WHAT WILL

STOCKS, GOLD, COMMODITIES DO IN 2017

Intro
At Investing Haven, we do not suffer from 'prediction addiction'. Our outlook reports do not contain
price targets, but rather a forecast of investment trends which allows readers to understand how to
position their investments, which asset classes to focus on (and which ones to avoid), which allocation
to choose for assets in a diversified portfolio. When forecasting, our guiding principle is to identify
ongoing trends, and, depending on the maturity of each trend, assess how relevant they will be in 2016.

About Us
Our experience covers +15 years of global markets. We have focused on stock markets across the globe,
commodities and precious metals, and fixed income.
Since 2011, we are actively writing for small and large financial media, including: FinancialSense,
MarketWatch, Investing.com, Inside Futures, Seeking Alpha, The Morgan Report, Stock House, Market
Oracle, Resource Investor, Harvest Exchange, Mountain Vision, Morning Star, MoneyTalks.net,
Coinflation, and many other smaller outlets.
InvestingHaven.com is our blog on which we publish several updates per day (for free), covering global
markets and asset classes, even analysis on specific stocks, with buy and sell signals coming from our
proprietary methodology.

Follow our work: Twitter @InvestingHaven or our RSS feed.

Our proprietary methodology

Over the years, we have developed our own methodology. It is based on 7 indicators. It is simple to
understand yet effective. Just like running a business, investing requires a set of rules (procedures)
which have stood the test of time, and which should always be respected.
1.
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6.
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Price patterns (we use trendlines as a means to an end, not a standalone objective)
Risk indicators
Inflation/deflation indicators (U.S. dollar trend, commodities, inflation expectations)
Intermarket analysis
Investor sentiment
Stock market internals
Futures market structure (only applicable to commodities)

Intermarket analysis
One of the key pillars of our analysis is based on intermarket dynamics.
Intermarket analysis provides a framework to identify which asset classes will thrive. We believe
markets started transitioning in the summer of 2016.
Markets move in cycles. Even more important, markets influence each other permanently. If one market
moves in such a strong way that it influences other markets, it creates a primary trend.
A primary market trend is important as it indicates in which direction all other markets are evolving, and
at with strength. Right now, we see a new and strong primary market trend developing for 2017, i.e.
rising interest rates.
Before looking into this new primary market trend, let's first look into the most recent one. Crude oil
crashed between the summer of 2014 and February 2016; as crude collapsed, the dollar went through a
monster rally and stocks got hit quite hard (though they did not really collapse). That is what we
call intermarket analysis.
Note that market moves are mostly part of the same trend. Last year, investors would have similar
yields when shorting crude oil, shorting stocks or going long the U.S. dollar as all these moves were part
of one and the same primary trend.
Understanding those intermarket dynamics is a key part of our methodology, and we have written
about it extensively in 2016.
Astute readers have noticed that we mention 'markets' but actually mean 'assets' which refers to the
leading assets / key assets like stocks, commodities, gold, leading currencies, interest rates.
Right now, interest rates are rising, and, in doing so, are influencing several assets. This is intermarket
analysis in action. Rising rates are obviously very bad for gold and dollar friendly, as rising rates stand for
risk taking and lower real rates. We are convinced that today's moves in markets will the primary
market trend in 2017. Financials (banking stocks, insurances) will benefit from that trend, and

commodities will have a negative or neutral effect (except for gold, which we consider a separate asset
type).
Below chart suggests that rates can still rise a bit, so from a timing perspective we this trend continuing
into the first part of 2017.

U.S. stock market forecast for 2017

One question top of mind of many readers is whether the stock market will crash in 2017, after a
gigantic 7 year bull market.
Though the "7 bear bull market" argument is definitely a valid one to take into account, it is not per se a
condition. A long bull market can also get longer, and we do not know at this point whether we will see
a "mania phase" first.
We remained convinced that a stock market crash in 2017 should have early signs in 2016. We do not
see that. We stick with our recommendation to remain focused on what prices are doing. Price analysis
lead us to the following conclusion which we explained in detail in our July analysis S&P 500 Suggests
Much Higher Prices Coming In 2016 And 2017:
The fact of the matter is that U.S. stock markets are trending higher, and will trade much higher in 2016
and 2017. We could find this counterintuitive, but thats not important, that is an opinion which falls in
the category noise. The charts are fact based, and that is the only thing that matters.
When examining ongoing price action in the stock market chart, we see many things, but certainly NOT
a stock market collapse in 2017. If anything, the retracement in September tested the 2016 breakout
level, which we consider an incredibly bullish sign.
In other words, the stock market collapse story could work well as a "story" to sell page views, but it is
not a serious thesis when looking at a chart.

