Tag: stocks

Posted on

How Long Before All The High Flyers Crash Back To Earth

There is no shortage of stocks going absolutely crazy over the last couple of months. To the upside that is. With the likes Tesla, Google, Netflix, Green Mountain, Facebook, etc…exhibiting double and triple digit gains over the last 12 months.

Are these surges justified?

ABSOLUTELY NOT.  While is some cases the fundamentals justify the rise, for the majority of highly speculative issues the primary driver has been just that….speculation and too much cheap credit floating around. With the stock market in its final “blow off” phase and the bear market just around the corner the companies above present us with a wonderful shorting opportunity.But, not yet. When these highly speculative stocks finally break, they will do so at X market multiple, maximizing our returns. 

When?  Please check out our exact market timing forecasts here. We are almost there.  

rocket ship to the moon investiwthalex

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

How Long Before All The High Flyers Crash Back To Earth Google

Posted on

Future Weapons Of War. US Treasury Bonds

What would be the first thing to happen if China and the US ever go to war?

Today, one of Putin’s advisers Sergei Glazyev gave us an indication. China would immediately dump $1.3 Trillion in the US Treasury at market. Many other nations would follow immediately (sell first, ask questions later) making the US insolvent and bankrupt overnight. Surging interest rates, collapsing equity markets and devastated economy would  be the immediate result. Surely, the FED would try to backstop any such action but they will be powerless given the volume. 

In fact, this action would probably cause more economic damage than any nuclear weapon could.  

It is unfortunate that the US finds itself in such a situation, but that is the price we have to pay for today’s “fake prosperity” through monetary policy, credit infusion and speculation. Even though Sergei Glazyev is being silenced for the time being, today, he gave us a clear indication of how future wars will be fought by suggesting that Russia should dump all of its Treasure holding if the US is to impose sanctions. 

1977TreasuryBond

MOSCOW, March 4 (RIA Novosti) – An adviser to Russian President Vladimir Putin said Tuesday that authorities would issue general advice to dump US government bonds in the event of Russian companies and individuals being targeted by sanctions over events in Ukraine.

Sergei Glazyev said the United States would be the first to suffer in the event of any sanctions regime.

“The Americans are threatening Russia with sanctions and pulling the EU into a trade and economic war with Russia,” Glazyev said. “Most of the sanctions against Russia will bring harm to the United States itself, because as far as trade relations with the United States go, we don’t depend on them in any way.”

Glazyev noted that Russia is a creditor to the United States.

“We hold a decent amount of treasury bonds – more than $200 billion – and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner,” he said. “We will encourage everybody to dump US Treasury bonds, get rid of dollars as an unreliable currency and leave the US market.”

According to US Treasury data from the end of 2013, Russian investments in US government bonds total around $139 billion out of a total of $5.8 trillion of US debt held in foreign hands.

US Secretary of State John Kerry on Saturday warned that Russian military interventions in Ukraine, which have been justified by the Kremlin as protection for residents in heavily ethnic Russian-populated regions, could result in “serious repercussions” for Moscow.

“Unless immediate and concrete steps are taken by Russia to deescalate tensions, the effect on US-Russian relations and on Russia’s international standing will be profound,” Kerry said.

Kerry mentioned economic sanctions, visa bans and asset freezes as possible measures.

Former deputy energy minister and lively government critic Vladimir Milov slammed Glazyev’s remarks, saying they would put further downward pressure on the ruble, which was pushed down Monday to a record low of 36.5 against the dollar amid fears about the possible outbreak of war.

“That idiot Glazyev will keep talking until the dollar is worth 60 [rubles],” Milov wrote on his Twitter account.

A high-ranking Kremlin source was quick to distance his office from Glazyev’s remarks, however, insisting to RIA Novosti that they represented only his personal position.

Glazyev was just expressing his views as an academic, and not as a presidential adviser, the Kremlin insider said.

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

Future Weapons Of War. US Treasury Bonds Google

Posted on

Stock Market Update. March 3rd, 2014

z8

3/3/2014 – The volatility is back with the Dow Jones down -153 points (-0.94%) and the Nasdaq down -31 points (0.72%). 

While the rest of the world blames Ukraine and Russia we know better than that. The stock market is tracing out its exact structure. Throughout last week I have warned you that the volatility will back due to a number of significant points of force arriving throughout March. What we are seeing today is clear evidence of that…not in terms of downside, but in terms of volatility. With VIX (volatility index) up 16% today alone and interference patterns abound, March will remain a highly volatile month. 

