weekly market update 9-13-17phoenixcapitalmarketing.com/pwa9-13-17.pdf · apache apa 8/23/17 $40.33...

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Weekly Market Update 9-13-17

©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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OilandNaturalGasfinallycaughtabidthisweek.WemovedintotheEnergysectorinlateJulybasedmyanalysisthatthesecondhalfof2016wouldbelargelyreflationaryinnature.Bywayofreview,reflationconcernssharpmoveshigherinassetsthatarelinkedtoeconomicgrowth/expansion:industrialmetals,agriculturalcommodities,Oil,etc.ThefirstwaveofthereflationtradehitinlateJuneandranintomid-tolate-July.Wecaughtthatfirstwaveperfectly,lockinginnumeroussignificantgainsintheindustrialmetalsproducerslikeFreeportMcMoRan(FCX),USSteel(X)andthelike.Belowareourgainsfromthistrend.

Stock Symbol BuyDate

BuyPrice

SellDate SellPrice Gain

RioTinto RIO 6/19/17 $39.48 7/10/17 $43.48 10% ClearEnergyETF PBW 4/19/17 $4.06 7/10/17 $4.25 10% EnterpriseProductsPartners

EPD 6/22/17 $26.007/17/17

$27.70 7%

USoilFund USO 6/28/17 $9.20 7/17/17 $9.57 4% ChinaETF ASHR 2/1/17 $24.98 7/24/17 $28.08 12% Uranium URA 6/15/17 $12.76 7/24/17 $14.28 12% Cameco CCJ 6/15/17 $9.14 7/24/17 $9.95 10% USSteel X 6/19/17 $20.83 7/24/17 $23.69 14% FreeportMcMoRan FCX 6/19/17 $11.53 7/25/17 $14.08 22% Chevron CVX 6/22/17 $104.45 8/2/17 $110.86 6%

Now,marketsarelivingentitiesandneveractinaperfectlylinearfashion.Thefactthatreflationisthedominanttrendinthemarketsdoesn’tmeanthatEVERYreflationaryassetwillrallyatthesametime.Andforwhateverreason,duringthisfirstwaveofreflation,theEnergysector,particularlyOilandNaturalGas,failedtocatchabid.Thatchangedthisweek.Asindustrialmetalsarenowcorrectingfromtheiroverboughtstatus,Energycamealive.Asofthismorning,OilisfinallybeginningtobreakthroughthedescendingtrendlinethathaslimiteditsupsidemovessinceFebruary2017.

Weekly Market Update (9-13-17)

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Oncewebreakthisline,we’llbemovingtowards$52Oilandthen$54Oil.AndIfullybelieveOilwillhit$58beforethisbullmarketruniscomplete.NaturalGaswillbefollowingsuit.Indeed,ithasalreadystagedaconfirmedbreakoutofitsowndescendingtrendline.

IamstressingallofthisbecauseIknowitwaspainfulbeingearlyonEnergy.Ameretwoweeksago,ourEnergyplayslookedlikethebelowtable:afewsmallwinnersandalotoflargerlosers.

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Stock Symbol BuyDate BuyPrice SellDate SellPrice

Transocean RIG 6/15/17 $8.56 $8.10 -5% PioneerNaturalResources PXD 6/15/17 $158.02 $128.80 -18%

HelixEnergySolutions HLX 7/19/17 $6.16 $6.28 2%

SouthwesternEnergy SWN 7/19/17 $6.17 $5.30 -14%

EOGResources EOG 7/19/17 $95.00 $83.67 -12%

NaturalGasETF UNG 8/2/17 $6.30 $6.52 3% EnergyTransferPartners

ETP 8/2/17 $21.35 $18.70 -8%

EnterpriseProductsPartners

EPD 8/9/17 $26.08 $25.70 -1%

OilServicesETF OIH 8/23/17 $22.07 $22.12 0%

Apache APA 8/23/17 $40.33 $38.37 -5%

Halliburton HAL 8/23/17 $39.06 $38.67 -1% Herearethosesameplaystoday:mostlywinnersandmovingupsharply.

