If the forecasts of Jay Feuerstein, the CEO of managed futures trading firm 2100 Xenon, come true, a lot of investors are going to get crushed by an oncoming train wreck in commodities and equities. “You’ve got global tightening happening at exactly the wrong time,” this Chicago-based former bond trader says, as well as “the removal of fiscal stimulus and monetary stimulus just when the market needs it most.”
Feuerstein’s outlooks are for sure the boldest I have heard anywhere, as he predicts “the Dow Industrials will trade decisively below 10,000 again by November 1st(that’s just 4 1/2 months away, folks!).” And he’s looking for the price of crude oil to tumble to $60 a barrel in the next 12 months.
If he’s right, he’ll be hailed as a genius, and a rich one, too. But let’s back up a bit and look under the 2100 Xenon/Feuerstein hood, if you will.
His overall thesis — on any asset class — is derived from a combination of trend and macro analysis with an expected holding period of only 20 days. Though he admits it is a lot shorter currently and his firm can flip and go the other way in very short order. A “trend” in his universe could be as short as a couple hours or as long as a couple decades. Right now he says “the trends are pretty well established to the downside.”
Not surprisingly, he thinks the U.S. and global economies are in “pretty tough shape.” And with the Federal Reserve set to extract itself from the market with the end of QE2, “that means there’s nothing holding up a very fragile situation.”
See the full “Breakout” interview below:
Related ETFs: iShares Barclays 20+ Year Treas Bond (NYSE:TLT), SPDR Dow Jones Industrial Average (NYSE:DIA), United States Oil (NYSE:USO), iPath S&P GSCI Crude Oil TR Index ETN (NYSE:OIL), Teucrium Crude Oil Fund Exchang (NYSE:CRUD), United States 12 Month Oil (NYSE:USL), United States Brent Oil (NYSE:BNO), PowerShares DB Oil (NYSE:DBO)