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The Dow Is Going To 50,000. Why not 100,000?

I really hate this sort of typical Wall Street BS reporting. (read full article below). 

  • Money got nowhere else to go.
  • Money will keep chasing stocks, blow off top still ahead.
  • Put a stop loss 25% below today’s levels.

WTF? Why stop at the DOW 50,000. Let’s keep going my friend. This is absolute garbage and nonsense. Disregarding all of the fundamental, technical and timing issues associated with the statements above……… if putting a stop loss 25% below today’s levels doesn’t make this advice obsolete, I don’t know what will. The bottom line is as follows, you can listen to this garbage and lose a lot of money or you can follow our work. 

As we have maintained for so long, the bear market of 2014-2017 is about to start. When it does, we will experience a very similar environment to what we have experienced between 2000 top and 2002 bottom (on the DOW). If you would be interested in learning exactly when this bear market will start (to the day) and it’s internal composition, please Click Here.  

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The Dow Is Going To 50,000.  Why not 100,000? Google

z23

Breakout Writes: The case for Dow 50,000(Watch Video) 

Today marks the official end of the first quarter of 2014 and most traders are happen to see it end. The S&P500 (^GSPC) managed to grind out gains but it took nerves of steel to effectively trade the gyrations. That’s one reason professional trader Tres Knippa takes the emotion out of it by staying long and rolling up his stop-losses.

It’s less that Knippa is “bullish” in the traditional sense of expecting improving fundamentals. He simply thinks the bubble is still in inflation mode.

“Money’s got no where else to go. A lot of people keeping talking about overvaluation. ‘The market has come too far too fast. I’ve missed the opportunity.’ I actually don’t think you’ve missed the opportunity.”

Knippa thinks we’re in the seventh inning of a bubble but maintains that’s where the most explosive moves are often made. The so-called “blow-off top” formation is the frenzied buying before the bottom falls out from long market runs. The most famous end of a bubble of the last generation was the 30% gain in the Nasdaq (^IXIC) from February 1st to the all-time high on March 10th 2000.

Whatever you think of the valuations and today they are nothing compared to what was going on during the waning weeks of the dot.com top formation.

Obviously it’s dangerous for investors to be caught long during an investment implosion but Knippa is unabashed about the upside potential. “I don’t think we’re ridiculously overvalued but I think we’re gonna become ridiculously overvalued. I think equities could double or even triple from here.”

His strategy for participating in the upside without getting completely wiped out is to stay long individual stocks and put in stop-loss orders 25% below his positions. The key is rolling those stops higher as the momentum continues.

For long-term investors Knippa’s strategy is absurd on the surface. The implications of what would be left in the wake of a bubble of that magnitude would be horrific. It’s hard to objectively hope such a scenario unfolds but Knippa is clearly devoted to the market he has, not the one he wants.

Knippa thinks stocks are going much, much higher. It’s an openly extreme call but long time traders know better than to question what’s possible.

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SAC Capital Doubles It’s Zynga Stake….Time To Buy?

SAC Capital (Point 72 Asset Management) doubled their stake in Zynga (ZNGA)  to 5% over the last few months. With Zynga selling at 70% off of its value from just two years ago….is it time for us to load up as well? 

Probably NOT. 

Listen, I would be the first one to tell you that I am not smart enough to figure out Zynga’s business model. Not in terms of their revenue generating capability, but in terms of creating “popular games”. This is more or less similar to a movie business model where the hits can be anticipated, but not fully predicted. 

While the stock has been trending higher over the last few months, it did leave a large gap at around $3.50 that it must close before any meaningful gains can take place. Further, with our mathematical and timing works showing a bear market between 2014-2017, there will be very little chance for this highly speculative stock to move higher. As such, I would definitely stay away from Zynga until and unless it breaks out above $6.  

zynga-investwithalex

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SAC Capital Doubles It’s Zynga Stake….Time To Buy?   Google

Bloomberg Writes: Troubled SAC Capital Doubles Its Stake in Troubled Zynga

Maybe it’s investment as performance art? Hedge fund titan Steven Cohen, head of insider trading hotbed SAC Capital, has increased his stake in troubled game makerZynga (ZNGA) to more than 5 percent, according to a company filing, more than double the 2.2 percent he held at the end of 2013.

Zynga makes FarmVille, Words With Friends, Draw Something, and other social games. The company has had a rough time since going public at the end of 2011, including multiple rounds of layoffs, ill-considered acquisitions, and a soured relationship with Facebook (FB). Hedge funds own almost 58 percent of Zynga shares, according to Bloomberg data, up from 27 percent one year ago.

