Interview With The Next Bull Market Move On Bitcoin, Gold, And Uranium

I had the pleasure to be part of a year-end interview series on The Next Bull Market Move.  Below is a reprint of the interview, and I would highly recommend checking them out for more upcoming interviews!

Hi Justin, welcome back to The Next Bull Market Move. It’s been a while since we last spoke and as it’s nearing the end of the year I thought it would be great to get your thoughts regarding the markets in 2017. Let’s start with Gold. It looks as though we are still consolidating since the run up we had last year and sentiment is looking bearish. How is Gold looking to you?

Gold is still moving sideways right on top of its 30-week moving average. The gold stocks are acting slightly weaker than gold if you take a look at GDX or GDXJ.  They are both trading more below their 30-week moving average than gold.

Silver is also acting weaker than gold which typically isn’t a good sign. One thing I have noticed is how the volume has collapsed in GDX and GDXJ as this consolidation has dragged on.  That can be a bullish sign as volatility and volume often collapse before a market moves higher, especially for a market that has been basing for a while like gold and gold stocks.

I’ve been out of gold and gold stocks all year and I don’t see any reason to be in them until we see them move above the 30-week moving average on increased volume in a new Stage 2 breakout.  Until then I’ll keep monitoring the situation.  Certainly we could see things change dramatically at any time.

Let’s move on to Uranium. Over the last few weeks it looks as though the sector wants to break out, your thoughts?

After the Cameco production cut announcement we’ve seen almost all the uranium stocks move above the 30-week moving average on increased volume.  This includes Uranium Participation Corp. which tracks the price of uranium.

I like how the volume in that fund is actually heavier than it was during the breakout in uranium stocks we saw around the same time last year.

We are at the point now where the rubber needs to meet the road in uranium stocks.  We’ve consolidated around the 30-week moving average after the initial breakout.  If this is a real breakout it should start to move higher again over the next couple weeks.

If it doesn’t it will be a higher chance that this a fake breakout and the market will consolidate sideways for a while longer.  It’s definitely not abnormal to see multiple fake breakouts in a Stage 1 base, that’s what wears people out until the real breakout happens.

What has been the biggest surprise of the year for you? Bitcoin comes to my mind.

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I’m simultaneously surprised and not surprised at all by what has happened to Bitcoin over the past year.  I am surprised by the amount of money that has poured into it, I never fathomed over 300 billion dollars would pour into this asset class.  It has also been a lesson for me because I made a fundamental judgement on Bitcoin back in 2012 that has kind of kept me out of being interested in trading it.  Basically I decided that I didn’t think it had any intrinsic value so it couldn’t be considered a real form of money.

What I should have done was just traded it like any other Stage 2 breakout and I could have captured the biggest winner of 2017.  I’ll definitely learn from that for the future.  What I find unsurprising is that humans have blown another bubble, we seem to love to blow bubbles periodically and this is yet another example.  In my lifetime I’ve already experienced the Internet bubble, the housing bubble, and huge parabolic moves in other assets like oil and uranium.  My lesson learned from Bitcoin is to just trade the chart like any other asset class and apply the Stage Analysis system.  It would have worked beautifully on this huge move in Bitcoin from 2015 until now.

Which sectors in 2017 have done well for you? And what lessons have you learnt from this?

I took some good profits on uranium stocks at the start of this year when they were exploding higher.  But I also let a few winners turn into losers, I used that as another learning experience.  Besides that I’ve done very well in tech stocks over the last three months of this year.  I’ve been discussing real trades I’m taking on my website since September and you can see some big winners I identified if you go back and look at some of my posts at www.nextbigtrade.com.

This has proved to me again that I have a system that I can trade any market with, and that’s a big advantage because every market goes in and out of favor.  I want to be always focused on the markets that are in favor, and in particular getting in early on new uptrends.

I think it’s interesting that certain elements of the trend analysis you follow are designed to be logical and non-emotional, that it’s based on a few key indicators that provide a guide, but that the market itself is emotional and irrational.  Do humans generally get in the way of winning trades and investments?

