Weekly Update & Summary: July 5th, 2014

A strong up week with the Dow Jones up 255 points (+1.51%) and the Nasdaq up 87 points (+1.97%). The Dow left behind two large down gaps. One on Tuesday, July 1st at 16,825 and one on Thursday, July 3rd at 16,970. Suggesting that the market will go down over the next few days/week in order to close these gaps.

At the same time, we continue to have a number of other large down gaps, the one on May 27th, two large gaps on May 21st/23rd and two large gaps on April 14th/16th. Indicating an eventual correction. Further, there are a number of smaller gaps left behind, leading all the way down to February 5th low.  We continue to believe that the Dow will close such gaps when the next bear leg develops at below mentioned time frames (please see mathematical analysis & timing section below).

WEEKLY REVIEW:

Would You Like A Million With That Coffee? (10 Bagger Book. Part 4)

Continuation of Part 3(below)…...What no one at the time realized is that they were sitting on top of a goldmine that would transform their business.  Through the combination of Keurig’s Premium Coffee System and Green Mountain’s coffee and K-Cups (single cup) technology, the company was about to create something of a “printer & ink” combination in the hot beverage/coffee industry.

So much so that the company went from deriving 95% of their revenue from their low margin wholesale coffee business in 1999 ($65 Million), to deriving 95% of their current revenue base from their high margin sales of Keurig Coffee Systems and K-Cups ($4.3 Billion). In summary, staring in 1998-1999 Green Mountain Started its transformation from a sleepy coffee distributor/roaster into a high-technology coffee company. Hence the growth and the 49,616% return on investment since 1999.

For our purposes,  we must ascertain if it would have been possible to predict this meteoric rise and take position in the second half of 1999 from the fundamental perspective alone.

The short answer is NO.

There were very few clues that would allow us to take a position at the time. First, there was nothing special about the company. It was just another regional coffee distributor/roaster. Second, the company was stuck in a tight trading range for over five years. Further, the company’s valuation at the time (with the P/E of 20) would not warrant a value oriented investment. Finally, there was nothing to suggest that the company was about to stage a massive revenue growth spurt.

Even Green Mountain’s own management didn’t not anticipate that their Keurig line would take off as much as it did. The best any fundamental analyst could have done at that stage is thrown this company into a “Big Potential” bin. That is after analyzing Keurig & K-Cups in great detail and realizing that the company MIGHT have a great product line on their hands.  Yet, no one at the time could have predicted that Keurig and Green Mountain would be able to achieve the growth that they have had. This brings us to the technical side of the equation.

TECHNICAL ANALYSIS:

Since the fundamental analysis has failed to give us the ability to take a long position in Green Mountain’s stock in the second half of 1999, we must now concentrate on the technical side of the equation to see if would have had better luck there.

As you can see from the 1994-2000 GMCR chart above, after going public the company’s stock immediately declined over 50%. Thereafter, the stock price remained in a tight trading range of $0.14-0.40 (split adjusted) between  1994 and the second half of 1999. Bottoming at $0.14 in October of 1998.

With the stock price trending higher in 1999 and 2000 we would had two opportunities to take a long position in GMCR at the time. One in September of 1999 at $0.31 and one in January of 2000 at $0.35. With the $0.35 entry point in January of 2000 being technically more sound.

To Be Continued Tomorrow…….

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Stock Market Update

While the market continues to put most traders/investors into a deep state of trance, the chart above should give them a swift kick in the ass. At least in theory.  Among other things, it clearly shows that forward P/E for the S&P is now officially higher than it was back in 2007. And while some will stop there, I will not.

You see, the E in P/E has been massively diluted over the last 5 years by the FED, massive capital infusion, QE, etc….Creating “fake or pay it forward” earnings for all of the corporate America.  So much so that if we make make certain adjustments and take that monstrous/artificial liquidity out, the real P/E is likely to be above 40. Making today’s market incredibly overpriced. This is exactly what happened in 2008 when corporate earnings collapsed and the S&P P/E ratio briefly jumped over 100.

So, – 49%, -57% and -??% to complete our 2000-2017 secular bear market.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  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

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The Shocking Truth Behind Predicting Nuclear World War 3 (Book, Intro, Part 4)

Continuation of Part 3…..After a decade long research into the subject matter, let me firmly state that everything that was said in the article above is 100% true. Once the stock market structure is understood in its entirety,  the market or individual stocks can be timed with great precision. Not by some arbitrary technique that cannot be replicated, but through the use of modern science and mathematics. Math doesn’t lie and when the market turns/reverses at exact mathematical points of force,  only one explanation remains. The market is not a randomly volatile instrument, but a mathematically precise tool that baffles the mind.

What does that have to do with predicting the future?……. Everything.

Again, if one can predict the future movements of stocks, one should also able to use the same mathematical knowledge to predict the future of our everyday lives. As above, so is below. In other words, the same TIME cycles that apply to the stock market can be applied towards predicting everything else. Everything from major disasters to major events in our own lives, from major political changes to wars.  Once you understand that, predicting the future becomes a whole lot easier.

