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Welcome To Cold War II

Mother Russia is furious at the West. Here is quick summary of what the Russian media is saying in regards to the West’s reaction.  

  • The west is responsible for destabilizing Ukraine to begin with. 
  • Russia is acting within lawful framework as it tries to protect Russian interest in Ukraine.
  • New Ukrainian Government is illegitimate.  
  • Russia will not be intimidated by the West. They will answer every blow to Russia with the blow of their own. 

As you can see, this tag of war between Russia and the US is a clear case of “My $%ck is bigger than your co*#”.  Unfortunately, when we look back at this juncture a few years from now we might identify it as the beginning of Cold War 2. Where the only winners are 1. Retarded Politicians and 2. Military Industrial Complex. Too bad.   

Запад угрожает Москве санкциями и отзывает собственных дипломатов, а в США собирают подписи по вопросу об исключении России из ВТО

Дипломатические демарши Россию не испугали

Фото: ИЗВЕСТИЯ/Владимир Суворов

После того как 1 марта Совет Федерации РФ принял предложение президента Владимира Путина ввести войска на Украину для «нормализации общественно-политической обстановки» в стране, против Москвы развернулась настоящая дипломатическая война. Канада приняла решение об отзыве своего посла из России. Главу отечественной дипмиссии вызвал «на ковер» МИД Великобритании. Оттава, Париж, Лондон и Вашингтон приостановили подготовку к июньскому саммиту G8 в Сочи. 

Кроме того, Запад заговорил о возможном введении политических и экономических санкций против Москвы. В частности, на сайте американского Белого дома начался сбор подписей под петицией об исключении России из ВТО, отмене виз для членов российского правительства и их семей, а также заморозке их финансовых счетов в американских банках. Ее подписали уже более 5,8 тыс. человек. Собственный ответ Москве пообещал подготовить и Евросоюз, министры иностранных дел стран-членов которого собираются 3 марта на экстренное совещание в Брюсселе. 

Пока Россия отвечает ударом на удар. В ответ на оскорбительные заявления Обамы сенаторы предложили отозвать посла России в Вашингтоне. Найдутся адекватные меры и на другие заявления Запада. 

— На самом деле, вся эта истерика Евросоюза — не более чем пиар-пузырь, приуроченный к выборам в Европарламент 25 мая. По всем прогнозам, в следующем его составе окажется большое количество евроскептиков и нынешние еврокомиссары во главе с председателем Жозе Мануэлем Баррозу вынуждены будут уйти в отставку. А потому подобные их заявления сегодня надо делить как минимум надвое — во время избирательной кампании часто врут, — сказал «Известиям» зампредседателя комитета Совета Федерации по международным делам Андрей Климов. 

Новые же члены Еврокомиссии вряд ли продолжат после майских выборов затеянную в отношении Украины политику. По словам сенатора, те слишком хорошо понимают, что такого нахлебника, как Украина, членам ЕС просто не прокормить. 

— Пока Россия сталкивается со своего рода дипломатическими демаршами, то есть демонстративными действиями символического значения. Не приходится рассчитывать, что Россию в вопросе по Украине поддержат, — считает глава Совета по внешней и оборонной политике Федор Лукьянов. 

По словам эксперта, даже от Китая, который симпатизирует российской политике по отбрасыванию евроатлантической экспансии, ждать поддержки не стоит. Прежде всего — из-за довольно размытых постулатов международного публичного права. 

В то время как Москва стремится представить свою позицию как отклик на призыв о помощи россиянам в Крыму и действующему президенту Украины Виктору Януковичу, Запад видит в этом лишь попытку аннексировать часть территории суверенного государства. 

При этом, отмечает Лукьянов, ни США, ни страны ЕС не собираются проводить параллели с собственными вмешетельством «ради мира» во внутренние дела, например, Ирака или Ливии, а также призывами навести порядок в Сирии. 

— Двойные стандарты были, есть и будут основой международных отношений. Западные державы интерпретируют международное право по-разному — в зависимости от собственной выгоды, — говорит Лукьянов. 

Руководствуясь именно такими соображениями, США и Европа в определенный момент поддержали новое прозападное правительство Украины — закрыв глаза на юридический аспект произошедшей смены власти, отмечает председатель московской коллегии адвокатов «Николаев и партнеры», специалист по международному праву Юрий Николаев. 

— Янукович был выкинут из президентского кресла при помощи физической силы. Согласно правовой оценке, это стало настоящим госпереворотом — произошел захват власти, не предусмотренный украинским законодательством, — объясняет юрист. 

Как отмечает Николаев, ни Россия, ни, что примечательно, Евросоюз до сих пор не представили официальных документов, в которых признавали бы новое правительство как единственно легитимное. А значит, законным главой Украины всё еще остается Янукович. Следовательно, формально он вполне имеет право обратиться за помощью — в том числе и военной — к соседям. 

— Согласно украинскому законодательству, Янукович должен был бы обзавестись поддержкой парламента, прежде чем обращаться с такой просьбой к России. Однако здесь у него не оставалось выбора, ведь законно избранной народом рады уже не существует, — отмечает Николаев. 

Подобная логика отвечает позиции Москвы, которая настаивает еще и на своем долге. А именно — общем с Украиной историческом прошлом и защите проживающих на ее территории российских граждан. Ведь только в Крыму около 60% населения являются русскими. 

На ООН как на арбитра рассчитывать тоже не стоит. Даже если другие страны попытаются провести через организацию санкции против России, Москва, обладающая правом вето, никогда их не пропустит и сможет заблокировать любое решение по Украине. По словам специалистов, ООН лишь в очередной раз показывает сегодня свою несостоятельность в решении подобных вопросов. 

— В настоящее время такие вопросы переходят от международных организаций отдельным государствам. Так, вопреки ООН, ранее США и Великобритания решили самостоятельно нести в Ирак демократию на штыках, — отмечает Николаев. 

