InvestWithAlex.com 

Stock Market Update. InvestWithAlex.com February 7th, 2014

Daily Chart February 7, 2014

Continue to maintain a LONG/HOLD position if invested -OR- be in CASH if not. 

2/7/2014 – Another large rally in the market with the Dow up 165 points (+1.60%) and the Nasdaq up 69 points (+1.69%). 

Many market participants are calling for the end of the correction and continuation of the bull market. I believe they might be premature and the overall notion is beside the point. 

As I have stated so many times before, the Dow Jones topped out on December 31st, 2013, ushering in the next leg of the cyclical bear market scheduled to bottom in 2017. While the long-term technical trend remains up and this could be viewed as a correction, my mathematical work is rarely off. First, it is yet to be seen if the rally over the last couple of days has any legs or if this is a simple bounce. Based on my calculation it is possible that Monday was the bottom, but the point of force was not strong enough to confirm an intermediary bottom. 

Is it possible that the point of force discussed below is the top and not the bottom? Yes, that is a possibility. However, before I change my position to such an outcome, we must first have a strong follow through early next week. If we do not and if the market proceeds to roll over and go lower, the points of force below once again become our primary targets and turning points. 

Either way you twist this, the situation above does not impact our overall trading portfolio. We continue to stay in CASH or LONG/HOLD while waiting for a confirmation that the bear market is indeed here. Please see tomorrows weekly update for a more detailed analysis. 

Short-Term Projections:

As of today, I am not adjusting the points of force below. My mathematical work shows two points of force coming in February. Typically we should anticipate a turning point on such dates. (Would you like to see the exact points of force in both price and time? Please +Subscribe to our premium service above). 

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

Book Formlead Big

Stock Market Update. InvestWithAlex.com February 7th, 2014 Google

LinkedIn (LNKD) Generational Buying Opportunity?

Let’s make this very simple. Great quarter for LinkedIn. Pretty much as good as it gets. They lowered their forward guidance, hence the stock sell off. Should you buy?

Not if you like your money. No doubt, LinkedIn is a very well run company. Yet, it is way too expensive for my taste. With about $25 Billion market cap, forward revenue of about $2 Billion and slowing growth, LinkedIn is too richly priced. Certainty, the company will continue to grow at a fast clip, but even a stampede of unemployed workers coming to LinkedIn’s platform (due to upcoming recession) in order to spam each other about job opportunities won’t justify the valuation.

Now, valuation metrics aside, stocks tend to deviate (sometimes significantly) over a short period of time. Is it possible for LinkedIn to surge higher? Sure, but even technical picture is somewhat deteriorating. Today’s down gap is likely to be closed over the next few days. Yet, will LinkedIn and its expensive stock price be able to avoid the pull of the upcoming bear market? Given its rich valuation and slowing growth trajectory, I don’t believe so. If anything, I wouldn’t be surprised to see Linkedin stock price to be cut in half over the next 3 years.

linkedin chart

——————————————————————————————–
Here is a good analysis

LinkedIn’s (LNKD) Q4 and FYR lived up to expectations, but guidance was not what the market had hoped for. So once again the usual pounding happened in after hours trading, but to my surprise, not enough if you ask me.

Actually, the company’s results were great and I don’t think investors could have asked much more from the company. Anything more would have been unrealistic. But once again, the problem is not the results or even the guidance, it’s what you pay for it. And in LinkedIn’s case, investors are paying way too much.

I am not going to bother running down the numbers. The company’s results are here and the presentation is here. If you have not read them yet, go ahead and do so …

Let me tell you what shocked me from yesterday’s report. Earnings aside and taking only revenue into account, the chart below shows the quarterly revenue of LinkedIn over the past several years.

(click to enlarge)

The blue line is the quarterly revenue of the company up until its recent report. The extension to that, beyond Q4 of 2013 (the green line), are numbers filled in by me based on guidance. In other words, irrespective of the actual results, I started with Q1 of 2014 by plucking in $460 in revenue — which is management’s upper limit guidance — and from there I simply increase randomly revenue every quarter thereafter, so as to come within guidance of $2 billion in revenue for all of 2014 (the green line).

The red line calculates year-over-year quarterly revenue growth. Now up to the most recent quarter, quarterly growth on a year-over-year basis has been coming down since about Q3 of 2011. With the most recent results, it is now down to about 40%. But based on management’s guidance, that will come down to about 20% by the end of 2014.

