By Justin Spittler, editor, Casey Daily Dispatch
“If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!”
President Trump issued this warning to Iran on Sunday. But he didn’t stop there.
The next day, Trump said he would respond with “great force” if Iran attacked U.S. interests.
Now, I probably don’t have to tell you that the U.S. and Iran aren’t friends. They’ve been adversaries for decades.
But tensions are now approaching a boiling point.
And I’m not just saying this because Washington and Tehran have been exchanging words.
• Two weeks ago, the U.S. sent an aircraft carrier group to the Middle East…
Since then, U.S. fighter jets have been seen flying patrols in the region.
The White House took these measures due to “a number of troubling and escalatory indications and warnings.”
Now, we obviously don’t know everything the White House knows. But we do know that U.S. intelligence believes Iran loaded missiles onto boats run by Iran’s Islamic Revolutionary Guard Corps – a terrorist organization.
Four oil tankers were also attacked off the coast of the United Arab Emirates on May 12. And U.S. intelligence believes Iran was behind the attack.
Iran, of course, denies this. So it’s hard to know who to believe.
But that, frankly, doesn’t matter. What’s important is this…
• Tensions in the Middle East are red-hot…
In fact, Iran’s foreign minister recently said the U.S. is “playing a very, very dangerous game” by sending military assets to the region.
We’re now at the point where many believe a major conflict could break out any day now. This includes our founder, Doug Casey. He’ll explain exactly why in a brand-new Conversations With Casey tomorrow.
If Doug’s correct, we could see major moves in the markets. We could see a flight to safety. Volatility could spike.
We could also see a monster oil rally… and that’s exactly why I’m writing to you now.
In a moment, I’ll tell you why we think oil could spike from here. And I’ll show you how to position yourself.
But I first need to take my hat off to Casey Report and Crisis Investing chief analyst Nick Giambruno.
• Nick predicted this would happen over a year ago…
He wrote last May:
The chances of a BIG Middle East war are greater now than they’ve been in over 45 years.
And Iran will almost certainly be the focal point of the Middle East’s next regional war.
The balance of power in the Middle East has shifted towards Iran. The U.S., Israel, and Saudi Arabia find that unacceptable. But at this point, war is the only thing that could slow Iran down.
And it looks like Nick’s bold prediction could soon come true.
But he didn’t just make this bold call. He put his readers in a position to profit.
• Specifically, Nick recommended a world-class oil company…
And here’s why:
The Middle East, of course, accounts for more than 40% of global oil exports. So – in addition to the sad and inevitable damage to human life – this could be catastrophic for global oil supplies.
You may recall the 1973 oil shock. Oil prices suddenly spiked, roughly quadrupling in a matter of weeks. Today, we could be on the verge of an oil crisis even worse than that.
An oil shock is exactly what it sounds like. It’s when there’s a major disruption in global oil supply that causes the price of oil to surge.
You can see below that there have been two major oil shocks since the 1970s.
The first one occurred in 1973. The price of oil quadrupled in value because of it. The second one happened in 1979. That time, oil more than doubled in value.
According to Nick, we’re now on the verge of a third major oil shock.
And Iran will play a major role in this one for a simple reason…
• Iran controls the Strait of Hormuz…
The Strait of Hormuz is the world’s most important oil choke point.
One third of the world’s sea-borne oil passes through the Strait of Hormuz every day.
But that could come to a screeching halt. Nick explains:
Nearly $2 billion worth of oil passes through the Strait of Hormuz every day. In the event of a war, Iran would quickly shut down the Strait of Hormuz. It’s been blatantly clear about this.
If and when that happens – even if there’s only a whiff of it happening – investors should expect the third and most dramatic oil shock.
It’s also worth noting that the Strait of Hormuz is the only sea route connecting the Persian Gulf to the open ocean. So the price of oil would almost certainly skyrocket if Iran shut it down.
Now, I want to be clear about something.
Neither Nick nor anyone else at Casey Research wants to see the U.S. and Iran go to war.
But it’s also our job to help you protect and grow your wealth – no matter what’s going on in the world. And the odds of major conflict involving Iran haven’t been this high in decades, which is clearly bullish for oil.
• So consider speculating on higher oil prices if you haven’t yet…
You can do that by buying the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) or a similar oil fund.
You may also want to check out Nick’s advisory, The Casey Report. He recommended a world-class oil company that he says is “perfectly positioned to profit from the Third Oil Shock” for a few reasons…
One, none of this company’s assets or production would be threatened by a shooting war in the Persian Gulf. Plus, the company has a strong balance sheet. And the company has more than doubled its output since 2012.
