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Malaysia Airlines Flight 370 Conspiracy Theory Lives On. And Always Will.

As a money manager, it’s my job to question everything and to dismiss most things I see/hear from the traditional media/government sources as outer nonsense. If I don’t, I will lose money. It is as simple as that. Which brings me to the quick point I would like to make about Malaysia Airlines Flight 370. I wrote about Flight 370 before, Did The US Navy Land Malaysia Airlines Flight 370 At It’s Diego Garcia Base In The Indian Ocean? Here are my follow up questions…… 

How did they find the plane (black box ping) so fast given the size of the Indian Ocean and the depth of the plane (15,000 feet)? Click Here to see how deep it is……hint….it will blow your mind. Even with the projected/estimated flight path at hand, given the size of the search area and the depth of the plane, it would take an outright miracle to find it this fast. I fathom this would be equivalent to finding an individual grain of sand on a 10 miles long stretch of a beach.  In my opinion, the only way to find that plane is to know exactly where it is. The only way to hear that ping is to sit right on top of it. The only way to do that is to, once again, know exactly where that plane had crashed. How did they know? Who crashed it there? Unfortunately we will never know. 

Always question everything….it will make you smarter. Looks like my conclusion here was right on the money. 

Malaysia Airlines Flight 370 investwithalex

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Malaysia Airlines Flight 370 Conspiracy Theory Lives On. And Always Will.  Google

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Why Most Market Participants Are Clueless About The Stock Market

The article/video below is a perfect illustration of why most market participants are clueless about the underlying stock market structure and the cyclical/mathematical composition within the market. Of course, it takes decades of incredibly hard work to get there….something that Wall Street is allergic to. Case and point…..

“I think longer-term we’re in a secular bull market very much like we were from 1982 to 2000,” offers Saut in the attached video. “Not a lot of people believe that, especially not the individual investors. They don’t understand how you can have a secular bull when you have dysfunctional government, unemployment higher than what it should be at this stage of a recovery and GDP lower than what it should be.”

Here is something you don’t understand Mr.Saut. Secular bull/bear markets don’t last 9 years as you are proposing (2000-2009 bear). If you study the Dow Jones all the way back to it’s inception on May 10th, 1790 you will find an alternating bull/bear cycle that oscillates 17/18 years(see chart).  You would also learn that every 17/18 Bear leg completes itself with a 2-3 year severe bear market. As such, while you expect a 12% return for the year, I will be taking your clients and your money on the short side. If you would be interested in learning exactly when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please Click Here. 

Long Term Dow Structure3

 

 

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Why Most Market Participants Are Clueless About The Stock Market  Google

Breakout Writes: Jeff Saut: The bull market will survive a rough spring

When Wall Street strategists insist on hedging their forecasts using time frames it means one of two things. Usually it’s a way of sidestepping accountability and ducking into the standard sales pitch about the stock market historically returning somewhere around 9% or more on an annual basis. While mathematically true that’s neither earth shattering nor actionable.

In the case of Raymond James’ Jeff Saut his emphasis on the big picture is a polite way of avoiding the fact that stocks have been trading horribly for over a month and there’s little to suggest the near-term risk outlook is anything other than ominous.

“I think longer-term we’re in a secular bull market very much like we were from 1982 to 2000,” offers Saut in the attached video. “Not a lot of people believe that, especially not the individual investors. They don’t understand how you can have a secular bull when you have dysfunctional government, unemployment higher than what it should be at this stage of a recovery and GDP lower than what it should be.”

What don’t investors understand? Stocks don’t care about absolute levels. What matters is direction. Saut thinks the economy is improving. In the big picture everything else is noise.

In the more immediate term it’s impossible to ignore the fact that 5 years into Saut’s range of ‘82 to 2000 there was the 1987 crash. Saut isn’t looking for a repeat necessarily but the volatility of the tape suggests traders have almost no confidence in the market at this juncture. Markets put in an attractive bounce on Wednesday but those under the impression that a $7 pop in Facebook (FB), to take one example, is healthy after shares fell 20-points in a straight line need to keep in mind the wild ride isn’t over yet.

For the year Saut thinks the S&P 500 (^GSPC) can post above average gains of 10-12%. For the next 3 months his forecast is for some rocking and rolling. Review your portfolio to fit your personal tolerance for pain

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Chinese Protests Escalate. Full On Revolution Next?

Despite having overwhelming control, the Chinese Communist Party is starting to worry. More and more of their folk are protesting in the streets, picketing government offices and besieging factory floors. While most of the protests (871 mass incidents over the last 10 years) concentrate on labor and land grab disputes, we believe that is about to change. As reported here earlier, China is facing dual and massive real estate and credit bubbles.