My question is, is LinkedIn worth $26 billion? Is any company with $2 billion in revenue and with forward guidance of 20% revenue growth worth that much? In my book, LinkedIn is not worth $26 billion even with 50% year-over-year quarterly revenue growth, let alone 20%.

But let me ask investors another question. What will happen if the growth trajectory of the company continues to disappoint further in 2015 and 2016? How much of a multiple will the market put on LinkedIn then, if for example management’s guidance calls for 30% revenue growth in 2015 instead of the almost 50% that the market is expecting? Will the market still pay $26 billion for the company’s stock? My answer is no.

And if you want my opinion, if management disappoints again and the market realizes that the super high growth days are over, then it will mark the stock down beyond what anyone imagines. By how much we will have to wait and see, but even $100 a share is pretty farfetched for LinkedIn’s stock if you ask me.

The market was modeling $2.16 in revenue for 2014 and management gave the market around $2 billion. The market is modeling around $2.9 billion in revenue for 2015 and my guess is that analysts will be bringing that figure down. By how much makes no difference, because even with $3 billion in revenue, there is no reason for LinkedIn’s market cap to be around $26 billion anyway.

LinkedIn (LNKD) Generational Buying Opportunity?  Google

US To European Union, “Straight Up F$%# You”

I am scratching my head here. Yes, yes… everyone knows that the US has the biggest cock on the block, but what the hell is the US doing meddling in Russia’s and EU business is beyond me. What was long speculated upon by Russia and Ukraine was finally revealed to be true. The US is sticking its big nose into Ukraine’s “you know what”, trying to smell what Russia is cooking. 

Yet, the US wasn’t done. One thing we have in excess in the “Land of the Free” is arrogance.  Taking this unlimited natural resource in mind, the US Officials proceeded to accuse Russia of spying on their secret communications.

WTF???  What planet do these people live on. First, NSA spies on every monkey with a cell phone on the face of this earth. Then the US Government tries to engineer or assist in a political coup in Ukraine (territory that Russia firmly controls) and they get “angry” because Russia intercepted their communication. I give up. The Dow is going to 25,000 by March….I better go buy some stocks now.  

12

__________________________________________________________________
Bloomberg: Intercepted F-Bomb Phone Call Shows U.S. Role in Ukraine

Some undiplomatic language by the top U.S. diplomat for Europe has rattled relations with the European Union and added more tension to the East-West strains over Ukraine’s political crisis.

“F–k the EU,” Assistant Secretary of State Victoria Nuland said in a private phone call, expressing frustration with European Union efforts to resolve Ukraine’s political turmoil.

On the eve of Russia’s showcase Olympics in Sochi, the U.S. suggested yesterday that Moscow’s intelligence apparatus was involved in some way with the leaked recording of the intercepted phone call between Nuland and U.S. ambassador to Ukraine Geoffrey Pyatt. The call was made last month, based on references in the discussion.

State Department spokeswoman Jen Psaki blamed Russian “tradecraft” — a word used to describe espionage activity — after an unknown individual posted the audio recording on Google Inc.’s (GOOG) YouTube. The clip, which was subtitled in Russian rather than Ukrainian and accompanied by photographs and images of people mentioned in the call, was reported by the Kyiv Post earlier yesterday as Nuland arrived for talks in the Ukrainian capital.

US To European Union, “Straight Up F$%# You” Google

The Russian Machines Are Coming. Save Yourself

Great analysis of how Skynet will take over the world and nuke mankind back to the stone age. In all seriousness, a great read if you believe robotics will have a significant impact on our economy and our labor force over the next few decades. While I believe the author comes to a “pie in the sky” conclusion, the reality is brutal. 

Today’s robots can already replace some of the blue color/white color workers at the cost of $3.40/hour. With technology improvements the cost of robotics is expected to plummet over the next decade. Will anyone be able to compete against $1.10/hour robots who don’t whine, form unions or take pissing breaks? Let me think about that for a second.

terminator-investwithalex

—————————————————————————————————————————————
The Bear’s Lair: What happens when the robots take over?

February 3, 2014 posted by Martin Hutchinson

The economic disruption will be considerable, but robots will likely be a boon to the economy by pushing technological frontiers and facilitating entrepreneurship.


