VRA Must Read: If the Market Crashes, The FED Will Have Blood on Their Hands

Sep 09, 2015

VRA Must Read: If the Market Crashes, The FED Will Have Blood on Their Hands

Must Read for All Active Investors...For These Two Reasons:

1) If the Market Crashes, the FED Will Have Blood on Their Hands

2) Regardless of What Happens, THIS is the Exact Environment the VRA Was Made For...We'll Continue to Beat the Markets Handily Either Way

I'll Explain Both (briefly) Below:

First, make NO mistake about this; there's only ONE reason that the stock market...both in the US and globally...is dropping 3% one day, rising 3% the next day, and then dropping 2% the next day. That reason is THE FEDERAL RESERVE, led by her highness, Janet Yellen.

As I wrote this morning, I see NO WAY that the FED can raise rates in this environment....NO ONE IN THEIR RIGHT MIND SEES ANY WAY THE FED CAN RAISE RATES IN THIS ENVIRONMENT!

Consider:

Following stability in global markets on Monday and Tuesday, US markets had a very strong and stable Tuesday here, ending with nearly 400 points in Dow Jones gains.

That was followed by massive gains in Asia overnight, then in Europe this morning, and finally with a strong US opening in stocks here of close to 200 points.

Finally...stability and resolution seemed on its way...normality was returning. But that all changed with an obscure economic report at mid-day today...the JOLT report showed that job openings had reached a multi-year high here in the states, and once again, the FED's lack of clarity seemed to open the door to an actual rate rise at the end of next week. US markets reversed course promptly, from gains of 1% to Dow losses of 240 points by the close. Does anyone actually want to risk their hard earned money in this kind of risk filled environment?? Not no, but HELL NO. And they wonder why the individual investor is leaving the market in droves...

I'm willing to give this FED a "bit" of room to run...but only because they have not actually acted to increase interest rates. However, should they act next week, and raise rates for the first time in more than 9 years, no one should be surprised if the markets crash...because that could very quickly become our global reality. 

Having said this, I still see NO WAY that the FED will raise rates. But here's what I have no clue of; why haven't they already announced that a rate increase is off the table?? It's exactly what they "should" do...not only would the markets have instant stability, but if they took the further step to then say that no rate increase would take place until 2016, both stock markets globally...but more importantly, economic situations globally....would be able to find their footing and put to rest this central bank fed insanity.

Will the FED take these actions? Of course not. Why not? Incredibly, because these high profile, pseudo masters of the financial universe, have fallen in love with the celebrity of it all. 

Second, Regardless of What Happens, THIS is the Exact Environment the VRA Was Made For

Going forward, we may have to be more nimble than most would prefer to be, but know this; it's this exact environment where the VRA shines. Whether the market is rising or falling, we can and will make money in either direction...I can say this with confidence because its exactly what I've done for more than 12 years...and there are thousands of VRA Subscribers that can attest to exactly this. Sure, I would rather make money in a normal, rising environment, but we don't always get what we want...I learned this long ago, along with the perfect strategies to make money in a falling market.

Until next time, stay frosty...we'll be ready regardless

Kip

vraletter.com

VRA Update: Yellen's Test - Frankenstein is Hungry

Yellen's Test

It's hard for me to be more clear about this then I've been. We will have much MORE QE in our future. Why there's this talk about raising rates is little more than a farce. 

If Yellen and her team of "can't shoot straight monetary gangsta's" moves forward and increases rates by even just .25%...in THIS environment...then all bets will be off for global equities/global economies. And yes, that means that the likelihood of a crash would then become very, very real. 

Bottom line: the world looks to the US for "real" leadership. I was never a fan of QE in the first place...having only written 1000 articles against it over the years...but the FED made their decision to go for it, and in doing so, created a global economic Frankenstein. And, just as in the old horror tale, this Frankenstein will seek to kill its master as well, should the beast fail to be fed.

The FED's the one that decided "this is WAR"...and that "all was fair"...now, they must see their original battle plan through, come hell or high water. Then, they have to hope like crazy that their long term plan to reinflate the economy will actually work. I'm in the camp that says "no way it works"...but I'm also in the camp that says "the worst case scenario is still 1-2 years away".

PREDICTION: we will avoid both an economic and stock market crash...for now...and Yellen will not raise rates until next year at the soonest. 

CHINA, THE MARKETS AND US FUTURES

Like Japan of the 80's, today's China has been shown to be much less of a global economic threat to US dominance than previously thought. As I've said, the US will lead the way out of this mess...and we should expect US stock prices to bottom first...followed by a major recovery move higher in China.

I DO NOT expect China to go through a near 30 year recession...which is what Japan experienced once their 80's "power move" failed. The demographics and economic futures of Japan 1980's v China today are just completely different...as in, VERY few parallels.

Overnight, China failed to move higher for the 6th straight day (losses of roughly 1.5%), but here in the states, US Dow futures show us opening 200 points higher. We saw 450 points disappear quickly yesterday, so anything is possible...but I remain optimistic.

