Weekly Market Update 4-12-17phoenixcapitalmarketing.com/PWA4-12-17-3.pdf · suitability of any...

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Weekly Market Update 4-12-17

©2017·PhoenixCapitalResearch,PhoenixCapitalManagementInc.AllRightsReserved.Protectedbycopyright laws of the United States and international treaties. This newsletter may only be usedpursuanttothesubscriptionagreementandanyreproduction,copying,orredistribution(electronicorotherwise, including on theworld wideweb), inwhole or in part, is strictly prohibited without theexpresswrittenpermissionofPhoenixCapitalManagementInc.·AllRightsReserved.

Disclaimer: The informationcontainedon thisnewsletter is formarketingpurposesonly. Nothing contained in thisnewsletter isintendedtobe,norshallitbeconstruedas,investmentadvicebyPhoenixCapitalResearchoranyofitsaffiliates,norisittoberelieduponinmakinganyinvestmentorotherdecision.Neithertheinformationnoranyopinionexpressedonthisnewsletterconstitutesandoffertobuyorsellanysecurityorinstrumentorparticipateinanyparticulartradingstrategy.Theinformationinthenewsletterisnotacompletedescriptionofthesecurities,marketsordevelopmentsdiscussed.Informationandopinionsregardingindividualsecuritiesdonotmeanthatasecurityisrecommendedorsuitableforaparticularinvestor.Priortomakinganyinvestmentdecision,youareadvisedtoconsultwithyourbroker,investmentadvisororotherappropriatetaxorfinancialprofessionaltodeterminethesuitabilityofanyinvestment.OpinionsandestimatesexpressedonthisnewsletterconstitutePhoenixCapitalResearch'sjudgmentasofthedateappearingontheopinionorestimateandaresubjecttochangewithoutnotice.Thisinformationmaynotreflecteventsoccurringafterthedateortimeofpublication.PhoenixCapitalResearchisnotobligatedtocontinuetoofferinformationoropinionsregardinganysecurity,instrumentorservice.Informationhasbeenobtainedfromsourcesconsideredreliable,butitsaccuracyandcompletenessarenotguaranteed.PhoenixCapitalResearchanditsofficers,directors,employees,agentsand/oraffiliatesmayhaveexecuted, or may in the future execute, transactions in any of the securities or derivatives of any securities discussed on thisnewsletter. Past performance is not necessarily a guide to future performance and is no guarantee of future results. SecuritiesproductsarenotFDICinsured,arenotguaranteedbyanybankandinvolveinvestmentrisk,includingpossiblelossofentirevalue.Phoenix Capital Research, OmniSans Publishing LLC and Graham Summers shall not be responsible or have any liability forinvestment decisions based upon, or the results obtained from, the information provided. Phoenix Capital Research is notresponsibleforthecontentofothernewsletterstowhichthisonemaybelinkedandreservestherighttoremovesuchlinks.OmniSansPublishingLLCandthePhoenixCapitalResearchLogoareregisteredtrademarksofPhoenixCapitalResearch.OmniSansPublishingLLC-POBOX2912,Alexandria,VA22301

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Ihadanepiphanylastweek.Somethinghasbeeneatingatmeforthelastfewweeks.Thatsomethinghasbeenaseriesofquestions…

1) WhyisJanetYellensuddenlyvoicingaconcernaboutdebtlevelsinthemedia?Afterall,thisisthesamewomanwhosignedoffonsevenyearsofZIRP,allowingtheUS’sdebtlevelstodouble.

2) WhyistheFedmovingtoaggressivelyrateinterestrates?TheFedmaintainedZIRPforsevenyears…whyhasitnowraisedratestwicesinceTrumpwaselectedandispushingtoraisethemevenmore?

3) WhydidNYFedPresidentBillDudley,perhapsthebiggestdoveinFedhistory,

emphasizethatthemarket“misconstrued”hiscommentsthattheFedmightemploya“pause”initsratehikesandthatsuchpause,ifany,wouldbe“little”?