MIT professors Erik Brynjolfsson and Andrew McAfee in their new book, “The Second Machine Age” (Norton, 2014), look at recent advances in machine capability and suggest that we are going through a second Industrial Revolution, with robots soon capable of taking over massive new areas of human activity. Their picture of a world with ubiquitous robots is interesting but lacks definition; there is rather too much popular, but fallacious, economics and not enough futuristic robot wisdom. I thought therefore that I would fill the gap, using their admirable analysis of what robots might be able to do and consider, using better economics albeit infinitely less understanding of robots, what kind of a world this would produce. 

The move to a world of robots has been slower than the 1950s expected. On the one hand, Moore’s Law, formulated by Intel founder Gordon Moore in 1965 and which says that the capacity and speed of computers doubles every two years, has been fully in operation since that time. On the other hand, many quite simple operations are in fact very difficult indeed for robots to carry out. For example, according to “The Second Machine Age,” it currently takes a robot fully 24 minutes to fold a towel.

This makes robots a lot less useful than they might be. The Jetsons world of a universal robot housemaid is still decades away. If it takes a robot 24 minutes to fold a towel, it presumably takes it several hours to make a bed properly and days-upon-days to clear up the living room after the kids have been through. We therefore are reduced for the foreseeable future to the simple iRobot Roomba, an admirable machine that is nevertheless modestly capable only of vacuuming the apartments of compulsive neat-freaks who don’t scatter junk about.

The most exciting part of the book is its description of the ways in which the power of computers is beginning to make things possible that were previously regarded as beyond the machines’ capability. While the doubling period has slowed somewhat, from little over a year to about two years, sophisticated advances in design have enabled engineers to overcome physical barriers that had been thought impenetrable. 

That means that problems that appear impossible may be relatively straightforward only a decade later when computers are some 32 times more powerful and faster. In 2004, a DARPA race for self-driving cars was a fiasco; ten years later Google self-driving cars are buzzing all around the streets of Mountain View (although there still may be difficulties in extreme driving situations). Beating Grandmasters at chess was the great achievement of IBM’s Watson in the late 1990s; 15 years later Watson can even match wits with the far greater intellects of “Jeopardy” champions (though switch to “Wheel of Fortune” without reprogramming and Watson is toast).

There is thus good news for harried homeowners: the move to a “Jetsons” robot housemaid is only a matter of time. For example the robot which takes 24 minutes to fold a towel simply needs a few more iterations of Moore’s Law. After 10 more iterations, in 2034, the robot will be able to fold a towel in 1/1,024 of its present time, or 1.4 seconds. Problem solved: the towel closet will no longer be a baffling intellectual Matterhorn for the robotic household help. 

Before rejoicing at the future capabilities available to us, we should however remember the Great Moore’s Law Compensator, propounded by Niklaus Wirth in 1995, which says that software is growing more sluggish and complex faster than computer power is increasing. For example, according to a 2008 InfoWorld article, the 2007 version of Microsoft Office performed approximately half as fast on a 2007 computer as the 2000 version did on a 2000 computer.

The entry into robot bliss is thus not guaranteed. What’s more, the authors lose considerable credibility when they take a mechanistic approach to technological change, asserting that very little changed in the millennium before 1750 and that “human population growth and social development were very nearly flat until the steam engine came along.” 

While I defer to nobody in my admiration for Song Dynasty China, the fact remains that from about 1500 technological change was rapid in the West. In Britain, at least, this was accompanied by considerable economic growth. Anyone who has read N.A. M. Rodger’s excellent history of the British Navy, for example, will know that Nelson’s flagship “Victory,” built in 1759, could have blown the entire 1588 Spanish Armada out of the water single-handedly because of its guns’ greater range, higher muzzle velocity and much faster reload time.

Even today, productivity has advanced less than you think. The great Earl of Clarendon, exiled in 1667, compiled his magnificent “History of the Great Rebellion” of about 1.2 million words, a three-volume autobiography, an excellent refutation of Hobbes’ “Leviathan” and several other books—a total of about 2 million carefully researched words—almost entirely in the seven years before he died. And he was working with a quill pen, in candlelight and moving from one temporary exile abode to another, haunted by the illnesses of old age and seventeenth-century medicine. Given the amount of learning involved and the quality of the prose, there is no modern writer who could do as well, with all his modern equipment. 

