Weekly Market Update 3-23-17phoenixcapitalmarketing.com/PWA3-23-17.pdfBarrick Gold ABX 10/5/16...

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Weekly Market Update 3-23-17

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Thepost-electionnightrallyisnowrapidlyunwinding.AsI’vepointedoutagainandagain,thisentiremovewasdrivenbyinterventioninthecurrencymarkets,namely,byrampingthe$USD/JapaneseYenpair.Wellthatrampingisnowofficially,over.The$USD/Yenpairhasrolledoverandtakenoutcriticalsupport.

Thistellsus,pointblank,thatstocksareonborrowedtime.Indeed,theretailsectorhasalreadyunwoundtheentiremovesinceNovember2016.Somuchforthenotionthat“theUSconsumerisback.”

Weekly Market Update 3-23-17

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Indeed,bythelookofthings,retailasawholeinadeathspiral.Belowisthenumberofstoreclosingsformajorbrands.PartofthisistheimpactofAmazon.TheotherpartisthefactthattheUSeconomyhasrolledover.

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IntermsofmarketactiontheretailsectorasawholeissportingamassiveHeadandShoulderspattern.We’llprobablynottakeoutthatnecklineonthefirsttry,butanyonewhoisbettingontheUSconsumercomingbackinabigwayislikelyinforarudesurprise.

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Notfarbehindretailersarethebanks.Sinceelectionnight,thefinancialmediahasbeenproclaimingthatBankswillbethesinglebestsectortoown.Thereasoningforthisisthatbanksmaketheirmoneyfromthespreadbetweentheinterestratetheypaydepositorsonsavingsandtheinterestratetheyearnontheirloans…andwearesupposedlyinarisingrateenvironmentwhichwillleadtogreaterbankprofits.Thebelowchartarguesotherwise.StartinginearlyFebruary(incidentallythisisaroundthetimetheFed’sGDPmodelbeganforecastingacollapseingrowth)bankstockshavebeencollapsing.TheyarenowatCRITICALsupport.Oncewetakeoutthisline,Bankswillcrash.

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Bearinmind,thattheBanksleadthegeneralmarketduringthepost-electionmovehigher.Theyarenowdoingthesametothedownside.

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Thepictureisevenmorebrutalforregionalbanks.SupportisLONGgone.Thisbouncewon’tlasteither.

Anothersectorthatiscalling“BS”onthewholenarrativeofrisingratesisUtilities.TheUtilitysectorisprimarilyanincomesector,meaninginvestorsbuythesestocksfortheirdividends,notforgrowth.Assuch,Utilitiesrallyduringfallingrates(asinvestorsbuyfortheyield)andfallwhenratesarerising.Whatdoesthebelowchartlookliketoyou?Becausetome,itlooksliketheUtilities(XLU)sectorisrallyinghard,meaningrateswillbeFALLING.TheFedisdonewithratehikes.Watch,assoonasthestockmarketcollapsesFedofficialswillstartrollingbackalltalkoftwomoreratehikesthisyear.

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TheRealEstateInvestmentTrustorREITindustryisalsosignalingthattheFedisdonehikingrates.REITsareanincomeplay(thistypeofinvestmentvehiclehastopayout90%ofitsearningsindividends).Becauseofthis,whenratesarerising,REITscollapseandwhenratesarefalling,REITSsoar.Takealookatthischart.ThisisastorageREIT.AnditisVERYbullish.

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We’regettingonboard.ActiontoTake:BuyPublicStorage(PSA).Elsewhere,thelong-USTreasuryETF(TLT)hasjustputinahigherlow.Allweneedtodoistakeoutthattopbluelineandthewhole“election”rallyor“Trumptrade”isover.Againthischartistellingusthatlower,NOThigher,ratesarecoming.

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Similarly,theotherassetclassthatsufferedpost-electionnight,Gold,isnowonthecuspoftakingoutcriticalresistance.Ourminersareabouttoexplodehigher.

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MypointwithallofthisisthattheTrumpunwindisfinallyunderway.Withthatinmind,ifyou’relookingfornewpositions,thereislittlevalueifanyonthelongside.ThereWILLbesomeincredibleopportunitiestoloadupinboththeEnergyandEmergingMarketsectorsoncethismarketmoveends.ButrightnowisNOTthetime.Oilisinveryserioustrouble.Iwouldnotgonearit,oranythingintheEnergysectorbeforewehit$46.

DittoforEmergingMarkets.Ithinkthislatestrallyisoverdone.We’redueforapullbacktothebluelineatwhichpointI’llhaveanumberofnewindividualplaysforyou.

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Ontheshortsidehoweverthereareanumberofappealingtrades.However,beforegettingintothemIonceagainwanttostressthatyoushouldkeepyourpositionsizesinanyoftheserelativelysmall.Donotputahugeamountofcapitaltoworkhere.Thesepositionsaremeanttobehedgeswhilewewaitforthemarkettobottom.Havinggottenthatoutoftheway…Firstandforemost,Apple(AAPL)hasadatewith$120.

