Investment Tips for the current Bear Market

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Mavis Robertson
6 years ago
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November 18, 2014 Investment Tips for the current Bear Market According to Jesse Livermore, most people don t want to study the market or invest intelligently, they just want tips to play the Market,

1 November 18, 2014 Investment Tips for the current Bear Market According to Jesse Livermore, most people don t want to study the market or invest intelligently, they just want tips to play the Market, in hopes of getting seriously rich, and as Robert Shiller points out in Irrational Exuberance, the United States Annual Wager stated as the amount people lost on gambling in 2000 was more than they spent on all other forms of entertainment combined: including movie tickets, recorded music, theme parks, spectator sports and video games. So if you re one of these, players and are looking to gamble for fun & excitement, follow these tips, and your odds of beating the house, and the herd, will be higher than if you were an ace card counter. 1) This is a Bear Market, in a Bear Market all stocks go down. Don t hold any long stocks, they are money down the drain. 2) Don t fall for the long-term Buy & Hold strategy In a super-sized Bear Market the long-term could out-live you. 3) Because the dollar has been debased & abandoned by the Fed in attempts to spend its way out of deflationary recession, T-Bonds will get killed. All bonds sync with Treasuries. Don t hold any bonds. 4) In simple terms, that leaves Cash, and the best cash is held in appreciating currencies, as opposed to depreciating dollars. If you can think cyclically, realize that all such extremes of the pendulum swing are mean-reverting via the opposite extreme. Since June, the greenback has appreciated over 7%, its nose-dive devaluation is bound to be far more spectacular. In fact, its 7% climb is analogous to climbing the high-diving platform prior to a Dive. Page 1 of 10

5) While most currencies will appreciate against the US dollar, the uro will likely appreciate the most, as the single currency becomes the repository of choice for safe haven capital globally,

2 5) While most currencies will appreciate against the US dollar, the uro will likely appreciate the most, as the single currency becomes the repository of choice for safe haven capital globally, particularly funds flowing from China & Japan. The last time the dollar faltered, a wave of funds flowed into the uro, concurrent with much talk about pricing Oil in Euros, as opposed to Yankee dollars. 6) In aggregate, China & Japan hold over 40% of US government debt. As the second largest currency, the uro is bound to receive the lion s share of new money, as well as flight capital from plunging US dollars. The single currency is only beginning a super-sized Bull Market. Analogous to the trajectory of US stocks beginning in 1982, the uro is in the early stages of a long-term speculative bubble, as opposed to the $US, at the edge of a steep precipice. 7) Now is the time to hop onto the uro bandwagon before others do, as more and more others catch onto the trend, the feed-back loop described by Robert Shiller, & a function of the market s transcending Elliott magnitude, demand for the uro, & its price in dollars, will be driven higher like a rocket launch. You stand to make the Page 2 of 10

3 most in dollar terms by side-stepping US dollar deflation, in appreciating uros, and then to buy back dollars at the trough. Measured in terms of the US Dollar index, the greenback will trough at approximately 73, from its current lofty level of 88 for a 17% return =15/88 = 17% If we compound the dollar s decline by holding uro s, its concurrent appreciation will likely bump up your return to a 25-30% in the next months, with little risk & zero leverage. 8) The Fed has been printing money on, and off, for 18 years, and steadily for the last 14 years, while the European Central Bank has only just begun to seriously print money in the last two years. Compared to the US dollar, the uro s value has been diluted relatively little by unprecedented monetary easing. If you re still craving action If you re still craving action, set aside 1/3 of your funds to intelligently invest via Exceptional Bear s Market Timing signals on 11 Exchange-Traded Funds (ETFs).The charts below show our strategic asset allocation from the perspective of the minimum gain to the 2009 trough, where they appreciated disproportionately. The Crash ahead will easily exceed these valuations, eventually by a multiple of at least 4x. At the bottom right you see Elliott s A-B Base, from which a new Bull Page 3 of 10

4 Market launches, to indicate the plummet of all long asset classes, without exception. Short US Small-Cap stocks, Page 4 of 10

5 Short Financials Short Real Estate Page 5 of 10

6 Short Biotechnology Short T-Bonds in an inverse Bond Bull Market Page 6 of 10

Short Emerging Markets We remain Long Emerging Markets until

7 Short China for the longer-term We remain long China until the completion of the b-wave reversal on bottom right. Short Emerging Markets We remain Long Emerging Markets until the completion of the b wave reversal on bottom right. Page 7 of 10

valued in dollars and due to spike to reflect the dollar s plunge in

8 Long Gold Commodities are often inversely correlated to stocks, gold troughed in late 2008 Long Oil - Commodities (particularly oil & gold are valued in dollars and due to spike to reflect the dollar s plunge in purchasing power, to compound Commodities inverse correlation to stocks) Page 8 of 10

Long the $VIX Volatility Index - Next comes the Spike in Wave V Obviously the Fed will step-in with its magic bullet at some point to prop up markets after a precipitous decline, so you cannot Buy &

9 Long the $VIX Volatility Index - Next comes the Spike in Wave V Obviously the Fed will step-in with its magic bullet at some point to prop up markets after a precipitous decline, so you cannot Buy & Hold any asset classes as if this were a Bull Market - Bear Markets are highly volatile and are optimally swing-traded against the irrationally stampeding herd. When the herd can t get enough of our inverse funds at any price, we scale-out 1/3 of our position, if the feeding frenzy forces prices to highly exuberant extremes, we scale-out another 1/3, and then wait for the reaction to subside, to buy back the same ETFs at a deep discount. Herds tend to be very impatient, and are always running to or from something, they lack staying power. Done over and over, this Bear Market strategy compounds capital faster than any other. Such swing trading has a steep learning curve however, and the market extracts a high tuition from those who attempt to gain proficiency by trial and error. To attempt to learn swing-trading via hard knocks is penny-wise, and thousands of dollars foolish. The Page 9 of 10

10 Market delivers her lesson, and presents you the bill only afterwards. Our subscription fees are far more modest. To view the long-term charts included in our inverse ETF allocation since 2009, follow the link to Public Stockcharts, click here. If you already subscribe to Stockcharts, I would appreciate your vote. Eduardo Mirahyes Page 10 of 10

Has Oil Bottomed yet?

November 14, 2014 Has Oil Bottomed yet? Oil has bottomed intermediate-term. The next move is a bounce to the area of at least $100/barrel within a span of ~12 months. Once that upside completes, oil will