While a computer could certainly compose 2 million words in half an hour or so, they would be rubbish, little better than the output of a million monkeys on typewriters. Even at the level of investment recommendations, one can easily spot the automated ones, and however many further iterations of Moore’s Law we get, they are not going to enable a computer to write like Clarendon. Typesetting and proofreading Clarendon’s “History” took the Oxford University Press several years in 1699-1703; that would certainly be quicker today, but the actual writing wouldn’t.

One area where future robots may provide major productivity lifts, however, is medicine. IBM is already attempting to turn Watson into “Dr. Watson,” capable of undertaking medical diagnosis. The theoretical knowledge is of course no problem here; the difficulty is applying that knowledge to individual cases. Once diagnosis is possible, one can imagine robots undertaking surgery—presumably only after they have got towel-folding down cold. There are a number of mechanical operations in surgery that one would not wish carried out at one hundredth the normal speed.

This offers the possibility of a really major advance. Medicine is, after all, only maintenance of the human body; it is thus ridiculous that it should cost 17% of GDP. It’s as if a $30,000 automobile required $5,000 of garage work every year in order to keep it on the road. That may have been the case with the unreliable beasts of 1910, but today the maintenance proportion is far below that. Similarly, we can envisage medical costs being reduced by robotics to the 5% of GDP or so that they historically averaged in 1960. That would leave 12% of GDP available for other things and relieve a huge burden from government budgets.

The authors’ economic prescriptions for dealing with a robotized world are disappointing – standard Whig rubbish including higher taxes on the rich, handouts to the unemployable impoverished and, incredibly, more immigration in spite of their assumption of massive low-skill unemployment. Their one really helpful insight is that in many areas a combination of machine and human can produce results superior either to unaided humans or unaided machines (apparently a man-machine combination can still ace “Jeopardy” against IBM’s Watson.) Presumably a man/machine combination might prove especially capable in the medical area, at least for highly specialized processes.

At first sight, that sounds like a solution to the unemployment problem the authors so eloquently point out. As robots take over household and low-wage tasks, such as janitorial services, landscaping, food service and low-end retail, people can be attached to the robots in areas where a robot-human combination is optimal. However, there are almost certainly far too many humans for this to work, because as in a modern factory one human will be able to supply the “human factor” for a dozen robots or more, leaving a huge surplus of unemployed labor. Once again, as in so many other areas of human activity, when one looks forward one is forced to the conclusion that the system will only work properly with a population perhaps one tenth of that today – in other words about the 1 billion humans of 1800 about which the authors are so scathing. Maybe the population increase that accompanied industrialization isn’t permanently sustainable after all, but merely a giant blip.

Contrary to the authors’ estimate, I do not see further inequality or mass unemployment from the robot revolution. By all means, there will be actresses and athletes paid excessive sums, as the entertainment complex has always valued the tiny extra stratum of excellence. For the rest of us, however, apart from those who design robots or interact with them in some way, there will be the universe of “long-tail” products and services appealing to a small minority audience. 

Authors, artists and musicians have always made a living appealing to a relatively small group of connoisseurs.  While J.K. Rowling is a billionaire, that kind of wealth from the arts is a modern phenomenon. Dr. Johnson, the most successful writer of his age, was only able to live comfortably because of a royal pension of £300 per annum granted by George III. In a world of robots and 3D printing, the opportunities for specialized, quirky, non-machine-made output in the arts and crafts (or, by all means, “twerking” pop music) will be much greater than today, and hundreds of millions may find satisfaction and a modest living thereby.

I can almost get enthusiastic about the advent of genuinely functional robots. I was brought up in the 1950s and 1960s expecting that everything would be robotized by now, so it’s good that it’s actually happening. The economic disruption will be considerable, but I refuse to believe we will enter a world where 80% of the population lives on welfare while the other 20% pay 90% income taxes to support them. Instead, I think arts and crafts will support far more of us than they do today, while others will work with the robots and a small group will push forward the technological frontiers or engage in entrepreneurship. It will be a more prosperous world if we have fewer people. But that also is a problem we can solve if we have to, possibly through interstellar travel—that other fantasy of the 1950s that has been unaccountably delayed. Above all, it will still be free, and we will be richer, not poorer.

The Russian Machines Are Coming. Save Yourself Google

January Jobs Report Disaster And Other BS From The Department Of Labor

This should come as no surprise, but this jobs report has more holes than a Tijuana hooker. The report missed by about 72,000 jobs with 185,000 expected Vs 113,000 actual jobs created. Yet, leave it to the government geniuses to spin it the right way. It was too cold. Yes, apparently it was too fucking cold to hire anyone in January. 