4) WhyisJanetYellentalkingsomuchnonsenseaboutemploymentandGDPgrowthbeing

strongwhentheFed’sOWNdatarefutesthis?Noneoftheabovemakesanysense.ItisnowcleartheUSeconomyisinserioustroublewiththeFed’sOWNGDPNowmetricforecasting1Q17growthat0.6%(downfromaforecastof3.0+%backinFebruary)!

Weekly Market Update 4-12-17

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SowhyistheFedsodesperatetohikeratesnow?Remember,thisisthesamegroupofindividualsthatwerewillingtopossiblylettheeconomyrun“hot”backinOctober…andnowthey’resuddenlypushingforamultipleratehikes?Thenmyepiphanyhit.InallofthehubbubaboutTrump’spushforanObamaCarerepeal,taxreformandthelike,thefollowingstoryfailedtofullysinkin:

PresidentDonaldTrumpwillbeabletorecasttheFederalReservebyfillingthreeormorevacanciesonitsseven-memberboardofgovernors,andisleaningtowardcandidateswithbankingandfinancialworldexperienceratherthanacademiceconomists.Afterhiscampaigncriticismofthecentralbank'slow-interest-ratepolicies,manyobserversspeculatedhewouldseekmore"hawkish"candidateswhowouldfavorhigherborrowingcosts.Buthischoicesmaybedrivenlessbytheseissuesandmorebytheirpracticalexperience,judgingfromhisearlypicksforothertopeconomicpolicy

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postsintheadministration--drawnfrominvestmentbanking,privateequityandbusiness--andthepoolofearlycontendersfortheFedjobs.Suchchoiceswouldmarkadeparturefromthetrendofrecentdecades,whenmostFedofficialswereeconomists,manywithextensiveexperienceinacademiaorthecentralbank.ItcouldusherinareturntotheFed'searliestyears,whenbankers,lawyersandotherbusinesspeoplehadamuchlargerpresence.http://www.foxbusiness.com/markets/2017/02/20/president-trump-will-be-able-to-recast-fed-by-filling-vacancies.html

ThisclarifiesEVERYTHING.Fedofficials,whileterribleatforecasting/creatingeconomicgrowth,areveryastuteatsensingcareerrisk.AndwhenTrumpwon…itrepresentedtheendoftheeraofacademiceconomistslikeYellenattheFed.HadHillaryClintonwontheUSPresidency,JanetYellenandherivorytoweracademiceconomistcohortswouldmostassuredlyhavebeenguaranteedadditionaltermsoftheircurrentrolesattheFed(theYellenFedisveryliberalfromapoliticalstandpointwithmembersofitsBoardevenmakingfinancialdonationstoClinton’scampaign).ButClinton,didn’twin.Trumpdid.AndhewillbeabletocompletelyremaketheFed’sBoardofGovernorswithinthenext18months.Letmeexplain…TheFed’sBoardofGovernorshassevenpositions.Currentlytwoarevacant.Andathirdwillbeopeningupshortly.Ontopofthis,bothcurrentFedChairJanetYellen’sandVice-ChairStanleyFischer’stermsendinthefirsthalfof2018(FebruaryandJune,respectively).Whilebothcouldtechnicallyremainontheboarddespitethis,it’shighlylikelytheywillstepdowngivenTrump’sfocusonthosewithprivatesectorexperience(nottomentiontheclearlyrockyrelationshipTrumphaswithboth).Putsimply:within18months,FIVEoftheFed’ssevenBoardMemberswillbeTrumpappointees.TrumpcouldeffectivelybuildaFederalReserveboardthatwouldvotetohisliking.

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AsImentionedbefore,Fedofficials,whileterribleatforecasting/creatingeconomicgrowth,areveryastuteatsensingcareerrisk.AndwhenTrumpwon…theclockstartedtickingforYellenandherkind.THISiswhytheFedispushingaMAJORpolicyshifttowardstighteningatatimewhenitisCLEARLYamistake.BeforemovingforwardIwanttoreiterateakeythemeregardingFedcommunications:theFedNEVERwantstosurprisethemarketswithamajorpolicyshift.ForthisreasonFedofficialsALWAYSprepthemarketswellinadvancewhenamajorpolicychangeiscoming.Withthatinmind,considerthatonApril5th,theFedreleasedtheminutesfromitsMarchmeeting.AndwithinthoseminutestheFedrevealedthatitintendstobeginshrinkingitsbalancesheetthisyear(andthatmoreratehikesarecomingsoonerratherthanlater).