We continue to believe that the eventual collapse in such bubbles will result in millions of Chinese families losing everything, including their jobs.  Further, we believe that such economic developments will force millions of Chinese to hit the streets to protest their government. We saw some early signs of that when Chinese developers started to cut prices a few years ago (right before the massive credit pump instigated by the Chinese government).

Will the Chinese Communist Party be able to survive a massive protest and/or disobedience or will it collapse just like the Soviet Union did? We can’t wait to see what happens. What do you guys think?

Chinese Protests Investwithalex

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Chinese Protests Escalate. Full On Revolution Next? Google

BusinessWeek Writes: What Drives China’s Protest Boom? Labor Disputes and Land Grabs

What are the main reasons Chinese take to the streets, picket government offices, and besiege factory gates? A recent report by the Chinese Academy of Social Science provides some answers on why people protest, a question that keeps China’s party officials awake at night.

Most protests erupt over labor disputes and land grabs, according to the Annual Report on China’s Rule of Law No 12 (2014), also known as the Blue Book of Rule of Law. The analysis reviewed 871 “mass incidents”—protests involving more than 100 people—carried out by more than 2.2 million people from January 2000 through September of last year, as the official China Daily reported.

As China’s leaders push for faster urbanization, with plans to convert hundreds of millions more farmers into city dwellers, land disputes are a growing problem likely to get even bigger. “In land acquisitions and forced demolitions, for example, many officials often overlook public interest,” Shan Guangnai of the Chinese Academy of Social Sciences told the official newspaper. 

The majority of the protests involved fewer than 1,000 people. Still, almost one-third of the incidents included between 1,000 and 10,0000 people, and 10 megaprotests involved more than 10,000 people demonstrating en masse. Of the largest, half were protesting pollution issues. The two other main causes were traffic accidents and conflicts involving China’s many ethnic groups, which include Tibetans, Muslim Uighurs, and Mongolians.

Almost one-half of the protests were directed at government, with disputes due to problems with law enforcement, land acquisitions, and forced demolitions involving local officials, plus various other rights issues. The remainder of the demonstrations focused on conflicts with enterprises, landlords, schools, and village committees. The large majority of protests—about four-fifths—were organized rather than spontaneous, and 36 incidents resulted in a total of 79 deaths.

The report also showed that protests occur most often in more-developed regions, including eastern and southern China, with Guangdong province alone accounting for about 30 percent. And the number of incidents is rising each year.

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Stock Market Update. April 9th, 2014. InvestWithAlex.com

daily chart April 9 2014

A strong up day with the Dow Jones up 181 points (1.11%) and the Nasdaq up 71 points (1.72%)

While most of today’s rally was caused by the FOMC Minutes, I give very little weight to such fundamental factors. As explained earlier on this blog, we believe most market participates do not have the correct fundamental macroeconomic framework or understanding associated with today’s market environment.  Certainty not the cyclical market structure.  In fact, we believe the market (particularly the Nasdaq) continues it’s bounce from an oversold position. When the bounce completes itself over the next few trading days, we would expect the market to XXXX. 

Further, our mathematical and timing work continues to show that the bear market of 2014-2017 is just around the corner. When it starts, it should very quickly retrace most of the gains derived over the last two years (at least). Those who are positioned properly should be rewarded handsomely. 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 here. 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 9th, 2014. InvestWithAlex.com Google

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Investment Grin Of The Day

An investment firm is hiring mathematicians. After the first round of interviews, three hopeful recent graduates – a pure mathematician, an applied mathematician, and a graduate in mathematical finance – are asked what starting salary they are expecting.
The pure mathematician: “Would $30, 000 be too much?”

The applied mathematician: “I think $60, 000 would be OK.”

The math finance person: “What about $300, 000?”

The personnel officer is flabberghasted: “Do you know that we have a graduate in pure mathematics who is willing to do the same work for a tenth of what you are demanding!?”

“Well, I thought of $135, 000 for me, $135, 000 for you – and $30, 000 for the pure mathematician who will do the work.”

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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. 

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FOMC Minutes Confirm Our Forecast Google

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What You Ought To Know About The Baltic Dry Index Crash

baltic dry index is breaking down

Baltic Dry Index, the measure of sea freight prices, keeps crashing lower to the levels unseen since the summer of 2013. Signaling a worldwide economic slowdown. Down 31% in just two weeks, the index is just a few clicks away from a technical breakdown. This works well with our overall stock market premise. Despite governmental claims of accelerating worldwide economic growth, at least the BDI is not buying it. 

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What You Ought To Know About The Baltic Dry Index Crash Google

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How Long Before The Stock Market Is In Real Trouble

Once in a blue moon CNBC posts something worth reading (see full report below). 

“What we’re concerned about it whether or not some of the other stocks that have gone straight up are starting to move sideways, either in a consolidation or in preparation for some distribution,” Yamada said, referring to a bearish pattern that indicates a market top. “It’s a little iffy here.