But its not all bad news. The unemployment rate is now down from 6.7% in December to 6.6% in January. Plus, the participation rate surged higher 0.2% from 62.8% to 63%. Holy Fuck!!! That’s incredible, let me run out and buy some stocks now.  

On a more serious note, this is not a laughing matter. Even though the US Economy was propped by a massive infusion of credit over the last few years, it is now running on empty. I assure you that any marginal job gains will soon turn into massive layoffs as the bear market takes us into the 2017 bear market bottom (see my timing work to find out why) 

UNRATE_Max_630_378

—————————————————————————————————————
WASHINGTON (Reuters) – U.S. employers hired far fewer workers than expected in January and job gains for the prior month were barely revised up, suggesting a loss of momentum in the economy, even as the unemployment rate hit a new five-year low of 6.6 percent.

Nonfarm payrolls rose only 113,000, the Labor Department said on Friday. But with strong job gains in construction, cold weather probably was not a major factor in January.

The second straight month of weak hiring – marked by declines in retail, utilities, government, and education and health employment – could be a problem for the Federal Reserve, which is tapering its monthly bond-purchasing stimulus program.

December payrolls were raised only 1,000 to 75,000.

The data also comes on the heels of a report on Monday showing a surprise drop in factory activity to an eight-month low in January and could rattle investors, already nervous about slowing global growth.

Economists polled by Reuters had forecast payrolls increasing 185,000 last month and the unemployment rate to hold steady at 6.7 percent.

But there was a silver lining in the report. The unemployment rate dropped a tenth of a percentage point to 6.6 percent last month, the lowest since October 2008.

The household survey from which the jobless rate is derived showed gains in employment. In addition, more people came into the labor force, an encouraging sign for the labor market.

The participation rate, or the proportion of working-age Americans who have a job or are looking for one, increased to 63 percent from 62.8 percent in December, when it fell back to the more than 35-year low hit in October.

The unemployment rate is now flirting with the 6.5 percent level that Fed officials have said would trigger discussions over when to raise benchmark interest rates from near zero.

But policymakers have made it clear that rates will not rise any time soon even if the unemployment threshold is breached.

The private sector accounted for all the hiring in January. Government payrolls fell 29,000, the largest decline since October 2012.

Manufacturing employment increased 21,000, rising for a sixth month. Retail sector jobs fell 12,900 after strong increases in the prior months, the first decline since March.

Construction payrolls bounced back 48,000 after being depressed by the weather in December. It was the largest increase since December 2012.

Average hourly earnings rose five cents. The length of the workweek was steady at an average of 34.4 hours.Book Formlead Big

January Jobs Report Disaster And Other BS From The Department Of Labor  Google

Emerging Markets Crisis… About To Throw US Into A Recession? Or Is It The Other Way Around?

The Ivory Tower brain bank idiots have done it again. Yes, let’s blame those pesky “Emerging Economies” for all of our economic troubles. The reality, of course, is the other way around. The emerging economies are the extensions of the US Economy to whatever degree they were stupid enough to dilute their own economies with the help of the FED and it’s “free” credit.

The emerging economies will suffer the same fate as the US, but to a much more devastating degree. When the US Economy catches the cold and slips back into a severe recession, due to the upcoming bear market (based on my mathematical work it has already started),  the emerging economies will, to the large extent collapse……vomiting out blood and guts associated with credit. 

Philippines is one of the “Emerging Markets”. Philippine Stock Index: Please note the technical setup. The chart is sitting right next to support indicating a possible break down. There is absolutely no support until it reaches 2,000 or 60% haircut. 

philippines-stock-market2

————————————————————————————————————-
Emerging markets: Big trouble ahead but crisis? “I think not” says economist

The pain in emerging markets is cutting into the performance of funds managed by some of the biggest names on Wall Street including BlackRock and T. Rowe Price, with some mutual funds already down 10% this year on falling stocks and currencies. As investors rush to pull more money out, how concerning is the emerging markets turmoil and how might it affect developed economies like the United States?

“Emerging markets are certainly in trouble,” says Eswar Prasad, Cornell University professor and author of “The Dollar Trap: How the U.S. Dollar Tightned Its Grip on Global Finance.” There is “big trouble ahead, but a crisis? I think not.”