FederalReserveofficialssaidthesheddingofthe$4.5trillioninbondsthecentralbankisholdingonitsbalancesheetwillbeginthisyear.TherevelationcameWednesdayfromasummaryoftheFederalOpenMarketCommitteemeetingheldinMarch,duringwhichthegroupapprovedaquarter-pointhikeinitsbenchmarkinterestratetarget.OfficialsatthemeetingnotedthattheFedlikelyisonafasterpacewithratehikesahead.Unwindingthebalancesheetissignificantbothbecauseofitssheersizeandtheimpactitcouldhaveonmarkets,asFedmembersincludingChairJanetYellenhaveindicatedthatthemoveitselfwouldamounttoaratehike."Providedthattheeconomycontinuedtoperformaboutasexpected,mostparticipantsanticipatedthatgradualincreasesinthefederalfundsratewouldcontinueandjudgedthatachangetotheCommittee'sreinvestmentpolicywouldlikelybeappropriatelaterthisyear,"thesummary,orminutes,said.http://www.cnbc.com/2017/04/05/fed-set-to-unwind-balance-sheet-this-year.html

ThisisaMASSIVEpolicyshift.Technically,theFed’sQEprogramendedOctober2014.However,rememberthattheFediscurrentlysittingonover$4.5TRILLIONworthofassets(mortgagebackedsecuritiesandTreasurybonds).

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Thoseassetspayinterest,whichmeanstheFedisearningmoneyonitsholdings.However,sincetheFedisnota“for-profit”entity,itgetsaroundthisissuebyusingthemoneyitearnsonitsassetstoinvestinnewassets/securities.ThisistheFed’s“reinvestment”program.AndtheFedhasnowindicatedthatitintendstoSTOPthisprogramandbeginSHRINKINGitsbalancesheetthisyear(2017).Ontopofthis,theFedimpliedthatitwouldlikelybehikingratesevenhigherBEFOREitbeginsshrinkingitsbalancesheet.Putsimply,moreratehikesarecomingsoonerratherthanlater.AndtheFedhopestostartshrinkingitsbalancesheetsoonafterthat.Lestanyonemistakethemessagehere,lastFridayNYFedPresidentWilliamDudley(whoisinchargeofFedmarketoperations)appearedtoemphasizethattheFedwouldonlyissuea“littlepause”initsratehikesonceitbeganshrinkingitsbalancesheet(meaningtheFedisseriousaboutalonger-termtighteningcycle).

TheFederalReservemightinthefutureavoidraisinginterestratesatthesametimethatitbeginstheprocessofshrinkingits$4.5trillionbondportfolio,promptingonlya"littlepause"inthecentralbank'sratehikeplans,aninfluentialFedofficialsaidonFriday.TheFedhashikedratestwiceinthelastthreemonthsandaims,accordingtopolicymakers'forecasts,totightenpolicythreetimesineachofthenextfewyears.MinutesfromtheFed'smid-Marchmeetingshowedmostpolicymakersexpectedtostartsheddingbondslaterthisyear,asentimentDudleyendorsedagainonFriday,addingitcouldalsohappenin2018.http://www.reuters.com/article/us-usa-fed-dudley-portfolio-idUSKBN1792M9

Dudleywasemphaticthatthiswouldonlybea“little”pauseandthatthemarket“misconstrued”hisearliercommentsthattheword“pause”meanttheFedwouldbedonehikingrates.

Treasuryyieldsroseledbythefive-yearafterNewYorkFederalReservePresidentWilliamDudleydownplayedthelengthofanypauseinshort-termratenormalizationbythecentralbankwhenitstartstoshrinkitsbalancesheet…DudleysaidhisMarch31commentsthatcausedbondstorallyandsteepenedthecurvewere“misconstrued”bysome…

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Apause“atthetimeyoumakethedecisiononthebalancesheet”wouldbetomakesureit“doesn’tturnouttobeabiggerdecisionthanyouthoughtyouweremaking.So,Iwouldemphasizethewords‘littlepause,”’Dudleysaid.https://www.bloomberg.com/news/articles/2017-04-07/treasury-curve-flattens-on-mixed-jobs-data-paring-weekly-move

So…

1) TrumpwinsthePresidencyandputstheacademiceconomistsattheFedinhiscrosshairs.