Stock Symbol BuyDate BuyPrice SellDate SellPrice

Transocean RIG 6/15/17 $8.56 $9.21 8% PioneerNaturalResources PXD 6/15/17 $158.02 $135.51 -14%

HelixEnergySolutions HLX 7/19/17 $6.16 $7.31 19%

SouthwesternEnergy SWN 7/19/17 $6.17 $5.85 -5%



ETP 8/2/17 $21.35 $18.82 -8%


EPD 8/9/17 $26.08 $26.15 0%


Apache APA 8/23/17 $40.33 $42.34 5%

Halliburton HAL 8/23/17 $39.06 $41.80 7% Imentionallofthistoillustratethreeofmymostimportantrulesforinvesting.

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1) Marketsarelivingentities.Assuch,theydonotalwaysmakesense,noraretheirmovesusuallyrational.However,theyDOspeakthroughprice.Andifyoupaycloseattention,youcancatchwhatthey’resayingrelativelyoftenwithclarity.

2) AnyonewhowantstomakemoneyfrominvestingneedstoALWAYSremember#1.Marketsdon’tfollowrules.Theyhavetendenciesandtrends.

3) Asidefromremembering#1,anyonewhowantstomakemoneyfrominvestingneedsto

alsohavepatienceanddiscipline.Ifyouendupearlyonapricemove,focusonwhatthemarketsaresaying.Unlesspricebeginstocontradictyourinitialthesis,stickwithit.You’llberewardedforyourpatience.

Speakingof#1,somethingmajorhasbeguntodevelopinthemarkets.ThatsomethingisaninflationaryspikecomingfromChina.TheChineseYuanhasbeguntoriphigherinabigway.AndwhenIsay“bigway”Imean“BIGWAY.”

Theculpritforthismove?Thecollapseofthe$USD.Belowisachartshowinganinverted$USD(meaningthebluelineriseswhenthe$USDfalls)withtheChineseYuan.Asyoucansee,the

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Yuanspikeshigherwitheverynewdropinthe$USD.

ThisisHIGHLYinflationary.Letmeexplain.Itisgenerallybelievedthatwheninflationspikes,thecurrencyofthecountryinwhichitisspikingtendstodrop.ThisisNOTcorrectatall.The$USDisthereservecurrencyoftheworld.WhenITdrops,it’sinflationary.Butforeveryothercountry,itisactuallyinflationaryfortheircurrenciestoRISE.Irealizethisishardtobelieve.Solet’slookatsomecharts.ThebiggestwaveofdeflationinthelasttenyearshitwhentheJapaneseYenCOLLAPSED.Thiswasbecausethiscollapseresultedinthe$USDmovinghigher.BelowisachartoftheYen(blackline),thepriceofcommodities(blueline)andtheinverted$USD(whenthe$USDrallies,theredlinefalls).

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You’llnoteallthreeofthemmovingtogether.AcollapsingYenwasHIGHLYdeflationary.

Bywayofcontrast,thusfarin2017,theJapaneseYenhasbeenrallying…

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AndSURPRISE,Japaneseinflationisrising!

JapanesewholesalepricesroseatthefastestannualpaceinnearlynineyearsinAugustasrobustChinesedemandboostedcommodityprices,offeringglimmersofhopeconsumerinflationwillacceleratetowardthecentralbank’s2percenttarget…Wholesalepricesrose2.9percentinAugustfromayearearlier,increasingfortheeighthstraightmonthandmarkingthefastestpaceofgrowthsinceOctober2008,BankofJapandatashowedonWednesday.https://www.reuters.com/article/us-japan-economy-prices/japan-august-wholesale-prices-rise-at-fastest-pace-in-nine-years-idUSKCN1BO0E1

Similarly,theEurohasbeenroaringhigherthusfarin2017.

AndSURPRISE,Europeaninflationisontheupandup!

