Another Leg Down?

Another Leg Down?

We have seen a hefty relief rally but does Another Leg Down loom? For those who are Wealth Maximizer Pro members, you have caught the nice profitable rally, contratulations.

I am seeing some “disturbing” signs that the market is very close to re-testing the lows that we previously have made, or, will it form another leg down loom?.

At the very least, it is 98% certain we will come to test the lows around 2250 at any moment in time. It is possible that we have another final leg down, and I believe that we likely will.

It is important for you to remain patient instead of panic buying and falling into bull trap.

During this last leg down, simultaneously, Gold and Silver will likely sell-off for liquidity reasons. People are now and will continue to liquidate their hidden savings.

Here’s why we know that the last leg down is coming:

The VIX remains incredibly elevated (60+) despite big pops in the markets and has not subsided. This tells you another sell-off is looming. Whats more, it’s supported by many other technical and fundamental factors.

For the market to continue up and ignore these factors would be unprecedented.

Prepare for another drop to the eventual bottom.

Marxism, Buffett, Dalio, Stalin & The Bottom

Marxism, Buffett, Dalio, Stalin & The Bottom

As always, the Democrats just can’t stand the fact that Trump might take credit for helping people and have blocked and relief package. Democrats claimed in true Marxist fashion in the Senate that the GOP’s push to set aside $425 billion for loans to help select companies and industries, dubbing it a “slush fund” for the Treasury to direct as it sees fit. They said the bill is tilted toward corporations instead of working people. What they fail to even address is that those working people rely upon small businesses the Democrats hate so much which provides 70% of their employment.

Small businesses have been ordered to close down. They cannot pay employees and nobody has suspended their rents. The destruction of small businesses will be devastating to the economy and this is all about playing politics. I am saddened.

The closing for March, if down from last Friday may spark more serious liquidation as Hedge Funds dump everything and some may more to suspend withdrawals as is taking place in European bond funds. The Solus Alternative Asset Management LP, Hedge Fund, known for its investment in retail chain Toys “R” Us, informed its investors that it is shutting its flagship fund and will restrict redemption’s as it works to sell off holdings.

Even Warren Buffett’s Berkshire Hathaway may have lost more than $70 billion on its 10 biggest investments. This type of decline shows that the buy-and-hold strategy fails in a serious market correction. Ray Dalio, who will go down in history for his proclamation that “cash is trash” on January 21, 2020, has lost probably more than $4 trillion in Bridgewater.

Where the 2007-2009 Crash took out Lehman Brothers and Bear Stearns, this time we will see Hedge Funds go down in flames. This undermines liquidity and makes the market vulnerable because market-makers pull back just to survive. 

We are headed into a Global Recession which could become even worse than the Great Depression. Here’s why?

This time we have politicians taking advice from the medical industry. The medical people who do not understand that you cannot shut down the economy on this grand scale because of the devastation is insurmountable to people, their jobs, and wiping out their pensions. This economic shut down on such a massive scale is far worse than if the Corona death toll was even 8%.

Never before has the economy been crashing with such speed for this is orchestrated by people who only look at how diseases spread and not how the economy contracts.

See the source image

Yes, it is true that if we all stayed home we can even beat the common cold. But the post-coronavirus world is going to be far more damaging to the future than any of these people understand.

To have the Democrats playing politics in the middle of the is just insane.

Liquidity is collapsing everywhere. Bank failures rose after the 1929 crash because liquidity failure with a declining velocity = less money with even less money moving around the economy = recession and potential depression.

A monthly closing on Oil below $20.50 will warn of the economic recession ahead as people stay home and this command of quarantine and social distancing may undermine the very cooperation which is the foundation of civilization. 

If people are afraid to interact and suspect everyone, that is precisely the atmosphere created by Stalin during the Communist era.  We are voluntarily limiting and quickly losing all rights including the freedom of assembly. Even Twitter has shut down those who dissent against the coronavirus and this is calling into question our freedom of speech as well.

InterAnalyst will help guide everyone out of this time of insecurity and political misdirection via selfish ignorance.

Look at the chart below:

Finding The Bottom

As the markets find the bottom, it will be laced with volatility and insecurity with the media frightening you to the point of insecurity. this is not done for YOU as an InterAnalyst member. It is done for those Buy and Holders who never exited at the top and now have been scared into submission. 

However, as an InterAnalyst member,  you recognize that it likely will become the best entry point of your life! Yes, insecurity will be there but you know the stock market is going nowhere!

The stock market never lies and it always returns when there is “blood in the street” and the bottom arrives.

Thus, follow the guideline to a risky to safe entry back into the coming slingshot move.

Step One: Wealth Maximizer Pro (Daily Charts)

When the Daily chart delivers a green signal, jump for joy, then choose to enter a position or wait to see if the daily signal is holding for a few days for stability. If we are at or close to a bottom, volatility will be very high so prepare for it if you choose to trade it.

Step Two: Wealth Maximizer (Weekly Charts)

When the Daily is followed by a Weekly green signal you know that the economy is attempting to settle and gain strength.

You should begin to feel a bit more secure. Entering a bullish position here is a bit less risky because the weekly signal has some economic strength attached rather than pure daily volatility. You can even wait another week to see if it develops more strength.

Step Three: The Wealth Preserver (Monthly Charts)

Once the Green signal has elevated from the Daily to the Weekly and the Weekly has moved into a second or third week of a bullish trend, you may select to beat the green monthly Wealth Preserver signal by entering a bullish position before month end.

If you look at The Wealth Preserver chart above, ask yourself whether you remember the days or weeks Just prior to the bottom green signals in 2003 and 2008?  NOPE, right. You don’t remember them, but what you would have remembered is getting in after preserving your money at the prior top, before the full devastating decline those bear markets delivered.