Best of all, the stock’s a “buy” at the current price. But that could change in a heartbeat if a major conflict in the Middle East breaks out.
Casey Report subscribers can access the pick here.
If you’re not a subscriber, you can learn much more about this opportunity, including how to access details on this company, by watching this urgent presentation that Nick and his team put together.
Delray Beach, Florida
May 23, 2019
P.S. Stocks are coming off a rough day, with the Nasdaq dropping 1.6%. And as we’ve been showing you all week, master trader Jeff Clark says this is just a taste of what’s to come.
He sees a big crash coming in 2019… and it’s never been more important to prepare. Here’s Jeff with the latest…
Market Insight: A Significant Warning Sign
By Jeff Clark, editor, Delta Report
“It’s all hype…” “It’s clickbait…” “It’s fear-mongering…”
That’s just some of what folks are saying about my prediction that the stock market will crash this year.
I can’t blame them for being skeptical. After all, the financial industry is full of folks who make scary predictions just to capture headlines and get their “15 minutes of fame.”
But what if I’m not one of those people?
What if I’m just a guy who has been following the financial markets for nearly four decades? What if I’ve made plenty of bold calls – many of which have been dead-on accurate? And what if I’m noticing that many conditions in the stock market today are eerily similar to the conditions that preceded bear markets before?
Folks… that’s not fear-mongering. That’s just suggesting, as the storm clouds build in the distance, that you might want to carry an umbrella.
Let me show you just one of the things that has me concerned. Take a look at this monthly chart of the S&P 500 plotted along with its 20-month exponential moving average (EMA)…
Longtime Delta Report subscribers know I use this chart to define bull and bear markets. If the S&P 500 is trading above its 20-month EMA (the blue line), stocks are in a bull market. If the index is trading below the line, the bear is in charge.
The Moving Average Convergence Divergence (MACD) indicator at the bottom of the chart provides one of the early warning signs of a bear market.
Without getting too complicated, if the black MACD line is trading above the red line, stocks are in a bull market. When the black line crosses below the red line, traders need to be on the lookout for the bear.
Notice how in 2000 and 2007, the MACD indicator gave us that “bearish cross” from extremely overbought conditions. In both cases, the S&P 500 dropped into a bear market a few months later.
Of course, you’ll notice the S&P 500 also dropped below its 20-month EMA in 2010 and 2011. But, in both of those situations, the MACD was more neutral than overbought. There wasn’t a bearish cross in 2010. And in 2011, the bearish cross reversed just one month later.
So we didn’t have the conditions necessary for a bear market.
Today, though, the storm clouds look a little more ominous.
The MACD indicator completed a bearish cross last November. And it hasn’t yet reversed (as it did in 2010 and 2011). That’s a significant warning sign.
The stock market has recovered from December’s breakdown. And the S&P 500 did manage to make a new all-time high in April. But that action has created negative divergence on both the MACD and the Relative Strength Index (RSI) indicators.
Negative divergence – when a chart makes a higher high but an indicator makes a lower high – tells us that the momentum behind the rally is waning. It’s a sign of a potential change in trend from a bull market to a bear market.
This is just one of the reasons that suggests to me that the stock market may be heading for a crash later this year. I shared a few more reasons in a special presentation last night that you can access right here.
For now, the S&P 500 is still trading above its 20-month EMA. So the bull market is still intact. But there are plenty of caution signs.
So, like I said earlier, you might want to carry an umbrella. You know… just in case.
– Jeff Clark
P.S. If you want to be more prepared than the average American, I gave all the details on the stock market crash I see on the horizon in a presentation last night.
You can find out exactly when I predict the next crisis is coming… and how you can protect your wealth from getting obliterated.
There’s still time to watch the replay of my presentation. Go here to check it out.
More praise for Doug Casey’s interview about the “freak show” inside the Democratic Party and what it means for America’s future:
A dispiriting picture you’re painting, Doug.
Sadly, nobody stays on top forever, not even the U.S. I’ve long accepted that China will emerge as the world’s foremost superpower.
Their population is far greater than ours.
This doesn’t mean we’re just going to dry up and blow away – we’ll simply become something like a typical European power, too enervated to bother even reproducing. (Sigh! These kids are just too much trouble!)
Well, what the hell – I’ve had my fun, and all my kids are launched on successful careers. Always look forward to and enjoy your columns.
As always, send any questions, comments, or concerns to [email protected].
Is The Crash of 2019 Coming?
Jeff Clark is confident that the next crash is coming soon… because he also predicted the 2008 financial crisis… and his strategy helped his readers double their money 10 different times.
Now, he’s urging all Americans to brace for a market move that could either destroy your savings… or make you a fortune – if you’re ready.