Eurozoneinflationroseto1.5percentyear-on-yearinAugust,narrowlybeatinganalystexpectationsandedgingslightlyclosertotheEuropeanCentralBank's(ECB)target,accordingtoflashestimatesreleasedbyEurostatonThursday.

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TheEuropeanUnion'sstatisticsofficeprojectedconsumerpricesintheeurozonewouldreachitshighestlevelinfourmonthsinAugust.TheestimateisthehighestratesinceApril,wheninflationstoodat1.9percent,andcouldraiseexpectationsthattheECBwillsoonstarttowinddownitsultra-loosemonetarypolicy.https://www.cnbc.com/2017/08/31/euro-zone-inflation-cpi.html

Andfinally,China’sYuanhasbeenroaringin2017aswealreadynoted…andChineseinflationispickingupaswell.

China'sproducerpriceinflationacceleratedmorethanexpectedtoafour-monthhighinAugust,fueledbystronggainsinrawmaterialspricesandpointingtostrong,sustainedgrowthforbothfactoryprofitsandtheeconomy.Consumerinflationalsoquickenedmorethanforecasttoaseven-monthhigh,amidsignsthatupstreampricegainsaretricklingthrough,butanalystssaidpricegainsremainmodestandthereislittlepressureonthecentralbanktotightenpolicyfurther.https://www.cnbc.com/2017/09/09/china-aug-producer-inflation-jumps-to-4-month-high-as-economy-races-along.html

Again,foranycountrythatdoesn’tprint$USD,inflationequalstheircurrenciesrising.AndwiththeChineseYuanroaringhigher,wehavethemakingsofasignificantinflationspikeinthefinancialsysteminthecomingweeks.Chinaistheworld’slargestconsumerofmostcommodities.IfinflationisheatingupinChina,itmeanscommoditieswillstartingrippinghighershortly.Onthatnote,thepressureisbuildinginAgriculturalcommodities(RJA).We’veputinaVERYsolidbase(redline)andarepreparingforabullishbreakouttotheupside.Oncewebreakthatupperblueline,wecouldripto$8.50withoutblinking.

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Agriculturalcommoditiesarenottheonlyones.Thecommoditycomplexacrosstheboardlooksprimedforamajorbullrun.IftheDMCommodityIndex(DBC)breakstheuppertrendlineofitstriangleformation,it’sgoingto$22inthenearfuture.

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ActiontoTake:BuytheDBCommodityIndex(DBC).Oil,towhichwehavealreadyallocatedsignificantcapital,willprofitfromthisaswell.Putsimply,themarketsarebeginningtoshift.Whatstartedasreflationinthefirsthalfofthesummerisbeginningtolooklikeinflation:a$USDcollapseandspikeinothercurrencies.AndjudgingbythemoveintheYuantherecouldbeasignificantspikeininflationassetsinthenextfewweeks.Theonlyassetsthatwillnotparticipateinthismoverightawayarethosethatarealreadyoverbought,namelypreciousmetalsandindustrialmetals.Goldhasadatewith$1,300.

Silverwillbebreakinginto$16andchangeagain.

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WhileCopper’sheadingtowards$2.70.

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Iwouldsteerclearofanyindustrialorpreciousmetalproducersforthenexttwoweeks.Oncethesesectorshavecorrected,we’llhavesomeextraordinarybuyingopportunities.Butrightnow,they’reabunchoffallingknives.Thisconcludesthisweek’supdateforPrivateWealthAdvisory.Overthenexttwoweeks(unlessthemovescomefaster)thebigtrendswillbeaspikeincommoditiesparticularlyOilandNaturalGas,whilePreciousMetalsandIndustrialMetalscorrect.We’rewellpositionedforallofthis.I’mwatchingthemarketscloselyandwillissueupdatesasneeded.Butbarringanynewdevelopmentsyou’llnexthearfrommenextWednesdayafterthemarket’scloseinourusualweeklymarketupdateforPrivateWealthAdvisory.Untilthen…

