Archive for February, 2015

When Will Apple Be Worth $1 Trillion?

1 | By Wall Street Insights and Indictments Staff

On Fox Business, Shah chats with Stuart Varney about Apple Inc. (Nasdaq: AAPL), Telsa Motors Inc. (Nasdaq: TSLA) and Goldman Sachs Group Inc. (NYSE: GS). Who’s overpriced? Who’s a “Buy”? He lets us know.

Of course, he likes Apple.

“I don’t think you could have a portfolio and say you’re fully diversified enough if you don’t have a lot of Apple in it,” Shah says. “There’s nowhere for Apple to go but up.”

So, how soon can Apple be worth $1 trillion? Find out here:

 


The Fed’s History of Assassination

25 | By Shah Gilani

The Federal Reserve System has a very dark history.

I’m talking about a history of murder.

Maybe you didn’t know, but there’s a theory that the Fed ordered John F. Kennedy’s assassination.

Today, I’ll share with you the facts behind that theory.

And then I’ll show you the facts that prove the Fed is guilty of even more murders…

By Any Other Name

First of all, “Federal Reserve System” is a misleading name.

A group of private bankers, who crafted the Fed, dubbed it that in 1910.

They chose “Federal” because it implies the system is a federal institution.

It never was – and it isn’t today. It’s private.

They chose “Reserve” to imply that the system would be rich in “reserves” and, therefore, supersafe. The Fed mandates “reserve requirements” for the United States’ banks but has a zero reserve requirement for itself.

And those bankers, back in 1910, chose “System” because they agreed to never call it a “bank.” But that’s exactly what it is.

The Federal Reserve System is a privately held (by banks as shareholders) bank.

It’s the United States’ central bank.

Beyond comprehension, beyond what’s written in the U.S. Constitution about Congress’s right to coin money and issue bills of credit, the Federal Reserve owns the money of the United States.

You read that right.

When President Woodrow Wilson signed the Federal Reserve Act into law on Dec. 23, 1913, the Fed was granted the power to control America’s money – to actually issue it and own it. They got around the Constitution by having the U.S. Treasury actually print and coin their money.

Look at any bill in your wallet, right now, get one out. Right there on the front of every bill, on the top, it says “Federal Reserve Note.” A “note” is a loan. All the money in your hand is on loan, from the Fed.

The BIG picture works like this.

The government can’t pay for what it spends, so it borrows. It borrows by issuing Treasury bills, notes and bonds. The Federal Reserve buys a lot of that debt (most of it) with the money it tells the Treasury to print for it. The Treasury then pays interest on its debt instruments.

So the Fed collects interest on money it made up out of thin air. A very neat trick, but that’s how banks work, folks.

Where does the interest come from? From taxes we pay. And because the Federal Reserve was going to buy the government’s debt from Day 1, those bankers wanted to make sure the government would be able to pay the interest it promised.

So, also in 1913 – surprise, surprise – Congress votes something new into law: the income tax.

Welcome to the new slavery, only this time it’s the Federal Reserve that’s our master.

The Theories

Fast-forward to June 4, 1963.

President John F. Kennedy issued Executive Order 11110, which empowered JFK with “The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption.”

In other words, Kennedy, by executive order, created the authority to print money.

Some conspiracy theorists believe the president was assassinated because he directly challenged the Fed’s sole authority to issue money.

Is that possible? If you believe in conspiracy theories surrounding the Kennedy assassination, anything’s possible.

I don’t believe the “lone gunman” theory.

But I also don’t believe the Fed had JFK killed.

The president gave his Treasury the right to print and issue silver certificates in lieu of having people come with their other dollars and coins in order to redeem them for actual silver. Instead, they would get “silver certificates.”

However, Jim Marrs, in his 1989 book, Crossfire: The Plot That Killed Kennedy, postulates that Executive Order 11110 was Kennedy’s opening salvo in what would be a battle with the Fed for control of the country’s money.