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WeareBEYONDoverboughthere.Thisisthesinglemostownedstockinexistenceformutualfunds.Andthey’reallabouttogettakentothecleaners.ActiontoTake:ShortApple(AAPL).AnotheroneistheCopperMinersETF(COPX).Allthathypeandhopeofaneconomicutopiaisgoingtogetunwound.We’regoingtotheblueline.

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GrahamSummersChiefMarketStrategistPhoenixCapitalResearch

BestRegards,

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ActiontoTake:SHORTtheCopperMinersETF(COPX)ThesetwoShortswillserveuswellwhilewewaitforthemarketstobottom.Thisconcludesthisweek’smarketupdate.I’mwatchingthemarketscloselyandwillissueupdatesasneeded.Barringanynewdevelopments,you’llnexthearfrommenextWednesdayinourlongermonthlyissueofPrivateWealthAdvisory.Untilthen…

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OPEN POSITIONS

STOCKS PORTFOLIO

Pricesasofmarket’scloseon3/23/17.Gainsincludedividends

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT PRICE

GAIN/ LOSS

RPXCorp RPXC 8/5/15 $15.48 $12.00 -22%

PeruETF EPU 12/7/16 $33.23 $33.82 2%

UraniumETF URA 6/8/16 $15.49 $15.24 4%

Cameco CCJ 1/4/17 $10.69 $11.00 3%

CoalETF KOL 1/4/17 $12.59 $13.81 10% AgriculturalCommoditiesETF RJA 1/12/17 $6.46 $6.42

-1%

EmergingmarketsETF EEM 1/12/17 $36.60 $39.71

8%

ChinaETF ASHR 2/1/17 $24.91 $25.16 1%

BrazilETF EWZ 2/8/17 $37.58 $36.61 -2%

UtilitiesETF XLU 2/8/17 $49.40 $52.01 6%

PublicStorage PSA 3/23/17 $225.92 NEW BUY!

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BONDS PORTFOLIO

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT

PRICE

GAIN/ LOSS

NuveenMuni.Fund NVG 1/2/14 $13.12 $14.38 32% EmergingMarketBonds EMB 11/21/16

$109.82$113.49 5%

LongUSTreasuries TLT 11/21/16 $121.05 $120.64 1%

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT

PRICE

GAIN/ LOSS

Gold 3/17/10 $1,120 $1,244.00 11% Silver* 3/17/10 $16.23 $17.60 8%

GoldMinersETF GDX 10/5/16 $22.83 $23.03 1% GoldMiningJuniorsETF GDXJ 10/5/16 $37.52 $36.26

1%

SilverWheaton SLW 10/5/16 $22.59 $20.61 -8% SilverStandardResources SSRI 10/5/16 $10.30 $10.54

2%

BarrickGold ABX 10/5/16 $15.54 $19.37 25%

NewGold NGD 10/5/16 $3.88 $2.95 -24%

RoyalGold RGLD 2/8/17 $71.36 $67.15 -6%

SilverMinersETF SIL 3/15/17 $35.81 $35.85 0%

PRECIOUS METALS/ MINERS PORTFOLIO

Pricesasofmarket’scloseon3/23/17.Gainsincludedividends*Averagepriceof$17.50and$14.97

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SPECIAL SITUATIONS/HEDGES/SHORTS PORTFOLIO

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT PRICE

GAIN/ LOSS

FranceETF(SHORT) EWQ 9/16/16 $23.38 $26.24 -12% ItalyETF(SHORT) EWI 9/16/16 $21.56 $25.52 -18% Russell2000ETF(SHORT) IWM 12/14/16 $135.37 $134.78 0% FinancialsETF(SHORT) XLF 12/21/16 $23.61 $23.57 0% USSteel(SHORT) X 2/1/17 $31.33 $34.02 -6% Apple(SHORT) AAPL 3/23/17 $140.92 NEW SHORT! CopperMinersETF(SHORT)

COPX 3/23/17 $22.64NEW SHORT!

CASH/ CURRENCIES PORTFOLIO

POSITION SYMBOL BUYDATE

BUYPRICE

CURRENTPRICE

GAIN/ LOSS

EuroTrust FXE 10/5/16 $108.80 $104.54 -4%

Pricesasofmarket’scloseon3/15/17.Gainsincludedividends

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RECENTLY CLOSED POSITIONS

POSITION SYMBOL BUYDATE

BUYPRICE

SELLDATE

SELLPRICE

GAIN/ LOSS

AmericanEagleOutfitters(SHORT) AEO 5/26/16 $15.36 1/31/17 $14.59 5%CliffsNatResources(FIRSTHALF) CLF 2/8/17 $10.15 2/13/17 $12.10 19%

Ambev ABEV 11/25/16 $4.96 2/23/17 $5.93 21%Cemex CX 11/25/16 $8.07 2/23/17 $8.69 8%CliffsNatResources(SECONDHALF) CLF 2/8/17 $10.15 2/23/17 $11.13 10%

Exxon XOM 9/24/14 $95.82 3/8/17 $81.28 -8% EnterpriseProductsPartners EPD 11/31/16 $25.93 3/8/17 $27.83

9%

NaturalGasETF UNG 2/22/17 $6.57 3/8/17 $7.11 8%