2) TheFedhikesratesinDecember2016despiteclearevidencethattheUSeconomyisbeginningtoweaken.

3) TheFedhikesratesagaininMarch2017despiteevidencethattheUSeconomyisnow

weakeningrapidly(theFed’sownGDPNowmeasurehaddroppedfromforecastingGDPgrowthof3.0+%in1Q17to0.9%growthwithinthespanofsixweeks).

4) TheFed’sMarchFOMCminutesrevealthattheFedisdiscussinghikingratesagainaftertheMarchhike(whentheFediscertainlywellawareoftheaforementionedGDPNowcollapse)

5) Duringthatsamemeeting,theFedbegandiscussingtheshrinkingofitsbalancesheet.

6) Afewweekslater,theNYFedPresident(themaninchargeoftheFed’smarketoperations,i.e.buyingansellingsecurities)statedthattheFedwouldonlytakea“littlepause”fromhikingratesonceitbeginsshrinkingitsbalancesheet.

Then,thetopifoff,soonafterDudley’scommentshisthewiresonFriday,FedChairJanetYellenannouncedshewouldbegivingapreviouslyunscheduledspeechthefollowingMondayattheGeraldR.FordSchoolofPublicPolicyinMichigan.DuringherspeechYellenstated:

1) TheFed’sindependenceisunder“somethreat”(aCLEARjabatTrump).

2) TheriskinmonetarypolicyisthattheFedmightnotraiseratesfastenoughandwillget“behind”thecurveregardinginflation.

IfyouwanttheFedtobroadcastitsintentions,youdon’tgetmuchclearerthanthis.

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Themarketstooknote.OnMarch262017,themarketputtheoddsofaratehikeinJuneatjust56%.BycloseofbusinessApril9ththeoddshadsoaredto74%.Sowhyisthemarketnotyetfullypricingthisin?BecausethemarketbelievestheUSisgoingtowar.Butthemarketiswrong.ThebiggestnewsingeopoliticshasnothingtodowithRussiaorevenSyria.Thebiggestnewsisthefollowing:

“Chinahasabottomlinethatitwillprotectatallcosts,thatis,thesecurityandstabilityofnortheastChina...Ifthebottomlineistouched,Chinawillemployallmeansavailableincludingthemilitarymeanstostrikeback.Bythattime,itisnotanissueofdiscussionwhetherChinaacquiescesintheUS’blows,buttheChinesePeople’sLiberationArmy(PLA)willlaunchattackstoDPRKnuclearfacilitiesonitsown."

http://www.zerohedge.com/news/2017-04-11/china-threatens-bomb-north-koreas-nuclear-facilities-if-it-crosses-beijings-bottom-l

Historically,ChinahasbeenNorthKorea’s#1supplierforeverything:itsprimarysourcefortradeaswellasfood,energy,andweapons.Withthatinmind,thefactthatChinapublishedastorythreateningtobombNorthKoreasoonafterChina’sleaderXIJinPingmetwithUSPresidentTrumpispossiblythesinglebiggestdevelopmentingeopolitics.InweeksleadinguptotheTrump/JinpingmeetingUSSecretaryofStateTillersonmadeitclearthattheUSwouldnolongertolerateNorthKorea’snuclearweaponsprogramsandwouldnotruleoutmilitaryattacks.Thiswasnowclearlymeanttosetthe“tone”fortheTrump/Jimpingmeeting.Andbythelookofthings,Trumpmayhavecuttheultimatedeal,gettingChinatosidewiththeUSagainstNorthKorea(thefactTrumpwasliterallybombingSyriahoursbeforemeetingwithJinpingprobablyhelpedwithnegotiations).Now,theabovestoryhassincebeenredactedinChina(likelyasPartyleaderssoughttosavefacefromthefactthattheyhadbuckledtoademandfromPresidentTrump).However,ChinaismovingamilitaryenvoytoSouthKorea.

