Megatrends From 2016 Still Megatrendy

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In December 2015, I distributed to our readers what I considered the Top 10 Megatrends to trade from in 2016 and beyond.

Here they are in the original form:

1. Climate Change: Solar Energy, Raw Materials at risk, Electric Cars, China as a possible leader in Alternative Energy Technology.
2. Geopolitical Turmoil: Emerging Markets, Raw Materials at risk (including oil), Defense companies and Cyber Security (At Risk-Big Banks), Impact on Travel-Hotels, Airlines and Cruise Lines
3. Domestic Violence: Gun Stocks, Companies that make Security Systems
4. Social Media: Facebook, Twitter, Linked In
5. Online Shopping Versus Brick and Mortar: Began in 2015 and should continue that trend
6. Growing Baby Boomers: Necessary consumables versus luxury goods
7. Video Gaming: Already growing, especially with the Millennials, expect that to continue to burgeon
8. Smart TVs Versus Cable Providers: Continued switch to subscription based entertainment such as Amazon and Netflix versus DirecTV Dish Cable, etc.
9. 3D Printing: Still in infancy but with an inevitable growth trajectory
10. Alternative Currency: Bitcoins and/or some other internet based barter systems.

One and half years later. Some of those trends and corresponding individual stocks, i.e. Social media-Facebook, Video Gaming-Nvidia, Online shopping-Amazon, Smart TVs-Netflix to name a few, paid BIG!

Other trends-not so much.

In the photo, the woman with the headset tunes into the fortune teller via light and sound waves. What is she transmitting to us now?

A quick note first about yesterday’s topic-gold and gold miners. Last night I wrote, “From a technical standpoint, gold miners tend to lead before gold makes a move higher.”

Today, GDX rose nearly 1% while GLD rose only by .12%. A trend worth noting? Indeed, if GDX continues its run and especially if it goes parabolic.

In fact, I am eager to amend the megatrends listed in 2017 by adding gold and the miners as ETFs to watch. Particularly sensitive to geopolitical turmoil, both are hedges should alternative currencies continue their tear, hence threatening the future of the big banks.

Number 6, Growing Baby Boomers has less relevancy now. That population will begin to decline in the next decade while Millenials will continue to grow.

For Millenials, most of the other Megatrends overlap. Social media, online shopping, alternative currency, climate change, video gaming, etc. all encompass the expanding trends of that generation.

I consider 3D printing, cybersecurity (related to Geopolitical turmoil) and alternative energy (Climate change) in embryonic stages.

The same rings true for Alternative currency. Bitcoin, Ethereum and Ripple, 3 cryptocurrencies, gather popularity. If this trend continues, which seems very likely, then the standard money and banking systems should eventually change as well.

Finally, I would add Medical and eventually Recreational Marijuana. Only legal in a handful of states, the research and viability of weed for safely dealing with many ilnesses both of the mind and body will “cultivate” exponentially.

As far as trading and capitalizing on these trends, rather than rely on the words of a hologrammed Fortune Teller, I suggest you employ sound and proven trading strategies.

S&P 500 (SPY) 244.50 pivotal. Looks good above. Under 242 see 240.

Russell 2000 (IWM) With a monthly channel top at 142-143 level, Friday tested that top. The month is young. Either this takes a bigger lead, or that was it-party over.

Dow (DIA) New highs

Nasdaq (QQQ) 136.85 the 50 DMA support. Has to clear 142.

KRE (Regional Banks) Inside day. Not surprising ahead of FED. 56.00 pivotal with 53.50 the underlying support

SMH (Semiconductors) 81.92 the 50 DMA. Has to clear 86.70.

IYT (Transportation) Resistance all the way up to 172.89. But much better now that it cleared 170.

IBB (Biotechnology) 291-292 must hold and the elusive 300 must clear.

XRT (Retail) 41.00 pivotal and 42 the overhead 50-DMA

IYR (Real Estate) Held all the moving averages but still in massive consolidation between 77 and 81.

XLU (Utilities) 53.25 area near-term support.

GLD (Gold Trust) 119.85 the underlying 50-DMA. 124.50-125.50 next big resistance

GDX (Gold Miners) Converging Moving averages so wouldn’t give up yet if this can clear over 23.30

USO (US Oil Fund) If clears 9.80 could see some buyers.

XLE (Sel Energy Spdr Fd) Liked on the reversal and now has to clear/close over the 50 DMA at 67.80

TAN (Solar Energy) 18.40 should now hold

TLT (iShares 20+ Year Treasuries) Fed day tomorrow-hard to predict.

UUP (Dollar Bull) 25.10 now pivotal