GrahamSummersChiefMarketStrategistPhoenixCapitalResearch

BestRegards,

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OPEN POSITIONS

STOCKS PORTFOLIO

Pricesasofmarket’scloseon9/13/17.Gainsincludedividends

POSITION SYMBOL BUY DATE

BUY PRICE

CURRENT PRICE

GAIN/ LOSS

RPXCorp RPXC 8/5/15 $15.48 $12.87 -17% AgriculturalCommoditiesETF RJA 1/12/17 $6.46 $6.08

-6%

PublicStorage PSA 3/23/17 $225.92 $208.74 -7%

Verizon VZ 4/26/17 $47.17 $47.25 1%

VietnamETF VNM 6/7/17 $14.64 $14.79 1%

Transocean RIG 6/15/17 $8.56 $9.21 8% PioneerNaturalResources PXD 6/15/17 $158.02 $135.51 -14%

HelixEnergySolutions

HLX 7/19/17 $6.16 $7.31 19%

SouthwesternEnergy

SWN 7/19/17 $6.17 $5.85 -5%



ETP 8/2/17 $21.35 $18.82 -8%


EPD 8/9/17 $26.08 $26.15 0%


Apache APA 8/23/17 $40.33 $42.34 5%

Halliburton HAL 8/23/17 $39.06 $41.80 7%

UraniumETF URA 8/29/17 $13.53 $14.05 4%

Cameco CCJ 8/29/17 $9.88 $10.20 3%

DBCommodityETF DBC 9/13/17 $15.26 NEW BUY!

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BUY PRICE

CURRENT

PRICE

GAIN/ LOSS

Gold 3/17/10 $1,120 $1,326.00 18% Silver* 3/17/10 $16.23 $17.83 10% WheatonPreciousMetalsCorp WPM 10/5/16 $22.59 $19.97

-11%

FirstMajesticSilver AG 5/12/17 $8.70 $7.02 -19%

PRECIOUS METALS/ MINERS PORTFOLIO

Pricesasofmarket’scloseon9/13/17.Gainsincludedividends*Averagepriceof$17.50and$14.97

BONDS PORTFOLIO


BUY PRICE

CURRENT PRICE

GAIN/ LOSS

LongTreasuryETF TLT 7/27/17 $123.16 $126.29 3%

EmergingMarketBondsETF EMB 7/27/17 $115.17

$116.82 2%

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SPECIAL SITUATIONS/HEDGES/SHORTS PORTFOLIO

CASH/ CURRENCIES PORTFOLIO

POSITION SYMBOL BUYDATE

BUYPRICE

CURRENTPRICE

GAIN/ LOSS

EuroTrust FXE 10/5/16 $114.05 $114.75 1%

Pricesasofmarket’scloseon9/13/17.Gainsincludedividends


BUY PRICE

CURRENT PRICE

GAIN/ LOSS

FranceETF(SHORT) EWQ 9/16/16 $23.38 $30.38 -30% ItalyETF(SHORT) EWI 9/16/16 $21.56 $30.88 -43% Russell2000ETF(SHORT) IWM 12/14/16 $135.37 $141.96 -5% Apple(SHORT) AAPL 3/23/17 $140.92 $159.65 -13% Facebook FB 5/31/17 $151.63 $173.05 -14% Alphabet GOOGL 5/31/17 $987.72 $950.44 4% HomebuildersETF XHB 8/9/17 $37.94 $39.03 -3%

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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 $19.04 23%

UraniumETF URA 6/8/16 $15.49 4/12/17 $15.90 9% Cameco CCJ 1/4/17 $10.69 4/12/17 $11.48 7% CoalETF KOL 1/4/17 $12.59 4/12/17 $14.51 15% 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%

USSteel(SHORT) X 2/1/17 $31.97 4/13/17 $29.42 8% CopperMinersETF(SHORT) COPX 3/23/17 $22.64 4/18/17 $21.02 7%

