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Ukraine Is About To Explode As Cold War Continues To Escalate

The situation in Ukraine continues to escalate and is now days, if not hours, away from turning into an all out armed conflict. After watching and analyzing Russian TV over the weekend, I am certain of it. Remember, this conflict has nothing to do with freedom/democracy for the Ukrainians and everything to do with the US/Russia/NATO/EU balance and positioning in the region. The bottom line is, Russia doesn’t want NATO in Ukraine and it will go to extraordinary length, including an all out war, to make sure it doesn’t happen.  

The amount of Anti-American propaganda on Russian TV at this juncture is truly incredible. While their American counterparts are for the most part clueless about what is truly going on in Ukraine, Russian media is releasing classified files showing that the disintegration of Ukraine was caused by the US/CIA involvement. Ukraine’s interim government is viewed as illegitimate and/or as an extension of the West.  Overall, I got a feeling that Russia is going in one way or another to wrestle away control and to regain stronghold over Ukraine.

All we need now is a trigger point. With multiple deadlines, shootings and counter terrorist actions already in progress, I believe we are days (if not hours) away from any such a trigger. I fully expect Russia to go in within this week, triggering a massive international conflict. I doubt that financial market will react to such a development in a positive fashion.  

Pro-Russian armed men stand guard while pro-Russian protesters gather near the police headquarters in Slaviansk

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Ukraine Is About To Explode As The Cold War Continues To Escalate  Google

 

Reuters Writes: Ukraine gives rebels deadline to disarm or face military operation

(Reuters) – Ukraine has given pro-Russian separatists a Monday morning deadline to disarm or face a “full-scale anti-terrorist operation” by its armed forces, raising the risk of a military confrontation with Moscow.

Angered by the death of a state security officer and the wounding of two comrades near the flashpoint eastern city of Slaviansk, acting president Oleksander Turchinov gave rebels occupying state buildings until 0600 GMT to lay down their weapons.

“The National Security and Defence Council has decided to launch a full-scale anti-terrorist operation involving the armed forces of Ukraine,” Turchinov said in an address to the nation.

He blamed Russia, which annexed Ukraine’s Crimea region when Moscow-backed former president Viktor Yanukovich fled after months of pro-Western protests, for being behind the rash of rebellions across Russian-speaking towns in eastern Ukraine.

“We will not allow Russia to repeat the Crimean scenario in the eastern regions of Ukraine,” Turchinov said.

Russia’s foreign ministry called the planned military operation a “criminal order” and said the West should bring its allies in Ukraine’s government under control.

“It is now the West’s responsibility to prevent civil war in Ukraine,” the ministry said in a statement.

A United Nations Security Council diplomat told Reuters on condition of anonymity that the council would meet at 8 p.m. (0100 GMT) in New York at Russia’s request. Another diplomat said negotiations were under way on Ukraine’s participation.

Earlier, the American ambassador to the U.N., Samantha Power, said on ABC’s “This Week” that the latest events in Ukraine bore “the telltale signs of Moscow’s involvement”.

“The president has made clear that, depending on Russian behavior, sectoral sanctions in energy, banking, mining could be on the table, and there’s a lot in between,” she added.

With East-West relations in crisis, NATO described the appearance in eastern Ukraine of men with specialized Russian weapons and identical uniforms without insignia – as previously worn by Moscow’s troops when they seized Crimea – as a “grave development”.

Ukraine has repeatedly said the rebellions are inspired and directed by the Kremlin. But action to dislodge the armed militants risks tipping the stand-off into a new, dangerous phase as Moscow has warned it will protect the region’s Russian-speakers if they come under attack.

One Ukrainian state security officer was killed and five were wounded on the government side in Sunday’s operation in Slaviansk, interior minister Arsen Avakov said. “There were dead and wounded on both sides,” he wrote on his Facebook page.

The Russian news agency RIA reported that one pro-Moscow activist was killed in Slaviansk in clashes with forces loyal to the Kiev government. “On our side, another two were injured,” RIA quoted pro-Russian militant Nikolai Solntsev as adding.

Russian TV broadcast grainy footage of what it said was the body of the militant. The images, which Reuters could not verify independently, showed a man in black clothes, slumped against the door of a car, with a pool of blood between his legs. A rifle lay next to him.

“UNDERMINING ELECTIONS”

The separatists are holed up in the local headquarters of the police and of the state security service, while others have erected road blocks around Slaviansk, which lies about 150 km (90 miles) from the Russian border.

However, details of the fighting remain sketchy. A statement from the administration of the eastern Donetsk region indicated the security officer may have been killed between Slaviansk and the nearby town of Artemivsk. It said nine were wounded.

An eyewitness in Slaviansk said a gunman walked up to a car in the city centre and fired four or five shots into it. Video footage from the scene later showed a man being pulled out of the car, either seriously wounded or dead. It was not clear what links the shooting had with the unrest in the town.

