Weekly Update & Summary: May 24th, 2014

A strong up week with the Dow Jones up 115 points (0.70%) and the Nasdaq up 95 points (+2.33%). While the Dow and the S&P remained within their tight trading range, the Nasdaq displayed a strong divergence and a short-term trend shift by surging higher on low volume. Short covering in “High Flyers” was the most likely culprit.

The Dow left two large gaps on the downside this week (May 21st/23rd). That is in addition to two other large downside gaps on April 14th and on April 16th. Indicating an eventual correction.

Further, there are a number of smaller gaps left leading all the way down to February 5th low. We continue to believe that the Dow will close such gaps when the next bear leg develops at below mentioned time frames (please see mathematical analysis & timing section below).

WEEKLY REVIEW:

A Closer Look At VIX And What It Predicts

VIX, often referred to as the fear index, continues to decline to levels unseen since the 2007 or right before the collapse. While most market pundits dismiss this measure as a simple volatility gauge, it would pay big dividends to pay closer attention. Here is why.

Historic Lows Indicate Trend Reversal: Historically, when VIX approaches historic lows it tends to reverse shortly thereafter, typically leading to massive sell offs synonymous with 1987, 2000, 2007, etc…. Suggesting today’s environment is very dangerous.
Shows Complacency & Excessive Risk Taking: I continue to maintain that the amount of risk taking in our financial system is off the charts. Although it is hard to see due to “Asset Inflation” and “Massive Stimulus”..… it is there. Plus, with most speculators being in a comfortable and soothing state of sleep (due to lack of volatility), a sharp bear market move here might snap everyone back to reality.
Combining VIX, Cycle Work, Seasonality and Fundamentals: While looking at VIX alone won’t allow you to predict anything, combining it with other measures can give you a fairly accurate picture of what is to come. With market internals deteriorating, 5-Year cycle now complete, “sell in may and go away” and extreme levels of fundamental overvaluation/speculation, VIX suggests a violent move.

Conclusion: Considering all of the above and with VIX at $11.77, this is a clear recipe for a disaster. The only question is when. If you would be interested in learning exactly when this bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

Russia and China Sign A Historic $400Bn Gas Deal. EU Freaks Out.

Mr. Putin just became a whole lot richer as Russia Signs $400 Billion Gas Deal After Decade of Talks

Infrastructure investment from both sides will be more than $70 billion and will be the world’s largest construction project, with Russia providing $55 billion up front and China $22 billion. This is Gazprom’s biggest contract to date.

While the gas deal itself is historic, the geopolitical ramifications of this deal are much more important.

First, it will allow Russia and Putin (who will rule Russia for as long as he wants) to diversify away from the EU. The next time either the EU or the US will threaten Russia with NATO, war or sanctions they might very quickly find their gas turned off and their economies collapsed.

More importantly, as the US continues to poke both Russia and China with their “freedom and god given righteousness” stick, Russia and China continue to form much closer ties. Such close ties will eventually turn into a military alliance to counterbalance NATO (aka the US Industrial Military Complex) in South East Asia and in Europe. Just as predicted in my report here…Nuclear World War 3 Is Coming Soon.When, How & Why

Scientists Convert Light To Matter. Amazing.

Scientists in London have been successful in converting light to matter with powerful lasers. Scientists find way to turn light into matter

“What was so surprising to us was the discovery of how we can create matter directly from light using the technology that we have today in the UK. As we are theorists we are now talking to others who can use our ideas to undertake this landmark experiment,” Rose continued.

What does any of this have to do with the stock market? …… Everything.

While most people believe the stock market is random, volatile and unpredictable, it is anything but that. Everything in our Universe (or our dimension) functions according to a certain set of fixed laws. As Albert Einstein so famously said, “God doesn’t play dice”. Meaning, the only randomness in the Universe are the things we do not yet understand.