That’s theory.

The Facts

What isn’t a theory is the fact that the Federal Reserve Act murdered the Constitution by running over it. It gave the Fed the right to own America’s money

And then it back up over the Constitution again, by having the Treasury physically print and coin the Fed’s money to make it look Constitutional.

The Fed, right out of the gate, murdered U.S. citizens. It forever enslaved them through a federal income tax to pay interest to the Federal Reserve Bank for so graciously printing all the money any and every profligate government would ever need to borrow.

The Fed murdered the stock market in 1929. It let speculators borrow insane amounts of easy money to bet on stocks that had been “watered-down” by the banksters who mostly controlled the markets.

Then the Fed murdered the economy by causing the Great Depression with its failed monetary policies. Just ask Ben Bernanke – he knows.

The Fed murdered free-market capitalism and replaced it with Soviet-style central planning in 1977. That’s when it wrangled from the incompetent, panicked hands of a sycophantic Congress the Fed’s now infamous “dual mandate.”

What’s the dual mandate? It’s the Fed’s second mandate. The first is the Fed’s duty to keep prices stable and long-term interest rates moderate.

The second mandate, the one delivered in 1977, is to “promote effectively the goals of maximum employment.” In other words, the Fed is supposed to run the economy as if it were the Politburo.

The Fed murdered the economy again in 2008. But you know that.

And it’s killing us all now.

There’s no fiscal responsibility anywhere because everything’s in the Fed’s hands. There’s not even any trickle-down economics anymore because the Fed’s “stimulus” policies, also known as Quackatative Euphoria, has only benefited the 1% who own all the assets that have gone up.

And the Fed just keeps pumping markets higher and higher. The Fed hopes to help addicted speculators come down easy as it weans them from heroin onto methadone, and then down to Xanax, so no one feels the fall from Dow 30,000, or wherever it goes.

No, we don’t need to “audit the Fed.”

We need to kill it and bury it an unmarked grave.

P.S. I encourage you all to “like” and “follow me on Facebook and Twitter. Once you’re there, we’ll work together to uncover Wall Street’s latest debaucheries – and then we’ll bank some sky-high profits.

All We Know Is That a Black Swan Is Coming

13 | By Shah Gilani

Last week I wrote to my trading service subscribers that most of the hurdles facing the stock market were out in front of us, that we could see them, and that as long as the market climbs that “wall of worry” the path of least resistance for stocks, for the moment at least, appears to be up.

However, the known worries aren’t what worry me – it’s the black swans.

That led to a lot of people asking, “What black swans?”…

They’re Out There

There are plenty. But the nature of black swans is that we supposedly don’t know what they are.

I don’t buy that, nor or any of The Black Swan author Nassim Nicholas Taleb’s other theories, for that matter.

The whole black swan thing is about real black swans.

Forever and a day, everyone thought all swans were white. It was a given. There’s no such thing as a black swan.

Then, sure enough, black swans were discovered in Australia. Now we know there are black swans. That’s the thing about black swans – they’re not out there, until they are.

Black swan events aren’t unpredictable.

Take the markets, for example. We know that things we expect to work sometimes stop working.

The May 6, 2010, Flash Crash is an example.

My biggest black swan market fear is that terrorists, jokesters, or something in-between – like a mad nation-state to prove it can – “black-swans” the market.

We know it can happen. It happened in the Flash Crash. I’m not saying that was a cyberattack. I don’t think it was. But it could have been. We don’t really know what caused it.

The regulators have never come out with an explanation.

That’s what worries me. They know what went wrong and they’re not telling us.

What triggered the 1,000-point Dow Jones Industrial Average drop in a matter of seconds is secondary, though I’ll come back to that.

What’s important is that regulators can’t come out and say why what happened was possible in the first place.

There’s a difference – and it’s very important.

Whatever triggered the drop is secondary to the fact that stocks fell 1,000 points because systemic changes in how markets operate, mechanically, made it possible.

