PART II – Delinquencies Pile Up – Will Commodities Make A Massive Move Soon?

PART II – Delinquencies Pile Up – Will Commodities Make A Massive Move Soon?

In our previous article PART I (Delinquencies Pile Up – Will Commodities Make A Massive Move Soon?) we explained and showed you the delinquencies rising in various areas of the credit market and what it means.

 

Now, we get to the fun part of our research.  Assuming our Head-n-Shoulders Top formation continues to play out and the US and Global markets continue to play the Credit/Debt game (and we are really watching China as recent news from the IMF and others is that China is trying to hide massive debt defaults), what do we expect the markets will do and how can we profit from these moves?

 

In short, we are cautiously watching the global markets for signs of continued weakness and signs of a debt contagion situation.  There has been quite a bit of news that global debt is an issue with China, Italy, Venezuela, Greece, Puerto Rico and others.  Our concern is this debt issue turns into a cancer like disease for the rest of the globe.  And in our opinion, it would be rather easy for government, banking or corporate institutions to become a “black hole” that creates another crisis event.

 

Our recent article reviewing the potential of a Technology “DOT COM Do-Over” clearly illustrated the hype that is current found within the global technology markets.  Technology has been on fire for the past 3+ year because global ROI has languished and the global FANGS have provided a much greater ROI opportunity than almost anything else.  This focus on technology may setup to become an issue that drives a substantial market correction.

 

2000-tech-crash

 

Global commodity prices are poised to wreak havoc on producers and suppliers.  A general decrease in global commodity prices will do two things to the global markets : A. provide breathing room for commodity consumers and general consumers, B. provide pricing/profit pressure on global producers and suppliers.  This second aspect of the commodity market price decrease is concerning because an extended global decrease in commodity pricing will likely draw a relatively massive decrease in global GDP as a result – reducing a number of key economic factors and potentially creating a “constricting cycle” across the globe.

 

globalAllCommodities

 

As this, potentially, plays out in the near future, the first signs of any weakness would appear in the mature markets technology and commodity sectors.  Watching the US, European and Asian markets for technology weakness in combination with certain commodity weakness would be a fairly clear warning that we are entering a contraction phase.  Of course, commodities like Metals and Oil will react inversely (at first) to any contraction phase, whereas Oil will eventually drift lower and global economic output decreases and the Metals will rally as global weakness will result in more capital moving to traditional safe-haven investments.

 

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The US dollar will likely form support throughout this move as we believe the mature markets (US, Canada, British and certain other countries) will fair stronger than others.  The facts remain that less mature markets are typically less resilient to global commodity and equity market declines.  They are dependent on materials production/exports and often burdened with debt.  More mature economies tend to recover more quickly simply because they have a wealth-affect that allows internal economic functions to weather weakness more efficiently.

 

Think of these mature economies as rooted to core global economic function more solidly whereas less mature markets may seem less rooted.  Because of this, the results of any economic contagion crisis would likely devastate certain emerging markets quickly and viciously whereas other, more mature markets, would see a slower and less dramatic crisis event unfolding.

 

We believe the US dollar will hold above the $92.00 level either way and begin a new rally phase over the next few months.  Partly because we know our VIX Cycles are set to explode in less than 60 days and partly because we believe our analysis of the NASDAQ and Global Technology firms is playing out exactly as we predicted (so far).

 

USDollar_F

 

These moves are setting up for dramatic trades that could result in 30~60%+ profits (or more) over short periods of time.  Understanding how these market dynamics are at play and understanding where the market rotations are happening is key to knowing when and where to trade.  This is where our ActiveTradingPartners.com can assist you.  This research document was put together by our team of analysts and our earlier research reports have been deadly accurate.  We predicted a VIX Spike nearly 6 weeks prior to it actually happening – and it happened on the EXACT DAY we predicted.

 

If you want to know how ATP can assist you, visit our web site today and take a look at our services and results.  We are currently advising our clients with active trading signals and research to keep them in the profits and out of trouble.  Unless you understand how these global markets are playing out, you are likely to get trampled as this plays out.  Isn’t it time you invested in your future success with traders that can find unique opportunities each month?

 

Want to know what’s going to happen next, join www.ActiveTradingPartners.com today.

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