Kiev accuses the Kremlin of trying to undermine the legitimacy of presidential elections on May 25 that aim to set Ukraine back onto a normal path after months of turmoil.

However, Russian Foreign Minister Sergei Lavrov said Kiev was “demonstrating its inability to take responsibility for the fate of the country” and warned that any use of force against Russian speakers “would undermine the potential for cooperation”, including talks due to be held on Thursday between Russia, Ukraine, the United States and the European Union.

WELL ORGANISED ATTACKERS

Relations between Russia and the West are at their worst since the Cold War due to the crisis that began when Moscow-backed Yanukovich was pushed out by popular protests in February.

Moscow then annexed Crimea from Ukraine, saying the Russian population there was under threat. Some Western governments believe the Kremlin is preparing a similar scenario for eastern Ukraine, something Moscow has strenuously denied.

In Kramatorsk, about 15 km south of Slaviansk, gunmen seized the police headquarters after a shootout with police, a Reuters witness said.

The attackers were a well-organized unit of over 20 men, wearing matching military fatigues and carrying automatic weapons, who had arrived by bus. Video footage showed the men taking orders from a commander. Their identity was unclear.

Their level of discipline and equipment was in contrast to the groups who have occupied buildings so far in Ukraine. They have been mostly civilians formed into informal militias with mismatched uniforms.

NATO Secretary-General Anders Fogh Rasmussen expressed concern about similarities in some of the rebels’ appearance to that of the Russian troops who seized control in Crimea.

Calling on Russia to pull back its large number of troops, including special forces, from the area around Ukraine’s border, he said in a statement: “Any further Russian military interference, under any pretext, will only deepen Russia’s international isolation.”

NATO has effectively ruled out military action over Ukraine, which lies outside the Western alliance. However, Washington and NATO leaders have made clear they would defend all 28 member states, including former Soviet republics in the Baltic that are seen as the most vulnerable to Russian pressure.

NATO allies have beefed up their air and sea firepower in eastern Europe. The alliance has also cut off cooperation with Russia and stepped up work with Ukraine, including advising its military on reforms and promising to increase joint exercises.

With EU foreign ministers due to discuss the crisis in Luxembourg on Monday, Britain called on Moscow to disown the rebels. “Assumptions that Russia is complicit are inevitable as long as Moscow does not publicly distance itself from these latest lawless actions,” a Foreign Office spokesman said.

GAS WAR RISK

The crisis over Ukraine could trigger a “gas war”, disrupting supplies of Russian natural gas to customers across Europe. Moscow has said it may be forced to sever deliveries to Ukraine – the transit route for much of Europe’s gas – unless Kiev settles its debts.

For now, though, the focus of the crisis was in eastern Ukraine, the country’s industrial heartland, where many people feel a close affinity with neighboring Russia.

In the eastern city of Kharkiv, supporters of the revolution that brought the Kiev leadership to power clashed with opponents who favor closer ties with Russia. Police said 50 people were hurt, 10 of whom received hospital treatment.

In another eastern town, Zaporizhzhya, Interfax news agency said 3,000 pro-European supporters turned out in a unity rally and faced off with several hundred pro-Moscow supporters, many of them waving the Russian flag.

“We are ready to defend ourselves,” said separatist Vyacheslav Ponomaryov, who said he had taken over leadership of Slaviansk after the city’s mayor fled.

Weekly Update & Stock Market Forecast. April 12th, 2014 InvestWithAlex.com

daily chart April 11 2014

Weekly Update & Summary: April 12th, 2014

An ugly week with the Dow Jones down 386 points (-2.35%) and the Nasdaq down 128 points (-3.1%). Structurally, the market did very well by closing most of its gaps. In fact, just today the Dow finally closed the before mentioned large gap located at around 16,050. There are a number of smaller gaps left leading all the way down to February 5th low, but the Dow will close them as the bear leg develops further at below mentioned time frame. Overall, it has been a fairly clean week.

WEEKLY REVIEW:

Mortgage Origination Collapses….Real Estate To Follow

According to Black Knight, monthly origination volume was the lowest on record and down 23% month-over-month. This is wonderful in depth look into the state of today’s real estate market. Anyone who believes the real estate market will stay at these levels or move higher is smoking some good quality crack. Click Here to see this outstanding report. Here are just a few points.  

  • Origination volume is the lowest on record with prepay speeds signaling more drops in refi originations. 
  • Monthly sales were essentially flat year over year, but traditional sales were up almost 15% 
  • The government share of originations has decreased, led by a sharp drop in HARP originations 
  • Credit standards have shown few signs of loosening,  with very little origination activity in the lowest credit score bucket.  

mortgage origination

Russia Outlines It’s Economic Warfare Plans Against The USA

In no uncertain terms, Gazprom CEO Aleksander Dyukov outlined Russia’s Economic Warfare plans against the USA in case of further sanctions or any further meddling associate with Ukraine.  To summarize….