А интересов на Украине у Вашингтона не меньше, чем на Ближнем Востоке, считает он. В прошлом году здесь открыли крупное месторождение алмазов в Кировоградской области. Да и возможность заполучить военную базу под боком у РФ США бы вполне порадовала. 

Главный вопрос в том, экономические санкции какого рода и в каком объеме США и страны ЕС решатся самостоятельно применить против Москвы. 

— Подобное «наказание» со стороны Брюсселя и Вашингтона было бы для  России  болезненно, — считает Лукьянов. — Правда, пока неизвестно, насколько Вашингтон и Европа сами захотят пойти на собственные издержки и потери своего бизнеса. 

По словам сенатора Андрея Климова, США сегодня практически не имеют серьезного товарооборота с Россией, а потому экономические санкции Вашингтона большого вреда Москве не принесут. 

— При этом страны ЕС зависят от нас ничуть не меньше, а может, даже больше, чем мы от них, — говорит Климов. 

В частности, для Европы заменить поступающий из России газ будет нечем. По этой причине, ЕС вполне может начать переговоры с Россией отдельно от США. Да и единения в Евросоюзе в вопросе отношения к происходящему на Украине не наблюдается. 

— В сложившейся ситуации я бы вообще порекомендовал Брюсселю и Вашингтону принять санкции друг против друга. В отношении США — за разжигание гражданской войны и взрывоопасной ситуации в Европе. В отношении ряда стран ЕС — за то, что своим бездействием нарушили договоренности о нормализации ситуации на Украине от 21 февраля, что открыло ящик Пандоры, — говорит Климов. 

При этом экономически Россия может вполне выжить и в ситуации экономических санкций со стороны Брюсселя и Вашингтона. В настоящий момент Москва наращивает экономические связи со странами БРИКС. Как отмечает сенатор, в них проживает  40% населения Земли. По золотовалютным резервам группа в разы опережает Евросоюз. А совокупный ВВП входящих в БРИКС государств превышает ВВП США и ЕС

Читайте далее: http://izvestia.ru/news/566846#ixzz2uueXsK00

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Welcome To Cold War II Google

Will The War In Ukraine Collapse The US Financial Markets?

The Dow Jones gapped down at the open to the tune of -130 points. Raising the question if the potential war in Ukraine and the continued escalation of tension between Russia and the US will be enough to set off a large bear market move. Based on my mathematical timing work the answer is YES and NO. The gap we see at today’s open is likely to be closed. Either today or over the next few days. It is my belief that the market will settle down to continue it’s present trend, but not for too much longer. While the trouble in Ukraine could be blamed as the catalyst that sets the upcoming bear market off, such is not the case. Again, the market is tracing out it’s exact structure. It will start the bear market when the time is right.      

When is that time?

Check out our Subscription section. 

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NEW YORK (Reuters) – U.S. stocks were set to open sharply lower on Monday, alongside other risk assets, as Ukraine and Russia prepared for war after Russian President Vladimir Putin declared he had the right to invade his neighbor.

Ukraine mobilized for war on Sunday and Washington threatened to isolate Russia economically after Putin said he had the right to invade Ukraine, in Moscow’s biggest confrontation with the West since the Cold War.

The S&P 500 closed at a record high on Friday, and profit taking was expected on Wall Street due to the political uncertainty.

“There’s been a very significant rally,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

“If you need an excuse to sell, this is a good one.”

Russian stocks and bonds fell sharply and the central bank hiked interest rates to defend the ruble.

Energy stocks could stand to lose if relations between the United States and Russia deteriorate further. Volatility will likely spike alongside the uncertainty of the situation.

“Anything that involves a boycott of Russian supplies, which are very significant, could impact the energy sector dramatically,” said Meckler.

“In situations like this you see very quick reactions reverse as people understand the scenario and how things play out.”

S&P 500 e-mini futures fell 17 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 130 points and Nasdaq 100 futures lost 34 points.

Gold prices hit a four month high as investors sought safe-haven assets, boosting gold stocks.

Though the focus will likely remain on Ukraine, the economic calendar is full on Monday.

U.S. consumer spending rose more than expected in January, likely as chilly weather boosted demand for heating.

Will The War In Ukraine Collapse The US Financial Markets?  Google

What You Ought To Know About This Secular Bear Market. Plus, Weekly Market Update.

daily chart Feb 28, 2014

Weekly Update & Summary: February 28th, 2014

The market continued its bull move with the Dow Jones being up +218 points (1.36%) and the Nasdaq being up +44 points (1.05%) for the week. Structurally, the market did very well, leaving only one gap behind….at 16,100. There are still a number of gaps going all the way down to 15,500 on the Dow, but all of them will be closed during the upcoming bear market leg.   

FUNDAMENTAL & MARKET ANALYSIS: 

During the week Charles Schwab Chief Investment Strategist, Liz Ann Sonders, claimed that the bull run stocks have enjoyed for the last five years is not over yet. According to her, “I think what started five years ago was the beginning of a secular bull market, not just a cyclical bull within an ongoing bear.”   

This is an important claim that we must discuss. This will help me explain, once again, where we are in the cycle. If you are not familiar with the terminology….

Secular Bull Market ……. is a long term bull market. For example, what we saw between 1982-2000.

Cyclical Bull Market Within Ongoing Bear…..is a bear market rally. For instance, the move between 2002/03 bottom to 2007 top.

So, what she is saying is that the bear market that started in January of 2000 is now over and that the new long term bull market started at 2009 bottom. There is just one problem with her statement.

Liz Ann Sonders didn’t do her market homework. Since the stock market officially “opened” in May of 1790 there hasn’t been a single bear market that lasted 9 years. Not a single one if you understand the cyclical composition and market structure. Why would it be different this time? It is not.