Prasad says Turkey and Argentina in particular are countries that are really susceptible to crises. Others like Brazil, India and South Africa — which are vulnerable because of large current-account deficits, budget deficits, and political instability — are going to have a rough patch. But he notes that things have really shifted over the last decade for emerging markets, which don’t have as much external debt as they used to and possess lots of cash reserves.

In terms of what impact this turmoil has on the developed world, opinions differ. Economist Nouriel Roubini is warning of a tail risk to the global economy and Goldman Sachs says “what happens in emerging markets mostly stays in emerging markets.”

Prasad says the emerging market weakness is “certainly not good for the U.S. economy.” He says with these economies slowing, “the world is again going to be looking to the coattails of the U.S. to pull it along.”

He asserts that the weaknesses in the rest of the world keeps the U.S. dollar stronger than it would otherwise be, which means fewer exports and fewer jobs here. While he acknowledges that it makes U.S. imports cheaper, he says it’s not good for growth.

Emerging Markets Crisis About To Throw US Into Recession? Or Is It The Other Way Around? Google

Ukraine Imposes Capital Controls. Is Ukraine About To Collapse?

Typically, governments don’t impose capital controls on bright shiny days. They do it right before shit hits the fan. Argentina and Venezuela are perfect examples of that. No doubt Ukraine is on the brink of a political collapse or worse, much worse, economic collapse. With political meddling from EU, US and Russia, this powder keg is about to explode. If you know anything about the region, understand one thing. There is no way in hell, in this universe and the next, that Putin will let Ukraine go to the EU or Western side. As far as Russian government is concerned, Ukraine is still part of the iron “Soviet Union” and will remain so for the foreseeable future. No matter how many tantrums the UE or the US throws. Yet, even with Russia’s support I would expect Ukrainian economy to be flushed down the toilet and soon. Capital controls are never short term and are never good. Expect the worst especially when the Ukranian Government assures otherwise. 

ukraine currency

————————————————————————————-
Ukraine Imposes Capital Controls as President Meets Putin

Ukraine’s central bank imposed limits on foreign-currency purchases, bolstering a sagging hryvnia after interventions failed to, while President Viktor Yanukovychprepared to meet Russia’s Vladimir Putin in Sochi.

The monetary authority set a monthly cap on foreign currency purchases for individuals and imposed a waiting period of at least six working days for companies and people, according to a statement on its website yesterday. The crisis, in its third month, has rocked the hryvnia, squeezing reserves as authorities struggle to contain a record current-account gap.

With a leak of undiplomatic language from a U.S. diplomat rattling ties with the European Union as they discuss potential aid, Yanukovych traveled to the opening ceremony of the Sochi Olympics where he is to meet the Russian president, who halted payments from a $15 billion bailout after nationwide protests led to the cabinet’s collapse.

“It may be difficult for the central bank to contain the situation until there is more clarity regarding a bailout from Russia or, potentially, from the West,” Ben Griffith, an analyst at Victoria 1522 Investments LP in San Francisco, said by e-mail. “The market needs to know what changes would cause Russia to pull its agreement or cause the Western bloc to step in with assistance.”

Hryvnia, Bonds

The hryvnia, which has fallen to a five-year low of 9 per dollar several times in the past three days, gained 3.6 percent to 8.545 by 12:59 p.m. in Kiev, the biggest gain since September 2009, according to data compiled by Bloomberg. That pared the decline this year to 3.4 percent.

“The decision by Ukraine’s central bank to impose targeted capital controls should bring some short-term relief to the hryvnia,” Neil Shearing, a London-based analyst at Capital Economics, wrote in an e-mailed report today. “But it is unlikely to prevent further falls in the currency over the coming months.”

The yield on Ukraine’s dollar bonds due this June rose 191 basis points, or 1.91 percentage points, to 16.67 percent yesterday, the highest since before the Russian bailout was announced Dec. 17. The rate was 97 basis points lower at 15.70 percent at 2:18 p.m. today.

The cost of insuring the country’s debt against non-payment for five years using credit-default swaps fell 15 basis points to 1,071 after reaching the highest in almost two months yesterday, CMA data showed.

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

Book Formlead Big

Ukraine Imposes Capital Controls. Is Ukraine About To Collapse?  Google

Stock Market Update. InvestWithAlex.com February 6th, 2014

Daily Chart February 6, 2014

Continue to maintain a LONG/HOLD position if invested -OR- be in CASH if not. 

