I remember 2006 very well. I was going around telling people the following, “Listen guys, this is unsustainable, this market is in a crazy bubble driven primarily by mortgage finance and it will blow up soon”. Most didn’t care and those who did called me “Boy who cried wolf”.
Fair enough. I decided to take matters into my own hands by shorting subprime mortgage lenders and multiple other real estate related companies that I believed are nothing more than a pile of stinky (but worthless) mortgage paper. Yet, the companies kept going up throughout 2006 and early 2007. Not only going up, they kept surging up like they were the best investments in the world. This was before my timing work and I was feeling miserable. My research was 100% accurate, yet the market was going the other way. When these stocks did finally collapse in the summer of 2008, they have collapsed within weeks. With one stock price going from as high as $87 to as low as ZERO (filed for bankruptcy) in 11 trading days. I was vindicated, but it didn’t matter.
What’s the point of this story?
Even though I am currently a huge bear based on fundamental, macro and timing analysis, I do not currently hold a short position. Quite the opposite. I am long the market, but solely based on my timing work. My mathematical work clearly illustrates that a severe (3 year) bear market is starting in 2014 to complete in 2017. Before that happens, I feel the pain the bears are going through. Of course, they are right but they are suffering through the most difficult stage of all…. market blow off top. This is the time where there are almost no bears left. Most of them have been killed. Case and point.
S&P 500 Will Be at 2,000 Sooner Than You Think article that not only makes fun of the bears, but claims that everyone is bearish and that’s why S&P will hit 2000 soon. Well, maybe everyone is bearish if you can find any bears left. I don’t know of any. Even permabears have turned bullish.
To moral of the story is this. With the market surging ever higher, this is the most difficult time to be a bear. Every bear looks like a complete idiot and loser. Yet, as the saying goes, it is always darkest before the dawn. True bears who maintain their position at this time will soon be greatly rewarded. So much so that every true bear will be able to afford a Lamborghini.
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Larry Summers, the man who was almost chairman of the Federal Reserve, is surprisingly gloomy about U.S. growth prospects. In a recent speech at the International Monetary Fund, he suggested the U.S. might be stuck in “secular stagnation”—a slump that is not a product of the business cycle but a more-or-less permanent condition.
Summers’s conclusion is deeply pessimistic: If he’s right, the economy is incapable of producing full employment without financial bubbles or massive stimulus, both of which tend to end badly. The collapse of the debt-fueled housing bubble led to the financial crisis of 2007-09, and some policymakers worry that the Fed’s easy-money policy is setting the economy up for another fall. Witness the Dow Jones industrial average at 16,000.
“Conventional macroeconomic thinking leaves us in a very serious problem,” Summers said in his speech. “The underlying problem may be there forever.” He added: “We may well need in the years ahead to think about how to manage an economy where the zero nominal interest rate is a chronic and systemic inhibitor of economic activity, holding our economies back below their potential.”
Mr. Summers is right on the money. Exactly as I have argued before, we now know the true reason behind his candidacy withdrawal from FED Chairmanship role. Unlike Janet Yellen who is a cheerleading fool who believes she can control the markets, Mr. Summers has a clear view of what’s coming.
He doesn’t want to be at the helm of the next substantial economic and financial market downshift that will start in 2014. Further, he is very well aware that the FED is the primary source of the problem. Instead of creating economic stability and an environment that is conducive to productive capital allocation, the FED’s have blown bubble after bubble in order to give the appearance of economic stability. Yet, any such economic stability is a mirage at best. In reality it is a ticking time bomb.
If we can learn anything from history, every financial bubble eventually bursts. Some spectacularly so and some with the whimper. As my timing work illustrates, the bear market will start in early 2014 and complete itself in 2017. I expect to see some fireworks as the market deflates back to where it should be.
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So, how do we measure the stock market in 3-dimensional space?
By using simple math. However, before I go any further I would like to give credit where the credit is due. The technique below was first developed by a brilliant market analyst by the name of Bradley Cowan. If you are serious about performing stock market analysis I encourage you to seek out his work.
In order to measure the stock market in 3-dimensional space, we must unify price and time values into a one joined value. How do we do that? By using simple geometry and Pythagorean Theorem. For our purposes here is all you need to know. We call the outcome 3-Dimensional Value (3DV)
As such and in order to properly calculate the value we need two numbers. Time and value over a studied period of time. As a reference point, we typically measure these values between bottom-to-top -OR- top-to-bottom moves. Let’s take a quick look at the real life examples for a quick reference point. There was a strong bull market between November 1994 and January of 2000(a 5-year cycle).