In fact,  the market oscillates in bull and bear market cycles that on average last 17-18 years. There is a reason for that, but let me illustrate instead of telling you. Let’s take a closer look

Long Term Dow Structure3

  • 1897-1914 Bear Market. (17 Years).
  • 1914-1932 Bull Market. (18 Years). * Please note, the last 3 years of this cycle 1929-32 we had a cycle inversion. I will talk about it in my future writings, for now, its outside the scope of our discussion.
  • 1932-1949 Bear Market (17 Years).
  • 1949-1966 Bull Market ( 17 Years).
  • 1966-1982 Bear Market (17 Years).
  • 1982-2000 Bull Market (18 Years).
  • 2000-2009 Bear Market ? ….I don’t think so….

As you can clearly see, bull and bear markets alternate in 17-18 year cycles. Any notion that, somehow, this bear market was only 9 years long and we are now in a cyclical bull market is ludicrous.  

This is further confirmed by my mathematical work. What we have seen between March 2009 bottom and today was a simple bear market rally, even if it did set a new high. It was a 5 year cycle (exactly the same as in 2002-2007) and it is now done. Cyclical bear markets tend to finish off with a 2-3 year down moves and that is, once again, being confirmed by my calculations.

I have stated on numerous occasions that the stock market has topped out on December 31st, 2013, ushering in the final leg of the bear market. When this bear market completes the Dow Jones will be well below it’s 2000 top of 11,800……essentially tracing out a flat move over an 17 year period of time. Exactly what a bear market should look like.

I hope this brings further awareness and understanding of where we are in this economic and market cycle. If you want more precise timing capability, please take a look at our Timing Analysis section below.

MACROECONOMIC ANALYSIS:  

One word. Ukraine.

As I have mentioned in one of my posts during the week, there is absolutely no way in hell that Russia will let Ukraine go.  What we are seeing today is indicative of that stand.  If you are not following the story, here is what had transpired.  The EU Bureaucrats and the US Government have decided that it would be a good idea to destabilize Ukraine after Ukrainian government decided to go forward with Russia instead of joining the EU or NATO.  Thus far, the western governments were successful it toppling Ukrainian President and “claiming victory”.

However, here is what even a retarded CIA/NSA analyst should understand. Russia will never let Ukraine go.  It will go to war over that territory if need be and that is exactly what we are seeing today. Obama coming out and “WARNING” Russia does nothing but infuriate Russia even more. Again, the US Government has no business in Ukraine.  Ukraine is a split nation and when Obama talks about the “Ukrainian People who want freedom and closer ties to the EU” he talks about 25% of Ukrainian population at best.  The bottom line is this, Russia will take it and no one will stop it.

Is this important? Will this impact our financial markets?  While it will not have any impact on the US financial markets  (outside the spectrum of our forecasts) it is an incredibly important geopolitical event. It is quite possible that when we look back, this event will be indentified as the beginning of the Cold War II between Russia and the West. With one big difference. Russia will have an incredibly strong partner on its side that it didn’t have last time…..China.  This is a fascinating development that will impact us all over the next few decades.

TECHNICAL ANALYSIS: 

While the overall technical picture is clearing up.

Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market. 

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 trend has turned bullish as well.

While all 3 trends are bullish, this might be misleading. Please read our Mathematical and Timing Analysis to see what will transpire over the next few weeks.    

MATHEMATICAL & TIMING ANALYSIS:  

(*** Please Note: About 75% of the information contained within this section has been deliberately removed. 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.Subscription is through lottery only. Don’t forget, we have a risk free 14-day trial). 

I continue to believe that March will be a very volatile month. We have a number of interference patterns in play, indicating a number of strong and powerful bull/bear moves. With that said, I believe Friday’s market action has cleared a lot of question marks. Primarily, XXXX. 

In addition, the market closed two important gaps all the way up to 16,400 that were left there in January. I have talked about these gaps on numerous occasions, suggesting that the market must close said gaps before any meaningful bear market can start. That was done today, clearing the way for the market to XXXX

While there are a number of important turning points in March (indicating interference), there is one particular price point that works very well. As such, I propose the following turning points.

Date: XXXX
Price Target: XXXX

Explanation: XXXX

Hence, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action.

If You Are A Trader: XXXX

If No Position: XXXX

If Long: XXXX

If Short:  XXXX

CONCLUSION: 

We have a couple of existing and challenging weeks coming up. March of 2014 presents us with numerous high probability turning points. Indicating volatility, multiple interference patterns and an incredibly important long-term XXXX. Those anticipating the moves and those who can time them properly will be rewarded appropriately. Once the moves described above play out in full, the market will be set free to continue its next cyclical bear market leg. 

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

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What You Ought To Know About This Secular Bear Market. Plus, Weekly Market Update.  Google

Will This Stock Go Up 500% Over The Next 3 Years?

Rite Aid Corporation (RAD)

Investment Thesis Summary: Rite Aid is a “turnaround” undervalued stock with a significant upside potential.  Due to improved company fundamentals and performance the stock price is up 550% over the last 1.5 years. Yet, I believe the company’s stock continues to be undervalued. It is still far from where it could be if the company continues to execute its turnaround plans.  In fact, based on today’s valuation metrics, if Rite Aid is to approach  the valuation metrics and margins of its competitors over the next 3-5 years, Rite Aid’s stock should appreciate 2-5X from today’s price.

THE STORY:

Please click on this presentation to learn about the company, future plans and their turnaround story.

The company has a number of things going for it.

1. Aging Population

This is straight forward and self explanatory.  According to US Census Bureau the population of those 65 & Older in the US will be at 56 Million by 2020. That is about a 40% increase from today’s levels. It doesn’t take a genius to figure out that these older Americans will be visiting Rite Aid more often to buy larger quantities of drugs as they continue to age. Driving sales and profitability higher.