The same is true now. 

So, the bottom is going to come. You must be patient, it will arrive, it always does!

Enter in when you feel most comfortable, but recognize that the Wealth Preserver has proven to be deadly accurate at economic turning points.

The phrase to be true: “Better Safe, than Sorry!” 

Obviously, entry at any point has its risks, but as you look closely at The Wealth Preserver chart above, making a move using the monthly charts is rarely a poor decision…ESPECIALLY OFF THE BOTTOM.

This time it is coming with a slingshot.

6 Facts About The S&P500 Index

6 Facts About The S&P500 Index

In terms of history and novelty, no stock index, including the S&P 500, takes precedence over the Dow Jones Industrial Average. The Dow is the second-oldest stock index in the U.S., trailing only the Dow Transportation Index, and it recently celebrated its 122nd birthday.

But for as revered as the Dow is, it’s also a pretty useless index with regard to tracking the health of the U.S. stock market. It has just 30 components, meaning some industries have little or no representation, and more importantly, it’s a price-weighted index. This means that share price, not market cap, determines how much influence a component has within the index. Thusly, Boeing and its nearly $335 share price has close to 10 times the influence of drugmaker Pfizer, which has a share price of around $37 (yet, incidentally, a larger market cap than Boeing by about $20 billion).

If we want a truly encompassing benchmark to track the health of the U.S. stock market and economy, then the broad-based S&P 500 Index, with its representative 500 companies from a variety of industries and sectors, is our best choice.

Like the Dow, the S&P 500 is rich in history, as well as interesting facts. Here are, in no particular order, seven fascinating facts you may not have known about the S&P 500.

1. Originally, it didn’t contain 500 companies

A little more than 61 years ago, on March 4, 1957, the S&P 500 we know today took shape. Back then, as it is today, the Index was comprised of 500 companies. But the S&P 500 hasn’t always tracked 500 companies. When it was first introduced in 1923, it was simply known as the “Composite Index” and tracked the performance of a relatively small number of companies. This was expanded in 1926 to include 90 stocks, which was the number it stuck with until its expansion to 500 companies in March of 1957.

2. There’s been a lot of turnover, yet many familiar faces remain

As you might have rightly imagined, there’s been quite a lot of turnover in the S&P 500 since March 1957. An S&P Dow Jones Indices committee is responsible for reviewing and replacing companies in the S&P 500 on a regular basis to ensure the Index reflects the dynamic nature of the U.S. economy as closely as possible.

According to a Bloomberg report from March 2007, 50 years after the modern-day S&P 500 came into existence, there were 86 original members still remaining. Though this figure has likely fallen over the past 11 years thanks to mergers, acquisitions, bankruptcies, and removal decisions from the committee, there are still dozens of companies that have been a part of the S&P 500 for more than 61 years and counting. Examples include Coca-ColaMerck, Pfizer, PepsiCo., and Kroger, to name a few.

3. Technically, there are more than 500 stocks included in the S&P 500 right now

Here’s a weird fact to share with your friends at parties: Technically, the S&P 500 tracks more than 500 stocks. Though the index is limited to 500 companies, some companies have issued more than one class of stock, meaning the index tracks two or more of these classes. As of July 2018, the S&P 500 actually tracked 505 stocks.

As an example, in 2014, Google, which is now known as Alphabetissued a new class of stock. The pre-existing Class C shares (GOOG) have no voting rights, while the 2014-issued Class A shares (GOOGL) have one vote per share. Because Alphabet is such a mammoth of a company, its inclusion in the S&P 500 makes sense…but only if both classes of its stock are tracked by the S&P 500.

4. There are stringent criteria for inclusion in the Index

Though the committee has the ultimate say on what companies are included and removed from the S&P 500, there are some pretty clear guidelines for inclusion. The selection criteria include:

  • A market capitalization in excess of $6.1 billion.
  • Annual dollar value traded to float-adjusted market cap is greater than 1.0.
  • A minimum monthly trading volume of 250,000 shares in each of the six months leading up to committee review.
  • Must be a publicly listed company on a major U.S. exchange (no over-the-counter (OTC) stocks).
  • Certain securities are ineligible, such as limited partnership, master-limited partnerships, OTC stocks, preferred stock, royalty trusts, and exchange-traded

5. Its 10 largest components comprise more than 21% of the Index

Even though the S&P 500 doesn’t fall victim to the uselessness of price-weighting, it’s still heavily influenced by a relatively small number of components. As of July 5, 2018, the largest 10 components accounted for more than 21% of the S&P 500’s weighting:

  1. Apple3.924345%
  2. Microsoft3.300070%
  3. Amazon.com2.947227%
  4. Facebook2.049400%
  5. Berkshire Hathaway Class B1.553777%
  6. JPMorgan Chase1.520523%
  7. ExxonMobil1.500398%
  8. Alphabet Class C: 1.469428%
  9. Alphabet Class A: 1.467526%
  10. Johnson & Johnson1.443485%

In other words, like the Nasdaq, technology plays a key role in influencing the Index.

6. The S&P 500 has undergone 36 corrections since 1950

While we often think of the stock market as a wealth creator, it’s worth noting that downtrends and corrections — defined as at least a 10% move lower from a recent high — actually happen quite often. According to data from stock market analytics company Yardeni Research, the S&P 500 has undergone 36 corrections since the beginning of 1950, or about one every two years. Though bear markets are less common — downside in the stock market is inevitable!

Despite being prone to corrections every so often, at no point would an investment in the S&P 500 for a period of 20 years have produced a loss. What’s more, with the exception of the correction that occurred earlier this year, all previous 35 corrections since 1950 have eventually been completely erased by bull market rallies.

In short, the broad-based S&P 500 has demonstrated that patience and proper research pays off over the long run.

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