More precisely, the market moved exactly 8,296 points in exactly 8,437 trading hours. The move occurred between BOTTOM on 11/24/1994 and TOP on 1/14/2000. There are 6.5 trading hours each day the market is open. I highly recommend you verify these numbers and perform sample calculations on your accord for better understanding.
Now, to calculate 3DV according to the formula above
SQRT(8296^2+8437^2)= 11,832.75 *SQRT= Square Root
The 11,832.75 value is the 3-Dimensional Value we are seeking. It is the first step in our Timing financial analysis. An analyst who is willing to put in the work, will soon start seeing periodicity and recurring patterns of the same size movements on multiple time frames. Once the sequence of such moves is understood, exact forecasts into the future could be made. For example, let’s take a look at our 3DV of 11,832.72. Do you know that the stock market topped out on January 14th, 2000 at the price of 11,866.55 or just 33 points away from our 3DV.
Do you believe that is a coincidence? No, not at all. As I have told you before, there is a mathematically exact structure within the stock market and once that structure is understood, the stock market(and individual stocks) can be timed and predicted with great precision.
To Be Continued…..
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China’s population is aging, largely because of the one-child policy in place for decades.
With China’s population likely to peak by 2020 and then start declining sharply, the government will have no choice but to act soon, according to Ting Lu and Xiaojia Zhi, China economists with Bank of America Merrill Lynch (BAC) in Hong Kong. “We are highly convinced the Chinese government will announce a significant change (allowing families to have two children if at least one parent is a singleton) to the outdated one-child policy in the next few months,” write Lu and Zhi in a new report.
Further details of party policy decisions published Friday by the official Xinhua News Agency show that change is indeed coming: Couples will be able to have two children if either parent is an only child….
When it comes to population control and its future economic growth I am not sure what to think here. China is either performing brilliantly or has dropped the ball big time.
From the initial analysis it looks China has dropped the ball by about 10-15 years and that gap will cause significant disturbance in both the Chinese Economy and Chinese Society. Yet, if you look at the situation from an analytical standpoint, they might be right on the money. Unlike the US, China doesn’t have massively underfunded entitlement programs like Social Security and Medicare. As such, China’s generational transition will be much easier. Further, China’s government doesn’t have to worry that much about its older generation. Chinese family structure requires younger generation to care of the older one, taking the government out of the equation and making things much easier (unlike in the US).
As such, I believe China is executing its population control strategies perfectly by now allowing couples to have more than one child. If these laws work as anticipated and lead to a baby boom in China, it will give the Chinese economy another boost in growth in about 20 years.
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Janet Yellen indicated she’ll press on with the Federal Reserve’s unprecedented monetary stimulus until she sees a robust recovery, downplaying risks the policy is inflating asset bubbles.
“I don’t see evidence at this point, in major sectors of asset prices, misalignments,” she said yesterday during her confirmation hearing to be the next Fed chairman. “Although there is limited evidence of reach for yield, we don’t see a broad buildup in leverage, where the development of risks that I think at this stage poses a risk to financial stability.”
Yellen signaled her determination to use bond buying to strengthen the economy and drive down the nation’s 7.3 percent unemployment rate.
Janet Yellen is either a lying idiot who doesn’t understand economics or she is just a lying idiot. Why? For a couple very simple reasons.
First, anyone with a keen understanding of today’s economic environment would run away from this job. Only a fool without an understanding of where we are in the economic cycle would take it. Let’s put it this way. Would you take a job as a CEO of the company that seems to be doing fine, but you know is massively cooking its books? You know the company is essentially insolvent and the truth will come out shortly. You also know that if you take this job you would be blamed for the upcoming collapse. Would you take that job?Of course you WOULDN’T. You don’t need that in your life. So, Janet Yellen either has an overinflated ego where she believes she can control and manipulate financial market OR she simply doesn’t understand today’s economic environment. Either way, its not a good start.
Second, she signaled further stimulus by pumping even more money into the economy if need be and stated “I don’t see evidence at this point, in major sectors of asset prices, misalignment”. Well, there is so many things wrong here that I don’t know where to begin. As I have said before, we are in the largest financial bubble the history has ever seen. Surely the FED’s see it, yet they continue to lie for the sake of stability. Yet, such stability can only exist until the markets have their first seizure. Thereafter, relative stability will translate into massive volatility.