Then the guy goes on to destroy all credibility: “The one positive, of course, is that 2015, as a year ending in 5, has a very good record of being an up year,” the technician said. “That’s the silver lining.”

Overall we tend to agree. When (not if) the S&P breaks below 1,740 it will signal the beginning of a bear market. With that said, we already know exactly when that is going to happen as per our mathematical and timing work. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and it’s subsequent internal composition, please Click Here.  

S&P Chart

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How Long Before The Stock Market Is In Real Trouble  Google

CNBC Writes: If this happens, the S&P 500 is in real trouble: Pro

After two tough sessions for the market, the S&P 500(^GSPC) hit a one-month low on Tuesday morning before turning positive for the day. But technical analyst Louise Yamada says the stock slide isn’t over just yet.

“I don’t think the pullback is already over,” Yamada, of Louise Yamada Technical Research Advisors, said on Tuesday’s episode of “ Futures Now .” “I think that it’s an interim pullback, and we’ve certainly seen what we’ve expected, in the Internet and biotechs coming off. And I think that although they may bounce, there’s probably still a little bit more to go on the downside.”

Read More 2 charts tell the whole story of value vs. growth

Worse yet, the selling could spread to other sectors, such as aerospace and consumer discretionary stocks.

“What we’re concerned about it whether or not some of the other stocks that have gone straight up are starting to move sideways, either in a consolidation or in preparation for some distribution,” Yamada said, referring to a bearish pattern that indicates a market top. “It’s a little iffy here.”

What would cause real concern is if the S&P trades below 1,750.

“If we break that level, that will be the first lower low that we would have seen all the way back to 2011, really,” Yamada said.

 

Below 1,750, support lies at 1,650, which is “where the 2009 uptrend would be by midyear,” she wrote to CNBC.com. That is about 11 percent below current levels.

Yamada says the weakness in stocks lines up well with broader bearish indicators, such as the fact that 2014 started with a weak January, and is a midterm election year.

Read More Why you should totally ignore the ‘January barometer’

But it’s not all bad.

“The one positive, of course, is that 2015, as a year ending in 5, has a very good record of being an up year,” the technician said. “That’s the silver lining.”

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Ukraine: As Jews Flee American Mercenaries Flood In. Situation Critical

time bomb

While only 16% of Americans can find Ukraine on the map, what is about to happen in that small country might have severe repercussions on the American way of life. Why? First, if the US/NATO end up getting militarily involved in the conflict this might lead to an all out war with Russia. While the probability is low, I wouldn’t put it past warmongers in Washington. Second, expect the financial markets to sell off hard and the US fall into a recession (possibly even faster than we are predicting). Here is the latest and what you need to know

Things are about to get very interesting.  

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The Case For Gold

I will be the first one to tell you that I am not smart enough to figure out the fundamental story behind gold. China, Indian, supply/demand, money or commodity, inflation/deflation, etc…. there are just way too many variables at play to gauge a clear picture. Yet, from the Macroeconomic perspective and based on our timing and mathematical work Gold is about to surge.

Here is why. We continue to believe that most people don’t have the right macroeconomic setup in mind. Most market participants believe the economy will continue to perform fairly well (if not surge) and that will force the FED to raise interest rates or otherwise tighten. Yet, that is not what our mathematical work shows. It shows a severe bear market between 2014-2017 and a subsequent deep recession in the US Economy. That is why we continue to believe the FED will be cutting interest rates or looking at various way  to re-inflate the markets with additional liquidity (as opposed to tightening) around this time next year. As you can imagine, Gold will do very well in such an environment from both the “fear” and an “inflation” type of a trade. 

So, find a good entry point and profit.  

the case for gold

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Breakout Writes: Where gold is going and how to play it: Frank Holmes

Don’t call it a comeback but since reaching lows last week gold has been on the rebound.

Weak jobs numbers, rising tensions between Russia and Ukraine, the European Central Bank indicating it may not recur to more stimulus, and the Iraqi Central Bank’s recent gold grab are all contributors to the rising price of the yellow metal which was up 1% Tuesday morning.

Breakout’s Jeff Macke sat down with Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors to discuss where gold is going and how to play it.

Physical demand for gold is immense in Asia, says Holmes. “Gold is leaving North America going to Switzerland, being melted down into smaller wafers and being sold to China, at a rate of 200 tons so far this year.”

China’s affinity for gold feeds what Holmes calls the “love trade,” raising prices.

Meanwhile, the “fear trade,” is coming into play with concern over the Federal Reserve’s policies and low jobs numbers.

“Last year inflation fell from 1.7% down to 1.2% and now it’s pushing back up against 1.7%,” says Holmes.

Holmes says to look out for the FOMC minutes tomorrow, as they will certainly have an impact on the fear trade and in the meantime, “have a 10% weighting in gold, 5% in gold coins or jewelry and then 5% in gold equities.”