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.

Crono-Crash & The Slingshot

Crono-Crash & The Slingshot

Livio,

I exited with the Wealth Preserver on the on March 2nd.  The last couple of bullish days brought to mind the Slingshot, are we there and have we missed the first 2 days. In your recent Celente video post you mentioned we’re entering into a global depression which may be even worse than the Great Depression.

Before all that happens is it possible we see DOW tumble another 5K-10K?

There seems to be an incredible amount of liquidating-at-all-costs mentality at the moment. I worked on an equity desk during the 2008 crisis, and currently at a very small non-bank FX dealing desk and have never seen anything like this. Your feedback is always appreciated.

Thanks,
Victor

“Great Question Victor.

The simple answer is NO.

The worst-case scenario appears to be testing the reversal technical line in the 15,000 level and do not see a drop to 5-10K. That is way too far for a slingshot. 

I see the slingshot build and breakout to new highs by 2023.

However, let’s tale a look at history to guide us on recovery times with similar drops to our current CronoCrash. 

Look at the two charts below.

What you see is that it took 65 months from the 2007-2009 Crash to get back to even.

The 1987 Crash appears to be a likely type of pattern from a timing perspective to our current Crono-Crash. That was a 53% decline and took 24 months to break even.

The 2000 -2003 Bear Market was a 3 year 54% decline and took 81 months to break even. 

If we were to fall on par with those declines, we would be looking at a drop to the mid-15000 level.

Because InterAnalyst members s stepped aside (red signals)  for most of the Corona-Crash, they will miss all those months of recovery just to get back to even.

More importantly, while everyone else is back to even, those who stepped aside will be 100% – 400% ahead of those buy and hold investors who did not step aside of the Corona-Crash.

As for the future, when we get back in (green signal) we could reach the test of just below the 40,000 level happening in 2024.

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.

Don’t Say We Didn’t Warn Of A Stock Market Plunge!

Don’t Say We Didn’t Warn Of A Stock Market Plunge!

The October issue of InsidersPower Newsletter covered the warning of a correction and what is coming for the balance of the year and into 2019. Now let’s take a look at our daily signals issued and when they were issued to help protect our members and their families from quick collapses.

 

S&P 500 Index

Warning Signal Issued: October 6

 


Nasdaq Index

Warning Signal Issued: October 6

 


Russell 2000 Index

Warning Signal Issued: September 24

The Russell 2000 is by far the most common benchmark for funds that identify themselves as “small-cap“.

 

Kiwi Bull Market Shows | NZ50 New Zealand Trade Signal | Evergreen Trading Strategy

Kiwi Bull Market Shows | NZ50 New Zealand Trade Signal | Evergreen Trading Strategy

Similar to the US Stock Market, the New Zealand market has remained primarily bullish since 2009! So we are working on almost 10 years of the greatest bull market in history for the Kiwis!

Investors interested in the New Zealand equities have few choices. Luckily, ENZL represents excellent exposure and is balanced among a diverse set of sectors. Daily volume in the fund is respectable, though spreads can be significant. ENZL scores poorly for block liquidity, and a single creation unit accounts for a significant share of the daily volume in its underlying holdings. Overall, this is an efficient fund providing broad exposure to the New Zealand equities market.

Let’s take a look at the charts to see how we can add them into our trading pattern.

Monthly Chart

New Zealand’s (NZX 50 INDEX GROSS) has been significantly bullish since the bottom in early 2009 and currently shows no signs of long-term weakness since the mild dip in 2016.

Weekly Chart

New Zealand’s index, when viewed on a weekly chart, shows that it supports the bullish overall trend of the market with no current weakness. Mild weakness was shown in early 2018 with the pullback int he US Markets, it would have been wise to look to the S&P500 chart of the US market to help make a decision of following the weekly lights.

Daily Chart

The NZX 50 has shown signs of weakness on the shorter term daily chart but currently remains bullish.

A summary review of the charts concludes that if you are using the Evergreen strategy, New Zealand appears to be a Green Light opportunity as the Monthly, Weekly, and Daily charts are in lockstep bullishness. A person who enjoys the volatility that the Daily charts provide can see that the red lights may provide notification of an upcoming entry point to longer-term gains.

Whats Up or Down With Real Estate?

Whats Up or Down With Real Estate?

I have reprinted a portion of this article because of important data that just came out. So, a closer look at the charts below the article is imperative.

 

Southern California home sales crash, a warning sign to the nation

  • Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic.
  • The median price paid for all Southern California homes sold in June was a record $536,250, according to CoreLogic, a 7.3 percent increase compared to June of 2017
  • In the past, California, one of the largest housing markets in the nation, has been a predictor for the rest of the country.

Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.

Sales fell 1.1 percent compared with May, but the average change from May to June, going back to 1988, is a 6 percent gain.