2. Drug Deal/Distribution

In mid February 2014 The company announced an expanded distribution agreement with McKesson (MCK), a massive drug retailer.  While this renewal is technically an expansion of their existing deal into 2019 it gives us an important clue to future growth and profitability.

The drug industry is changing. Today, most drugs are bought in massive quantities by the likes of distributors like McKesson. This gives both McKesson and Rite Aid higher pricing power and flexibility. In addition, the so called “Patent Cliff is in play. It is estimated that between 2011 and 2017 close to $130 billion worth of brand drugs will lose patent protection and become generic. When that happens, the margins for both pharmacies and drug distributors should increase further.

That is already becoming evident at McKesson where operating margins have risen from 1.63% to 2.03%  since 2011 and at Rite Aid where operating margins went from (-2.16%) to +3.76% over the same period of time. As you can see a massive jump.  As more generic drugs come on the market over the next few years, it is likely the operating margin will continue to expand.

3. Turn Around/Improved performance

rad1

 

rad2

Please see the presentation for other data points on turnaround and improved performance. Click Here

4. Undervaluation:

I believe that standard Intrinsic Value  Calculation/Valuation will not yield very good results in this case because the company is in the process of a turn around. To determine future valuation and  potential undervaluation  at this time, we must look at properly run competitors. Walgreen Co (WAG) and CVS Corp (CVS) in particular. We have to look at their existing valuation and assume that Rite Aid will move closer to such industry valuation metrics as it continues its turnaround plans.

The easiest way to do so is to look at  Price/Sale Ratio.  Again, the assumption here is that Rite Aid will continue to execute on its turnaround plan to reach industry metrics. Walgreen has a P/S ratio of 0.87 and CVS has a P/S ratio of 0.67

What does  it all mean?

It means that if Rite Aid continues to execute its turnaround plan and reaches industry metrics over the next 3-5 years, its stock price should be between $17.10 and $22.10. Giving us a respective yield of 158% and 233% over the next 3-5 years. With any other operating or margin improvements the return should be much higher.  

FUNDAMENTALS:

The stock is undervalued relative to today’s market.

Valuation Measures

 

 

Market Cap (intraday)5:

6.48B

Enterprise Value (Feb 25, 2014)3:

12.61B

Trailing P/E (ttm, intraday):

22.87

Forward P/E (fye Mar 2, 2015)1:

19.71

PEG Ratio (5 yr expected)1:

0.54

Price/Sales (ttm):

0.25

Price/Book (mrq):

N/A

Enterprise Value/Revenue (ttm)3:

0.50

Enterprise Value/EBITDA (ttm)6:

9.28

 

Financial Highlights

 

 

Fiscal Year

Fiscal Year Ends:

Mar 2

Most Recent Quarter (mrq):

Nov 30, 2013

 

Profitability

Profit Margin (ttm):

1.25%

Operating Margin (ttm):

3.76%

 

Management Effectiveness

Return on Assets (ttm):

8.32%

Return on Equity (ttm):

N/A

 

Income Statement

Revenue (ttm):

25.38B

Revenue Per Share (ttm):

28.01

Qtrly Revenue Growth (yoy):

1.90%

Gross Profit (ttm):

7.32B

EBITDA (ttm)6:

1.36B

Net Income Avl to Common (ttm):

280.41M

Diluted EPS (ttm):

0.29

Qtrly Earnings Growth (yoy):

15.60%

 

Balance Sheet

Total Cash (mrq):

183.21M

Total Cash Per Share (mrq):

0.19

Total Debt (mrq):

5.95B

Total Debt/Equity (mrq):

N/A

Current Ratio (mrq):

1.73

Book Value Per Share (mrq):

-2.31

 

Cash Flow Statement

Operating Cash Flow (ttm):

728.27M

Levered Free Cash Flow (ttm):

161.00M

The company financials are ugly, but getting better. If we are to look at the balance sheet, income statement and the cash flow statement the desire to invest is likely to disappear. However, we must be aware that by the point the financial statements will reflect improvement and return to stability, the stock price is likely to complete most of its climb.

What is the Intrinsic Value?  Too many variables and unknowns to calculate here. I believe the values provided in the “Undervaluation” section above make a lot more sense in this particular situation.

TECHNICAL:  

riteaid

As you can see, the technical picture is incredibly strong here. Since its bottom 1.5 years ago, the stock has appreciated over 550% with no signs of a technical slow down and/or a reversal.  Giving us an indication that most investors believe the turnaround story is developing (at this time) as this report suggests.

CONCLUSION, TIMING & POSITIONING:

XXXX

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Make No Mistake, Russia WILL Go To War Over Ukraine. Plus, Market Update

Update: Russian troops and tanks enter Ukraine @ Sevastopol. So it begins. 

Well, the American Government and the EU Bureaucrats have done it again. They have “liberated” the people of Ukraine from oppression and injustice. I wonder if there were high fives flying in the Oval Office over the weekend.  

Yet, as the Chinese story goes “Maybe it’s good and maybe it’s bad, we shall see”.

I have said it before, but I need to say it again so people have a clear understanding.  The US and the EU destabilizing and interfering in the business of Ukraine is equivalent to Russia destabilizing and trying to take over the government of Kentucky.  Technically speaking, Russia and Ukraine is a unified state going back thousands of years.  I would argue that it is idiotic at best and extremely dangerous at its worst for the western world to interfere in Russia’s and Ukraine’s business.

Luckily, I am not alone in thinking this way. Here is an open letter from Ron Paul: “Leave Ukraine Alone”

What most people don’t understand is this…… Russia and Putin in particular will never allow Ukraine to become a part of EU or worst NATO. They will go to whatever extent necessary to make sure that doesn’t happen. Even if it means going to war.  Also, it is only half of the Ukraine (western half, the poorer half) wanting closer ties with the EU. The other half (wealthier industrial eastern part) wants nothing to do with it. They want to have closer ties with Russia.  So, when American politicians scream out “Ukrainian People Want Freedom From The Tyranny of Russia”  they are talking about 25% of Ukraine’s population. Either way you twist it, this is a ticking time bomb.  