The long and short history of those changes has to do with the proliferation of electronic trading networks, competing exchanges, decimalization (trading in one-penny increments), high-frequency trading and the “unintended consequences” of other mechanical changes in markets.

So, the 2010 Flash Crash happened because it’s a possibility now. That’s what’s scary.

There are real ghosts in the machinery.

All it takes is a trigger to turn currently benign friendly market ghosts into black swans.

So, yes, a cyberattack could trigger a market crash. Because the black swans in the markets are actually sinkholes that we’ve let settle into the market’s foundation.

Sure, there are “circuit breakers” and all kinds of safety switches that will slow markets or halt trading if bad things happen.

But if a building can collapse because its foundation has been undermined, outside supports can only last so long.

Our markets are prone to cyberattacks, and our markets are mechanically unstable.

That’s the biggest black swan I can see.

And I’m not the only one who can see it.

P.S. I encourage you to “like” or “follow my communities of friends, colleagues and readers who want to receive ongoing coverage of Wall Street’s latest debaucheries in order to bank the biggest profits.

The Myth That This Time Is Different

11 | By Shah Gilani

Remember subprime?

It’s not that it’s back. It never left.

But this time is different.

Remember how low interest rates led investors into buying packaged, securitized boxes with black holes?

It’s not that that’s back. It never left.

But this time is different.

What’s different? Today I’ll tell you…

The Dice Are Different

The new subprime buildup isn’t about credit-damaged borrowers taking out mortgages. And new securitized boxes aren’t being filled with mortgages.

This time is different because credit-impaired borrowers are buying autos, borrowing on newly minted credit cards and taking out personal, mostly unsecured, loans. This time, institutional investors, mutual funds and retail investors are buying pieces of packaged leveraged loans.

This time is different because the dice are different.

What isn’t different is how the game ends. It’s still craps, and a lot of players will crap out.

According to a report released today – compiled by credit-reporting firm Equifax Inc. for The Wall Street Journal — in the first 11 months of 2014, four out of 10 auto loans, credit cards and personal loans went to subprime borrowers with credit scores of less than 640. That’s 50 million loans for $189 billion, in 11 months.

I’ve written about subprime auto loans here before. Subprime lending has helped boost auto sales 59% since 2009. That’s why we’re seeing record auto sales – lenders are throwing record amounts of money at borrowers, especially subprime borrowers.

Non-bank lenders, like private equity companies and hedge funds and venture capital firms, are able to borrow at next to nothing and put that money out to work in the “free market.” There they look to maximize the yield they get on the loans they make.

These non-bank lenders play in different sandboxes. Some throw money at auto dealers, both new- and used-car shops, so anybody who comes in the door can get a loan, as long as they’re willing to pay sky-high interest rates. Some back lending sites, like LendingTree or Elevate, which help themselves and their backers by lending money at high rates.

In 2014 LendingTree upped the loans it made to borrowers with FICO scores of 500 to 619 by 761% over 2013. None of the loans were mortgages.

Elevate, for its part, lends out at annual interest rates from 36% to a mere 365%.

Bound to Break

The New York Federal Reserve said last Tuesday that total household debt rose $306 billion in just the fourth quarter of 2014.

With so much of that debt being carried by subprime borrowers, something’s bound to break.

But not to worry.

Most of the debt that might turn rotten isn’t sitting on banks’ balance sheets. It’s in private hands. Or public hands, depending on which investors are backing private equity shops, hedge funds and VC firms – or, sometimes, as in a lot, the crap gets packaged and sold off to other yield-hungry “investors.”

Banks themselves are packaging some new, old stuff this time around.

They’re making “leveraged loans” to companies whose balance sheets are leveraged up with debt already. Borrowers apparently like the leverage to sometimes speculate on their own businesses, maybe buy each other out, maybe pay their controlling masters’ fees, maybe pay dividends, maybe buy back their overpriced shares, maybe just pay off old debt with new debt.