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Humans are wired to sell their winners short and let their losers run.  This is the exact opposite of winning trading.  This happens because most people have no system to trade the markets so they become a slave to their emotions or whatever biases they have, or they just follow a guru who has no system either.  You have to have a system that lets winners run and cuts losers short to be successful trading the markets, and I’ve found that using simple trend following like Stage Analysis is the easiest.

And as a final question, what are you looking forward to in 2018?

I’m looking forward to applying the Stage Analysis system to the markets again next year and seeing what markets that takes me into.  Or if we get a bear market next year I should be in cash and preserving my capital. Either way I will be trading what the market gives me.  One other thing I continue to focus on is position sizing since I think that is another great way to manage risk besides having a stop loss signal.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.

Interview With The Next Bull Market Move On Tech, Gold, Uranium, And Learning From Failure And Success

I recently had the opportunity to do another interview with Kerem at The Next Bull Market Move.  I would highly recommend subscribing to his site as his interviews are in-depth and contain a lot of great content.  Below is a reprint of our interview where we talk about gold, uranium, tech, and learning from both trading failure and success.


Hi Justin, welcome back to the The Next Bull Market Move. You recently released an update on the Uranium sector (click here to see) and I wanted to know if you feel this sector this still needs to consolidate more before a big break out? And if the market does breakout do you think it will a quick speculative move, or something more steady and characteristic of a sustained stage 2 uptrend?

I think the best way to look at the uranium market or any market is to evaluate what is happening right now, and then decide what you will do if uranium goes sideways from here or starts to breakout higher.  According to Stage Analysis the price of uranium is still below the 30-week moving average and the moving average is declining, so that’s a Stage 4 downtrend.  Some of the uranium miners however have started to break above the moving average and are acting stronger than the price of uranium.  This kind of price action tends to precede breakouts, but unfortunately in Stage 1 bases you can get false breakouts time and time again until the real breakout occurs.

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This is basically what happened earlier this year when we had a ferocious breakout on big volume but it faltered and the uranium miners gave up most of their gains.  You’ll notice though that the stronger uranium miners like NexGen have held onto a good portion of the gains even with the big pullback.  I interpret that action as bullish as well because that shows that big money is not bailing out on the better stocks even with uranium prices weakening again.

It seems to me like the uranium price is putting in some type of floor, but I don’t know how long this bottoming process will play out.  I don’t think the uranium miners will do much until the price of uranium resumes a Stage 2 uptrend.  So that’s the key indicator for me to get heavily involved in this sector again.  But when it does we could see a monster bull market in the uranium miners since they are so depressed and highly leveraged to the uranium price.

What’s your view on gold and the mining equities? It appears to me that we have been range bound for quite some time now. Has gold found a bottom yet?

Gold is similar to uranium right now in that we are starting to see signs that something might happen, but it’s not quite happening yet.  I think that’s a key distinction you need to be able to make to use a system like Stage Analysis properly.  You have to be able to interpret the chart for what it is, not what you think it should be.

If you look at GLD and GDX they are both chopping sideways above and below the moving average but not breaking out yet.  That’s Stage 1 basing action. I do like the fact that the price action seems to be tightening which is often what happens before a big breakout.  Also you are seeing bellwether stocks like NEM breaking out above the moving average this week.

It’s curious how poorly gold has reacted to the recent sharp move lower in the U.S. dollar.  That’s something that usually doesn’t happen, but the relationship between the two isn’t always negatively correlated.  If you look at the commodities sector as a whole through the GCC ETF, I think we are in a Stage 1 base that is going on 2 years old now. So if the dollar is in a new bear market now which is very possible, a new breakout in commodities overall would also greatly strengthen the bull case for gold and uranium.

Tell me something that the markets have taught you this year.

This year you’ve needed to be a good stock picker to outperform the major averages.  A lot of performance of the indexes this year is due to the big tech stocks like Facebook, Apple, Amazon, and Google.  There have been some big winning stocks no one is talking about though like AAOI and SQ, both of which had beautiful Stage 2 breakouts.