With Olympics now over, Russia has a lot more room to maneuver.  It will be interesting to see what develops over the next few weeks. I see 2 outcomes.

1.  In the past, Russia and Putin have proved to be good strategists. They might give an indication that they are stepping aside by allowing the EU and World Bank to try and bail Ukraine out by pumping billions of dollars into Ukraine’s economy.  Over the next few years, through various political actions and economic positioning Russia will, once again, replace Ukraine’s leader with their own “puppet” as they have done so many times before.  Of course, Western powers will never see their money again.  This is the most likely outcome and exactly what I would do.  

2.  However, if Russia is pushed too hard and too far, they WILL sanction and execute some sort of a military action in Ukraine.  With the EU and the US interfering in its business, Russia might literally have no other choice.

Which option will play out? Only time will tell, but I wouldn’t be surprised to see some sort of military intervention over the next few weeks.  Will Obama draw his “Red Line” again and send in the Marines to protect newly liberated Ukrainian people?  Yeah right. I truly feel sorry for the Ukrainian people who believe that the West will come to their rescue. 

One thing is for sure.  Neither the US nor the EU have any business interfering in this part of the world. Doing so might lead to an all out conflict with Russia and a new Cold War.  Unfortunately, it looks as if it is exactly what some of our leaders want.

russian022412

MARKET UPDATE:

The market surged higher right at the open with the Dow Jones appreciating +103 point (0.64%) and with the Nasdaq gaining +29 points (0.69%) for the day. 

With most speculative issues appreciating the most, the question I see from a lot of the bears anticipating a collapse….. Is this is the “blow off” top? As I have mentioned so many times before, the bear market of 2014-2017 will not be directional. While it will have a general down trend, it will not present us with a directional move as it did between 2007-09. That means a lot of volatility and a lot of powerful ups/downs that will surely confuse and frustrate both bulls and bears. With that said, what does it say of today’s market?  

Our last inflection point was located at……. XXXX.

Not quite yet. This market is certainty not making things easy for our trading position as it continues to push upper ranges of what is possible if February XXXX was indeed a turning point.

There is couple of reasons for my hesitation. 

1. All indices have opened up a gap in the morning. Typically, the market comes back to close this gap over the next few trading days. While the market can do so during the next leg down, it closes it within the next 3 trading days 70% of the time. Indicating a high % possibility of a short-term decline. 

2. My calculations show an alternative top at today’s top of XXXX. It is hard to explain, but at times the market produces gaps within its own mathematical structure. It might be the case here.

In summary, it’s too early to call the market either way. While it is pushing upper boundaries, it is possible….. XXXX.

What are we to do?

Maintain our positions as described below while watching the market on an hourly chart. If the Dow breaks above XXXX we must nullify our XXXX top. If that is the case, the market is likely to continue higher. Not much higher, but high enough to close the gap that was left at 16,400 on the Dow.

If No Position: XXXX

If Long: XXXX

If Short/Trader:  XXXX

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

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Warning: The US Economy Is Flying Blind…About To Crash

janet yellen investwithalex

Over the last couple of years I have argued, sometimes passionately, that the Federal Reserve doesn’t really know what is going on within our own economy and our financial markets. Not only that, but I have also argued that they are a bunch of idiots and fools who believe that they can somehow control our financial markets.

If recently released transcripts, generated during the 2008 meltdown don’t prove my point of view without a shadow of a doubt, I don’t know what will. Here are just a few quick points from the said transcripts.

  • They didn’t even realize recession was happening until the 4th quarter of 2008. By that point the stock market has completed 80% of its down move.  In fact, for most of 2008 they thought the recession “could be avoided”.

—-Hello???? Was anyone home??? Recession started in Q4 of 2007.

  • Bernanke talked about pent-up demand for housing as late as January 2008.
  • Bernanke was worried about inflation as late as January 2008.
  • Throughout Q1 of 2008 they have held a generally rosy view of the world and the US Economy

Here are the links to two great articles about the transcripts if you would like to learn more. Click Here and/or Click Here

bernanke meme

The lesson here is twofold.

First, anyone who believes that the FED can either control, anticipate or predict financial markets and/or the economy is even a bigger fool.  Neither Bernanke nor Yellen can predict the economy even if it hit them in the face with a brick. All they can do is look at past data and say “Oh, look, according to this data recession started in Q4 of 2007”. What a waste of time and money.  

Second, they will always be behind the ball. They will always be a reactionary force as opposed to market makers. Take today’s environment for example. They are cutting QE and talking about raising the interest rates at exactly the wrong time. The damage from their crazy liquidity party has already been done. The worst thing they can do now is cut it. The faster they do it the faster the markets will collapse.  

Why is any of this important?

Well, if you rely on FED to make money in the stock market and/or run your own business it becomes incredibly important. As such, no one should rely on any action by the FED as an investment indicator. It is as simple as that.

This brings us to financial markets and my premise that financial markets behave exactly as they should. Many people would argue that it was the FED’s actions that put the bottom in at the March of 2009 juncture, ensuring a subsequent and massive stock market rally.

WRONG.

Don’t confuse cause and effect. It was the market that made the FED’s look good and not the other way around. The market was structured to bottom on March 6th, 2009 at 6,469 and then have a subsequent 5-year market rally. It was the mid-cycle bottom (half point of bear market) and I predicted it as early as January of that year. I was 1 day and 100 points away. Close enough. I know I have shown this chart before, but let’s take another look.

Long Term Dow Structure35

If you perform the type of 3-dimensional analysis that I do you would know that the move between 2003 bottom and 2009 bottom would be IDENTICAL to the move between 1994 bottom and 2002 bottom. And so it was, exhibiting a variance of 22 3-dimensional units (equivalent to a few trading days or 100 points).