While Cohen is famous for buying and selling stocks rapidly, SAC Capital does have some large and seemingly miscellaneous holdings, including 8.8 percent ofClearwater Paper (CLW), 4.87 percent of Trulia (TRLA), and 4.71 percent of Crocs(CROX).

At $4.49, shares of Zynga have lost 69.7 percent since their high on March 2, 2012. This year the shares have gained 16.8 percent, owing largely to a $527 millionpurchase of mobile game developer NaturalMotion in January, which the company announced alongside a new round of layoffs. More analysts rate Zynga a sell than a buy, according to Bloomberg data.

Cohen’s hedge fund asked a federal judge on Thursday to approve its $1.8 billion insider trading settlement with the government, saying it was “deeply remorseful”for a sustained pattern of illegal activity by its employees. Six former employees have pleaded guilty to insider trading; two more, Michael Steinberg and Mathew Martoma, were found guilty at trial in recent months. As part of its deal with the government, SAC has agreed to stop managing outside investors’ money.

SAC, which is changing its name to Point72 Asset Management, will continue as a “family office” managing Cohen’s personal fortune. Cohen is worth $8.7 billion, and has amassed one of the world’s better collections of contemporary art, including a dead shark in a tank of formaldehyde, a human head sculpted out ofthe artist’s own frozen blood, and some paintings. Valued at $173 million, the Zynga stake is not much more than the $155 million Cohen paid one year ago for Le Rêve, a 1932 oil painting by Pablo Picasso.

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How The Stock Market Is Rigged

60 Minutes did a very good story on high frequency trading and how it rips most investors off. While we have talked about this issue a number of times on this blog, this report does a much better job. Further, while I don’t believe the notion that the entire stock market is gamed, the transactional side of it is most certainly rigged.  It is time our government does something useful for a change and ban this practice. 

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How The Stock Market Is Rigged Google

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Even Goldman Sachs Thinks Markets Are Ignoring Risks

Even Goldman Sachs’s President Gary Cohn believes that, for the most part, markets are ignoring geopolitical and overvaluation concerns. A situation where most investors are essentially forced to be in the stock market due to zero interest rate environment elsewhere. While true, this does not mean such an environment cannot be readjusted, leading to a substantial market decline in the very near future. Based on our mathematical and timing work, we are very close to such a point, as the bear market of 2014-2017 is about to begin. 

goldman-sachs-investwithalex

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Even Goldman Sachs Thinks Markets Are Ignoring Risks Google

Bloomberg Writes: Goldman Sachs President Says Markets ‘Ignoring’ Risks

Goldman Sachs Group Inc. President Gary Cohn said prices in global markets don’t reflect the risks from geopolitical conflicts such as Russia’s annexation of Crimea.

“For the last six to 12 months, markets for some reason have been ignoring a lot of the geopolitical risk,” Cohn, 53, said in an interview with Canadian television network CBC. “Russia, Crimea, Ukraine: this is not the first or newest geopolitical risk we’ve had in the last year or so.”

Cohn cited tensions between China and Japan as well as continuing violence in the Middle Eastas risks that haven’t halted a climb in global equities over the last 12 months. Investors with a lot of cash have felt pressure to deploy it, preventing a sustained downturn in prices, he said.

“Anytime we get any sell-off in the market, there’s new investors coming into the market, so we haven’t seen that repricing,” Cohn said. Investors are saying, “I’ve got to put cash to work, and maybe these situations are going to be with us for a long time, and I can’t sit on cash at the bank earning no return forever,” he said.

Still, Cohn said the U.S. stock market seems fairly valued, given low interest rates and bond yields that will probably climb. The Standard & Poor’s 500 Index has risen 18 percent in the last 12 months.

“In a lot of respects, owning equities in the world today seems like the least risky opportunity for cash out there,” Cohn said. “Each of the alternatives has its own negative potential consequences to it, and then you evaluate all the alternatives in relationship to each other, and then you end up in a scenario where I think equities provide the most upside versus the downside.”

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Weekly Market Update, Analysis & Forecast

Daily Chart March 28, 2014 investwithalex

Weekly Update & Summary: March 28th, 2014

This was a rough week for the market. Particularly, for the Nasdaq and iShare NASDAQ Biotechnology Index (IBB). While the Nasdaq lost 121 points (-2.83%), the IBB declined 16.6 points or (-6.76%). The Dow fared much better by squeezing out a tiny gain of 20 points (0.12%). Structurally, the market did very well this week by closing most of the gaps. Keep in mind, the Dow left a large gap behind at around 16,050. I believe the market will go back to close that gap when the bear market initiates.