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Astheysay,“actionsspeaklouderthanwords.”

AfteraChineseenvoyarrivedinSouthKorea,thetwosideshavereportedlyreachedanagreementtotake"strongaction"againstNorthKoreaifnuclearandballisticmissiletestingcontinues,accordingtoVOANews.https://www.aol.com/article/news/2017/04/11/trump-pressure-china-do-something-north-korea-nukes/22035463/

Andthenthere’sthis:

Chinahasordereditsmilitarytobeonnationwidealert,inadditiontoareasneartheNorthKoreaborder,astensionsescalateonthepeninsula…About25,000troopsoftheChinesemilitary's47thgrouparmyoftheNinthArmoredBrigadehavebeeninstructedtobereadytomovelongdistances,closetotheNorthKoreaborder,theHongKong-basedorganizationsaid.Othertroopsmayhavebeenmobilized.AccordingtoTaiwan'sChinaPost,theChinesegovernmentmayhavedeployedabout150,000troopsalongtheNorthKoreaborderonSunday,asU.S.andSouthKoreamilitariesconductedjointexercisesinandaroundthepeninsula.http://www.upi.com/Top_News/World-News/2017/04/12/China-tells-military-to-be-ready-to-move-to-North-Korea-border/5871492003177/

Insimpleterms,ChinaisnowsidingwiththeUSregardingNorthKorea.ThisrepresentsamajorchangeingeopoliticalrelationsbetweentheUSandChina.AnditalsoraisesquestionsaboutChina’salliancewithRussia(theothernationwithwhomtheUSiscurrentlyengaginginsaberrattling).IFChinaisindeedmovingtowardsaligningitselfwiththeUSbasedonthelatter’ssignificanceintermsoftrade,WARISNOTCOMING.ChinacouldpullthefinancialplugonNorthKoreaandits’GAMEOVERthereinamatterofhours.ThisiswhyIbelievethemarketiscompletelywronghere.AndnootherassetclassisaswrongasGoldwhichissufferingfromaridiculous“warpremium”andiscompletelymispricedatcurrentlevels.

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True,we’vehadabreakoutaboveresistance…

However,therearesomeBIGproblemswiththismove.Firstandforemost,theGoldMiningJuniorstoGoldMinersratio(GDXJ:GDX)hasbrokenitstrendline.ThisshouldnotonlyhaveheldbutweshouldhaveseenGDXJ:GDXERUPThigherifwarwascoming.

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Secondly,PalladiumusuallyleadsGoldinmajorpricemoves.Rightnow,PalladiumdoesnotbelievethemoveinGoldatall.

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SilveralsousuallyleadsGoldtotheupside.Rightnow,it’snot;it’slaggingbehindonthismove.

Finally,andmostimportantly,GoldtrackstheJapaneseYen/$USDpairclosely(we’vecoveredthismanytimesonthesepages).AndrightnowtheYen/$USDpairsuggeststhatGoldisoff-base(thecurrencypairshouldbeleadingnotlagginghere).

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MypointwithallofthisisthatMOSTofthemarketindicatesGoldiswronghere.WarisNOTcoming.Again,ChinacansimplypulltheplugonNorthKorea’sfundingandthelattercountrywillcollapse.Forthisreasonwe’veclosedoutanumberofourpreciousmetalsplaysinthelast24hours.We’llrevisitthemoncethecomingGoldcorrectionends(moreonthisshortly).OutsideofGold,themarketsaresendingcountlesssignalsthattheTrumpHypewaveisofficiallyover.IexpectthiswillonlyworsenastheFedcontinuestohikeratesintoeconomicweaknessintheUS.Firstandforemost,growthplaysacrosstheboardarecollapsing.MininggiantRioTinto(RIO)hastakenoutits“electionrally”trendline/support.

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Theentirecopperminingcomplexhasdonethesame:

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USSteel(X)hasformedamessyHeadandShoulderspatternandisnowabouttotakeoutcriticalresistance.

Economicbell-weatherFederalExpress(FDX)ishangingbyathread.

