The Top Three Trends to Profit from in 2013
By Josh Enomoto, FutureMoneyTrends.com Contributor
Trend #1: The Land of the Rising Bull
After more than 20 years of deflationary recession, Japan Inc will make a comeback starting in 2013. But rather than a one-off profit taking opportunity, this upside will be here to stay: in other words, the Japanese bull market is back!
For years upon painful years, Japan’s top companies suffered the dubious honor of its national currency being regarded as a safe-haven asset, and an influx of foreign demand made it virtually impossible for its central bank to induce the devaluation it so desperately needed. However, we currently sit on a historical precipice led by major technical and fundamental drivers.
First, the technical: In April of 1995, the Yen peaked at a parabolic high of 126 after the Nikkei indexed was rocked following the Kobe earthquake a few months prior (sound familiar?). Juxtaposing this high with the underlying lows culminated in a massive pennant formation that blew the Yen skyward, at one point going beyond the 130 level after a massive earthquake struck in the spring of 2011. However, on the 25-year chart, this disaster-fueled high was the top of a bearish head-and-shoulders formation. A break below the neckline (at the 120 level) will confirm the end of an astronomic Yen.
Second, the fundamentals: Shinzo Abe is likely to be the next prime minister of Japan, who is a notorious monetary dove. He also will have the privilege, if elected, of handpicking a candidate for the top seat within the Bank of Japan. Internationally, China’s economy is slowing while coinciding with an increase in demand for their bonds. I believe a major cyclical change is occurring, where China will absorb safe-haven foreign demand while Japan finally has the financial metrics in favor for aggressive devaluation of their currency.
Trend #2: Nothing crude about Crude Oil!
Why is everyone so down on crude oil? Until the United States actually becomes a top exporter of crude instead of forecasting that it will be, I will remain bullish on black gold. The recent sell-offs that were observed are nothing more than seasonal noise and some investor jitters over the fiscal cliff debacle. The 3-year candlestick chart confirms that crude oil has a long, strong and consistent trend channel that should serve investors well going into 2013 and beyond.
Technically, it wouldn’t be fair to call a bear market in crude until the price per barrel drops to $78, where it would effectively fall out of the current channel. Even if that were to occur, we would need to see how the price recovers before a full confirmation can be registered.
On a long, long term chart, you can see the development of a massive pennant formation that is likely to explode to the upside. Fundamentally, we know all about the latest uprisings in the Middle East and tensions towards Iran’s nuclear program is sure to flair-up again at an inopportune moment. With uncertainty like this, I am only certain about one thing: invest or diversify into crude oil!
Trend #3: A Golden Year for Gold (and Silver!!)
When a caller phoned into the Nov 19th edition of “Mad Money,” and asked about the future prospects of gold via the GLD, the ever outspoken prognosticator Jim Cramer yelled, “BUY, BUY, BUY!!!” And to avoid any potential risk of subtlety, let me be clear: gold is an absolute must-have in any portfolio of this new economic paradigm.
Because. Gold is an “intangible” tangible. People may not be able to express empirically why gold is valuable, but we know that it is. Its value is universally understood across the borders of time and culture and regardless of whatever happens in the future, it is a near-certainty that gold will continue to be held in high regard within the collective consciousness.
But here’s the best reason: it’s going higher! From a technical perspective, there are many roads that gold can take on its way to $2,000 and higher and it is currently sustained at key psychological support levels. Furthermore, look at the 25-year chart: another massive pennant formation is in play and we have confirmed its bullishness with the August rally.
I’m putting a price target of $2,200 by end of 2013 or the beginning of 2014, but we can easily see much more as the precious metals bull market unwinds. Those looking for more gains should consider silver, whose volatility affords more potential opportunities for entering in at attractive price points and exiting with huge profits!