The best thing about financial markets is that they teach all idiots a lesson. I was one of those idiots once, but now it’s Janel Yellen’s turn. I wish you luck Janet. The bear market of 2014-2017 (as per my timing work) will teach you a valuable lesson.
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Summary: Continue to maintain a LONG/HOLD position.
Once again, no change since the last market update to alter my opinion. The market continues to push through it’s daily highs as it marches forward. My previous updates remain right on the money. Please click on the links below to see them.
With that said, I would like to point out two things that you must keep in mind.
1. As of right now, everyone is asleep at the wheel. Meaning the market is continuing its slow ascend and the volatility is not there. Everyone expects this to continue indefinitely.
2. Bullish sentiment is close to record highs. I don’t see any bears. None at all. Even the people who used to be bearish have turned bullish. Bottom line, everyone expects the bull to continue.
When you combine both factors together, you end up in a dangerous situation. Kind of like speeding while driving drunk. In more simple terms, the market is perfectly setup for a volatile down move here. As we continue to hold our long position we wait for the reversal and the confirmation that the bear market into the 2016-2017 bottom has started.
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Second, along the same lines, I want you think of a simple pine tree seed. Before that seed is put into the ground and the tree begins to grow, that seed contains all available information about the tree. The seed is already pre-programmed with what that tree will look like. How tall, how many branches, their direction, their variation, etc… everything. No doubt, the environmental factors will have an impact, but such factors are typically within a certain range of variance. Should we have the technology, we should be able to know exactly what the tree will look like just by looking at the seed. Now the scientists can even take seeds that are tens of thousands of years old and set them on a proper growth trajectory. Amazing.
Back to the stock market. We have to begin thinking about the stock market not as a simple chart of price moving over time(2-dimensional representation), but as a complex natural system. If you look at and study nature, nothing in nature is two dimensional. Our perception could be two dimensional, but the nature itself and everything that exists in nature is 3-dimensional. Everything from galaxies to the smallest particles are 3 dimensional. With that said, is it possible that the stock market is not a simple 2 dimensional system, but a more complex 3 or even a 4 dimensional system?
The answer is YES.
With proper understanding now in place we can start looking at the stock market in a completely different way. The stock market is not a simple 2-dimensional structure (up and down over time) but a much more complex 3-dimensional system. In addition to moving up/down and sideways, it also moves in volume of space. While it is a little bit difficult to understand at first, please allow me to illustrate. I want you to take a look at the 3-dimensional tunnel above.
Imagine for a second that you are standing at the entrance and looking into the tunnel. Further, imagine that there is a snake in the tunnel that is moving away from you in a screw like fashion while hugging the wall of the tunnel. Got that picture in your mind? Great. That is a good representation of how the stock market truly works. Now, if you are to walk to the outside of the tunnel and stand at the half way point (preferably at a good distance from the tunnel) you will only see up and down movements of the snake as it move along the wall in a screw like fashion throughout the length of the tunnel (from left to right). And indeed, that is exactly what we see on a typical 2-dimensional stock market chart.
Simply put, when we look at any existing stock chart, we see the shadow of the move and not the move itself. In reality, the market moves up/down, over time and in 3-dimensional volume of space (not to be mistaken with transactional volume). Once we understand that the stock market is a 3-dimensional phenomena we can begin to apply all scientific and mathematical rules that could be found/applied in nature. Just as with the human being and the tree seed examples above, the stock market has its own “Genetic/DNA Code” and sequence and once that code/sequence is understood exact forecasts could be made.
Here is the best part. Once we start seeing the market that way we can begin analyzing and measuring the market in a completely different way. Instead of using technical analysis, trend lines, etc… it gives us the ability to bring in exact scientific and mathematical models into the analysis part of the equation. Where typical stock market forecasts are inaccurate at best , this mathematical modeling allows us to bring in precision that was unavailable before. Simply put, it allows us to predict the stock market with astonishing accuracy.
So, how do we measure the stock market in 3-dimensional space? To be continued….
It is now your time to become a Superhuman. To live the life full of love, happiness, joy, bliss, ecstasy, content and success.
The Secret Behind How The Stock Market Works (Part 3)
Andrew Huszar, a former Federal Reserve employee who executed QE, has written a Wall Street Journal op-ed apologizing for the “unprecedented shopping spree.”
Huszar worked at the Fed for seven years before leaving for Wall Street. The central bank recruited him back in 2009 to manage “what was at the heart of QE’s bond-buying spree–a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months.”
