A Middle East ceasefire juices stocks… diving into the details of how to trade… what do to about the pullback in oil/gold… keep an eye on the tumbling dollar
Stocks are surging Tuesday on hopes that a ceasefire between Israel and Iran – announced last night by President Trump – will hold this time.
“This time” is a reference to how the fragile peace has already stumbled.
The ceasefire was supposed to be effective as of midnight, but in the hours since, both sides have accused the other of violating the agreement.
Earlier today, an exasperated President Trump said that both sides “don’t know what the **** they’re doing.”
Let’s go to legendary investor Louis Navellier for more. From this morning’s Flash Alert in Growth Investor:
A little confusion going on with the situation between Israel and Iran.
Trump announced a preliminary ceasefire within 24 hours. Iran fired some missiles. Israel was still sending planes. President Trump told Israel to turn them around – don’t drop the bombs…
President Trump is on his way to The Hague for the NATO (North Atlantic Treaty Organization) meeting…
It’s still up, up and away folks. Stocks that have the best earnings are poised to prosper.
Like Louis, Wall Street is looking beyond this stop/start, seeing the end of the conflict. As I write, all three major indexes are up 1%+.
Meanwhile, safe-haven assets oil and gold are tumbling. This is unsurprising. In last Wednesday’s Digest, I wrote, “If the Israel/Iran conflict remains contained and supply remains uninterrupted, prices should drift back toward pre-conflict levels in the $60s.”
It appears that’s where we’re headed.
Longer-term investors should consider taking advantage. Top-tier oil stocks are already selling at low valuations. Meanwhile, the global supply/demand looks increasingly attractive as we look farther out.
Let’s rewind to our 9/20/24 Digest. We’ll pick up quoting CNBC:
The oil market will face a supply shortage by the end of 2025 as the world fails to replace current crude reserves fast enough, Occidental CEO Vicki Hollub told CNBC on Monday.
About 97% of the oil produced today was discovered in the 20th century, she said. The world has replaced less than 50% of the crude produced over the last decade, Hollub added.
“We’re in a situation now where in a couple of years’ time we’re going to be very short on supply,” she told CNBC’s Tyler Mathisen…
For now, the market is oversupplied, which has held oil prices down…
But the supply and demand outlook will flip by the end of 2025, Hollub said.
As for gold, we’ll circle back momentarily.
First, let’s switch gears…
The overlooked answer to some of today’s most urgent financial challenges
Consider these all-too-common investing issues:
“I started investing late – I don’t have 30 years to compound slow gains at 6.5%.”
Understood. Learn how to trade.
“Retirement’s rushing toward me. I can’t afford a market crash, but I haven’t reached my target yet so I must stay invested.”
Millions are Americans are in your shoes. Learn to trade.
“Our budget just got wrecked by surprise bills. How do we recover without sinking deeper into debt?”
You’ve got options – if you’ll learn how to trade.
“The way things are going, AI might take my job… and the next one too. How do I protect my income?”
Join the club… and learn to trade.
But what does “trading” really mean?
If you’re like me, you were raised in the school of buy-and-hold.
Trading was never taught – mostly warned against as a way that impatient investors lost money fast by targeting overnight riches.
So, when I’d hear people discussing their trading wins, I had loads of questions:
- How do you actually do it?
- How long does a trade last? A day? A week? Several quarters?
- What specific indicators inform your entry/exit timing? How accurate are they?
- Do you focus on a few big winners that offset loads of small losers? Or are tons of small-yet-consistent winners the way to go?
Without answers, I mostly stayed on sidelines. And when I tried a few trades – and lost money – retreating to buy-and-hold felt safer. You might have had a similar experience.
But as I’ve highlighted in past Digests, we’re not in the same market as decades ago. Today’s market isn’t built for passive investing alone. Greater volatility is the new norm. AI-based job disruption is real and accelerating. And the cost of living is rising fast.
In this environment, trading is becoming more essential than optional.
So, over the coming days, we’ll take some time in various Digests to look at different types of trading to provide you a starting point for your next step in sharpening this skill.
In this first installment, let’s begin by hitting the “easy button” on trading
Trading can be time-intensive, especially for beginners. It demands constant monitoring of markets, researching setups, tracking economic news, and managing positions in real time.
Unlike passive investing, trading is hands-on – requiring focus, discipline, and swift decision-making. Without a system or structure, it can quickly become a full-time job.
But cutting-edge technology can help bypass a lot of this.
In recent Digests, we’ve profiled how our corporate partner TradeSmith just launched a new trading tool. It scans 120 million data points to identify prime trading moments – freeing you from having to do it yourself.
The tool then suggests the direction a stock is about to move and shows you the type of trade you can execute to capitalize on it.
These “profit windows” range in duration, specific to the stock. Here’s TradeSmith’s CEO Keith Kaplan:
For example, today, Tesla could have a 6-day window. But Apple could have a 15-day profit window. And Microsoft could have a 10-day window…
In backtests, this tool identified time windows where stocks surged so fast, it was like compressing four, eight — even nine — years of market gains into just a few weeks.