  • Fundamental Shift & Move From EU/West To Asia/India: As discussed here earlier, Russia is currently making a major push to shift it’s gas and oil markets from the West to the East by signing a number of large longer-term contracts with both China and India.  
  • Move Away From The “PetroDollar” As A Reserve Currency: To demand payments for gas and oil in Euro, Yuan, Rubble, Gold or whatever else…..as long as it is not the US Dollar. As the theory goes,  since the US is heavily reliant on it’s Reserve Currency status for it’s ability to maintain a heavy debt load, any move away from the US Dollar would collapse the US Economy.  

I don’t buy this for the time being. Any such move by Russia will have a very limited impact, if any, on the US Economy or it’s financial markets as a whole. The US Financial System is way too large, too well diversified and there are way too many international players involved in the system to destabilize it that fast. Plus, our mathematical work in the Treasury market doesn’t confirm this either. I would give this a second thought if China decides to join Russia, but such a move would be highly unlikely at this juncture.    

In short, Putin might try, but he will fail. His own economy is on the verge of a collapse and he should pay a little bit more attention to that. In fact, if the US wants to finish off Russia it should collapse the price of oil to $20-30 for about 2-3 years and you will see another 1991 type of a regime change in Russia in short order. 

FOMC Minutes Confirm Our Forecast

 yield curve investwithalex

In just released FOMC Minutes, FED Officials confirmed their dovish approach to any future interest rate increases.  According to them, “even after employment and inflation are nearly back to normal levels, short-term rates may need to stay unusually low for a while because the economy isn’t fully healthy”. 

While the market is celebrating the news for the time being, this falls in line with our overall forecast. Investors/traders must realize that the economy is running on fumes even though the interest rates are at historic lows. Further, when the economy finally rolls over into an “official” recession there is very little the FED will be able to do in order to induce further stimulus. A double whammy. 

The outcome? An upcoming bear market of 2014-2017, a severe recession, a flattening yield curve and surging gold prices. In fact, based our mathematical and timing work the bear market is just around the corner. As such, now would be a great time to protect yourself. 

MACROECONOMIC ANALYSIS:  

Ukraine/Russia/USA/EU/NATO  continue to  be the most important issue. In fact, I continue to believe things will escalate significantly over the next few weeks.  

While Ukraine interim government backed away from their 24 hour deadline on Friday, the situation remains very tense. I continue to believe the US/NATO, Ukraine’s Interim Government, Pro-Russian Movement In the East Ukraine and Russia are one spark away from reigniting this conflict and going at each other on multiple levels.  While I don’t believe NATO and Russia will get involved in a direct military conflict (for the time being), any misstep here by either side might lead to Russia invading East Ukraine. In fact, I continue to believe it is just a matter of time. Such a move by Russia will spark a number of economic sanctions (from both sides), political storm, war rhetoric and a million other unforeseen consequences.  As you can imagine, this would be incredibly unsettling for financial markets.

TECHNICAL ANALYSIS THE FOR DOW JONES:  

Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market. Same applies to the market action over the last two weeks. Yet, that in itself can be misleading as per our timing analysis discussion below.

Intermediary-Term: Since February 5th, intermediary term picture shifted from negative to positive. Giving us a technical indication that both the intermediary term and the long term trends are up. Yet, that in itself can be misleading as per our timing analysis discussion below.

Short-Term: Short-term positive trend is about to reverse. If the Dow breaks below 16,000 in the upcoming week, short-term trend will shift from positive to negative. So, while the short-term trend remains bullish for the time being, it might be misleading as per our timing analysis discussion below.  

Again, even though all 3 trends are bullish for the time being, that might be misleading. Please read our Mathematical and Timing Analysis to see what will transpire over the next few weeks.    

MATHEMATICAL & TIMING ANALYSIS:  

First, a recap. Particularly for our new subscribers. Over the last few months we have maintained that the DOW will set a XXXX

(*** Please Note: This time around about 90% of the information contained within this section has been deliberately removed as it contain too much technical information. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public.  As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If  you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial).

Long-Term Overview:

XXXX

The next turning point is located at.

Date: XXXX
Price: XXXX

XXXX

Trading:

XXXX A lot of them have done incredibly well thus far and I hope you were able to benefit as well. I added my final position during the week as I have mentioned in the daily updates. XXXX

Remember, you should have an exact strategy and entry/exit points based on the forecast above. 

The list below is for your reference point. It entails my investment strategy for my own investment purposes. While you are free to follow me, please do so at your own risk. Do not take this as a trading advice. Please note, all of the positions below have been triggered.    

Stock

Entry Point ($)

Action Taken

Stop Loss @

XXXX

XXXX

Went XXXX

XXXX

XXXX

XXXX

Went XXXX

1250

XXXX

110

Went XXXX

121-123

XXXX

74

Went XXXX

80

XXXX

XXXX

Went XXXX

260

XXXX

XXXX

Went XXXX

460

XXXX

35

Went XXXX

39

XXXX

65

Went XXXX

70

XXXX

120

Went XXXX

120-130

XXXX

100

Went XXXX

108-112

XXXX

112

Went XXXX

120

Otherwise, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action. (This is continuation of our previous positioning).

