Phoenix is flying higher and higher!

Dear Trading Diary: Bingo! My Phoenix account has reached another milestone. From a humble £5,000 start it has now reached the impressive £25,000 valuation in just 17 months, making it a five-bagger.

I want to point out one very important feature. That is for the first few months, the growth was miniscule. It hovered around the £5,000 level for five months before latching on to the strong bull runs in Gold and Crude Oil. That initial lack of progress resulted in some members cancelling their memberships as they lost patience with me.

You can see the folly of their action in this chart. The moral is obvious is it not?

The other main feature is that there have been no major drawdowns despite the huge growth. Normally when trading leveraged markets (spread betting and CFD), large drawdowns are common. But not with my Phoenix methodology! That is because I employ a strict risk control procedures that time has proved highly effective. This is truly a High Reward/Low Risk campaign!

And Phoenix has seen both huge up markets and huge down markets in its life. This is a testament to the efficacy of my swing trading approach. I am not a bull or a bear – I just want to be on the right side of the markets as they unfold in their rolling waves.

OK, now I have a five bagger, now on to my next target for a ten-bagger at £50,000.

If Phoenix appeals to you then take a two week Free Trial here.

A Sliding Doors version of the US economy: The 1998 film Sliding Doors is a tale about a woman who is having a tough life where nothing is working for her. In one scene she is on a subway platform about to catch the next train – and her life unfolds as before as she steps inside the carriage. And in an alternate scene, she just misses the sliding doors that slam shut and catches the next one – and her life unfolds in a totally different way.

In 1971, President Nixon shut the gold window, and kicked off the great fiat currency debacle which launched the subsequent era of massive asset and consumer price inflation.

Below are charts of the four basic US economic building blocks priced in gold (the ‘barbarous relic’):

Exhibit A – The S&P priced in gold

Back to 1971 valuations!

Exhibit B – the GDP priced in gold:

Is the US economy ‘booming’ when priced in real money?

Exhibit C – Here is the oil price in real money:

Incredibly, oil is cheap and near record lows!

Exbibit D – Finally, here is housing in real money

And unbelievably, the price of an average house today is also near record lows, Tell that to your children!

Let’s take a moment to digest this. But I warn you – the longer you realize what your government has done to you, the angrier you may get.

So in a Sliding Doors alternate world, the economy would be stable, consumer prices would be stable (and generally low) and I would suggest the current political and social turmoil would not be present. It would be more like peace on earth than today’s conflicts.

In fact, the Federal Reserve would be hardly noticed as a factor in driving the economy (and stocks). And Powell’s anticipated speech at Jackson Hole on Friday would attract only a column inch or two in the pack pages of the financial press. Yesterday, he filled whole blogs with his ‘bullish’ comments.

Coming out of my daydream, I see the very opposite scenario today.

As for the Fed (that fills voluminous column inches today), their Fed Funds rate lies about 50 bps above market rates. Provided there is no sudden surge in market rates up to the next FOMC meeting on 18 September (unlikely), they are almost guaranteed to lower their rate by up to that much on that date. The Fed is behind the curve again and the only question is will they lower by 25 or 50 (or more?)?

This question should come to dominate the narrative now and should produce a more volatile two-way stock market. As I see it, the sharp manic rallies off the Black Monday lows is the result of an even greater desire to own stocks based on expectations of a large Fed cut.

But with the recent downward ‘revisions’ to the fake politically-desired job creation numbers (bearish), a falling dollar, a bearish French Fry Indicator and a weak commodity (ex-gold) sector and falling interest rates, this has all the hallmarks of a recession. But are investors are dancing on board while the band plays on? Is that an iceberg I see ahead?

Here is the most bullish option I have been following. The 2% collapse is wave 4 (in an almost textbook three down) and the rally off Black Monday will be the final wave 5 to new highs. The chart would look best if we see a dip in wave 4? of 5 into next week. If investors keep buying into the FOMC date then wave 3? would extend.

But here we are with stocks, houses, gold and most real assets at or near all-time highs – and the Fed is about to cut rates probably hard. In normal times, rates are cut when there is strong evidence the economy is weak and low asset prices need boosting (politically) to get the economy growing again.

Not today! So with the FOMC rate cut ahead, will stocks rally further into a Buy the Rumour, Sell the News scenario? We have a little over three weeks to find out.

As for my trading accounts, I took a tidy profit on my long Nasdaq trade for Phoenix last week and now I am flat. For VIP Traders, I have been testing the downside potential with small Dow shorts.

Update on my Gold/Silver campaigns: I was taken out of my long Gold positions last week on the hefty dip for excellent profits before the market righted itself and closed the week testing its Tuesday ATH at $2,530. Remember, we are in a strong wave 3 of 5 up and I do not want to be out of this market for too long. I will look to re-enter.

As for Silver, it was worrying that it lagged Gold badly for some time but when it got the message early in the week, my faith was restored for the resumption of its bull trend. Remember, Silver is caught in the middle of the (low) base metal markets and the (high) Gold.

My Copper analysis: But hold your horses – do I see signs the base metals are back in bull mode after the recent huge slump? Here is the fascinating Copper chart

The massive 25% slump off the May high (weak China and Net Zero outlook) to the 7 August low took it to a precise hit on the pink support zone. This support zone was previously resistance between the 12-month period March 2023 to March 2024 – a very lengthy period which validates it as a significant line. And the decline looks like a textbook a-b-c three wave correction.

Now it is bouncing up off that zone on a strong mom div and has reached the important trendline and is poised to break above it.

With China sentiment on the floor, are we setting the scene for a China – and Copper- recovery? The Net Zero and EV push (using masses of Copper) that Western governments are straining every sinew to make work has been floundering (see previous blogs). But has sentiment reached a low from where only a small piece of ‘good’ news could reverse the tide?

This is shaping up to be a most intriguing setup and I will be exploring some trade ideas now.

Update on my Cotton campaign: Earlier in the year I had a few aborted attempts to catch a major reversal. I was too early (a common trend with yours truly). But odds are growing such a major reversal is at hand – and the potential profits are truly impressive

On the long term weekly a new four-year low at 66 cents was set just a week ago. I now have a clear three wave correction off the 155 high set in 2022.

If this is correct then my first major target is the wave ‘b high at 103.

With signs Crude Oil is back on bullish track along with Copper (and Aluminium), is the commodity sector coming out of its funk? We could be at major Buy Low Sell High opportunities here – a trader’s dream!