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2017 is another good example of how important it is to be in the leading sectors of the market to really outperform.  If you’ve been in the right tech stocks this year you’ve had a great year or maybe some foreign stocks.  Meanwhile commodities, small cap stocks, and transports are all flat to down this year.  You have to be able to adapt and trade what the market is giving you.

Let’s talk about silver briefly. It seems investors have completely lost interest in silver and pretty much given up hope of ever seeing $50+ for an ounce. When no one wants to buy, this usually marks the beginning of a move that will surprise most investors, so will silver ever break out into a stage 2 uptrend?

Silver will certainly have another Stage 2 uptrend.  I’m watching silver right now just like gold and other commodities markets.  You’ve seen a year long consolidation now from the 2016 breakout in precious metals so we are definitely setting up the conditions for another Stage 2 uptrend.  I’m not getting involved again though until I see it breaking out on the chart, there’s no reason to get involved before that.

Within your investing career, what’s the biggest lesson you’ve learnt through a failure and through a success?

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Losing money in the markets is the best way to learn since it forces you to act differently or keep losing your money.  Earlier in my trading career I would make a bunch of money and then give it all back in a bear market since I had no respect for managing risk properly.  Bear markets also moved me to a trend following approach because I wanted to be able to decisively determine whether to be involved in a market or not.  I’ve found fundamental analysis to be too nebulous, with Stage Analysis I have a simple system and rules to follow and I can make money in bull markets and avoid bear markets.

In my opinion if you get lucky and catch a bull market and make a bunch of money, you’re not smarter or better at the markets than you were to start with if you don’t have a system or rules for managing risk.  You’re actually more dangerous to your own account because you have “free” money to trade with and even lesser respect for risk.  So “success” in the markets is an odd thing because if you’re following a system and managing risk and taking small losses, you’re actually being successful.

So to boil it all down to me learning through success means following your rules and keeping your account and mind intact by limiting your losses in bad markets. Learning through failure is taking a big loss in the market because you didn’t manage risk properly.

And finally, which markets are currently attracting your attention?

Technology stocks, especially those involved in semiconductors/IoT/fiber optics still have a lot of strong looking charts.  Many of them are working on their 2nd or 3rd pullback to the 30 week moving average though so they are already further along in their bull market cycle.  The volume in these stocks continues to be explosive which is a good sign.

Other than tech I’m keenly watching commodities sectors like gold, uranium, and copper and anything that is starting or could be starting a new uptrend.  My number one objective is to get involved as early as possible in an explosive Stage 2 uptrend, no matter what the sector is.

I highly recommend visiting The Next Bull Market Move for more quality interviews from a wide variety of guests!

Full Audio Interview With Financial Sense On The Stage Analysis Screener

Here’s the full audio from the interview I did back in late May with Cris Sheridan of FinancialSense.  This is by far the most in-depth interview I’ve done on the Stage Analysis Screener.  I talk about how I use the screener for getting the current health and breadth of the market and finding top sectors using the screener.  We also go into how the market has evolved since early 2016 with different market sectors taking leadership as the market has moved higher.

I still plan on releasing some videos at some point on the Stage Analysis Screener as I’ve discussed that in the past and I’ve had many people e-mail me about that.  Thank you for your patience and for all the positive feedback I’ve received!

Interview With FinancialSense On Stage Analysis And Leading And Lagging Markets in 2017

Last Thursday I had a great opportunity to interview with Cris Sheridan of FinancialSense.  In the interview we discussed the following:

  • 2017 has been dramatically different than 2016 in terms of market leadership and breadth
  • Currently the market is being led by semiconductors and large cap tech stocks
  • Small caps continue to lag large cap stocks
  • Commodities and cyclical stocks have performed the worst in 2017 after leading the markets last year
  • Foreign stock markets are outperforming the S&P 500

http://www.financialsense.com/justin-smyth/foreign-stocks-bull-market-breakouts

Since early March I’ve been noting on Twitter that the breadth of this market has been weak and therefore it’s been much harder to find winning stocks this year than last year.  This is definitely a stock picker’s market so far in 2017.