The question everyone is asking….will this be the start of the bear market?

In terms of bear market structure, my mathematical and timing work show, and I continue to believe, today’s gap down must be closed before this up leg from XXXX completes itself and the bear market resumes. In fact, in our weekly update I presented you with an exact price target that must be achieved before the market turns around. I see very little evidence that such a point will not be reached. .

Further, my analysis shows that Ukraine’s hostilities will die down over the next few days, allowing the market some time to close its gap, recover it’s losses and to push higher to our target below.

As reported over the weekend, at this stage I have a number of very strong indications that the market will hit this point before turning around.

Date: XXXX
Price Target: XXXX

(*** Please Note: About 75% of the information contained within this section has been deliberately removed. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public.  As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If  you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Subscription is through lottery only. Don’t forget, we have a risk free 14-day trial). 

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

If You Are A Trader: XXXX

If No Position: XXXX

If Long: XXXX

If Short:  XXXX

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!!!

Stock Market Update. March 3rd, 2014 Google

Posted on

Welcome To Cold War II

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

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

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

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

Дипломатические демарши Россию не испугали

Фото: ИЗВЕСТИЯ/Владимир Суворов

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Welcome To Cold War II Google

Posted on

Russian Markets Plunge, Central Bank Moves To Increase Rates

Russian stock market crashed today, declining 13.5% today in a near panic selling. Russian central bank moved swiftly, increasing interest rates by 150bps, the highest hike since 1998 default. The Rubble didn’t fare any better with USDRUB rising to an all time high of 37.

Will this swift market action, gut punch to the Russian economy, threat of sanctions and capital flight be enough to stop Russia or Putin in his tracks in terms of Ukraine?

That wouldn’t be our bet. As a matter of fact, if anything it will make Russia even more determined to go ahead and resolve Ukraine’s situation as they see fit. At the end of the day, Putin doesn’t place as much of an importance on capital markets and the state of the overall economy as the US does.  The more important question is, how will this action/reaction impact the US Market.

It’s very clear. Please check our timing section to find out exact what the market is going to do over the next few weeks.  

RUSSIAN MARKET

Russian markets plunged Monday morning as investors reacted to the prospect of Western-led economic sanctions aimed at punishing president Vladimir Putin for Russian actions in Crimea.

The selloff prompted the Russian central bank to take aggressive action to try to stabilize the markets. As the ruble sank to new lows against the euro and the dollar, the bank raised interest rate by 150 basis points (1.5 percentage points), lifting it to 7 per cent.

Russia’s benchmark stock market index, the Micex, got battered by 13.5 per cent at one point by near panic selling. All of the big names on the index including Gazprom, the state-controlled natural gas company whose pipelines to Western Europe run through Ukraine, fell sharply. Gazprom was down in line with the market.

Yields on Russia’s 10-year sovereign bonds rose as high as 9 per cent, up sharply from Friday’s close of 8.1 per cent, as debt investors apparently took the view that that the Ukraine crisis could escalate even if there have been no clashes between Ukrainian and Russian troops in Crimea, the largely Russian speaking region in Ukraine’s far south which is the home to Russia’s Black Sea naval fleet.

The Russian selloff came as the leaders of the Group of Seven industrialized countries, Canada among them, released a joint statement “condemning the Russian Federations clear violation of sovereignty and territorial integrity in Ukraine.” On Sunday, the G7 countries halted preparatory meetings for the G8 summit scheduled for Sochi, Russia, the host city of the Winter Olympics, in June. Russia is the eighth member of that group.

The strongly worded G7 statement indicates that the Western countries may be on the verge of launching sanctions of some sort against Russia, though no formal plan had been announced by Monday morning. On Sunday, U.S. secretary state John Kerry, who is to travel to the Ukrainian capital Kiev on Tuesday, said the Western countries are “prepared to put sanctions in place, they’re prepared to isolate Russia economically.”

In a note, Kit Juckes of the French bank Société Générale said: “This weekend’s events will be followed by a lot of uncertainty and further risk aversion as a diplomatic solution is sought….wider scale capital flight from Russia must be a risk. Russia is unlikely to back down on its support of the regional government in Crimea. The important of Ukraine as a line in Europe’s energy supply line and as the point were Russia and the European Union meet, makes the idea that either side just backs down hard to imagine, but equally, provides plenty of incentives to work towards a diplomatic solution.”