If You Are A Trader: XXXX

If No Position: XXXX

If Long: XXXX   

If Short:  XXXX

CONCLUSION: 

An incredibly interesting week is coming up. We are now looking for our forecasts above to be confirmed over the next few trading days/weeks. I have also described what to anticipate over the next few months and exactly what you should do now. With increased volatility, multiple interference patterns and an incredibly important long-term turning points coming up over the next few months we must be very careful and risk averse here.  Those anticipating the moves and those who can time them properly will be rewarded appropriately.

Please Note: XXXX is available to our premium subscribers in our + Subscriber SectionIt’s FREE to start. 

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Weekly Update & Stock Market Forecast. April 12th, 2014 InvestWithAlex.com  Google

Stock Market Update. April 11th, 2014. InvestWithAlex.com

daily chart April 11 2014

Another down day with the Dow Jones down 143 points (-0.89%) and the Nasdaq down 54 points (-1.34%) 

The amount of stupidity associate with the recent market decline continues to increase unabated. From Carl Icahn’s barber being excited about this stock market to most market pundits predicting an Earth shattering decline of 5-7% before an eventual bounce. While all of that is going on the iShares Nasdaq Biotechnology (IBB) is already down over 20% while the Nasdaq is down 8.2%. Yet, all of the above is irrelevant.  One must understand where we are in the cyclical and mathematical composition of the stock market. While I have tried my best to drill that information into investor consciousness, most of it falls on deaf ears. That is to be expected, I got the same reception in 2007.

To quickly summarize,  we are still in the secular bear market that started on January 14th, 2000. Based on our mathematical and timing work this bear market will complete itself in 2017. When it does, you will see most of the gains from 2009 bottom vanish into thin air. With the 5 year cycle (1994 -2000, 2002-2007 and 2009-2014) now complete you will see a bear market initiate within a relatively short period of time. If you would be interested in learning exactly when the bear market of 2014-2017 will start(to the day) and it’s subsequent internal composition, please Click Here   

(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). 

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Stock Market Update. April 11th, 2014. InvestWithAlex.com  Google

Warning: Hedge Fund Secrets Revealed. Why Revealing Just This One Secret Should Get Me At Least A Few Death Threats

Are you ready? 

Secret: Hedge fund smart money is just as dumb as your smart money. Or is it the other way around? I am not exactly sure, but according to the WSJ report below most hedge funds have been caught in the recent sell off, just as everybody else. This should not come as surprise to the industry insiders. At the end of the day 99% of market participants tend to operate in the same fashion (the other 1% make all the money). Including the hedgies. Here is how. 

z23

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Warning: Hedge Fund Secrets Revealed. Why Revealing Just This One Secret Should Get Me At Least A Few Death Threats Google

WSJ Reports: Hedge Funds Scramble As Stocks Tumble

For hedge funds, it’s been a race to the exits in the stock market.

Hedge funds have been cutting their overall exposure to stocks in recent weeks–both bullish and bearish positions–amid the selloff in high-flying technology stocks, Credit Suisse says.

Overall bets on higher stock prices have fallen to their lowest level since August 2012, with the steepest cuts coming over the past month, according to the bank. That can be seen in the “long/short ratio” which compares the amount of long positions to short positions. That ratio has fallen to 46% among the bank’s prime brokerage clients, down from a peak of 58% earlier this year, according to an April 9 report from Credit Suisse.

“It’s battening down the hatches to weather the storm,” said Jon Kinderlerer, managing director at Credit Suisse’s prime brokerage business.

Within the stock market, hedge funds have been shuffling their holdings as well. Funds have been cutting their exposure to high-growth areas of the market and boosting their bets on more defensive sectors. As recently as last fall, bets by hedge funds on so-called cyclical stocks—sectors seen as benefiting from an expanding economy, such as technology and retail—were 12.9 times greater than their bets on defensive stocks.

Now, the figure has dropped to about 5.7.

Many funds had crowded into bets on the high-flying growth stocks that have fallen sharply in the recent market rout.

“We’ve certainly seen risk reduction in the hedge fund space,” said Mr. Kinderlerer. “It’s not a frantic rush for the exits, but gross exposure has come down—just taking down the book size.”

Overall market exposure has also declined. Hedge funds curb their exposure to stocks not just by ditching riskier long positions, but also by closing negative bets and moving into cash. Such moves can lead to a sudden rally in heavily shorted stocks, a phenomenon that took place earlier this week.

Meanwhile, hedge funds have been loading up insurance against further declines by purchasing options contracts that become more valuable if the stock market continues to fall, Mr. Kinderlerer said.

China Is Tired Of Stimulating Everything & Everyone. 不再

According to Chinese Premier Li Kegiang, there won’t be any more major stimulus this time around to keep the Chinese economy afloat and it’s zombie companies alive. Exactly at the wrong time. 

