In spite of the Federal reserve buying 85 Billion worth of bonds  per month in the last 9 months,
the interest rates have been going up. Soon the 10 year bond with hit 2.5% before some correction. What happens to 30 year mortgages? The interest rates are going up and will result in home sales going down.

The jokers on wall street are predicting higher stock prices. They are now fully invested and they want everybody else to get  sucked in.

Tokyo market is in a bear market and European markets are going down steadily. Indian rupee hit a new low against the dollar and so is happening with other currencies.

The currency wars are on. Gold  can  hit new lows against the dollar soon.

In the last 3 days, the markets went up but most of the stocks did not participate in this rally. 

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Japan's debt to GDP has gone upto 230% of  the economy compared to  only 170% in 2008.

In the U.S., the debt jumped by $7 trillion since end of 2007. Our total debt hit a record $49 trillion (350% of GDP) at the beginning of  2008.Today  total U.S. debt is more than $55 trillion. We can carry this debt only because our rates are near zero.
 Now that interest rates have started rising, decline in stock  and bond markets around the world has started.  ( 30 year Mortgage rates have gone above 4% compared to less than 3.5% only a month ago.)  No amount of speeches by Federal Reserve members is going to reverse this trend. 



 Same is happening in   Japan. Their 10-year note jumped from 0.6 to near 1% in a few days. Nikkei is now down 19% from its peak in early May. The illusion of growth created by Central Banks around the world will come to an end. A currency war among nations has already started.

 

While the market is going down TZA is going up.

Long positions should be opened only in TZA as IWM and RUT continue to go down

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The decline that started  on May 22  will accelerate now. TZA should go up nicely now as the decline in IWM and Rut continues. All long positions in stocks should be closed if you have not  done already.TZA is triple bearish ETF. As Russell  2000 and IWM move down, TZA will move up 3 times in percentage terms.

See charts below

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DJI, SPX, RUT, Nasdaq did not go above the highs made on May 22 today May 29.

The market  may be ready for a big decline. It will be further confirmed as all these indices go below their 15 Day Moving Averages.

If new highs are made in all of these indices, the decline will be postponed .

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All asset classes are moving lower that includes bonds, Gold,  Silver and many commodities. IWM and RUT  are  ready to move below 15 day moving averages which means the need for selling TNA and buying TZA. We have been warning about this decline for a few days. This decline has not been confirmed by DJI and SPX. Till that happens please be careful about being too bearish. Gold may be basing here for a multi week rally or may go even lower if it breaks below recent lows. IF DOLLAR GETS EVEN STRONGER HERE, decline in precious metals will continue. So be careful.

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No major index  has yet moved below its 15 day moving average. This does not mean that we should go long here.

Instead you should take profits specially in leveraged positions.

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Dollar went above 10150 yen to a dollar and also strengthened against Euro and British pounds.

Not a good sign for US Exporters.
The overall market has not yet given a SELL signal

 

Gold and Silver ended there short term rallies and will now make new lows soon.

See the chart of GLD today

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