Bond market outlook for 2017

The bond market will be center stage in 2017, and will be the primary driver of markets. That is the key
outlook for 2017 by the Investing Haven research team.
The chart in this article reveals at a glance our bond market outlook for 2017, and, in doing so, also
determines the general market outlook for 2017.
We wrote recently that a new trend is developing, as explained in A Primary Market Trend In 2017. In
particular, interest rates are on the rise since this summer, and, in doing so, they are influencing other
leading assets (stocks, gold, commodities, currencies). That is the basis of intermarket analysis. The
challenge to understand where markets are going is to identify which asset has the strongest move
(primary trend) and how that move impacts other assets.
Based on the first signs, rising rates are negatively impacting gold, positively influencing the dollar and
financial stocks (banking stocks, insurances, etc). Rising rates is not per se negative for stocks, it rather
depends, and that is the difficulty with interest rates as the primary driver: context is important. Rising
rates in the context of risk taking (which we believe is what is taking place right now) is favoring stocks.
The easiest way to identify the bond market outlook for 2017 is to examine the following chart. It shows
the 20 Year Treasury bonds since 2002 on a weekly chart. The pattern on the chart is clear: a rising trend
channel since 2003, with a strong resistance line since 2009.
As 20 Year Treasuries have peaked in July of this year, it is obvious it will be followed by a retracement.
Now here it becomes a bit more tricky. We see two potential scenarios playing out in terms of
retracement:

1. Scenario 1: A retracement in bonds will come with significant risk taking, which will push bonds
to their lower support at around 105. In that case, rates will rise significantly, and, in doing so,
stocks will go much higher as gold would feel a lot of pressure.
2. Scenario 2: Bonds will retrace mildly, rates will rise moderately, stocks will do well as the
sentiment will still be "risk on" but only moderately. In that case, 20 Year bonds will retrace until
the 120 area.
So in other words, in order to know exactly how markets will trend in 2017, investors should closely
watch how the 20 Year bond market (TLT) and how it will behave around the 120 level.
The bond market in 2017 will determine the market outlook for 2017.

Financials will be outperformers in 2017

In recent years, two sectors have outperformed the broad stock market: technology and health (biotech
being part of it).
For 2017, we expect the financial sector to join the group of outperformers. That is directly linked to
the primary market trend, which we discussed at length in previous articles, as recent as this week
in The Primary Market Trend Of 2017.
The underlying fundamental "rationale" behind the recent breakout is that rising rates will bring a
higher yield on loans (banks), pensions (insurances), etc.
The chart of financials (represented by the XLF ETF) shows a text book pattern: a breakout followed by a
successful retest (this week). The most likely path forward is a continuation of the breakout, and,
consequently, bullish momentum and energy.

We expect financial stocks to rise to all-time highs in the coming weeks. They have some 25% upside
potential in 2017.
Some interesting financial stocks which are breaking out: Comerica (symbol CMA), Suntrust Banks
(symbol STI), Regions Financial Corp. (symbol RF).

A gold price forecast for 2017

Gold was hot in the first 6 months of this year. Hardly anyone predicted the monster rally we saw in
2016. And, as it always goes, right at a time that everyone got overly excited, gold prices stalled and did
go nowhere since then.
The excitement around the summer of this year was striking, as suggested by the non-stop bullish media
coverage. We highlight a couple of the articles that appeared right at a time when the price of gold was
in the process of peaking:

Credit Suisse Sees $1,500/Oz Gold By Early 2017 published by Kitco on June 30
RBC Calling For $1,500 Gold For 2017, 2018 published by Kitco on July 15
Is Gold Set To Hit $1,500 Per Ounce? published by Forbes on July 21
Gold Bull McEwen Sees Prices as High as $1,900 by End of Year by Bloomberg on September 20

As always, we prefer to stick to the facts which we derive from chart developments as well as sentiment
analysis and intermarket dynamics. We see a concerning trend developing on the gold chart. The green
circles on below chart highlight the rare periods of price stabilization. Gold is a volatile asset, so it does
not happen often that prices stabilize. In December of 2016, the price of gold stabilized which was an
indicator that a reversal was brewing. Right now, we see the same happening. Both happened right a
major support and resistance.
Price analysis suggest that the gold price forecast for 2017 is bearish.

Our expectation is much closer to what this article said in May I See Gold Correction In 2017, and,
unfortunately, it is not as bullish as the articles highlighted above.
Where do we see the price of gold going in 2017? We start sensing that gold will continue to as a "fear
asset" in 2017. Given that stock markets, which we consider an important risk indicator, are becoming
very bullish, as suggested in S&P 500 Suggests Much Higher Prices Coming in 2016 and 2017, gold could
take a hit as fear is moving away from markets. In the early days of 2016, markets were driven by fear,
which is the reason gold rallied so strongly, but that has changed recently.
With that in mind, we see gold moving towards the lower area of its bearish trend channel. Right now,
support comes in around 990 USD. By the second half of 2017, that will be around 890 USD, which is
exactly the peak of 1980.
In other words, we do not exclude the scenario in which the gold price will hit 890 USD in 2017 after
which it will turn around and evolve into a new and strong bull market.