“We will not take, in response to momentary fluctuations in economic growth, short-term and forceful stimulus measures,” Li said in a speech. 

Too bad. Unfortunately, his statement has a shell life of a banana. Despite already creating the largest credit and shadow banking bubble in the history of mankind (Where Is China’s Hidden Debt Bomb), Chinese Government will be forced to induce further stimulus as soon as the worldwide recession of 2014-2017 hits.  No stimulus at that stage would mean a complete collapse to the Chinese economy, credit/real estate bubbles, chaos in the streets and a possible revolution. Leaving comrade Li with no other choice.   

Chinese Premier Li claps as he attends the opening ceremony of the BFA Annual Conference 2014 in Boao

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Reuters Writes: China says no major stimulus planned; March trade weak

(Reuters) – Chinese Premier Li Keqiang ruled out major stimulus to fight short-term dips in growth, even as big falls in imports and exports data reinforced forecasts that the world’s second-largest economy has slowed notably at the start of 2014.

Li stressed on Thursday that job creation was the government’ policy priority, telling an investment forum on the southern island of Hainan that it did not matter if growth came in a little below the official target of 7.5 percent.

“We will not take, in response to momentary fluctuations in economic growth, short-term and forceful stimulus measures,” Li said in a speech.

“We will instead focus more on medium- to long-term healthy development.”

His comments are among the clearest yet on the government’s plans for the economy, which has rattled global investors this year with a surprisingly lackluster performance.

Trade data on Thursday showed exports unexpectedly fell for the second consecutive month in March, the worst showing in more than four years, while imports fell by the most in 13 months.

Exports fell 6.6 percent in March from a year earlier, following an 18.1 percent slide in February, and imports fell 11.3 percent, their weakest performance in 13 months.

Economists were most worried by the fall in imports, which was seen confirming weakness in manufacturing and consumer demand. Some of the fall in exports was attributed to figures early last year being inflated by fake invoices before a government crackdown around the middle of 2013.

“My bigger concern is imports. It suggests a weakening in China’s own economy.” Louis Kuijs, economist at RBS in Hong Kong.

Data on April 16 is forecast to show the economy grew an annual 7.3 percent in the first quarter, the weakest rate since early 2009, in the immediate aftermath of the global financial crisis.

Economists at Barclays lowered their first quarter GDP forecast to 7.2 percent after the trade data, saying it was to reflect more signs of soft domestic and external demand.

STIMULUS EXPECTATIONS

The almost unabated run of disappointing data this year has fuelled investor speculation the government would loosen fiscal or monetary policy more dramatically to shore up activity.

But authorities so far have resisted broad stimulus measures. On Wednesday, the top economic planning agency said the government had less room to underpin growth because it did not want to inflate local debt risks.

Still, authorities have take some steps to bolster growth. Earlier this month, they announced tax breaks for small firms and plans to speed up some infrastructure spending, including the building of rail lines.

The national railway operator now plans to raise its annual investment by 20 billion yuan($3.2 billion) to 720 billion yuan in 2014.

There have also been moves to cut down on bureaucracy and to open up state-dominated sectors to private investors.

In his speech, Li said China was positioned to sustain a reasonable level of growth over the long term.

“We have set our annual economic growth target at around 7.5 percent,” he said. “It means there is room for fluctuation. It does not matter if economic growth is a little bit higher than 7.5 percent, or a little bit lower than that.”

Investors have long steeled themselves for growth to slow as China’s economy matures, especially as the government tries to steer it away from investment- and export-driven growth and towards consumption-led activity.

But the extent of the slowdown this year has still been a shock to some.

“A lot of people weren’t expecting growth to slow so quickly,” said Julian Evans-Pritchard of Capital Economics in Singapore.

“For us, it’s not unexpected. You’ve seen credit growth slowing since the middle of last year. We think that the current slowdown is a natural extension of that,” he said, adding it would extend into the June quarter.

Economists have repeatedly cut their growth forecasts for 2014, with a Reuters poll showing growth is forecast at 7.4 percent, a shade below the government’s 7.5 percent target.

How Dumb Is Mainstream Financial Media? Warning: They Are So Dumb This Statement Will Boil Your Blood

When will the selling stop and when will the markets bottom? 

According to the article below, when the “Smart Money” quits selling. That’s Just F#&$ing Brilliant Ladies and Gentleman. 

Sure, you can believe this blood boiling bullshit or you can Click Here. Not only did we predict with the pin point precision when this selling would start, but we have already identified when this leg of selling will stop and bounce (in the overall cyclical 2014-2017 bear market). To the day and to the point. So, you can wonder away when the so called “smart money” stops selling or you can pay attention to highly advanced mathematical research that will tell you exactly when. It’s your call.  

Dumb and Dumber(Screengrab)

Market selloff will stop when the ‘smart money’ quits selling

The stock market will stop quaking when the smart money is through selling. 

