David thinks there is a potential for a market decline especially if Trump is unable to make the tax and stimulus reforms that he campaigned on. Many things have been priced into the market based on the early enthusiasm over his promises, as a result there could be an unraveling and that should have a negative effect on the market. The upcoming national debt ceiling limit could be a political hot spot for this administration as well.
He says gold and government bonds, are indicating that we are in the later stages of the current rally. Normally in a general bull market they would be down, however they have held up fairly well. In 2015 and 2007 the same thing occurred, right before corrections began, we are in the very early stages of a bear market.
Bull markets like this one rarely last this long, the only others that were longer are the 1920’s and 1990’s. Many stocks have moving averages that are now rolling over, as a result there is a general decline in the quality of the rally, which usually precedes corrections.
He is a bit mixed currently on the gold market outlook as we are entering a seasonally poor time for gold stocks and in the short term things could go either way.
David is looking at exploration companies with resources and short term production plays in small caps, as these companies do quite well early in new bull markets. He thinks that just positioning in these types of companies early, will let you do well in the coming market. With mining companies you want to find quality management, a decent resource base, liquidity, good share structure and make sure they are in a safe country that favors the mining industry.