The Russian sell-off triggered a smaller selloff of equities in Europe, where the FTSE-100 and the Eurofirst 300 indexes fell by more than 1 per cent. Investors sought safety in commodities rose. Brent crude was up 1.6 per cent and gold rallied strongly, gaining 1.8 per cent, taking its value to almost $1.346 (U.S.).

Economists doubted that the Ukraine crisis would trigger a full-blown emerging market crisis because of the small size of the Ukrainian economy. It is worth 0.2 per cent of global gross domestic product. Still, some countries, notably Russia and Poland, have significant trade ties to Ukraine and Russia has the power to make or break Ukraine’s energy supplies. Ukraine depends on Russia for half of its natural gas supplies and about 20 per cent of the gas consumed in the European Union is delivered through pipelines that cross the Ukraine.

The fear among Ukrainians is that Russia will use gas supplies as a geopolitical threat. Russia has reduced out outright eliminated supplies to Russia several times in the last decade over gas pricing and contract disputes.

The Financial Times reported that, over the weekend, Russia signalled that it might use gas exports to apply pressure on the interim government on Kiev. Gazprom, the world’s biggest gas supplier, hinted that it may raise gas prices to Ukraine. In December, Mr. Putin gave Ukraine a big discount on gas supplies as part of a $20-billion bailout package (of which only a few billion dollars has been delivered). The price, however, must be renegotiated every three months.

Russian Markets Plunge, Central Bank Moves To Increase Rates  Google

Posted on

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

daily chart Feb 28, 2014

Weekly Update & Summary: February 28th, 2014

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

FUNDAMENTAL & MARKET ANALYSIS: 

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

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

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

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

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

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

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

Long Term Dow Structure3

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

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

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

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

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

MACROECONOMIC ANALYSIS:  

One word. Ukraine.

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

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

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

TECHNICAL ANALYSIS: 

While the overall technical picture is clearing up.

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

Intermediary-Term: Since February 5th, intermediary term picture shifted from negative to positive. Giving us a technical indication that both the intermediary term and the long term trends are up. Yet, that in itself can be misleading as per our timing analysis discussion below.

Short-Term: Short-term trend has turned bullish as well.

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

MATHEMATICAL & TIMING ANALYSIS:  

(*** Please Note: About 75% of the information contained within this section has been deliberately removed. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public.  As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If  you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Subscription is through lottery only. Don’t forget, we have a risk free 14-day trial). 

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

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

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

Date: XXXX
Price Target: XXXX

Explanation: XXXX

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

If You Are A Trader: XXXX

If No Position: XXXX

If Long: XXXX

If Short:  XXXX

CONCLUSION: 

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

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

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

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

Posted on

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

Rite Aid Corporation (RAD)

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

THE STORY:

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

The company has a number of things going for it.

1. Aging Population

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

2. Drug Deal/Distribution

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

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

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

3. Turn Around/Improved performance

rad1

 

rad2

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

4. Undervaluation:

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

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

What does  it all mean?

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

FUNDAMENTALS:

The stock is undervalued relative to today’s market.

Valuation Measures

 

 

Market Cap (intraday)5:

6.48B

Enterprise Value (Feb 25, 2014)3:

12.61B

Trailing P/E (ttm, intraday):

22.87

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

19.71

PEG Ratio (5 yr expected)1:

0.54

Price/Sales (ttm):

0.25

Price/Book (mrq):

N/A

Enterprise Value/Revenue (ttm)3:

0.50

Enterprise Value/EBITDA (ttm)6:

9.28

 

Financial Highlights

 

 

Fiscal Year

Fiscal Year Ends:

Mar 2

Most Recent Quarter (mrq):

Nov 30, 2013

 

Profitability

Profit Margin (ttm):

1.25%

Operating Margin (ttm):

3.76%

 

Management Effectiveness

Return on Assets (ttm):

8.32%

Return on Equity (ttm):

N/A

 

Income Statement

Revenue (ttm):

25.38B

Revenue Per Share (ttm):

28.01

Qtrly Revenue Growth (yoy):

1.90%

Gross Profit (ttm):

7.32B

EBITDA (ttm)6:

1.36B

Net Income Avl to Common (ttm):

280.41M

Diluted EPS (ttm):

0.29

Qtrly Earnings Growth (yoy):

15.60%

 

Balance Sheet

Total Cash (mrq):

183.21M

Total Cash Per Share (mrq):

0.19

Total Debt (mrq):

5.95B

Total Debt/Equity (mrq):

N/A

Current Ratio (mrq):

1.73

Book Value Per Share (mrq):

-2.31

 

Cash Flow Statement

Operating Cash Flow (ttm):

728.27M

Levered Free Cash Flow (ttm):

161.00M

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

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

TECHNICAL:  

riteaid

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

CONCLUSION, TIMING & POSITIONING:

XXXX

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!!!

