gold.

  • 5 lachlan // May 1, 2015 at 10:22 am

    yeah that oil, what a buy it was and yes even still…where would we be without cheap oil eh?

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