That might sound glib or obvious — something that’s more or less true by definition of each market drop. But it’s a particularly fitting observation now, because the current market tremors are more a matter of Wall Street’s elephants running from risk than the ground giving way underneath the economic recovery. 

The dominant themes of the sharp pullback have been a reversal of the winning investment trades of 2013 (which got very crowded and expensive), a rush by startup-backers and buyout artists to jam stock offerings into new investors’ hands, and heavy selling of shares by corporate insiders. 

This is all on the up-and-up, and all are typical features of a bull market. Yet there was just too strong a sense in recent weeks that those early to many winning ideas were done pressing their bets and wanted to – or were forced to – cash them in.

Consider:

The first quarter saw the highest volume of initial public offerings since 2000, with 70% of debuting companies having yet to turn profitable. About a third of the deals in the past month had traded below their offer price, a sign that supply was swamping demand or that the quality of the companies was slipping.  The offering for Ally Financial Inc. (ALLY), while a relative victory for the U.S. government, which rescued it with a big investment during the financial crisis, has sagged in its first two days on the market, a decent example of supply-driven action. For good measure, Kenneth Moelis, the veteran investment banker who began at Michael Milken’s Drexel Burnham Lambert ion the 1980s, is looking to take his 7-year-old advisory firm Moelis & Co. public at a $1.5 billion valuation. 

Private-equity firms have been exiting rapidly from companies they bought in recent years. According to data tracker Dealogic, buyout firms have raised $13 billion this year in 31 IPOs of their portfolio companies, a record level to this point in any year. Blackstone Group’s secondary offering of 15 million SeaWorld Entertainment Inc. (SEAS) shares  — about one-sixth of all outstanding equity — as the company reported weak results further sent a message of the sharp guys ringing the register.

Corporate insiders have been selling heavily in recent months, as executives take advantage of all-time highs in many stocks and the big indexes. While this isn’t a great market-timing indicator – and selling always tends to be active ahead of the tax deadline following a great year for stocks, as 2013 was – it fits neatly with the story that those with the best knowledge of businesses are not seeing good value in their shares. 

Perhaps most important to the day-to-day action, certain popular hedge-fund positions — no doubt amplified by margin-borrowing balances at all-time highs — have been upended. Merrill Lynch global strategist Michael Hartnett points out that the winners so far in 2014 (emerging-markets stocks, bonds and gold up) match exactly last year’s losers and vice versa (with the Nasdaq, Japan and the U.S. dollar suffering). 

Michael Block, chief strategist of Rhino Trading, points out some telltale behavior in certain instruments makes it obvious some big players were caught badly offside as momentum trades faltered. 

The exchange-traded fund for Brazilian stocks, iShares MSCI Brazil (EWZ), has been almost perfectly negatively correlated with the U.S. Standard & Poor’s 500 index this week, as if they sat on opposite ends of a seesaw. Brazil has been a popular short, and the S&P 500 and Nasdaq’s growth stocks very trendy longs, and liquidation on some level is washing over it all. Similarly, Facebook Inc. (FB) has traded as the virtual inverse of Petrobras Argentina SA (PZE). 

Another odd move? The surge in the price of nickel on the London Metals Exchange, another seeming beneficiary of desperate speculators being chased from bearish commodity bets, perhaps as their brokers demand they curtail risk exposures and investors withdraw funds. 

As Block puts it: “This is all about pain. Managers came into this long growth stocks, and short things like emerging markets and metals. When someone yells fire, crowded positions take on a life all their own.  I fear that we will hear more about certain managers taking losses in [the first quarter] and April in the coming days.  There’s no two ways about it.  Prime brokers are tightening reins, as are fiduciaries. That’s what this is. Trying to rationalize any of this by citing fundamentals is a dangerous wild goose chase.”

This doesn’t mean fears of a first-quarter lull in U.S. economic growth and a stalling housing recovery are irrelevant, or that China’s weak export data and broader slowdown signs are meaningless. Sure, the market is reassessing its expectations for a growth acceleration come spring and summer.  Yes, there is nervousness about Federal Reserve intentions as it slowly dials down its asset purchases and eyes frothy financial markets. Long-term Treasury yields have receded while short-term rates have held steady, flattening the yield curve, which implies slower growth and/or marginally less-easy money down the road.

No dramatic real-economy developments

Yet none of these real-economy developments are particularly dramatic or new enough to account for the degree and character of this selloff. The corporate-credit markets have remained firm through all this, which likely wouldn’t be the case if markets were sniffing out the makings of a nasty economic shock or higher risk of U.S. recession. 

That’s the good news. The bad news is that so many market sectors – especially the ones that led the push to new highs in late 2013 and early this year, such as Internet, biotech and small-cap stocks  – had appreciated dramatically more than the pace of economic or earnings growth did. So there arguably could be plenty of room for the hottest, growth-iest parts of the market to re-price lower before this corrective market action is through. 