Now, I know what you are thinking.  The future is impossible to predict, we do not live in a “predetermined” world and the very notion of living in such a “pre-programmed” world is ludicrous…..everyone know that.  Well, do they? Do I really have to remind you that just 500 years ago 99.9% of the Earth’s population believed that  A. The Earth was flat and B. The Earth was the center of the Universe. And if you were to suggest otherwise you would be called a heretic and grilled at the stake.

Point being, when it comes to understanding the world we live and/or the multi-dimensional architecture behind our 3-Dimensional reality, the human race has not even started its ascend. We act as children in a pitch black room, groping everything and understanding nothing. And instead of arguing this point further I will leave you with a quote from someone who has a little bit more credibility and a lot more intelligence. Someone who is basically telling you the same thing.

God Does Not Play Dice
-Albert Einstein

When it comes to predicting Nuclear World War 3 the book will look at the subject matter in the following order.

1. The Study Of Time Cycles & Predicting The Future:  We will look at a number of real life examples and I will prove to you, without a shadow of a doubt, that the TIME cycles I talk about are real. We will also take a look at how they work and what the future holds.
2. When Will The War Start: We will study the WAR TIME CYCLE in great detail. We will also look at the exact time window associated with the start of the WW-3 and the meaning behind it.
3. Why Will The War Start & Why Will It Be A Nuclear War:  We will look at the number of today’s geopolitical issues in order to determine who will fight the war, why it is unavoidable and why it will be a Nuclear war.
4. How Will The War Start:  We will look at a number of possible scenarios.
5. What You Can Do Now To Protect/Save Your Family & Yourself:  As a bonus section we will look at what you can do over the next decade to protect/save your family and yourself.

Buckle up, it’s going to be a fascinating journey.

GEOPOLITICAL & MACROECONOMIC ANALYSIS:  

With the week ending where it began, most of the issues discussed in last week’s update remain intact. Below is a re-print of last week’s update.

This week has not been a good week from a geopolitical sense. With so many conflicts happening simultaneously it certainly feels as if the world is going to hell in a hand basket.   Let’s take a quick look at the three  of the most important ones and see if they can impact our financial markets

• Ukraine/Russia/NATO/USA/EU: As I have mentioned in last week’s update this situation continues to die off. While there is cease fire and with Putin suggesting that he will not invade, this issue might be on  a verge of completion. With that said and as with any conflict, a quick re-escalation is always a possibility. Unfortunately, the US relationship with Russia will continue to deteriorate for as long as this administration remains in place. If the conflict dies off, there shouldn’t be any impact on our financial markets.
• China/USA/NATO/Philippines/Vietnam/Taiwan/Japan:  China has already said, in no uncertain terms and a number of times, that it wants the US military presence out of Asia.  China will continue to flex its military muscles to try and control the entire region.  While there have been a number of incidents, thus far they have not caused any major problems. Yet, make no mistake, the pressure is building and this powder keg will explode. Sooner or later. No impact on our financial markets as of today.
• Iraq/Syria/USA: In a stunning turn of events, various factions of Islamic militants, crazies, al-queda, etc….. have nearly completed their takeover of Iraq in a matter of day.   Given the circumstances and reports coming out of the Iraq, it is probable that Baghdad might fall to such militant groups within a matter of weeks. Giving them control of the entire country. No amount of “strategic bombing” by the US will prevent that from happening. Only an invasion can and no one is willing to do that.

This is the most important issue now….. on two fronts. First, if successful, these Islamic militants will be able to use Iraq and parts of Syria as lawless land where anything and everything goes. Further destabilizing the region and having the ability to train as many terrorists as their little hearts desires. This will come back to haunt us. Second, OIL & OIL money.  They might end up as the wealthiest terrorist organization ever created, destabilizing the oil markets in the process.  We must watch this situation very carefully and anticipate that it MIGHT have an adverse impact on our financial markets.

TECHNICAL ANALYSIS FOR THE 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 few months. 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 trend remains positive for the time being. The Dow would have to break below 16,800 for the short-term trend to shift from positive to negative.

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:  

It’s going to be a long one.

First, a re-cap. Particularly for our new subscribers. Over the last few months we have maintained that the DOW will…..

(*** 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).

In conclusion, xxxx

Longer-Term Overview:

The next turning point is located at……

Date: XXXX 
Price: XXXX

TRADING: 

I am now fully committed to the XXXX side of the market with 11 individual positions taken at the prices outlined below. A lot of them have done incredibly well thus far and I hope you were able to benefit as well. I will be updating you of any changes or anticipated changes before they take place.

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	xxxx	91
xxxx	xxxx	xxxx	1250
xxxx	110	xxxx	121-123
xxxx	74	xxxx	80
xxxx	xxxx	xxxx	260
xxxx	xxxx	xxxx	460
xxxx	35	xxxx	39
xxxx	65	xxxx	70
xxxx	120	xxxx	120-130
xxxx	100	xxxx	108-112
xxxx	112	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 important 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 Section. It’s FREE to start. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Weekly Stock Market Update & Forecast. July 5th, 2014. InvestWithAlex.com Google