The weakness was especially apparent in sales of newly built homes, which were 47 percent below the June average. Part of that is that builders are putting up fewer homes, so there is simply less to sell.

“A portion of last month’s year-over-year sales decline reflects one less business day for deals to be recorded compared with June 2017,” noted Andrew LePage, a CoreLogic analyst. “But affordability and inventory constraints are likely the main culprits in last month’s sales slowdown, which applied to all six of the region’s counties and across most of the major price categories.”

 

Fewer affordable homes

The median price paid for all Southern California homes sold in June was a record $536,250, according to CoreLogic, a 7.3 percent increase compared with June 2017. While part of that is due to a mix shift, since there are fewer lower-priced homes for sale, it is becoming increasingly clear that fewer buyers are able to play in the higher price ranges.

“Sales below $500,000 dropped 21 percent on a year-over-year basis, while deals of $500,000 or more fell about 3 percent, marking the first annual decline for that price category in nearly two years,” said LePage. “Home sales of $1 million or more last month rose just a tad – less than 1 percent – from a year earlier following annual gains of between 5 percent and 21 percent over the prior year.”

LePage points to the rise in mortgage rates over the past six months, increasing significantly a borrower’s monthly payment. Rates haven’t moved much in the past month, but are suddenly going higher again this week, pointing to even further weakness in affordability.

 

Time to check the trend charts:

The charts below represent the Real Estate Sector and can tell us if the information in the article above is pointing to a possible Real Estate price crash or it has it already started. Should we look to transfer from a REIT to something with more growth potential? Should we move form Real Estate Mutual funds or Exchange Traded Funds to another sector?

Let’s take a look:

The Image below is our longer-term Monthly Trend Chart for IYR, a Real Estate Index ETF:

As you can see it is bullish after a short corrective decline since January. But because of the late spring and summer building that exploded, we have reacted bullishly. Could that turn south again?

 

The Weekly chart below gives us even more information revealing that the overall real estate market has been extremely bullish since late February. Our algorithm was hit with a rare quick scare in late April only to capture the bull run since then. But the article is speaking of data that just came out. So, a closer look is imperative.

 

The Daily Chart for the Real Estate Index tells a changing story:

 

We can see that a downturn in the real estate index has just begun and may be illustrating the start of a downward move that can be traded successfully.

It can also be a guide telling you that the weekly Red Light is could be arriving shortly. This would confirm that both the daily and weekly are supporting a decline in prices that just started this month.

Better yet, this information could tell you to exit your ETF, or even take a short position to profit from a decline.

The Dow Jones Vs. Europe

The Dow Jones Vs. Europe

The Dow has held support at roughly the 24,800 level and we see another 1000 points coming, but it will only hold above if it closes above 25800 on a weekly level to actually break out of the current consolidation we have been in since late 2017.  At the time of this post, the Dow is trading at 25272. I am still bullish, but we still see this month as a possible reaction high with a retest of support into September/October. In November we could see crazy volatility.

The facts are that the overwhelming majority fear a trade war and/or rising interest rates.

Many mutual funds have liquidated positions on those fears yet the market has held despite all the selling. This means that they will be forced to buy new highs but we are NOT at the end of this Bull Market!

Yes, it is possible that the consolidation time frame I have told you during the first quarter of 2018 could extend as far as 2020. Right now we need to keep in mind that the rise in global taxes has been systemic. Governments only look at what they need right now with no long-term consideration of their short-term thinking.

I want to let my European audience know that the EU and IMF are pushing to triple the inheritance taxes which will cause a total collapse in real estate the banking system there and push them even further into third place. Remember just a three years ago where the Euro was supposed to kill the dollar.

The chips are starting to fall around the world now that the European economy has fallen behind China to 3rd Place. This will make life very difficult for Trump. His hands will be full as the dollar continues to rise on the failures of these other governments.

European governments tax contagion and inept financial management are now being realized and spreading. Europeans know their history and as investors, they move their money to safety. Safety is not Government bonds, but ownership in companies, the stock market. The safest stock market indexes are the US indexes; S&P500, Dow Jones, Russell 2000, and the Nasdaq.

I see growth for the future with continued consolidation and volatility before a breakout.

Aussie Update (AXJO)

Aussie Update (AXJO)

The business confidence index produced by the National Australia Bank (NAB) decreased to 6 points in June from 7 points in May.

The series nevertheless remained positive indicating that Australian businesses are largely optimistic regarding economic conditions.

Looking at the sector-by-sector picture, the manufacturing, and transport and utilities sectors grew slightly less optimistic, while the construction and mining sectors became more optimistic. Meanwhile, business conditions improved in June on the back of an improvement in trading conditions and profitability. The employment index decreased for the second consecutive month, although it is still consistent with the pace of jobs growth sufficient to keep the unemployment rate at least constant.

All sectors remained firmly in positive territory and business conditions remained strong, which bodes well for business investment and growth this year.

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