Astro positive March

1.      1. H2 MARCH ASTRO POSITIVE

2.      Hence our Trading posture will be BUY THE DIP until we are above DJIA 20K and retesting market highs.

3.      The investor question then becomes: When do we sell in May and go away?  April, May or June?

FUNDAMENTALLY we continue to see MARKETS OVERPRICED by 10%-12%, but given future increasing profits for many companies, and lower taxes and less regulation, IT SHOULD BECOME LESS OVERVALUED AS TIME PASSES. 

1.      TECHNICALLY, watch resistance at SP 2400, DJ 21K & NASDAQ 6000.

Downside potential is  DJ 20000 or 19762 [12/31 market close]. 

BOTTOM LINE: Given we expect H2 March up, but as long as markets stay above SP 2325, technically we are inclined to maintain a long basis.

Nonetheless, we always advise caution, and believe stock picking will easily well outperform index investing in 2017.

Additionally, short term trading and conservative hedging strategies (such as writing covered calls and 2-1 long/short ratios) are recommended for Spring.

Price wise, ~ SP 2400 1-1, and if markets are so inclined to move still higher up towards 2500, then 1-2.

    MARKERS          DJIA      SPX  NASDAQ SILVER   GOLD     OIL

2016 CLOSE	19762	2238	5383	15.96	1152	53.89
3/17/2017	20869	2375	5409	17.41	1228	48.72
PIVOTS	20800	2325	5400	17.05	1210	48
RESISTANCE	21061	2400	6000	20	1300	52

KEY DATES:      March 20, 22

DJIA:                    20800 PIVOT S1 20500  S2 20000  S3 19762 21000 RESISTANCE?

SPX:                     2375 PIVOT   
NASDAQ:           5400 PIVOT
GOLD:                 1210 PIVOT   R1 1240  R2 1280 R3 1300

SILVER:              17 PIVOT

OIL:                      44 OR 48 SUPPORT? -> $57+  

US 10 year         Distribute/Sell -> 2.75-3.00 [RESISTANCE]        

BP:                        122 PIVOT ->  1.30+                        

 

The Market Marker includes some cautious concern.

2016 CLOSE:          DJIA 19762 SPX  2238 & NASDAQ 5383

2015 CLOSE:          DJIA 17425 SPX  2044 & NASDAQ 5007

2014 CLOSE:          DJIA 17823 SPX  2058 & NASDAQ 4736

2013 CLOSE:          DJIA 16576 SPX  1848 & NASDAQ 4178

AFUND Fair Value: GOLD $1370
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: HEDGE AND PROTECT AGAINST DOWNSIDE RISK

 

2.      2. BUSINESS & BANQUETS: 

3.       At the PDAC CSE Investor Luncheon 2017, three companies caught our interest to potentially research:

4.       DNI Metals (CSE: DNI) , Oriental Non-Ferrous (CSE:URG) and West Lake Gold (CSE: RLG) .

5.       Additionally a client favorite also presented:  Metalla Royalty & Streaming (CSE:MTA; EXCFF)

6.       As I wrote last week the mood at the PDAC mining show in Toronto was decidedly upbeat.  I am still catching up and will say more about this next week.

 

3. As both a trader and investor, I wish to be long both Gold and Silver.

For Gold, it seems $1200 gold support is firm; with a relatively dovish FED, we should see rallies to retest $1300 and $20 respectively in 2017.  Still, how much longer must we wait for gold to move significantly closer to Fair Value ($1370)?

Gold remains cheap geopolitical crisis insurance.

Moreover for investors suffering from minuscule interest rates, accumulating gold continues to be a no-brainer! 

Likewise for investors who cannot or will not buy the $US currency as well as investors who wish to safely and cheaply hedge their US$ exposure, ONLY GOLD IS AS GOOD AS GOLD!

Gold FV $1370 = Commodity FV: 1325 + Currency FV: 1400 + Inflation Metal FV:1355 + Crisis FV: 1400.

Gold/Silver ratio -> 62  FV $22.

INVESTORS: Intermediate Term, we plan to stay LONG in H1 2017 (recommending steady accumulation and only occasional hedging, selling or profit taking).  We remain disinclined to short or sell until gold is overvalued e.g. $1400+.

For silver our first selling numbers are $23+. 

 

4. “We had the Fed meeting, the economic data continues to come in good, but we have a lot coming up in terms of Affordable Care Act, tax reform, [and] European elections. So investors are content to just sit tight. They know that if we see some meaningful policy change, the market will take off.”

Karyn Cavanaugh, senior market strategist, Voya Financial

HW: Today we see nervous Bulls AND Bears!

 

"The economic expansion is still intact. It may last another 2 to 3 years if we get capital investment and productivity improvement. But the rate of growth and momentum may slow.”

Atul Lele, chief investment officer, Deltec International

HW: Yes, it is possible we may not see an significant extended decline until 2019 or 2021.

 

5. The S&P 500 and Dow have now gone 108 days without a 1% decline

 

Investment banks ditch the diet and look to expand

 

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