But not to worry.

Most of the debt that might turn rotten isn’t sitting on the banks’ balance sheets. No, they syndicate big loans among club banks who are in on the same game, package them up (you know how that works) and sometimes, for good measure, “structure” them into collateralized loan obligations with funky “tranches” and different credit quality profiles that pay different buyers different amounts with different associated risks.

But not to worry.

Institutional investors, pension plans and mutual funds are buying these bits and pieces, and they’re being put into exchange-traded funds (ETFs) so individual investors can grab that little extra yield they’re so desperate for.

In other words, don’t worry, this time risks are being spread around, not to just the same people as before, but to new investors who just know this time is different.

P.S. In case you don’t know how to play craps, I recommend the “don’t pass” line. That’s a bet against the dice.

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When It Comes to Wall Street Crooks… Size Matters

5 | By Shah Gilani

If you didn’t read yesterday’s BrokeAndBroker blog by Wall Street lawyer Bill Singer, you should.

In in his earlier life, before he got a life, Singer was an attorney at the National Association of Securities Dealers (NASD) now known as the Financial Industry Regulatory Authority (FINRA). And his latest blog is titled “A Tale of Two Streets and FINRA’s Disparate Sanctions.”

It’s about a guy named Adam Jensen, who was registered with the FINRA – but isn’t anymore.

Jensen’s tale is interesting, but it’s his example that I’m interested in today…

Our Crooked Two-Tiered System

FINRA is the self-regulatory outfit that operates underneath the U.S. Securities and Exchange Commission‘s blinking eye, and that polices peeps and perps on Da Street of Dreams and Schemes.

Jensen, it so happens, submits a Letter of Acceptance, Waiver and Consent (AWC) to FINRA, neither admitting nor denying that he violated FINRA rules. In other words, it’s a “settlement.” He violated rules, got caught – and flashed his get-out-of-jail card.

If you want to know what he did, you’ll have to read the blog. Suffice it to say, Jensen came up with a clever scam to inflate his sales production numbers to get paid more… DUH.

His punishment? Jensen gets barred for life from associating with any FINRA-registered firm in any capacity. In other words, his Wall Street days are over, unless he wants to run a hot dog stand in one of the Street’s alleys.

Then, Singer tells the tale of the “FINRA 19,” as he calls them. All 19 are broker-dealers with names like UBS Securities, Merrill Lynch, JMP Securities – names you’ve heard of.

The 19 collectively paid a couple million dollars in fines and had to sign those good, old AWC letters, neither admitting nor denying that they pumped up some of their own numbers to attract more business to their trading desks, to, of course, make more money.

Again, you’ll have to read the blog to get the details about their misdeeds.

Anyway, some of them do the exact same thing again a few years later.

So, they have to pay some more money and sign some more AWCs. That’s it.

The point is, no one is barred, no one loses their jobs, no one is any worse off for violating rules, not once, but twice… that we know of.

That’s Bill Singer’s “Tale of Two Streets.”

It made me realize something pretty frightening.

By coddling crooks at big shops and barring little crooks where they find them, Wall Street’s regulators are engineering – make that breeding – super-crooks.

They’re like those super-bacteria that antibiotics can’t kill. They’re the bugs in the hospital that make everyone afraid to end up there.

Only the hospital here happens to be our capital markets – our economy.

No wonder we’re sick all the time.

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You Have to Own This One

2 | By Wall Street Insights and Indictments Staff

This company is sitting on $178 billion in cash, and that number is growing every day. In Shah’s latest appearance on Fox Business, he tackles Apple Inc. (Nasdaq: AAPL), the cash-flow-generating machine. And he explains why you need to buy – now – while the price is still cheap. Just check out the video below.

 


What to Do When It’s Time to Sell Everything

20 | By Shah Gilani

My Jan. 29 column, It’s Not Time to Sell Everything – Yet,” generated a lot of questions.