Any analyst working with this information would know that as soon as 2007 top was confirmed that the next move down would be exactly 8,130 3-dimensional units. Once the market developed further, the same analyst would be able to pin point the exact bottom with amazing precision and that is what I want you to understand without a shadow of a doubt. The stock market is not volatile or random, it is exact and precise.

Same thing applies to today’s market. In last week’s forecast I identified a turning point in February. While I am not yet at liberty to discuss this turning point (available to premium subscribers only), it clearly explains the market action we have witnessed over the last couple of days. By concentrating on mathematics and 3-dimensional analysis one can pick out turning points with a precision of a surgeon.

It is just my hope that the points above will force you to re-examine your reliance on the FED while eliminating your sense of false security. 

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Warning: The US Economy Is Flying Blind…About To Crash Google

Who Is Killing The JP Morgan Bankers? Plus, Market Update

As they say, real life is sometimes stranger than fiction. If you haven’t been paying attention, a number of high profile bankers have committed “suicide” over the last 30 days. Mostly, by “jumping” from the rooftops of their office towers. Seven of them to be exact (please see the list below) With three of them being from the JP Morgan Chase.

So, is there something in the air that is forcing these otherwise wealthy bankers at the prime of their career to commit suicide? Did we have a 1929 style market crash or is that a new termination policy at the major banks? Am I missing something here? 

Any notion that all of the said bankers have committed suicide is laughable. Take Richard Talley for instance, who ended up shooting himself 8 times with a nail gun in both torso and head. How is that even possible?  Plus, with multiple connections between the dead bankers, particularly those working at JP Morgan Chase, something doesn’t add up.  

Recently Madoff acknowledge that top brass at JP Morgan knew about his Ponzi scheme for over 10 years. Letting it go on and collecting massive fees in the process. This was part of a $2 Billion settlement JPM reached a few months back. So, is JPM terminating its own employees or is this a hit ordered by someone? 

Here are my two cents. I don’t think JPM has anything to do with this, but I do believe the people in question have found themselves on the wrong side of a trade or they have screwed someone. Big time. Perhaps an organized crime group, maybe a government. Basically, they took someone’s money (whether legitimately or not) and that someone put a hit on them. Simple as that. Just another point of reference that Wall Street is turning into a war zone. 

The lesson for Wall Street bankers is as follows. Next time you screw most of the world out of billions of dollars (mortgage backed meltdown), there might be people, organizations or governments out there crazy enough to put a hit out on you.

One thing is for sure, dead bankers don’t talk. 

jpmorgan_man on ledge

List of dead bankers

-Li Jie – 33 year old investment banker at JP Morgan jumped to his death from the roof of the bank’s headquarters in Central Hong Kong yesterday. Witnesses said the man went to the roof of the 30-storey Chater House in the heart of Hong Kong’s central business district and, despite attempts to talk him down, jumped to his death.

 
 

– On January 26, former Deutsche Bank executive Broeksmit was found dead at his South Kensington home after police responded to reports of a man found hanging at a house. According to reports, Broeksmit had “close ties to co-chief executive Anshu Jain.”

 

– Gabriel Magee, a 39-year-old senior manager at JP Morgan’s European headquarters, jumped 500ft from the top of the bank’s headquarters in central London on January 27, landing on an adjacent 9 story roof.

 

– Mike Dueker, the chief economist at Russell Investments, fell down a 50 foot embankment in what police are describing as a suicide. He was reported missing on January 29 by friends, who said he had been “having problems at work.”

 

– Richard Talley, 57, founder of American Title Services in Centennial, Colorado, was also found dead earlier this month after apparently shooting himself with a nail gun.

 

– 37-year-old JP Morgan executive director Ryan Henry Crane died last week.

 

– Tim Dickenson, a U.K.-based communications director at Swiss Re AG, also died last month, although the circumstances surrounding his death are still unknown.

 

MARKET UPDATE: 

2/20/2014 A strong rally from yesterday’s bottom with the Dow Jones appreciating +93 points (0.58%) and the Nasdaq climbing 29 points  (0.70%). 

Today is the perfect example of why we should wait for a market confirmation before committing to either going long or going short. Has anything changed since our proposed turning date of XXXX….. 

(*** Please Note: About 75% of the information contained within this section has been deliberately removed. 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). 

Hence, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action.

If No Position: XXXX

If Long: XXXX

If Short: XXXX

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

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The Bear Market Of 2014-2017 – Infographic

investwithalex inforgraphic 1

 

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The Bear Market Of 2014-2017 Infographic  Google

Is Obama Causing Ukraine’s Meltdown? Plus, Market Update

Ukraine has two things in abundance. Beautiful women and people stupid enough to believe that the EU and/or Obama will come to their rescue. 

Today President Obama warned Ukraine’s government against crossing the “Red Line” against its citizens and using force. Truly, I am in disbelief.

First, Obama administration works behind the scenes (aka covert CIA Operations or some crap like that) to instigate Ukrainian instability and uprising, then Assistant Secretary of State Victoria Nuland says “Fuck The EU” for the whole world to hear.

So, what business does the USA has interfering in Ukraine’s and Russia’s business? 

Well, it shouldn’t, but for some reason it does. It is either because the US completely lost all of it’s marbles or because Obama would like to get back at Putin. Apparently, the negative propaganda spin through western media is not doing it’s job. Whatever it is, I think Obama is about to look stupid again. Just as he ended up with Syria and Iran. 

The only way Ukraine will join the EU or the West is over Putin’s dead body. Make no mistake, he controls it and he will not let it go. No matter how many protesters they will have to kill. For Russia, losing Ukraine to EU would be equivalent to the USA losing Kentucky to Cuba.  Not happening.

I just hope that the situation resolves itself without any further bloodshed.  The next few days will be very critical.  