Interview with The Next Bull Market Move On Uranium, Gold, and The Most Important Lesson From 2016

I had the opportunity to catch up once again with The Next Bull Market Move to discuss the recent rally in the uranium sector and the potential for a new bull market.  We also discussed the gold sector and what I consider my most important lesson learned for 2016.

This week I caught up with Justin from the next big trade.com,  who always has a great take on the markets and how to stay the course when investing in bull markets. Enjoy!

Hi Justin, many thanks for taking the time to join us at The Next Bull Market Move again. Last time we spoke, one of the sectors we talked about was Uranium and your latest video now asks if the bear market in Uranium could be over, so from a stage analysis point of view, is Uranium breaking out or is it still too early to tell?

I think what we are seeing so far is constructive action in the Uranium stocks but it’s too early to tell if this is a real breakout or not. The Uranium stocks seem to be signalling a potential bottom in the price of Uranium, but that doesn’t mean Uranium will turn around and start moving higher immediately.

It could move sideways in a Stage 1 base for a while before that happens.
I’m going to be watching closely what happens to uranium and the Uranium miners as 2017 starts and trading volume comes back into the markets.

Right now trading volumes are thin over the holidays but that will change dramatically once the new year starts. If we see big volume continue to come into Uranium miners then it will be very likely this long bear market is over.

If on the other hand the rally fizzles out and volume doesn’t continue to come in then it might take longer for the final bottom to be put in. Either way the Uranium sector will be on my radar since it is a beat down sector that could easily transition into an explosive bull market at any time.

So if Uranium is back in a bull market, what do you think investors should expect for the stocks going forward?

I expect big gains for the Uranium miners when they transition into a new bull market. This would be yet another example of market cycles in action and the system I use to trade market cycles is called Stage Analysis.

You can find a detailed description of the system on my website at www.nextbigtrade.com. Basically what happens in Stage Analysis is after a Stage 4 bear market, the market eventually finds a bottom where enough buyers finally come in to create a Stage 1 base.

This is the phase where most people have given up, and interest in the market evaporates because it has been dealing out losses for a long period of time. But since there is so little interest in the market all it takes is a little buying pressure to ignite a new Stage 2 uptrend.

If you look at a lot of charts of the Uranium miners right now, and compare them to the Stage Analysis chart on my website you will see that it looks like we are right on the cusp of the explosive Stage 2 stage for Uranium. We just need to see what happens as next year starts, because sometimes rallies fizzle out, and we need to wait longer for the real breakout. That’s actually what happened for multiple years in the gold market until we got this year’s awesome rally.

Your current thoughts on gold, silver and the mining stocks?

Last time we spoke gold and the mining stocks were in a pullback but they were still above the 30-week moving average. However since that time the downtrend in the gold sector has continued and now the entire sector is in a Stage 4 bear market once again. I know this was surprising for a lot of people, myself included, but if you trade markets for a while you know anything can happen and you should plan for that.

Most of the weakness in the gold sector is due to the renewed Stage 2 bull market in the U.S. dollar. If I had to guess I would think that gold will either continue to move lower, or maybe find a bottom but not start a new rally until this uptrend in the dollar ends.

So if you’re trading using Stage Analysis you have to avoid the gold sector for now since it is in a Stage 4 bear market. Once gold gets in position to move into Stage 2 again, which could be next year or maybe further down the road, I’d be more interested in the sector.

And as the year draws to a close, what would you say is the most important thing you learned in 2016, in regards to investing and the markets?

Let the market tell you what to do, and don’t impose your will on the markets and expect it to do what you want it to do. I think most people take the latter approach, they form an opinion on the markets, and they try to trade it. If the market goes against them and they can’t change their opinion they take big losses.

Using Stage Analysis I was able to successfully trade a wide array of sectors this year including gold, copper, semiconductors, iron ore, and cannabis stocks to name a few.

The reason I was able to do that was because I used my trend following system to identify new trends in those markets, and then trade them according to my rules. I didn’t have an opinion on any of those markets and simply observed a potential opportunity as it arose, and then traded it accordingly.

If I continue to do that next year in 2017 and let the market tell me what to do and follow my trading system then I think I can have another successful year.