I’m answering most of them here – and also letting you know exactly what I’m going to do myself.

As to the timing of a possible crash and depression, that’s the bazillion-dollar question.

I don’t have the bazillion-dollar answer yet, but here’s the start of my plan…

How We’re Getting There

Markets last week, especially U.S. markets, got down to “support” levels and dutifully bounced in an orgy of lusting futures and Viagra-fueled excitement.

Higher oil led the charge.

That’s worrisome. Oil may not have found a bottom. Falling 60% and then bouncing close to 20%, without any consolidation or a capitulation bottom, isn’t a sure sign of anything.

A lot more buyers went “long” (bought) oil looking for a bottom than there were long futures holders selling on the way down.

If oil did put in a bottom and we hold between, say, $45 and $50 (based on the West Texas Intermediate spot price) on the downside, that’s good. However, if we break below $43, then break $40, and look like $30 is a possibility, all hell will break loose.

All those new buyers loading up on oil, oil stocks, drillers and explorers will dump their new bets like they were ticking bombs. In the process, all the longs who held on all the way down, because they were in a state of disbelief, will freak and sell, sell, sell.

That would make a crash self-fulfilling.

That could cause a stock-market sell-off – a panic. Why? Because investors were very nervous when we got down to support. When oil looked better, they all jumped back in.

All those new players will jump out if the oil higher it-feels-better sentiment turns to an “OMG, we were wrong” psychology. Then, if we get to support again, the same support that just held, and that gets broken, look out below. Margin calls will start rolling in.

Stocks are moving right up to resistance – we’re almost there. If stocks can’t break out above resistance levels and make new highs but slip this coming week, that’s not good.

As far as timing, I’m first and foremost watching oil and how stocks react to oil price movements.

At the same time I’m watching Europe. European stock markets better bounce, and European sovereign bonds better not weaken.

Interest rates rising, for any reason, will be the canary in the coal mine in Europe. With Europe’s new quantitative-easing program in place, neither of those two things should happen.

However, if something breaks in Europe, that’s another potential market killer. Watch Europe like a hawk.

I’m watching the U.S. dollar. The U.S. Federal Reserve could ratchet up expectations for an interest-rate hike, which would cause the dollar to rise further against all other currencies. At the same time, a lot of other countries are trying to devalue their currencies to make their not-so-robust exports more “competitive.”

The problem there is that emerging markets have $5.7 trillion of dollar-denominated debts.

That means they borrowed in dollars and have to convert their home currencies to pay interest and principal in dollars. Their falling currencies against the dollar could trigger defaults. If that happens, the rush out of emerging markets will make 1998 look like a day at the beach. Watch for foreign borrower defaults.

Last, but not least, by a long shot, there’s China. How about the Shanghai Composite‘s one-year gain of 51.29%, as every indicator in China shows the economy is slowing.

Does that make sense?

The People’s Bank of China (PBC) just had to lower reserve requirements for banks. Do you get that? As the world is trying to make banks safer by making them raise reserves, the PBC is telling its banks to reserve less. Why? Because they are facing a credit crisis. If it turns full-blown, it will make the U.S.-led credit crisis of 2008 look like a warm-up act.

All these hot spots are where I’m looking for timing cues. If we get past all them, that’s good, for a while. But only for a while. Unless all the structural problems underlying all these hot spots get fixed – and they won’t – the water just gets hotter.

And as the water gets hotter, here’s what I’m doing – and what I think you all should be doing.

Cash Will Be King

To position for the possibility of a market crash, first and foremost, I always have my money – whether it’s cash, investment holdings or trading accounts – in the biggest institutions I can find.

The too-big-to-fail financial institutions might fail, but we should be able to get our money out of them because they will be propped up by the government. They have to be. They always will be.

Otherwise, nothing matters.

What if the government fails to hold them up? If that becomes the case, all those survivalists we sometimes laugh at, well, we’ll be running to them for our own survival.