Obama-Red-Line

MARKET UPDATE: 

2/19/2014 – An across the board down day with the Dow Jones down -89 points (-0.55%) and the Nasdaq down -35 points (-0.82%). 

The Dow started the day by zooming up into our previously suggested upper range of 16,222 before reversing and subsequently dropping 182 points.  In the process confirming a bearish short-term trend on the hourly chart. 

Should we celebrate this precise hit as per our earlier forecast? 

Not quite yet. I tend to be a little bit more on the safe side and would like to wait for a follow through to the XXXX tomorrow or over the next few days before confirming an exact price/time hit. I did reverse my QQQ position today at $89.71, going XXXX at the same price, with a stop loss @ XXXX. Please check our updated portfolio section within member section. 

Other than that, we are right where we need to be in both price/time and in terms of portfolio allocation. Portfolio allocation suggested to all parties on 2/18/2014 is still in effect.

END OF UPDATE: —-Please Note: XXXX is available to our premium subscribers in our + Subscriber Section. It’s FREE to start. 

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Is Obama Causing Ukraine’s Meltdown? Plus, Market Update Google

The Bear Market Of 2014-2017 Is Starting. Why, How & When (Revisited)

As markets opened up on January 2nd, 2014, everyone was excited. After all, what was not to like. In 2013 alone, the Dow Jones was in the “new” bull market and according to most people, the rally would continue for the foreseeable future. And why not. After all, the economy was doing better, the unemployment rate was going down to 6.6%, corporate earnings were growing at a good clip. The stage was set for the bull market to continue or so everyone thought.

How little did they know.  What they didn’t (and still don’t) know is that the bull market topped out just two days earlier, on December 31st, 2013 at 16,588 on the DOW (Mathematical top, the actual top will come later in the year).  Ushering in the final stage of the Cyclical Bear Market that will take us into the final 2017 bottom.

How do I know?  I specialize in highly advanced mathematical timing work that can identify turning points in both price and time.  It is rarely wrong, particularly over the long-term time frames. Please get the first two chapters of my book CLICK HERE to learn more about the timing work that I do.

This report is to explore  the Why, How & When of the subject matter at hand. Particularly, why we are about to go thought a bear market leg, where we are in the long-term cyclical structure of the bear market, how long the final bear market will last, where will the market be at the end of the cycle, when it will end and what to expect thereafter. We will look at the matter from the fundamental, technical and timed value approach to investing.

The WHY?

This is probably the easiest question to answer. However, before I can do so, we must go back a few years to understand what got us into this predicament in the first place.

The tech bubble really took off in November of 1994, culminating with a spectacular blow off and a subsequent collapse in January of 2000. With the Nasdaq collapsing close to 80% and the DOW declining to the tune of 40%, the FED’s were concerned.  The country was already in the recession, facing much worse, a deflationary depression.

The FED’s opened up the flood gates by cutting interest rates into the negative category and flooding the market with cheap money.  The money flowed into two primary areas of the economy. The stock market and the housing market. Driving up the values of both in a spectacular fashion.

By 2007 we were  in a massive speculative bubble.  In the stock market, the credit markets and in the real estate market.  Not only were we in a bubble of historic proportions, but it was not fundamentally sound. Meaning, it was brought on by massive fraud happening in the real estate sector.  Here is a good chart showing overvaluation.

market to gdp

Actually, what surprised a lot of people, including myself, is how long that bubble went on. Even though traditional media would like you to believe that no one saw the bubble or the subsequent collapse coming, that is nonsense. At least a dozen people I know, saw it coming. Some did so as early as 2004-05. Maybe I am hanging out with too many bears.

The 2007-2009 collapse was unavoidable. There was too much fraud, juiced up earnings and bad credit in the system. Just like there is today. When it happened, instead of fearing a deflationary depression, the FED’s where scared shitless, fearing an outright collapse of our financial system and the subsequent “Greater Depression”. Rightfully so.

They proceeded to open the flood gates one again, drowning the market in free cash/credit, providing trillions in bailout money and backstopping the collapse. A little bit later, the FED’s introduced QE to push interest rates into the negative territory while providing “growth credit” to our nearly dead economy. The money flowed mostly to….yep, you have guessed it…….financial institutions (who initiated the collapse), hedge funds and high net worth individuals. Giving them a risk free way to speculate, well, in pretty much everything.

However, such actions do come at a cost and that is where we find ourselves today. That is what you have to understand.  The environment we find ourselves in today is not a “unique economic environment” but a continuation of the disastrous policies initiated by the FED against the US Economy since the 1990s. Well, the 1987 crash and Greenspan to be exact.

Today, the US Economy is nothing more than a  giant Ponzi scheme, shuffling money around, borrowing from Peter to pay Paul. It is identical to maxing out your credit cards, then getting more cards and maxing them out again just to pay the interest on the first batch. With one primary difference.  Thus far, the US has been saved through having a reserve currency, ability to print unlimited amounts of money and most importantly, through having the confidence of foreign investors/creditors.  When the trust goes away, and it will, there will be hell to pay.

As 2014 starts we find ourselves in the biggest credit bubble in the history of mankind. It was this credit that drove the stock market recovery from the March of 2009 bottom. It was this credit that drove the housing market recovery and the recovery in corporate earnings.  It was this credit that created an illusion of economic growth and recovery.  How much credit?  Over $3 Trillion in FED printing alone over the last few years.

Yet, if you take the credit away, the underlying economy is nothing more than a giant house of cards on a very shaky foundation.  When you take the unlimited credit away or the velocity of such credit slows down, both happening now, the whole house of cards will come down. And that is precisely where we find ourselves today.

What I want you to understand without a shadow of a doubt is  this. Today’s economic environment has very little to do with reality. Everything you see, everything that you see doing well, has been driven up by credit and speculation.  Eventually, the house of credit collapses and we find ourselves in a midst of an economic disaster. Once again. Unfortunately, just like every Ponzi scheme eventually collapses, so will this  one. There is no way to avoid this now.