FUNDAMENTAL & MARKET ANALYSIS:   

Why Interest Rates Will Remain Low

According to David Kotok, co-founder, chairman and chief investment officer of Cumberland Advisors,  ”long-term rates are likely to stay near current levels for quite a while”.

I tend to agree, but I will go even further. Not only will interest rates stay low, but I would expect the 10-Year Note to retrace back to at least 2% over the next 2-3 years.Why? 

Again, the forecast above is based on our incredibly accurate mathematical and timing work. This work predicts a severe bear market in US equities between 2014-2017 and a subsequent deep recession. As it is now, inflation is nonexistent as we continue to deal with debt liquidating deflationary forces.

When the bear market hits (we are almost there), the FED will have no choice but to abandon their “tightening” plan. Instead, a year from now they will be flooding the market with further liquidity/stimulus to try and avoid any further collapse. As you can understand, in such a interest rate environment, short-term rates will remain at zero while long-term tail of the yield curve will flatten once again. 

Is Gold About To Surge?

There is very little love for the yellow stuff at the moment. Since topping out less than two weeks ago, gold is down 6%. Today,many people and money managers are falling all over each other, suggesting that the gold has topped out and the time to short is NOW. Not so fast. Not according to our mathematical and timing work.

Here is what most people miss. Most people anticipate strong economy, tightening, stronger dollar and somewhat higher interest rates going forward. That is not what our mathematical and timing work shows. Not at all. Quite the opposite.  Our work shows that a severe bear market of 2014-2017 is about to start, ushering in a deep recession where the FED will be forced to flood the market with liquidity once again. Not tighten by any measure. In such an environment (liquidity pump while equity markets decline) gold tends to perform very well. 

That is on top of a favorable technical setup. While I wouldn’t buy just yet, Gold should be on your BUY watch list.

What Does The Yield Curve Yield?

The opposite of what most other market participants believe. Most market participants anticipate the FED to tighten, as they have indicated, indicating economic growth and higher interest rates. In such a scenario you should see spreads widening. Instead, we are beginning to see a trend reversal and yield curve compression since the start of this year. 

Does the bond market see something that most other market participants do not? 

yield curve investwithalex

I believe so. In fact, we anticipate the yield curve to flatten further over the next 24 months and possibly invert as the bear market of 2014-2017 enters the picture. As we have indicated on this blog so many times before the bear market will usher in a severe recession, forcing the FED to flood the market with further liquidity. In such an environment, we would anticipate the long end of the curve to head lower. Much lower. 

MACROECONOMIC ANALYSIS: 

Ukraine continues to  be the most important issue. In fact, things might escalate significantly over the next 10 days.  

As I published on my blog, I am getting an unconfirmed report from a Russian military acquaintance that Russia will go into East Ukraine late next week. This is further confirmed by my analysis of Russian media and physical Russian troop buildup along Ukraine’s border. In addition, this is further confirmed by Pentagon’s warning and direct warning against such action by President Obama. I will have much more on this on Monday as I need to verify this information from another source (I am trying to track someone down). Thursday, April 4th was mentioned as the date. 

If true, anticipate the stock market to crater next week. This action will provoke a completely different ball game in the international community. One thing is for sure, this will be an interesting week to watch.   

TECHNICAL ANALYSIS: 

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: While the short-term trend remains bullish, it might be misleading as per our timing analysis discussion below.  

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

MATHEMATICAL & TIMING ANALYSIS:  

(*** 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).  

Based on our mathematical and timing work the next turning point is located at

Date: XXXX 
Price: XXXX

XXXX

Point being, 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.

Stock

Entry Point ($)

Action To Take

XXXX

88

XXXX

XXXX

1160-1180

XXXX

XXXX

515

XXXX

XXXX

74

XXXX

XXXX

21

XXXX

XXXX

420

XXXX

XXXX

35

XXXX

XXXX

65

XXXX

XXXX

120

XXXX

XXXX

100

XXXX

XXXX

112

XXXX

Otherwise, I suggest the following positioning over the next few days/weeks to minimize 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. Only one scenario remains on the table. I have also described the point force we are looking at and exactly what you should do in each case. With increased volatility, multiple interference patterns and an incredibly important long-term turning point 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. 

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Weekly Market Update, Analysis & Forecast  Google

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Stock Market Update, March 28th, 2014. InvestWithAlex.com

Daily Chart March 28, 2014 investwithalex

Another volatile day with the Dow Jones appreciating 59 points (0.36%) and the Nasdaq up 4.5 points (0.11%).

