It’s Spooky Out There

Posted by Mark Leibovit - VR Traader

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Mark Leibovit, Timer’s Digest’s #1 Stock Market Timer of the year in 2011 so far & Timer Digest’s #1 US gold timer in 2011 takes a critical look at markets: Ed Note: The Following is just a small fraction of Mark’s Daily VRTrader Letter). Mark also produces


Though beating to a slightly different drummer, the stock market is attempting to mirror last year’s recovery following a summer swoon. If it does, we’re sooner or later going to exceed the May, 2011 highs (12,876 in the DJ and 1371 in the S&P). It is clear that the market’s rally has been (to put it politely) nudged along compliments of Ben Bernanke either through verbal ‘jawboning’ on his own, through his henchmen (male and female) or (more likely) direct intervention in the markets (again!). Fundamentally, there is little reason for this rally especially with the western world essentially bankrupt (both banks and nations) who are sinking further and further into debt, political uncertainty growing everywhere, and worrisome civil unrest. That said, I follow the markets cyclically and technically and

a low in September or October followed by a sharp year-end recovery is far from unprecedented. The big question is whether this rally is one heck of a bull trap or the makings of a sustainable advance through the U.S. election year. I will not even attempt to answer that question. Frankly, there is no way of knowing. My current feeling is that momentum is clearly on the side of the bulls and you don’t want to fight the tape until there is clear sign of a top. However, the fact the S&P 500 pretty much satisfied my expectations by entering the 1280-1300 target range is one reason to be cautious here and I’m not chasing the market. It’s far too spooky for me! I saved you from the big decline this summer and last summer by flashing ‘SELL’ signals and in that alone have earned my keep. Being a survivor in this game and protecting assets is more important than catching every move. I remain on a NEUTRAL signal for the market and, in hindsight, when I flipped from SELL to NEUTRAL back on October 4, I should have flipped to BUY! Short-term? A retracement back to the 1250s would not be out of the question in coming days and would represent a buying opportunity for traders. The huge surge on Thursday of over 70 S&P points intra-day (415 Dow Jones Industrial points) smacks of ‘painting the tape’ in my book. Huge point advances like these attract a lot of press attention and are often coincident with short-term market peaks. That said, I am not positioned in inverse ETFs or shorts here, though it is very tempting to do so. I am going to restrain myself due to ‘seasonal’ factors and try and buy the dips if offered unless volume turns uniformly negative. Bottom line: Don’t get caught up in the positive news ‘hogwash’. We are not being told the truth regarding the severity and depth of the problems. We are lied to regarding unemployment and inflation and there is no transparency at the Federal Reserve, an institution I strongly support being dissolved. As I said on Fox Business News, I am less concerned being invested in the stock market which has essentially gone nowhere for the past 10 years and more interested in the metals, especially physical metals which long-term provide you safe haven from a government gone wild.



We are pretty much fully invested in the portfolio in my VR Gold Letter, so I hope gold (and other metals) can muster the strength to continue reaching higher and higher short-term. That said, having predicted a technical and possible ‘dead-cat’ bounce into the 1722-1768 range, I cannot be less than nervous here that this market has temporarily exhausted itself. Volume was quite positive a week ago, but after a multi-day advance we’re beginning to see volume slow creating some negative divergence. It may only be temporary in view of the usual seasonal strength this time of year. My suggestion is to wait and see if you see a pullback here in early to mid-November before adding to positions.


Rates are slowly and steadily creeping higher here and it is becoming more and more evident that a top is in place in the bond market. Frankly, it appeared that the ‘bubble’ so many attributed to gold was instead occurring in bonds. I would not hold any form of U.S. bonds, less you run the risk of further deterioration in the U.S. Dollar and an ultimate devaluation which will strike like a 9/11 in your wallet.”


Mark Leibovit’s has been so successful this year alone that Timer’s Digest has him ranked as the #1 Stock Market Timer of the year in 2011 so far, an award he’s won in previous years. Mark has also done so well trading Gold it has just been announced that Mark is Timer Digest’s #1 US gold timer in 2011. Check out Mark’s  has a Special Offer HERE