A silver price forecast for 2017

Silver is breaking down, similar to gold and miners. That does not bode well for the price of silver in
2017. How deep could silver fall in 2017? That is the question we try to answer in this article.
Silver's breakdown should not come as a surprise, as we warned our readers already two months ago
that silver was on the verge of correcting, just weeks after the Brexit frenzy.
We do realize that we were a lonely voice, as evidenced by Bloomberg's bullish silver article, Keith
Neumeyer's nine-bagger prediction for silver's price, the expectation for a bullish silver price after
the Brexit. The Daily Bell came out with a fundamental argumentation on why the price of silver must go
higher. All that is fine, but serious investors should realize what it is: it is media.

Media articles are not a solid basis for smart investments.

Our analysis revealed a red flag for silver when the grey metal hit this triple resistance point which is
visible on its long term chart (see below). Let's be honest: a triple resistance point is not a coincidence,
and it should be taken very seriously.
Since then, silver's 2016 rally has stalled, and, as a consequence, it resulted in a stiff correction this
week. We believe this correction has more downside potential.
How low could silver fall in 2017? The answer is very simple: by examining silvers chart, we can derive a
first obvious target of $15, to be reached somewhere in the first months of 2017. In case that support
area would be breached, we would say that the most bearish scenario would result in a $10 silver price.
We do not expect silver to fall as low as $10 in 2017, but don't exclude it neither, for the same reasons
outlined in our gold price 2017 forecast. The alternative bearish target would be $12, i.e. the 2007 and
2009 lows.
Short term, the $15 target is as good as a fact.

Chinas stock market will go (much) higher in 2017

Many love to associate China with doom and gloom, for one or another reason. Though China has
passed the stage of exceptional rates of +10% annual GDP growth, it is still growing at rates not seen
since many years in the U.S. and Europe.
After last year's stock market collapse in China, it is clear that its market has stabilized. But here is the
good news for stock market investors seeking low risk opportunities: China's market could be on the
verge of a huge breakout, leading to strong gains in its stock market 2017.

The chart of the Shanghai Exchange makes our point. The chart setup is truly exceptional, we have not
seen such a pattern in a long time. Two trend lines are colliding right at the 3000 level. This is huge, as a
big move is coming very soon. As support lines have held consistently over the last two years, the odds
favor a bullish breakout, leading to a very bullish stock market in China in 2017.

As said before, we have noticed bullish energy in the FXI ETF, which represents the largest companies in
China. Its chart confirms the one above: the FXI is ready to break out, and, once done, things will go very
fast.

We remain very bullish on China, and believe its stock market will go much higher in 2017. FXI is an
excellent ETF to play that trend.

How high can the Indian stock market climb in 2017

The Indian stock market is having a great year. We observed exactly one year ago that India would
do extremely well this year, and our call was spot-on as the Nifty 50 Index rose some 25% in 2016.
However, 2017 is setting up to become an even more exciting year, according to our analysis.
The Indian stock market in 2017 is likely to rise much more than 25%, so it should not come as a surprise
that it is our favorite stock market index after the Nasdaq.
India is not a widely followed market in the Western investor community. In the Asia region it is a
popular market.
The Economic Times of India recently confirmed our bullish outlook as it wrote that Indian stocks will go
higher in 2017.
How high can Indian stocks climb in 2017? The answer to that question is that we could see a rally of
40%, and that is based on the current chart pattern. The ten year chart of the Nifty 50 Index shows a
bullish trend channel, drawn with the red lines on below chart. The support line was tested early 2016,
and we expect that the resistance line will get tested in 2017 (ultimately 2018). That resistance line will
be touching the 12,000 point level after summer 2017.
Are we saying that the Indian stock market will climb to 12,000 points in 2017? Yes, that is our most
bullish forecast, and we would say there is a 50% probability for that scenario to play out. Our bullish
expectation is based on the very strong real GDP growth in India of approximately 7%, combined with an
exceptionally strong chart pattern and a bullish forecast in general for emerging markets in 2017.
Western investors can go long an ETF like INDA which is a publicly traded instrument with a simple
entry.