If the world's about to crash, why is gold down another $3/oz this am...and why is oil a bit higher? If the shorts aren't asking themselves these questions...well, maybe they should.

You saw the sentiment indicators yesterday...as negative as ever (which is a reverse indicator of course, and a positive for markets). Assuming that the markets can stabilize, the short covering move higher could be pretty stunning.

Then, with an overnight ramp higher in China (which I fully expect!), we could see US markets rally big time once again...and guess what that might do? All of a sudden, the "TV guru's" will be saying that this looks like yet ANOTHER V BOTTOM in US stocks...and man, would the shorts ever be in trouble then (just as we're taking profits "again" and looking to reverse course).

Finally, the VRA now has net gains on closed out positions for the past 2 years of more than 1900%...and yes, this makes us #1...by far....again.

Kip

VRAletter.com

VRA Alert: Make Sure You are Positioned - Major Cycle Reversal

Corporate earnings are coming in, and the early read for me is “surprisingly solid”. And remember folks, this is the quarter where a combination of bad weather and a strong US Dollar (USD) were supposed to hit companies and hit them hard.

There is one area where hits from a strong USD have been felt. Take a look at the following commodities since their 2011 highs…

Commodity	Current Price	Recent High	Change
Iron Ore	$59.00	$195.00	-70%
Silver	$15.53	$48.55	-68%
WTI Crude	$44.88	$113.39	-60%
Corn	$358.50	$839.50	-57%
Natural Gas	$2.69	$6.21	-57%
Brent Crude	$55.24	$126.26	-56%
Hogs	$65.21	$133.06	-51%
Soy Beans	$962.00	$1,790.00	-46%
Uranium	$39.25	$73.00	-46%
Wheat	$504.50	$912.50	-45%
Copper	$5,882.00	$10,064.00	-42%
Platinum	$1,121.00	$1,884.00	-40%
Gold	$1,153.57	$1,874.72	-38%
Southern Pine Trees	$395.00	$499.00	-21%
Source: Thomson Reuters Datastream What a “Falling” Dollar Could Mean for Commodities Since July 2014, the value of the U.S. dollar has risen more than 25%. That's an incredible move for any currency. The rapidly rising dollar sent commodity prices falling just as fast... The chart below shows the inverse relationship between the Reuters/Jefferies CRB Index (that tracks 19 commodities) and the dollar. Since many commodities are denominated in dollars, the price of those commodities has fallen as the dollar has gained strength. As I’ve written extensively, I am looking for a major move higher in precious metals…and we are well positioned here with our current positions. Remember, gold shorts are at an all time high.....Euro Shorts/Dollar Longs are at an all time high. NOW is the time to be positioned as a perfect storm short squeeze develops.The chart above is going to reverse completely. And...for all of you that have bought into the argument that precious metals prices will fall in the face of rising interest rates, think back to the late 1970's, and more recently, the 2002-2005 time frame. Gold and silver skyrocketed as interest rates increased...this time would be no different. While it’s too early that say that the move higher in the USD is over, its not too early to take action on companies that will benefit greatly from a weaker dollar. Make sure you are positioned accordingly... VRA Subscribers just booked another 112% profit today. Incredibly, close to 70% of the public wants nothing to do with the stock market. Of course, after the Dow Jones has jumped another 30%, they will all be jumping in...and that's when we will be selling. Kip Herriage - VRAletter.com @kherriage (Follow me on Twitter)

VRA UPDATE: PERFECT STORM BREWING FOR 1200% GAINS

VRA UPDATE: PERFECT STORM BREWING – TIME FOR 1200% PLUS GAINS - AGAIN

Each week I run every indicator and chart that the VRA Trading & Investing System is comprised of, and as I have been predicting, a perfect storm looks to be brewing. I believe those that take action will see their portfolios skyrocket over the next 6-12 months, specifically in the individual sectors and stocks that the VRA recommends.

Roughly 4 years ago I turned bullish on the stock market, and while we have seen the market move sharply higher, we have yet to see what is commonly referred to as the “blow-off phase” of this bull market. As I’ve been predicting, I believe that phase is now underway, and barring some unforeseen black swan event, a short term move higher of roughly 30% in the Dow and S&P could be right in front of us, with far greater gains available to those invested in the best sectors and stocks.

Major bull markets in equities…and yes, this one certainly qualifies…go through specific phases. A bull market begins in a sell-off crash low, which we saw in 2009 at the height of the financial crisis panic lows (March 2009, which the VRA nailed within 30 minutes), followed by a series of higher highs and higher lows over a period of several years. The final phase of major bull markets is the most explosive. Typically, bull markets like this do not end until we see real froth in the markets. Think back to 1999-2000, and the dot com melt-up in stocks, and you’ll know exactly what I am talking about. 

Based on everything that I see technically, this final move higher is now underway. These are the 10 most important indicators that the VRA Trading & Investing System follows, and importantly, the fundamentals are confirming the technicals.

Bullish Fundamentals

I write about the fundamental reasons to be bullish fairly frequently, and we covered them on our most recent VRA Global Investment Call, but let’s take a look at them all in one place.