Bottom line: With this type of “trading,” you’re relying on new technology to do the heavy lifting for you.
Critically, what you’re not doing is relying on your own interpretation or “hunches”
With this style of trading, you’re basically allowing cold, impartial data and complex algorithms to guide your market moves – not your own instincts or gut feel.
While do-it-yourselfers may prefer to wield more control, studies on investor returns consistently show that we’re our own worst enemies. This is because our emotions trip us up, resulting in suboptimal market choices.
When you use technology to guide your trading, you’re handing over the reins to data and predictive analytics. You don’t have to second-guess your market decisions.
Back to Keith:
AI doesn’t enter a trade because of FOMO…
It doesn’t bias its decisions based on optimism, pessimism, or any other unhelpful human emotion.
And it doesn’t get rattled when the market opens red.
It simply follows the data.
Instead, it constantly scans the markets, analyzing millions of data points, backtesting strategies, and adjusting in real time.
Something no human – no matter how skilled – can do with the same level of speed and accuracy.
To see this in action, you can join Keith tomorrow at 10 a.m. Eastern. He’ll be holding a live demo of how this new trading platform works… what the backtests show about its results… and he’s even giving away the names and tickers of three new opportunities for July 1 that could each shoot up 100% or more in days.
To register to join immediately with just one click, click here.
Tomorrow, we’ll profile a trading method Luke Lango uses called “stage analysis.” One of Luke’s trades anchored in this approach recently passed the 200%+ milestone. I’ll tell you why tomorrow.
Returning to gold…
A few days ago, our macro expert Eric Fry of Fry’s Investment Report told investors that the move higher in gold was a “rally worth chasing.”
Today, gold is pulling back sharply as tensions in the Middle East cool. I suspect Eric’s response would be, this is a “pullback worth buying.”
Backing up, Eric has been a gold bull for years. He positioned his subscribers in various gold plays long before the yellow metal’s meteoric ascent that began in spring of last year.
For example, Eric’s Fry’s Investment Report subscribers who acted on his official recommendation several years ago were up 201% in Freeport-McMoRan as of yesterday’s close. More recently, subscribers are up 51% in Westgold Resources.
Let’s circle back to Eric’s analysis from a few days ago:
I rarely suggest “chasing rallies” like this one, but I suspect this rally is worth chasing.
A near-term correction could certainly strike the gold market at any moment, of course, but the long-term outlook for this ultimate portfolio hedge looks compelling.
Behind this is what Eric calls the “twin disorders” of monetary and geopolitical disorder.
Even if today’s fragile peace in the Middle East holds, we still must contend with monetary disorder.
Back to Eric:
During the last few months, CD rates – or prices – on U.S. Treasury debt have jumped to all-time highs. That trend suggests that some folks are getting nervous about a looming disaster in the Treasury market.
Rising CD rates on U.S. Treasury securities reflect a combination of risks, but the top among them is America’s soaring debt load.
Back in 2016, U.S. debt-to-GDP crept above 100% for the first time since the end of World War II. Since then, U.S. debt levels have continued ratcheting higher… and now tally nearly 125% of GDP.
Although that level of indebtedness is not fatal, it is suboptimal.
This is where gold comes in.
As I mentioned, gold is a different type of default insurance that has been soaring right along with U.S. debt levels.
Right now, dollar bills are the only asset backing U.S. Treasury debt, and the only “asset” backing dollar bills is the “full faith and credit” of the United States.
But if the dollar’s recent performance is any indication, there’s not a lot of faith in the U.S. government
The U.S. dollar is down about 10% on the year.
That’s significant, but if we’re on the cusp of a real dollar bear market, then your buying power will be headed much lower.
Here’s Charles-Henry Monchau, CIO at Syz Group:
True US Dollar bear markets are usually 20-40%:
1970s (-30%) – End of Bretton Woods (USD delinked from gold)
1980s (-40%) – Plaza Accord (G7 nations devalued USD to reduce trade deficits)
2000s (-30%) – Post-9/11 policy shifts, Fed rate cuts
While a dollar bear would be awful for that family vacation to Europe, it would be fantastic for your gold investments.
As Eric notes, our politicians seem unable (or unwilling) to curb their spending, which impacts the dollar:
As mighty as the greenback remains, it will not retain its might without prudent stewardship of our national finances.
Although the U.S. government’s debt burden is not yet fatal, it is moving in the wrong direction, which is why Moody’s – a company that provides credit ratings, research, and analysis on companies and governments – stripped the U.S. of its Triple A credit rating last month.
As Moody’s said, “Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.”
Given these trends, gold deserves an allocation in every investment portfolio, including yours.
We couldn’t agree more.
Bottom line: If you’re not in gold today, this pullback is a gift.
We’ll keep you updated here in the Digest.
Have a good evening,
Jeff Remsburg