The stock market continues to behave just as our mathematical and timing work indicates (exact forecast is available in our subscriber section). Most markets opened up with a gap and rallied early on. Only to sell off and close the gap before reversing higher. I continue to believe that we will see higher prices and a short term bounce over the next few days. As shown yesterday, the Nasdaq continues to be oversold and due for a bounce. Thus far it has been successful in building a short-term base from which it might rally over the next few days. 

Yet, any upside here will be short lived. Our mathematical work continues to show that the bear market of 2014-2017 will start in the not too distant future. If you would like to learn exactly when the bear market will start (to the day) and it’s internal composition, please Click Here.  

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Stock Market Update, March 28th, 2014. InvestWithAlex.com  Google

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What Does The Yield Curve Yield?

The opposite of what most other market participants believe. Most market participants anticipate the FED to tighten, as they have indicated, indicating economic growth and higher interest rates. In such a scenario you should see spreads widening. Instead, we are beginning to see a trend reversal and yield curve compression since the start of this year. 

Does the bond market see something that most other market participants do not? 

I believe so. In fact, we anticipate the yield curve to flatten further over the next 24 months and possibly invert as the bear market of 2014-2017 enters the picture. As we have indicated on this blog so many times before the bear market will usher in a severe recession, forcing the FED to flood the market with further liquidity. In such an environment, we would anticipate the long end of the curve to head lower. Much lower. 

If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please Click Here.  

yield curve investwithalex

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What Does The Yield Curve Yield?  Google

 

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Did Washington Warmongers Almost Start Another War In Syria

another war in syria

This is a long complicated story with more plot twists than your typical James Bond movie. This is rather simple. Here is my quick analysis. Washington asked Turkey (it’s NATO ally) to start a military conflict with Syria in order to counterbalance Putin/Russia and to display America’s military might. Unfortunately, direct negotiation plans for a staged attack on Turkey by Syria got leaked, leading to a subsequent ban of YouTube and Twitter in Turkey. This is not going to end well. 

Click Here To See, Read and Decide For Yourself. 

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Did Washington Warmongers Almost Start Another War In Syria  Google

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Private Debt Crisis. Roadmap To Next Economic Collapse?

We all know that over the last few two decades the FED indirectly forced both the US Government and American citizens to blow a giant debt bubble. How big? $36 Trillion. Give or take a few Trillion. Can’t relate?  That is about $110,000 in debt for every American citizen. That includes. 

 As of March 2014, American consumers owe $11.52 trillion in debt, an increase of 1.6% from last year. The average household owes $7,115 on their credit cards and the average indebted household owes $15,252. Americans owe $8.05 trillion in mortgages (the average mortgage debt being $152,209) and $1.08 trillion in student loan debt. When combined with corporate debts the U.S. collectively owes about $28 trillion in private debt. Plus, $7.6 Trillion of national debt. For A Grand Total: $36.6 Trillion. 

According to Richard Vague of Governor’s Woods Foundation, every crisis of our lifetime has been caused by a rapid increase of our private debt. I agree. Most booms are followed by speculative credit bubbles and subsequent collapses. Yet, most people today don’t even have the slightest comprehension of that. The debt levels above are not only burdensome, they cannot be possibly repaid.

The only way to get rid of such debts is either through a default, inflation and/or a war. Since the US Government is in the drivers seat when it comes to our monetary policy, I will let you decide which option they will chose.

private debt investwithalex

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Private Debt Crisis. Roadmap To Next Economic Collapse? Google

The Daily Ticker Writes:We’re in a private debt crisis that could lead to the next economic collapse: Richard Vague

As of March 2014, American consumers owe $11.52 trillion in debt, an increase of 1.6% from last year. The average household owes $7,115 on their credit cards and the average indebted household owes $15,252. Americans owe $8.05 trillion in mortgages (the average mortgage debt being $152,209) and $1.08 trillion in student loan debt. When combined with corporate debts the U.S. collectively owes about $28 trillion in private debt.

“Every major crisis of our lifetime has been caused by a rapid increase of our private debt,” says Richard Vague, chair of the Governor’s Woods Foundation. “They all were a function of runaway private lending.”

People focus too much on government debt, argues Vague, when they should be attempting to quell private debt. 

“There’s reputed to be 10 million mortgages that are still underwater,” he says. “There’s perhaps a half or ¾ of a trillion in second-lean loans that are still a problem and haven’t been dealt with. Those to us are logical candidates for restructuring programs.”

Restructuring loans is a controversial issue and there’s little incentive for banks to do so. Vague suggests allowing banks to spread the losses over a very extended period of time with a one-time dispensation that says “you can spread your losses over 30 years if today you go to the borrower and restructure with them’ they would get rid a problem and get to clean things up.”