A bullish DAX stock market index forecast for 2017

The German stock index DAX is one of the key stock indexes in the world, and, by far, the leading index
in Europe. Our forecast for the DAX is bullish, and it is based on two key findings:
1. The long term DAX chart which is displayed below.
2. The primary market trend in 2017 which we expect to encourage risk taking (favoring stocks).
Let's revise which bullish elements we see on the DAX stock market chart, and how we come to the
bullish 2017 forecast.
As indicated on the chart, it is a rather complex chart but two findings are visible. First, the 2000 and
2007 peaks stand out. They are both aligned at the 8250 level. Second, since 2009, the DAX is in a rising
trend channel, which is indicated with the two red lines.
Combining both findings gives an interesting conclusion: the important 8250 level was tested a couple of
times within the rising trend channel, and each test was successful. In other words, there is trend of
higher lows above the 8250 level.
A trend remains a trend until proven otherwise. So as long as the DAX remains in the current pattern, it
will go higher.
It is not so hard to derive that our first price target is the 2016 peak around 12,500, which is a rise of
around 20% from today's level. So our first bullish 2017 forecast for the DAX stock market index is
12,500 points.
In case "risk on" becomes a dominant force in 2017, we would not be surprised to see the DAX testing
its resistance line which would come in at 14,500 around the end of 2017. Are we saying that the DAX
will reach that level next year? No, not at all. We are saying that it is a possibility only if there would be a
strong risk taking sentiment in stock markets, so we don't exclude it but don't take it for granted neither.

4 Small-cap stocks with 10-bagger potential in 2017

The dream of each investor to score 10-baggers, i.e. stocks that go up tenfold. There is certainly a myth
surrounding 10-baggers, but, unfortunately, also a fraudulent perception as the topic is abused by many
fraudulent websites offering pseudo-advice on it.
In this article, we look at 4 small-cap stocks with 10-bagger potential in 2017 and later. Our selection is,
as always, based on decent research, long term analysis, and company fundamentals.
In general, 10-baggers are found in very volatile sectors, primarily technology and commodities (miners).
We believe technology companies will outperform other market segments in 2017, because the
dominant trend currently favors risk-taking and is neutral at best for commodities. This is also in line
with Forbes' thoughts on the matter as their recent article featured only small-cap stocks with 10-bagger
potential.
Energous Corp. (symbol WATT) potential 10-bagger in 2017
We have featured Energous Corp many times, as we consider it a fantastic story. Their technology
enables users of electronic devices to charge wirelessly. Recent speculation on a potential cooperation
with Apple took the share price many multiples higher.
Why do we believe this small-cap stock has 10-bagger potential in 2017? Because, according to their
plan, they would be break-even in the second half of 2017. It remains to be seen whether that will
happen or not, but, in case the company holds its promise, this stock will go much higher next year.

Edgewater Wireless (symbol YFI.V) small-cap stock with 10-bagger potential as of 2017
The last 18 months have been extremely exciting for Edgewater Wireless. The company is trading in
Toronto on the Junior Exchange. It has a market cap of $49M, so it basically ranks as a nano-cap. Its
technology solves the problem of high density wi-fi access. On a lot of public places, the wi-fi speed is

not good at all. Edgewater Wireless solves that problem adding bandwidth and capacity to wi-fi access
points.
The company does not have sufficient revenue at this point. It was rewarded with sponsoring by the
UpRamp Fiterator Program. In that program, only 4 tech providers are opened the door to the world of
cable and telco providers, as a way to accelerate the usage of innovative technologies. That program is
likely to accelerate the rollout of Edgewater's technology and sales channel(s), a trend which we expect
to start in 2017.
Buy this company on significant dips.

Mitek Systems (symbol MITEK) multi-bagger potential as of 2016

Mitek is active in the incredibly prosperous domain of mobile commerce and mobile identity. It is
already the market leader in its segment. We believe the company has multi-bagger potential because
the mobile trends are only know accelerating. Mitek has its technology adopted by top Fortune 500
companies. We believe this to have first mover advantages on which they can leverage as the mobile
market continues to grow.
Moreover, Mitek's technology is scalable. As more customers adopt their technology, revenue and
profits will increase disproportionately.

Biotime (symbol BTX) 10-bagger potential between 2017 and 2020

The biotech company Biotime offer solutions for an incredibly fast growing market: facial aesthetics.
This market is set to triple in the coming 3 years. Next to that, Biotime uses stem cells to generate
regenerative medicine solutions.
The company sits on strong growth trends, which makes it eligible to become a 10-bagger in the years to
come. With a market cap of only $350M, no debts, and a good cash position, there is tremendous room
for growth. We believe it is a matter of time until this company goes many multiples higher. The biggest
risk we see is that their products cannot meet the minimum requirements within the context of the
regulatory framework.

Note: investing in small-cap stocks comes with significant risk. Never buy more than 3 to 5% of your
portfolio in one such company. Consult your financial advisor before engaging in such a purchase.

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