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Indeed,theentireDowJonesTransportationIndex(themosteconomicallysensitiveindex)isinthesameboat=hangingbyathread.

Butwait,itgetsworse…WallStreetdarlingApple(AAPL)hasjustopenedatrapdoor,havingbrokenoutofrisingbearishwedgepattern.ThiscouldliterallyCRASHto$120inamatterofdays.

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Formertop-performerNvidia(NVDA)isabouttoimplode.

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RegardingtheFed’smonetarypolicyshift,asthemarketwakesuptothefactthatwarisnotcoming…andthattheFedisgoingtobehikingratesinJune,the$USDwillmovehigher.The$USDwillprobablyretestitsrecenthighs.

IexpectTreasuryyieldstorise(meaningbondpricesfall),aswell.Iftreasuryyieldscan’tdrophardonadayliketoday,they’renotgoingtobedroppingmuchatallforawhile.

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Ialsoexpectthatwe’regoingtoseeGolddropsharplybackdowntothe$1220-$1240rangeifnotlower.

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ThiswillcorrelatetoSilverdroppingto$17perounce.

GoldMiners(GDX)willprobablytest$21andchange.ThiswillpresentuswithaMASSIVEbuyingopportunityandwewillbeaddingtoourpositionthen(we’reholdingonfornow).

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ThesamegoesfortheGoldMiningJuniorsETF(GDXJ)withadownsidetargetof$32.50orso.

AsIwritethis,DonaldTrumphasjustannouncedthattheUSDollaris“toostrong”pushingthe$USDdownandGoldandminershigher.CNBCandeveryoneelseisproclaimingit’stimetobuyGoldbasedonthis.

PresidentDonaldTrumpsaidWednesdaytheU.S.dollar“isgettingtoostrong”andhewouldprefertheFederalReservekeepinterestrateslow.”https://www.wsj.com/articles/trump-says-dollar-getting-too-strong-wont-label-china-currency-manipulator-1492024312

Noneofthischangesmyviewconcerninganyoftheaboveanalysis.Indeed,withCNBCnowopenlycallingforGoldtorise,I’mmoreconvincedthaneverthatitwillweaken.

Remember,Trumphasdonethisbeforeamerethreemonthsagointheverysameoutlet(aninterviewintheWallStreetJournalpublishedJanuary172017).

Onthatday,the$USDplungedafull0.86%inasingletradingsession,whileGLDjumped1.4%,GoldMiners(GDX)jumped2.7%andGoldMiningJuniors(GDXJ)jumped3.4%.

Bywayofcontrast,todaythe$USDfinishedUP0.09%,GLDroseonly0.68%,GDXrose0.86%,

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andGDXJonlyrose1.44%.

Letmebeclearhere:thePRESIDENTOFTHEUNITEDSTATEStrashedthe$USDandthegreenbackstillfinishedUPandGoldMiningJuniors(whichroutinelymove3%-5%inasingleday)didn’tevenrise2%.

ThistellsuspointblankthatGoldistiredandabouttocorrect.IfGoldcannotmoveupamere1%fromthePRESIDENTtrashingthe$USD,it’sinserioustrouble.

Sowheredoesthisleaveus?

1) IexpectUSstockstocorrect,withTechleadingtothedownside.Thisprocesshasjustbegun.ThedownsidetargetfortheS&P500issub2,200ataminimum(purpleline)and2,100atamaximum(orangeline).

WhenthisbottomhitsIhaveseveralplaysIwanttomoveusinto.Theyare:

a. Materials(XLB),includingsomeindividualplays.

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b. MLPs(AMZ)

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IparticularlylikeEnterpriseProductsPartners(EPD)inthisspace.

c. Emergingmarkets(EEM)includingindividualplays.