“I can only say: I’m sorry, America,” Huszar writes. From the Journal:
It wasn’t long before my old doubts resurfaced. Despite the Fed’s rhetoric, my program wasn’t helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn’t getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.
Now the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street’s leading bankers and hedge-fund managers. Sorry, U.S. taxpayer.
Huszar argues that QE, while “dutifully compensating for the rest of Washington’s dysfunction,” has become Wall Street’s new “too big to fail.”
There you go everyone. In this stunning admission Mr. Huszar clearly confirms everything that I have been talking about on this blog. Basically, the FED’s are destroying the US Economy at the expense of the middle class and for the benefit of the wealthy, the banks and the Wall Street.
I know what you are thinking. At the initial glance the strategy seems to be working. After all, the economy “seems” to be doing fine and while the unemployment is still relatively high, it is getting better. The stock market is hitting all time highs and the future looks bright. However, such a positive view is highly distorted. It is equivalent to smoking crack and claiming that you feel great. Certainly you would, but only for a short while. Should you continue the behavior you will eventually die.
The US Economy and its entire financial system is in the same situation. Things seem fine, but that’s just a temporary illusion. As my timing work indicates, the economy and our financial markets will begin to have deadly seizures in early 2014.
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Donate Directly To Two Amazing Families In Desperate Need For Everything After Typhoon Haiyan In The Philippines
Dear Friends,
I have two very good friends in the Philippines who are in desperate need of your help. Their families have lost everything in the aftermath of Typhoon Haiyan. What’s worse is that their families are mostly comprised of the elderly and the kids (see pictures below). Their homes have been destroyed and they have no water and no food….. they are literally starving to death. Please see more details below.
Melanie on the left, Jessica in the middle, Ugly guy on the right is me
I first met Melanie and Jessica (cousins) shortly after I have arrived in Manila. I was walking through a local mall when I saw two beautiful girls sitting at a coffee shop talking. I have approached and asked them if they know if there was a Pet Shop in the mall because I have to buy a hamster for a friend I have. They looked me up and down, gave me a dirty look and told me with 100% assurance that I am out of luck as there are no hamsters available for sale in the Philippines. We have been friends ever since.
They have even worked for me and I have never met more deserving people. Here is what I can tell you. They came to Manila from Leyte at the age of 18, without knowing a single soul and without a penny in their pockets. Somehow they have managed to put themselves through a University while working full time. All while sending most of the money they have earned back to their families. I don’t know how they did it, but they did.
Not only are these girls beautiful and smart, but they are incredibly hard working and honest. Yet, sometimes life is not fair and bad things happen to good people. Sometimes life turns around and punches you in the face. That is what has happened here. The largest storm ever recorded, Typhoon Haiyan, has literally wiped out their home town from the face of the earth. While their families have managed to survive (although some people are still unaccounted for) they have nothing left. Everything their families have had is now gone.
When I say everything, I mean everything.Their families have managed to escape the Typhoon with just the clothe on their backs, but that’s it. After 4 days of no communication we just found out from a friend that they are sitting in the evacuation center with thousands of other people trying to survive. As of now they have no water nor food left and are literally starving to death.
They desperately need your help. NOW.
I know it’s a lot easier to give money to Red Cross or countless other organizations. Give,feel good and forget about it (so to speak). Yet, this is your chance to do a lot more than just to give and forget. Not only will every single penny that you will give go towards their families (no overhead cost), but I will keep you updated on all of the developments. Instead of just throwing money at the problem and not knowing what came out of it, I will keep you posted on where every single dollar goes.
I beg you to just give something. Even if it’s just a $1 or $5. I know times are tough, but I guarantee you that it is not as tough for you as it is for the families in question. They are dying of starvation. Just skip Starbucks tomorrow and send $5 to help these people out. If you can send more, we would be forever grateful. Please Click On The PayPal Donation button below to do so. Once again, every single penny will go towards helping these families 1. Survive and 2. Rebuild. We have no time to wait, please donate now.
Click on the Donate button below. Enter the amount you would like to donate and follow the steps. Thank you in advance for your help.
(***If you can’t send anything, I ask that you share this post with your friends so we can get more exposure).
QUESTIONS & ANSWERS:
Where were they from?
They are from a small town called, Leyte, Leyte. By now everyone knows of Tacloban City as it has been in every major media outlet. Leyte is a small town 30 miles to the west of Tacloban City. The eye of the storm has passed directly over the town and has decimated it completely. 100% of the city has been wiped out.