Just in the past couple of days, the weakness broadened to other areas such as banks and large-cap industrial stocks that were being used as havens. That’s healthy, as are the emerging signs that individual investors are registering more fear about the declines.

These are the prerequisites for an enduring recovery, but plenty of damage to the uptrend has been done already. Before sounding an “all-clear,” investors should look for signs that stocks can react reasonably well to earnings news in coming weeks, which would indicate expectations have been pounded low enough. And they should hope for the IPO window to narrow or close, insiders to quit selling and the trendy hedge-fund trades to stabilize.

In the past year-and-a-half, this market has seen pullbacks halted a bit before all the signs of capitulation have lined up. We’ll soon see if this is yet another 2013 pattern that is now working in reverse.

How Long Before Gold Breaks Above It’s $1,900 Top? If True, This Will Disturb Most Market Participants

According to CNBC and after losing over $1 Trillion in value over the last few years……NEVER. Yet, we are a little bit more optimistic. Our case is very simple. Based on our mathematical and timing work, there will be a severe bear market (2014-2017) and a subsequent deep US Recession. Stocks will collapse, economic growth will come to a halt and the FEDs will be forced to inflate/stimulate in any way that they can. As you can imagine, Gold does very well in such a “Risky, Volatile & Inflationary” environment. 

While we do not have the mathematical composite breakdown for Gold (as we do for the stock market), we can look at our stock market guidance to connect the dots. As such, we would expect the US Economy to be in an “official” recession by this time next year and FEDs talking about or already infusing further stimulus. Therefore, we would expect Gold to be approach/breaking $1,900 by the end of 2015 at the latest.  

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How Long Before Gold Breaks Above It’s $1,900 Top? If True, This Will Disturb Most Market Participants  Google

CNBC: Will gold ever recover from its ‘$1 trillion crash’?

This week last year, the price of gold (Exchange:XAU=)suffered a 15 percent drop inside two trading days. It was a volatile year for the precious metal — 2013 finally put an end to a 12-year bull run. And that is unlikely to be reversed no matter how volatile the markets get, analysts have told CNBC.

Gold has been trading near two-and-half-week highs and is on track for its best week in a month as equity markets have been hit hard and tensions continue to mount in Ukraine.

Read More As gold hits 6-month high, traders look to Crimea

In the near term, analysts have said gold is an obvious play as stocks around the world have had a challenging week, with the Nikkei (Nihon Kenzai Shinbun: .N225) suffering its worst week since Fukushima and U.S. and European technology stocks seeing heavy declines . Spot gold traded close $1,319 after three days of gains, peaking at $1,324 on Thursday.

“Investors are becoming more defensive, we have seen equities come off and that is where the value of gold really shines for investors,” said Martin Arnold, director and research analyst at ETF Securities.

Read More Gold suffers worst November since 1978 

But Arnold added that market volatility would ultimately not be enough to drive the price of the metal consistently higher – and this is down to Asia’s weak demand.

“We saw last year that the strong physical demand came in when the gold price slumped, but in the current lack of strong investor demand, you can’t expect very strong price gains. We expect a modest move higher this year – but see better opportunities in the commodity space, particularity with other precious metals with more industrial application,” he told CNBC.

At its peak in September 2011, gold topped $1,900. Investors who had hung on to the metal in the decade up to its all-time high would have seen a sevenfold increase in its price, or gains of 575 percent.

Read More Gartman on Gold: We’ve Never Ever Seen Anything Like It 

Beat Wittmann, CEO of TCMG Asset Management said the metal has been treated as “nothing more than a hedge in the last two years,” but as interest rates are relatively low at the moment, the opportunity cost of gold is not too inhibitive for investors.

“There are people that don’t want to be in credit or equities for structural reasons, gold then is a valid asset class. As long as we are in a very low interest rate environment, the alternatives are not very attractive, so the opportunity cost to hold for a lot of people is still OK,” he said.

The $1 trillion crash

The collapse of the gold price in April 2013, which saw the yellow metal sink below the key psychological level of $1,500 an ounce, was what Adrian Ash, head of research at BullionVault describes as the “$1 trillion dollar crash”.

“Gold lost one-tenth of its market value on Monday 15 April alone. That wiped the equivalent value of London’s entire housing stock off the world’s above-ground gold holdings,” he said.

Read More Why this top technician recommends buying gold now 

“Investors buying gold and gold derivatives because they expected gold to rise for 13th year running naturally took fright. But Investors still without it might ask what they’re missing in the bigger picture now gold’s rallied 10 percent already in 2014,” he said.

In Shocking Tirade Putin Warns The US: Screw Your Ukraine Gas Loan Guarantees. I Want My Cash Now & I Prefer Euros

Did Putin just put an end to the America’s living large IOU party financed by the Chinese/Japanese credit and the FED printing? It sure looks that way. After destabilizing Ukraine and plunging that country it outer chaos, the US has agreed to provide Ukraine with Loan Guarantees to help pay for a massive $15 Billion debt to Russia.  Yet, Putin, now wise to the American bullshit is not buying it. Instead, he demands CASH and he wants it in Euros. The CASH that America doesn’t have.  