2/6/2014 – Big day in the market with the Dow Jones up 188 points (+1.22%) and the Nasdaq up 46 points (1.14%). 

The question on everyone’s mind is…..has the market bottomed? Is the correction over? 

As of right now and based on my work I see very little evidence of that. Our primary points of force and their price targets remain intact (please see them below). At least for today. We might have to adjust those targets if we are to see strong follow through over the next few trading days, but that is still to be seen. The market opened up with a 60 point gap in the morning, giving us an early indication that it will turn around and go lower (in short order) to close the gap. Further, subsequent move lower to hit our points of force before any sustained bounce from the January-February sell off can take place is highly probable. 

As such, our current position remains intact. If you are in CASH, maintain your cash position while waiting for a technical confirmation that the Bear market has started. Otherwise, maintain a long/hold position.  The long-term trend is still intact and bullish. 

Short-Term Projections:

As of today, I am not adjusting the points of force below. My mathematical work shows two points of force coming in February. Typically we should anticipate a turning point on such dates. (Would you like to see the exact points of force in both price and time? Please +Subscribe to our premium service above). 

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

Stock Market Update. InvestWithAlex.com February 6th, 2014 Google

Daily Chart February 6, 2014

How To Make A Killing In A Deflationary Inflation

InvestWithAlex Wisdom 20Today’s 5-10 Minute Podcast Covers The Following Topics:

Topic: Inflation or Deflation Over The Next 5 Years? How To Allocate Capital To Make A Killing -OR- How To Make A Killing In A Deflationary Inflation.  

    • Inflation or Deflation….what will win over the next 5 years? 
    • Why it is incredibly important for your overall portfolio. 
    • How you should position yourself now. 
    • What steps to take to make a killing over the next 5 years. 

Please tweet me your questions @investwithalex

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!

Revealed: Who Will Win The Inflation-Deflation Battle And Make A Killing

Inflation or Deflation InvestWithAlex

Business Insider Writes: BILL GROSS ‘Be Careful 

In his February investment letter, Bill Gross, the manager of the biggest bond fund around at PIMCO, warns investors to “be careful.”

Why? Gross believes the rally has been fueled by ever-expanding debt.

Now, due to a combination of smaller government deficits and tapering of the Federal Reserve’s quantitative easing program, the rise in debt is slowing, which Gross argues is bad news for risky assets like stocks and good news for bonds.

“Bull markets are either caused by or accompanied by credit expansion. With credit growth slowing due in part to lower government deficits, and QE now tapering which will slow velocity, the U.S. and other similarly credit-based economies may find that future growth is not as robust as the IMF and other model-driven forecasters might assume. Perhaps the whisper word of “deflation” at Davos these past few weeks was a reflection of that. If so, high quality bonds will continue to be well bid and risk assets may lose some luster.”

Read The Rest Of The Article Here

Bill Gross is, of course, right on the money.  

The one question that gets left behind is whether or not we will have inflation or deflation over the next 5-10 years. That is an incredibly important question. A correct answer should greatly impact your overall portfolio allocation over the next couple years. Getting it right would mean outperformance, getting it wrong would only yield severe losses.

Gold bugs, inflationist and hyper inflationist would lead you to believe that hyperinflation is just around the corner, your dollars won’t be worth the paper they are printed on and that gold is about to surge to $100,000 an ounce.

Deflationist would lead you to believe that we are on a verge of an economic collapse, credit collapse, market collapse, great depression and that all asset prices are likely to decline to the tune of 90-95% over the next few years. If this scenario does indeed come true, it would be prudent to invest into a stockpile of canned food, a small arsenal of guns and a container load of ammo.

Who is right?

No one. The reality is somewhere in the middle. Technically we are in a deflationary environment due to a massive credit expansion and the subsequent collapse of that credit throughout our economic system. Basically, we are still feeling the impact of 2007-09 credit defaults, with more defaults coming up over the next few years (due to upcoming recession).   

On the other hand, the FEDs have been printing money like crazy over the last couple of years and distributing it though various channels of the economy. Mostly through financial institutions, speculation and asset price appreciation.   

That is why we are seeing the evidence of both inflation and deflation throughout  the economy. Which one will win out over the next couple of years and how to invest in such an environment?

Please listen to today’s podcast in order to get your answer. 

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

Book Formlead Big

Revealed: Who Will Win The Inflation Deflation Battle And Make A Killing  Google