If the giant institutions where you park your money start getting in trouble, you’ll see it in their stock prices. Get your money out if you see that happening.

I always have stops ready for all my positions. That includes bond, fixed-income positions.

Right now, I don’t own any real estate. I play real estate with real estate investment trusts (REITs).

I raise my stops every time the market makes new highs. My stops (unless they’re my trading account positions) aren’t close to current prices. I don’t want to get stopped out in a rising market. But I want out if things start falling. I can always get back in.

Someone commented, “Isn’t selling everything adding to the problem?” Yes it is. However, if you don’t get out before everybody else sells, you will be the biggest loser.

I own some gold. The real stuff. Not a lot, just enough to have something solid, something that might become more valuable, or something I can use for barter if we ever get into a financial shutdown, cool-down period.

Cash is king in a crisis. And the best cash in the world is U.S. dollars. Period. I’d stick mine in a safe spot. No, I’m not telling you where.

Why sell everything? Why keep U.S. dollars?

Because when the dust settles, and it will settle, if we get the big one, and we time it right (I’m here with you) and go to cash when everything falls, buying in at the right time will guarantee (and you NEVER hear me say that word) us spectacular gains in a matter of a few years as the world heals.

One last thing, if you have your trading accounts at big, safe institutions, you can short along with me.

Because selling everything is one thing, shorting everything else is something altogether more rewarding.

Any more questions?

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Corruption of the “Innocent”

4 | By Shah Gilani

It’s time to rate the Justice Department.

But before we grade it, I want to go on record with a serious proposal.

I think its name should be changed.

Why? To protect the innocent the department drags through the mud. Where’s the justice in that?

It’s not fair that an outfit with a name like the U.S. Department of Justice has the power to extract billions and billions of dollars in “settlements” from innocent, stalwart U.S. institutions.

So, let’s talk about fairness…

Another “Watchdog” With No Bite

This is the United States – and we need to protect the innocent.

Take S&P, for example. A wholly owned division of McGraw Hill Financial Inc. (NYSE: MHFI), Standard & Poor’s Financial Services LLC was found innocent on Tuesday of allegations it committed fraud.

What’s worse, the supposed fraud S&P committed was back in 2007. For justice’s sake, aren’t there statutes of limitations on this kind of harassment of systemically important financial institutions?

Apparently not. The Justice Department decided, years after the facts, to look under the hood at the ratings agency. S&P, for its part, was astonished that such a long time had passed and all of a sudden it was being investigated.

According to Standard & Poor’s, Justice was acting on behalf of the Obama administration in digging up such old, forgotten little stuff that really didn’t have any consequences, because S&P had the nerve to downgrade the United States’ credit rating on Aug. 5, 2011, and peeps were pissed.

Of course, it didn’t matter that Justice had gathered evidence against S&P. In fact, it amounted to such a small amount that when S&P demanded that Justice show the ratings agency what it really had, Justice had to forklift more than 290 million documents stacked up in a warehouse.

I mean, come on!

Well, the story has a sad ending for S&P and a happy ending for Justice, which is why I’m so upset.

S&P neither admitted nor denied systematically changing rating models in 2007 to guarantee higher ratings to issuers of hundreds of billions of dollars of mortgage-backed securities, so it wouldn’t lose business to competitors who were making the same accommodating moves. However, S&P agreed to pay about $1.5 billion to settle the matter.

It pains me to see the innocent fleeced such!

After Justice Department head hit man Eric Holder threw an in-your-face, take your place, you backstabbers, party announcing the settlement on Tuesday, the Poor’s wee-buggers caught up in this injustice sheepishly said that this settlement “contains no findings of violations of law.”

S&P will now have to fork over about a year’s net profit, or $687.5 million, to Justice, $687.5 million to a bunch of greedy states that joined the suit, and a bunch of money to some little pension outfit known as the California Public Employees’ Retirement System (CalPERS).

Oh, the humanity!