FinancialsETF(SHORT) XLF 12/21/16 $23.61 4/26/17 $24.06 -2%

RECENTLY CLOSED POSITIONS

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RECENTLY CLOSED POSITIONS CONTINUED


BUYPRICE

SELLDATE

SELLPRICE

GAIN/ LOSS

PeruETF EPU 12/7/16 $33.23 5/17/17 $34.775%

BrazilETF EWZ 2/8/17 $37.53 5/17/17 $39.90 6%UtilitiesETF XLU 2/8/17 $49.35 5/17/17 $51.58 5%SolarEnergyETF TAN 4/19/17 $17.20 5/17/17 $18.00 5%RoyalGold RGLD 4/26/17 $69.92 5/17/17 $79.90 14% SouthwesternEnergy SWN 3/30/17 $8.15 5/24/17 $6.76 -17% GulfportEnergy GPOR 3/30/17 $17.17 5/24/17 $15.47 -10% USOilFund USO 4/26/17 $10.37 5/24/17 $10.60 2% ExxonMobil XOM 5/3/17 $82.70 5/24/17 $82.29 0% EnergyETF(SHORT) XLE 5/24/17 $67.56 6/5/17 $65.05 4% EmergingMktsBondETF EMB 11/21/16 $109.82 6/7/17 $115.95 8% LongUSTreasuries TLT 11/21/16 $121.05 6/15/17 $126.10 5% NuveenEnhancedFreeMuniCreditFund NVG 1/2/14

$13.126/22/17 $15.22 40%

RioTinto RIO 6/19/17 $39.48 7/10/17 $43.48 10% ClearEnergyETF PBW 4/19/17 $4.06 7/10/17 $4.25 10% EnterpriseProductsPartners

EPD 6/22/17 $26.00 7/17/17$27.70 7%

USoilFund USO 6/28/17 $9.20 7/17/17 $9.57 4% ChinaETF ASHR 2/1/17 $24.98 7/24/17 $28.08 12% Uranium URA 6/15/17 $12.76 7/24/17 $14.28 12% Cameco CCJ 6/15/17 $9.14 7/24/17 $9.95 10% USSteel X 6/19/17 $20.83 7/24/17 $23.69 14% FreeportMcMoran FCX 6/19/17 $11.53 7/25/17 $14.08 22% BiotechETF IBB 4/26/17 $296.15 7/25/17 $324.86 10% Baidu BIDU 6/7/17 $187.53 7/27/17 $200.10 7% PeruETF EPU 6/22/17 $33.64 7/27/17 $35.61 6% Chevron CVX 6/22/17 $104.45 8/2/17 $110.86 6% EuroTrust FXE 10/5/16 $108.80 8/2/17 $114.61 5% USDollarETF UUP 8/2/17 $24.08 8/23/17 $24.18 0%

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RECENTLY CLOSED POSITIONS CONTINUED


BUYPRICE

SELLDATE

SELLPRICE

GAIN/ LOSS

GoldMinersETF GDX 10/5/16 $22.45 9/5/17 $25.0912%

GoldMiningJuniorsETF GDXJ 10/5/16 $34.72 9/5/17 $36.92 11%RandgoldResources GOLD 5/12/17 $93.25 9/5/17 $104.90 12%KlondexMines KLDX 8/10/17 $2.94 9/5/17 $3.55 21%WesdomeGoldMines WDO.TO 8/10/17 $2.18 9/5/17 $2.37 9% NewGold NGD 10/5/16 $3.88 9/6/17 $4.18 11% BarrickGold ABX 4/26/17 $16.92 9/6/17 $18.23 8% SilverMiningETF SIL 4/26/17 $34.44 9/6/17 $35.75 4% SilverStandard SSRI 4/26/17 $9.94 9/6/17 $10.70 8%

weekly market update 9-13-17phoenixcapitalmarketing.com/pwa9-13-17.pdf · apache apa 8/23/17 $40.33...

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