I use a lot of physics, mathematics and other sciences in my stock market work. Once you infuse structure and proper scientific tools into the study of the stock market (or individual stocks), most randomness disappears. Instead, you begin to see a beautiful structure within the stock market. Once that structure is understood the market can be predicted with astonishing accuracy.

Just as the scientists above were able to convert light into matter, you can convert this understanding into a life long pursuit of wisdom. Here is a hint…..the stock market is a life entity (not some dead chart) that moves in multi-dimensional space and according to its own DNA sequence.

MACROECONOMIC ANALYSIS:

Ukraine/Russia/USA/EU/NATO continue to be the most important issue. In fact, I continue to believe that things will escalate significantly over the next few weeks.

Ukraine’s election this weekend is incredibly important. If Ukraine decides to vote West we can anticipate Ukraine’s interim government to move forward with closer ties and a possible NATO integration. That’s a big NO NO for Russia and we will see Putin exercise his power.

While Putin said that he will respect the vote, allowing NATO troops into Ukraine would be a disastrous defeat for Russia and I don’t believe Putin will allow that to happen. His speech at the economic forum earlier today was a clear sign that the relationship between Russia and the US is at a breaking point. What happens over the next two weeks really depends on how far both Russia and the US will want to push the envelope.

As suggested before, any provocation from either side will explode this situation into an all out war. We are already getting indications that East Ukraine is mobilizing (with the help of Russia) to fight Ukraine’s federal forces/army. If the situation escalates any further, it might give Russia the pre-text needed to enter Ukraine in order to “defend” its new territory and its people.

As you can imagine this situation will spark a number of economic sanctions (from both sides), political storm, war rhetoric and a million other unforeseen consequences. It is highly probable that this would be incredibly unsettling for financial markets. I can tell you one thing, most markets do not have this priced in. The upcoming week is critical.

TECHNICAL ANALYSIS FOR THE DOW JONES:

Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market. Same applies to the market action over the last few months. Yet, that in itself can be misleading as per our timing analysis discussion below.

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

Short-Term: Short-term trend remains positive for the time being. The Dow would have to break below 16,000 for the short-term trend to shift from positive to negative.

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

MATHEMATICAL & TIMING ANALYSIS:

It’s going to be a long one.

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

(*** Please Note: This time around about 90% of the information contained within this section has been deliberately removed as it contain too much technical information. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public. As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial).

In conclusion, xxxx

Longer-Term Overview:

The next turning point is located at……

Date: XXXX
Price: XXXX

TRADING:

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

Remember, you should have an exact strategy and entry/exit points based on the forecast above.

The list below is for your reference point. It entails my investment strategy for my own investment purposes. While you are free to follow me, please do so at your own risk. Do not take this as a trading advice. Please note, all of the positions below have been triggered.

Stock	Entry Point ($)	Action Taken	Stop Loss @
xxxx	xxxx	xxxx	91
xxxx	xxxx	xxxx	1250
xxxx	110	xxxx	121-123
xxxx	74	xxxx	80
xxxx	xxxx	xxxx	260
xxxx	xxxx	xxxx	460
xxxx	35	xxxx	39
xxxx	65	xxxx	70
xxxx	120	xxxx	120-130
xxxx	100	xxxx	108-112
xxxx	112	xxxx	120

Otherwise, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action. (This is continuation of our previous positioning).

Weekly Stock Market Update & Forecast. May 17th, 2014. InvestWithAlex.com

If You Are A Trader: XXXX

If No Position: XXXX

If Long: XXXX

If Short: XXXX

CONCLUSION:

An incredibly important week is coming up. We are now looking for our forecasts above to be confirmed over the next few trading days/weeks. I have also described what to anticipate over the next few months and exactly what you should do now. With increased volatility, multiple interference patterns and an incredibly important long-term turning points coming up over the next few months we must be very careful and risk averse here. Those anticipating the moves and those who can time them properly will be rewarded appropriately.Weekly Stock Market Update & Forecast. May 24th, 2014. InvestWithAlex.com

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

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