With Oil and Copper in crash mode now, an indication of deflationary collapse, the world stock market is set up to do likewise very soon. If ever there was a time for bear ETFs and Put options, this must be it
The Oil and Copper crash has started, rosy looking COTs or not. They should now continue to plunge as deflationary fears intensify, then it's battle stations for the Fed and other world Central Banks, resulting in – you guessed it – the birth of QE4.
The next short-term downside target for Crude Oil is $35, and for copper it is near the 2008 lows at $1.25. Fair market value for crude oil is $20 per barrel but overshooting to the downside can take oil price down to the $10 zone.
World stock markets should crash imminently. If so, go to cash or better still bear ETFs and Put Options. On the announcement of QE4 we should see a violent reversal to the upside, that will be when we exit our short and go long.
What is likely to happen, after the market has been dropping a lot, and for a while, lasting anywhere between 4 to 6 months, is that the Fed comes riding to the rescue as the valiant white knight with QE4. Watch out for that as it will be the signal to reverse position to long again.
The next stock market rally will be the last leg of this current bull market, and it could rally very fast.