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Putsimply,we’renowjustwaiting.We’vehadanexcellentfirstfourmonthsof2017.We’renowjustwaitingfortheS&P500tocompletetheunwindingoftheTrumphypemove.Whenthisiscomplete,the$USDwillbegintocorrectaggressivelypushingcommodities/materials,MLPs/REITs(asbondyieldsfall),andEmergingmarketsthroughtheroof.Onaclosingnote,thankyouforyourpatiencelastweek.Thisconcludesthisweek’sweeklymarketupdateforPrivateWealthAdvisory.I’mwatchingthemarketscloselyandwillissueupdatesasneeded.Barringanynewdevelopmentsyou’llnexthearfrommenextWednesdayinourusualweeklymarketupdate.Untilthen…

GrahamSummersChiefMarketStrategistPhoenixCapitalResearch

BestRegards,

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OPEN POSITIONS

STOCKS PORTFOLIO

BONDS PORTFOLIO

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT

PRICE

GAIN/ LOSS

NuveenMuni.Fund NVG 1/2/14 $13.12 $14.81 36% EmergingMarketBonds EMB 11/21/16

$109.82$114.16 6%

LongUSTreasuries TLT 11/21/16 $121.05 $123.09 3%

Pricesasofmarket’scloseon4/12/17.Gainsincludedividends

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT PRICE

GAIN/ LOSS

RPXCorp RPXC 8/5/15 $15.48 $12.27 -21%

PeruETF EPU 12/7/16 $33.23 $34.00 3% AgriculturalCommoditiesETF RJA 1/12/17 $6.46 $6.32

-2%

ChinaETF ASHR 2/1/17 $24.98 $25.40 2%

BrazilETF EWZ 2/8/17 $37.53 $36.92 -2%

UtilitiesETF XLU 2/8/17 $49.35 $51.85 6%

PublicStorage PSA 3/23/17 $225.92 $224.30 -1% SouthwesternEnergy SWN 3/30/17 $8.15 $7.87 -3%

GulfportEnergy GPOR 3/30/17 $17.17 $16.64 -3%

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POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT

PRICE

GAIN/ LOSS

Gold 3/17/10 $1,120 $1,287.00 15% Silver* 3/17/10 $16.23 $18.48 14%

GoldMinersETF GDX 10/5/16 $22.83 $24.57 8% GoldMiningJuniorsETF GDXJ 10/5/16 $37.52 $38.04

5%

SilverWheaton SLW 10/5/16 $22.59 $21.87 -3%

NewGold NGD 10/5/16 $3.88 $3.03 -22%

PRECIOUS METALS/ MINERS PORTFOLIO

Pricesasofmarket’scloseon4/12/17.Gainsincludedividends*Averagepriceof$17.50and$14.97

SPECIAL SITUATIONS/HEDGES/SHORTS PORTFOLIO

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT PRICE

GAIN/ LOSS

FranceETF(SHORT) EWQ 9/16/16 $23.38 $26.36 -13% ItalyETF(SHORT) EWI 9/16/16 $21.56 $25.10 -16% Russell2000ETF(SHORT) IWM 12/14/16 $135.37 $135.04 0% FinancialsETF(SHORT) XLF 12/21/16 $23.61 $23.20 2% USSteel(SHORT) X 2/1/17 $31.33 $31.26 2% Apple(SHORT) AAPL 3/23/17 $140.92 $141.80 -1% CopperMinersETF(SHORT)

COPX 3/23/17 $22.64$22.05 3%

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CASH/ CURRENCIES PORTFOLIO

POSITION SYMBOL BUYDATE

BUYPRICE

CURRENTPRICE

GAIN/ LOSS

EuroTrust FXE 10/5/16 $108.80 $103.32 -5%

Pricesasofmarket’scloseon4/12/17.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%

EmergingmarketsETF EEM 1/12/17 $36.60 4/10/17 $39.20

7%

BarrickGold ABX 10/5/16 $15.54 4/10/17 $19.0423%

UraniumETF URA 6/8/16 $15.49 4/12/17 $15.909%

Cameco CCJ 1/4/17 $10.69 4/12/17 $11.487%

CoalETF KOL 1/4/17 $12.59 4/12/17 $14.5115%

SilverStandardResources SSRI 10/5/16 $10.30 4/12/17 $11.32

10%

RoyalGold RGLD 2/8/17 $71.50 4/12/17 $74.14 4%

SilverMiners SIL 3/15/17 $35.81 4/12/17 $37.60 5%