That is on top of a massive gas/oil deal that Russia is about to sign with China. A deal where Russia has asked China to pay in Euros instead of “Petrodollar”.  Thus far, China has responded with “We don’t have a problem with that”. So, will this combination deliver a death blow to the Dollar as a reserve currency which will, in turn, send the US Economy into the pits of the next Great Depression? We don’t believe so. As we suggested earlier, the US/World Economy is too reliant on the US Dollar and it will take a lot more than this to cause the USD to blow sky high. Yet, Putin’s action puts a first and a massive dent into the USD’s armor….. make no mistake about it

Come on Obama, lets hit Russia with more sanctions. 

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In Shocking Tirade Putin Warns The US: Screw Your Ukraine Gas Loan Guarantees. I Want My Cash Now & I Prefer Euros Google

US loan guarantees to help Ukraine are worthless – Putin

Washington’s offer to provide $1 billion in loan guarantees to help Ukraine is worthless as there are no banks willing to finance the recovery of crisis-hit country, President Vladimir Putin said Friday. Putin called Washington’s negative response to his letter addressed to European leaders, which contains proposals on how to solve the Ukrainian crisis, “a bit strange” as the United States was able so far only to offer guarantees rather than actual loans.

“What are these guarantees to the banks that would be ready to issue loans, but there are no such banks, which means there is no aid,” Putin said at a meeting with members of Russia’s Security Council. “We are seriously concerned about this,” he added.

Putin says Russia will fulfill its obligations to European gas clients

Russia will fully honor its obligations to supply natural gas to European partners, Russian President Vladimir Putin said.

“Russia is acting very neatly, very considerately and respectfully towards our partners. We will certainly guarantee in full the honoring of all our obligations to our European consumers. We are not the problem, the problem is ensuring transit via Ukraine,” Putin said at a Russian Security Council session on Friday.

Putin calls Ukraine’s non-payment for consuming Russian gas ‘completely intolerant’

Russian President Vladimir Putin on Friday called the Ukrainea’s non-payment for gas consumption “completely intolerable.” “The situation’s dramatization includes the fact that in the first quarter of this year [Ukraine] had the lowest gas prices, and even at those prices our Ukrainian partners stopped paying.

On April 7, there was another payment due according to the gas contract for March of this year. Out of the $540 million owed, not a single dollar or ruble was paid. Absolutely nothing, zilch,” Putin said. “This is an absolutely intolerable situation,” the president said.

Russian President urges Europe to help prevent economic ‘chaos’ in Ukraine

Russian President Vladimir Putin on Friday urged Europe to help prevent Ukraine’s economy from “slipping into complete chaos.”

“What is the current number-one problem? It is that Russia can’t carry this burden single-handed. It is for this reason that we have suggested to our European partners and friends that all of us meet as soon as possible and map out ways of support for the Ukrainian economy,” Putin said at a meeting of Russia’s Security Council.

He said anyone who is a friend of Ukraine and loves the Ukrainian people should help prevent the country from defaulting on its debts.

“Dumplings in the Maidan can’t do the job. That’s not enough to prevent the Ukrainian economy from slipping into complete chaos,” Putin said.

Shocking: As Middle Class Collapses, Family Dollar To Replace It’s Stores With Prada, Gucci and Versace Outlets

In yet another sing that the US Economy is on fire, Family Dollar Stores Inc (FDO) announced that they will be closing 370 stores and slowing their new-store growth after their net income collapsed 35% from a year ago. Family Dollar is said to be feeling the pinch after it’s lower and middle class customer base has been decimated by the FED for the benefit of the rich. Family Dollar anticipates that it will be able to transfer most of it’s closed store leases to the likes of Prada, Gucci and Versace. Enough said. 

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Shocking: As Middle Class Collapses, Family Dollar To Replace It’s Stores With Prada, Gucci and Versace Outlets Google

OBJ Writes: Family Dollar to close 370 stores

Family Dollar Stores Inc. will close 370 stores, slow new-store growth and take other strategic actions as its earnings continue to falter.

On Thursday morning, the Matthews, N.C.-based discount retailer (NYSE: FDO) said its net income fell 35 percent to $90.9 million, or 80 cents per diluted share, for the second fiscal quarter ended March 1.

In the same period last year, the company earned $140.1 million, or $1.21 per diluted share.

Family Dollar intends to take what it describes as “immediate, strategic actions,” said CEO Howard Levine.

That includes plans to close approximately 370 underperforming stores and reduce the company’s work force.

Family Dollar also plans to slow new-store growth beginning in fiscal 2015, with plans to open between 350 and 400 stores. That’s down from 525 stores this fiscal year.

Family Dollar operates about 8,100 stores in 46 states, including about 44 stores in Central Florida. It has about 34,000 employees.