It’s been a great week here in the DeHaemer bunker.
In my trading service, Options Trading Pit, I sold the VXX for 149% gains, then sold it again for 261% gains a few days later.
Today, Post Holdings (NYSE: POST) — the maker of Raisin Bran — is up about 10%, and my calls are up 47%.
And this is right after I sold my Wal-Mart calls for 96.25% gains in five trading days.
There are three major trends for Q4 2014 that you must be aware of to make massive returns in this market: falling oil prices, plummeting agricultural prices, and increasing volatility.
Oil Slick
Corn Crash
Fear This…
Oil prices are down because the United States is now pumping more than 8.95 million barrels of oil a day — and that is set to go above 10 million barrels over the next few months. The EIA keeps revising this higher!
Not only that, but because of good old Yankee know-how, the cost of pulling it out of the ground is going down. My good friend Keith Kohl has been all over this with his reporting on multi-well pad drilling — what he calls the Octopus.
Furthermore, even if the cost of fracking and oil sands was $80 a barrel, oil developers are a cash flow business. They have a lot of debt that must be paid every month, so they will keep selling oil, even at a loss. They have to if they want to remain a going concern.
We saw this happen in gold back when it was $250 an ounce, and we are seeing it today in natural gas.
The commodities industry is like a supertanker — it takes a long time to turn around, but once it’s moving, it is hard to stop.
That said, there will be some great, great buys coming up soon. Some of my favorite emerging market oil plays are down 70% from their highs. Africa is getting to be a screaming bargain after it has been hit with the triple whammy of falling ag, falling oil, and Ebola.
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Despite what you may have heard on CNBC or from the rest of the Wall Street shills, falling prices are good.
All booming economies are founded on inexpensive energy and food. This was true of Ancient Egypt, Victorian England, and Eisenhower’s 1950s U.S.
I spent the better part of last week speaking at the MoneyShow in Toronto. I was amazed by the number of folks who were bullish.
Canadian investment shows tend to be full of gold bugs and those types that bury AR-15s and have bug-out bags in their trunks. But speaker after speaker talked about falling unemployment, climbing wages, low interest rates, and booming GDP. The United States has a lot going for it at the moment.
The market reminds me of 1998. If you remember, back then we had an Asian currency crisis, the dollar was getting stronger, oil was crashing, interest rates were artificially pushed down by the Fed, and the NASDAQ went from 1,500 to 5,000 in less than two years.
Can a major market index go up more than 333% in two years? Of course it can. Heck, the S&P 500 was at 666 five years ago, and now it is bouncing off of 2,000.
Will it happen? No one knows, but increasing wages, lower energy costs, and lots of free money from the Fed have been precursors to market booms in the past, and that’s how I’m betting.
To exciting times,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