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

Posted on

Idiots At The Gate. Plus, Weekly Stock Market Update & Forecast

daily chart Feb 22, 2014

Weekly Update & Summary: February 22nd, 2014

The market remained relatively flat for the week with the Dow Jones losing -51 points (-0.32%) while the Nasdaq gained 19 points (+0.46) Structurally, the market did very well, closing all the gaps during the span of the week.  There is still a gap left around 15,500 on the Dow, but it will be closed during the subsequent bear market leg.   

Fundamental & Market Analysis:

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

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

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

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

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

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

bernanke meme

The lesson here is twofold.

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

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

Why is any of this important?

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

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

WRONG.

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

Long Term Dow Structure35

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

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

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

Macroeconomic Analysis: 

In a nutshell, Ukraine, Venezuela, Argentina and China. Argentina is on a verge of another default and I wrote about it before. Ukraine and Venezuela are both in the midst of violent revolutionary uprisings. While Venezuela will not have that much impact either way, Ukraine’s situation will have vast repercussions across the globe. Maybe not in economic terms, but certainly in geopolitical risk. All because of Russia. Having been born in Russia, let me tell you something. Russia is pissed off….big time.

They are pissed at a blatant American and EU interference into Russia’s business. Yes, Ukraine is Russia’s business. Always was and always will be. Just to give you a reference point, there would be a similar type of a reaction from the US if Russia was interfering in governance of Kentucky. Now, let’s take the “Ukranian people deserve freedom too and the US will go to any length necessary to see it happen” bullshit off the table. If you believe this crap, I have a $20 million bridge to sell you (give me a call).

What you see happening is the beginning of the next Cold War where both the US and Russia keep tearing into each other. With the only winners being the politicians and the military industrial complex. This is a negative development that should be watched carefully going forward. 

China’s shadow lending system continues to expand at breakneck speeds. No-one really knows for sure how big a problem China’s economy will eventually face due to the massive credit and money supply growth over the last few years. Since 2008 financial meltdown in particular. While no one has the real numbers, some of the estimates coming out of China are truly mindboggling. For instance, that China’s banking sector is now roughly the size of the US banking sector. With one primary difference. It took the US over 100 years of trial and error to get to that size, it took China roughly 5 years. Thus far China has been able to keep trouble at bay, but this is unlikely to continue much longer. Some sort of a blow up in China is imminent.

Technical Analysis: 

While the overall technical picture continues to remain murky, the resolution should be just around the corner.

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: Is somewhat bearish. Please view our mathematical and timing analysis below for further understanding and explanation.

Mathematical & Timing Analysis: 

(*** Please Note: About 75% of the information contained within this section has been deliberately removed. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public.  As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If  you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial). 

Last week we concentrated on February XXXX, as a turning point. Here is the forecast that was provided.

Date: XXXX
Price: XXXX

Thus far, the vertical rally that started on February 5th ran into a brick wall. To be exact, the Dow topped out 1 hour into trading on February 19th at 16,225 and then proceeded to collapse 200 points.  Recovering thereafter and subsequently oscillating without going anywhere.  

So, what is going on? Have we hit our turning point?

XXXX

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

If You Are A Trader: XXXX  

If No Position: XXXX 

If Long: XXXX

If Short:  XXXX. 

CONCLUSION: 

We have an existing couple of weeks coming up. The week of February 24-28th should finally confirm February XXXX as a turning point. In March, we should see a number of big and very important turning points. I will start talking about them once the current stock market action resolves itself. Those anticipating the moves and those who can time them properly will be rewarded appropriately. Once the moves described above play out in full, the market will be set free to continue its next cyclical bear market leg. 

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

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

Idiots At The Gate. Plus, Weekly Stock Market Update & Forecast Google

Posted on

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

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

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

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

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

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

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

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

jpmorgan_man on ledge

List of dead bankers

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

 
 

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

 

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

 

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

 

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

 

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

 

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

 

MARKET UPDATE: 

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

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

(*** Please Note: About 75% of the information contained within this section has been deliberately removed. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public.  As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If  you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial). 

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

If No Position: XXXX

If Long: XXXX

If Short: XXXX

Please Note: XXXX is available to our premium subscribers in our + Subscriber 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!!!

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