Briefly, here are the most important fundamental reasons that tell me a major move in the markets is on the way:

One: Climbing a Wall of Worry – bull markets tend to ramp higher when the investing public is negative and under-invested. We see this exact environment now with just 35% of the public invested in stocks (versus more than 70% in 2000). Contrarians are always the biggest winners.

Two: Election Year Cycle – the 3^rd year of an election year is far and away the best year to be invested in stocks.

Three: Stock Buybacks and M&A Activity – mgt teams are buying back shares of their own companies at a near record pace. In addition, favorable tax laws are taking mergers and acquisitions to all time highs. Corporate inversions, which allow co’s to base their headquarters in more tax friendly countries and pay 20-30% less in total taxes, are a major reason for this, and with the risk of this loophole closing we can look for M&A activity to grow larger still.

Four: Central Banks, QE and more than 20 countries slashing interest rates in an ongoing currency war tell us that stocks are the only place to be for your investment dollars. In addition, outright equity purchases by central banks, which has moved from conspiracy theory to conspiracy fact, tell us that we have a serious floor underneath stock prices. Any decline will be met with buying.

With interest rates at record low levels globally, where else are investors supposed to put their money??

Five: M2 Money Supply – with money supply growing by 7.3% in the US, and rising, serious cash is being forced into the economy by the FED.  Again, “Don’t fight the tape, don’t fight the FED” continues to be the theme of this bull market.

The 5 fundamental points above tell us that we WILL see a blow-off phase in stocks…and now is the time to be positioned for the move higher.

VRA PORTFOLIO NOTES: 

One: Precious Metals – it’s looking more and more like the VRA caught the November 2014 lows in precious metals and mining stocks. Not only have we seen a double bottom in gold, but mining stocks are giving us a very important chart pattern of higher highs and higher lows…exactly what technical analysts expect when a major move higher is beginning. Over the last two weeks, the Dow has increased by 1.3%, however the GDX (mining stock index) is up a very impressive 12.5%. 

Folks…talk about a perfect storm for precious metals. With 3.5 years of lower gold and silver prices, a huge number of mining co’s can no longer afford to explore. A combination of rising mining costs (thank you core inflation) plus falling gold/silver prices, have given us the perfect scenario for the next great bull market in PM’s and the miners. WE WILL MAKE FORTUNES IN PM’s AND VRA RECOMMENDED MINING STOCKS GOING FORWARD.

Two: Bull Market Positions. With my call for a big move higher in the overall stock market, make sure you own our top ranked selections. Our gains of 1200% from the past 14 months will be repeated...and more.

Important Point: Going forward, the VRA will be more aggressive in taking profits in these positions. Stay tuned for more info, but here’s the game plan. As the market gets overbought, we will look to take profits more frequently…then buy our positions back once they pull back in price. This gives us the opportunity for 200-300% gains in selected positions each year, rather than 50-100% gains.

The most explosive stage of this bull market is in front of us. Make sure you are positioned for another year of 1200% plus gains.

Until next time, thanks again for reading…make it a great week.

Kip

@kherriage (follow me on Twitter)

If you would like to subscibe to the VRA and save more than 70% off of the annual price, email me at: verticalresearch@mindspring.com

The Cartels - Real Life Matrix

Starting at 6 am each morning I look over my investing notes and the latest indicators from the VRA Trading and Investing System. This morning, my notes reminded me that 2015 is a “pre-election year” and that historically, this year is the strongest of all or the stock market. It’s just one of about ten primary reasons that I have been so bullish on stocks.

This also reminded me that yes…next year we have a Presidential election. While I’m a conservative at heart, I am also 100% independent. And yes…Republicans are every bit as messed up as Democrats.

THE CARTELS – Same Song Second Verse 

Sure, Republicans will "act" different from Dems…and they will parrot the conservative party line to a naïve public…but at the end of the day we have a government controlled by the most powerful of special interests, and whether Republican or Democrat, it is the Global Cartels of the world that rule (just about) everything.

Be it the Financial Cartel (the most sinister and powerful), the Military Cartel (always the most aggressive and deadly), the Energy Cartel (the source of massive, multi-decade, U.S. destroying wealth transfers), the Media Cartel (controlling/brainwashing the public) or the Drug Cartel (both legal and illegal), these cartels work hand-in-hand, functioning as a shadow government, to manipulate and control the masses. 

With this knowledge, we can view the events of the day entirely differently from the mainstream lemmings…helping us to make informed and correct decisions, based in the truth and outside of this real-life matrix. Understanding this is an important key to making great decisions.

No…it's not always easy being a member of the "informed minority", and in fact, can be more than just a little uncomfortable when putting your plans into place. However, once you begin to examine life by asking questions like; "Qui Bono?" (who benefits) and you begin to "Follow the Money" when looking for the truth, your search will become much simpler. I know mine has…. 

Make it a great day…

Kip Herriage

@kherriage (Twitter)

VRAletter.com