So, before we grade Justice, using S&P’s rating system (yeah, now you’re going to get yours, Injustice Department!), I suggest we change their official name to the “U.S. Financial Services and Miscreants Settlement and Toll-Taking Department.”

Hold on, I’m checking with S&P on its rating grade…

Okay! S&P says if it was up to them, without even looking at one of its new models – which just happens to be under investigation by the U.S. Securities and Exchange Commission (SEC) as we speak – they’d give Justice a AAA rating.

Wow, that’s generous.

S&P explains – not really – that it looked to its municipal bond rating scale. Because Justice is a toll-taking business, S&P says it would classify it as a revenue-generating enterprise. And since Justice has the power to raise what it charges and go anywhere to force innocent peeps like us and our bank buddies through its booth, S&P says it’s an OUTSTANDING credit risk.

“So,” I replied, “that’s why none of you ever go to jail. You have to be free to pay the troll.”

Stories like this prove what we already all know – that the players on Wall Street are corrupt.

However, that doesn’t mean you can’t make money in the markets. You just have to know some of the secret strategies that allow you to “play” just as profitably as the Wall Streeters.

Just think about one of the biggest myths in investing – the idea that blue-chip stocks can’t quickly and easily double in value.

The reality is that they do. And they do it every day.

Take, for instance, a company like Humana Inc. (NYSE: HUM), the $22.7 billion health insurance giant.

You wouldn’t think a company that large could bring its investors big, fast windfall profits, would you?

But this shocking video that I put together could immediately change the way you invest your money.

If you knew about this secret strategy, you could have doubled your money in Humana in just 43 minutes.

Now, this same investment is about to made in three more blue-chip companies that could give you a very real chance to amass a seven-figure fortune – in record time.

I want you to see it. Watch the full details here.

Visual Proof That Markets Are at a Tipping Point

8 | By Shah Gilani

I’m not an alarmist.

The sky isn’t falling. But the same may not be true for stocks.

And I am concerned. To see what I’m talking about, just take a look at the charts below the break. Take a good look at each one.

See if you see anything in them. See if you can see what I see.

Then I’ll tell you what I see and what I’m afraid of…

Do You See What I See?


They’re all different market indexes. They all look the same. Don’t they?

And they’re not the only indexes that look this way – check out the Dow Jones Transportation Average and the PHLX Semiconductor Index as well.

Not only do they look the same, but they’re all pointing to the same place – a danger zone.

On every graph, on the right-hand side, after the big drop in October, you can draw a pretty straight line under the dips on the right from the middle of December to now.

What is that line? That’s “support.” Every one of those charts and most individual stock charts look like these indexes. They all have the same support line.

What’s the problem?

If they break that support line – if just enough of them break their support lines – they’re all going down.

The correlation is frightening.

That’s what I’m worried about.

A major market sell-off can happen. We’re at that point – we’re hanging on to support.

Then again, support can be support. And we could bounce higher and make new highs.

As I write this, as we head into the close today, after being down triple digits this morning, we’re now up triple digits.

So far, so good. Support levels are holding.

However, I’m more concerned about preserving my capital than risking it at this juncture.

Right about now would be a good time to check your stocks, to put down some stop-loss orders, if you don’t have them down already.

Now is the time where I like to put on trades that will make money if the markets fall.

We’re down with our stops in my trading services – Short-Side Fortunes and Capital Wave Forecast – and we’ve got on some neat positions that will make a ton if the markets do fall out of bed.

And if they bounce off support and head higher, we’ll get out of our downside plays, take off some of our hedges, and let our portfolios bask in the sunshine of a rising market.

But, like I said up top, the truth is that I am concerned.

That’s all. I told you I’d let you know if I became uneasy with how the market is acting.

I’m saying it now.

Editor’s Note: But it’s not all bad news – if you know how to play markets like this. Shah has put together a presentation that shows you how to extract exponential gains – time and time again – from some of the biggest, most secure companies on the planet. Look for it soon.