What is it a strong storm?
Typhoon Haiyan was the strongest storm EVER recorded. Category 5, with wind speeds of up to 200 MPH. Nothing could withstand that power. Not even the structures build in the US. Everything in its path was destroyed. Just to give you a reference point, this storm was 3 times more powerful than hurricane Katrina which decimated New Orleans.
What is the extent of the damage to their properties and the lives of their family members?
Catastrophic. 100% destruction to everything. They have nothing left. Their homes have been completely destroyed. Please click on the pictures below to see the extent of the damage. These used to be their homes. We just got the pictures.
What is the status of their families?
They are living at a local school. The school has been severely damaged by the typhoon as well. They have no food and no water. They are literally starving to death. Supplies are on the way, but they desperately need more help….NOW. All together, there are about 20 family members in need. 12 of them are elderly and young kids. Here is just one picture I have. I will post more as they become available.
Grandma and 2 grand kids.
Who are you and how do I make sure this is not a scam?
The PayPal Account you will be donating to is under my business name ExpertZoo.com. You can verify that through whois database registry. Once again, every single penny will go towards the families and I will post prove later.
Why should I donate?
For you $5 is nothing, for them it’s the difference between life and death. Basically, I want you to save a life today and help another human being in need. It will come back to you 100 fold. I promise. Plus, every single penny will go directly towards helping these families and not towards overhead. Donate as much as you possibly can.
OK, how can I donate?
Please click on the PayPal button and donate any amount that you wish. Simply enter the amount and follow the steps. Thank you in advance for your help.
Continuation of The Secret Behind How The Stock Market Works
Let me repeat that one more time. TIME or TIMING is the most important element when it comes to stock market investing.
So much so that once you understand that fact and once you have a better understanding of how the stock market works you will be perplexed as to why most people and analyst on Wall Street completely ignore the TIME part of the equation. Going even further I will make two controversial statements that I will prove in this section of the book without a shadow of the doubt.
1. The stock market and/or individual stocks are not random.
Not at all. Quite the opposite, they are exact. The stock market moves in 3 dimensional space between mathematical points of force while tracing out an exact structure. In more simple terms, the stock market or individual stocks are moving exactly as they should and with mathematical precision.
2. The stock market and/or individual stocks can be predicted into the future with great accuracy.
Since the stock market moves with mathematical precision while tracing out points of force, once the overall structure is fully understood, exact calculations could be made in order to predict the stock market or individual stocks. Well into the future and on multiple time frames. From hourly moves to moves spanning centuries.
God doesnotplay dice withthe universe, —Albert Einstein
The quote above is right on the money. It means that nothing in nature is random. As Einstein himself said on numerous occasions, the only randomness out there is things we do not yet understand. I tend to agree. As such, the only reason we believe the stock market is random is because we do not yet understand its exact mathematical composition. To understand why, we must first look at nature, how things work and how all of it applies to the stock market. Let me give you two examples.
First, let’s take a look at the human being at the moment of inception. Not birth, but fertilization. When the genetic material of the sperm and the egg is combined to create a new cell that will rapidly start dividing. I want you to think about that single cell for a second. When genetic material is combined, in that split second an exact forecast could be made about what kind of a human being will be born. If we had the technology, in that split second we would know all possible information about that person.
For instance, we would know if it would be a boy or a girl. We would know the eye color, height, hair type and color, exact length of fingers and toes, blood type, predisposition to certain diseases, psychological predisposition, character traits, etc… We would also be able to know exactly what that human will look like at the age of 5, 25, 50, 80, etc… In addition, we would be able to make a pretty good guess about when that organism will die. All of that at the point of conception and all based on the DNA sequence/genetic composition alone. All of that information is available at the point of conception if we had the technology to decipher it. Maybe one day.
Certainly, the environmental factors such as accidental death, living conditions, etc… will have an impact on the human being in question, but not as much as you think. You are probably scratching your head now wondering what any of this has to do with the stock market. Well, most of us look at human life as random and unpredictable, yet, an exact forecast could be made about your human composition at the moment of conception. Same with the stock market…… To be continued
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How To Use Sex To Predict The Stock Market With 100% Accuracy
I remember 2006 very well. I was going around telling people the following, “Listen guys, this is unsustainable, this market is in a crazy bubble driven primarily by mortgage finance and it will blow up soon”. Most didn’t care and those who did called me “Boy who cried wolf”.