The HOW?

It depends who you listen to when it comes to apocalyptic views on our Economy and our financial markets.  On one extreme, we have hyperinflationist. They believe that actions by the FED will cause a hyperinflationary environment to the likes of Zimbabwe. In their view, the dollar will collapse, the gold will surge and Americans will use barrels full of $100 bills just to buy a loafs of bread in the neighborhood supermarket.

On the other side, you have deflationists. They believe the stock market, the credit market, the real estate market, …..everything will collapse, ushering in the next “Great Depression”.  According to them it would be best to accumulate cash, canned food, guns and ammo.

Who is right? No one and everyone. Let me explain. 

The massive printing and credit we have experienced over the last couple of years has, indeed, caused massive inflation. But not where you would expect. Yes, there are certain items throughout the economy like food and basic utilities that have appreciated substantially. However, their rise is not nearly enough to account for massive credit infusion and negative interest rates. So, where did all the money go?

The inflation everyone seeks and talks about went straight into various asset classes. Yes, you have guessed it right. Stocks, real estate, junk bonds, etc… Driving most to extreme overvaluation levels. Not only in the US, but worldwide.

Some analyst would argue that today’s stock market is not overpriced based on simplistic analysis such as P/E Ratios. However, such analysis misses the elephant in the room. A large portion of today’s corporate earnings have been driven by the same credit infusion. Without said credit, the real P/E ratio would be astronomical. How high?  Based on my conservative calculations, at least 2X and as high as 5X from today’s levels. Meaning the real S&P P/E ratio is somewhere between 36 and 100. Making current stock market not only expensive, but “are you fucking kidding me” expensive.

This is precisely what happened during the 2007-09 meltdown. While the pre bust P/E stood around 20 at the 2007 top, it quickly zoomed up close to 125 as soon as corporate earnings built on credit vanished into thin air. An identical situation to today’s markets.

s&p ratio

So, how will this house of cards collapse? Will we have inflation or deflation moving forward?

I think everyone, including bulls, bears, inflationist’s and deflationists will be disappointed at the end of the day. At least based on my mathematical work.  Yes, my work shows a bear market between 2014-17, but not as extreme and not as violent as most people would anticipate. It shows a bear market most closely resembling the bear market between January 2000 and March of 2003 on the Dow Jones (not Nasdaq).

Meaning, a volatile non directional move with a general downtrend.  An extremely difficult environment for both bulls and bears to make money in. Those wishing to make money in such an environment really only have two option. Go short at the inception of the bear market move and stay short for the duration of the move. Surely, to be a unnerving experience. The other option would be to try and time the turning points while trading in and out of bull/bear legs. A skill requiring a lot of experience and know how.

Of course, there is another option that might be more suitable for those wanting to avoid the entire mess. That option is to get out now, stay in cash and pick up substantially undervalued assets at the bottom of the bear market in 2017.

The When?

NOW. Based on my mathematical timing work the bull market from March of 2009 bottom has topped out on December 31st, 2013 (Mathematical top, the actual top will come later in the year). Ushering in the last leg of the cyclical bear market leg that started in January of 2000 and taking us into the final bottom of 2017.

What kind of timing work do I use? The chart below is just one data point.

Long Term Dow Structure35

To fully understand the chart above please get and read my book Timed Value. To quickly summarize, I use 3-dimensional analysis that unifies price and time into one value in order to analyze and time the market with incredible accuracy.  For instance, the chart above show that between 1994 and 2009, a 16 year period of time, the  market exhibited only 22 points of variance. Giving us precise timing and amazing accuracy.

An analyst familiar with this type of an analysis would be able to pick out every single major turning point over the last 20 years. To the day. For example, when 2007 top was reached and confirmed an analyst working with this type of an analysis would know that the upcoming bear move would be exactly 8,137 (3-dimensional units), the angle of the move and it’s exact termination point. So, while everyone was freaking out during the collapse of 2008-09, an analyst performing this work would either be positioned to profit from the collapse or waiting on the sideline for the bottom in March of 2009.

Then, we have cycle work that I talk about in my book as well. While there are a number of important cycles operating in the stock market at any given time, the one we have to take into consideration today is the 5-year cycle. While the 5-year cycle works for both bull and bear markets, it is most easily noticed during the bull moves. For example,  1924-1929, 1932-1937, 1982-1987, 1994-2000, 2002-2007 and now 2009-2014. While these 5-year cycles are the easiest to identify, there are many more. In both bull and bear moves. Plus, such cycles are not arbitrary, meaning they do not terminate at 5 years +/- 6 months. In most cases they terminate at exactly 5 years, with very little, if any, variance.

Taking both, my mathematical and my cycle work into consideration, we can safely assume that December 31st, 2013 was indeed the top of the bull market run (Mathematical top, the actual top will come later in the year). Well, when I take a number of other things into consideration. Things that I do not discuss in this short report.

How Low Will We Go & Exactly When Will This Bear Market Start?

If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE

CONCLUSION:

In this report we have looked at fundamental, mathematical and cycle data points.  With the fundamental case being clear cut and to the point, only a few questions remained.

When will the stock market top out and begin its bear market leg?  How violent will the decline be and how long it will take?  What will the impact on the overall economy be and how low will the market go?

It is my hope that the report above helped to answer all of the questions. The bear market of 2014-2017 will not be the one for the “record books”, but it will server its purpose. Completing the cyclical bear market that started in January of 2000 while ushering in the next bull run. Unfortunately, the next bull run is likely to be based on inflationary pressure as opposed to any sort of true fundamental recovery. More on that in one of my future reports.

If you would like to get more information and more exact forecasts (to the day), please visit us at www.investwithalex.com

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The Bear Market Of 2014-2017 Is Starting. Why, How & When Google