How to Think Clearly

"Never argue with stupid people. They will drag you down to their level and then beat you with experience." –Mark Twain

If you want to fully understand and appreciate the work of Mike Stathis, from his market forecasts and securities analysis to his political and economic analyses, you will need to learn how to think clearly if you already lack this vital skill.

For many, this will be a cleansing process that could take quite a long time to complete depending on each individual.

The best way to begin clearing your mind is to move forward with this series of steps:

1. GET RID OF YOUR TV SET, AND ONLY USE STREAMING SERVICES SPARINGLY.

2. REFUSE TO USE YOUR PHONE TO TEXT.

3. DO NOT USE A "SMART (DUMB) PHONE" (or at least do not use your phone to browse the Internet unless absolutely necessary).

4. STAY AWAY FROM SOCIAL MEDIA (Facebook, Instagram, Whatsapp, Snap, Twitter, Tik Tok unless it is to spread links to this site). 

5. STAY OFF JEWTUBE.

6. AVOID ALL MEDIA (as much as possible).

The cleansing process will take time but you can hasten the process by being proactive in exercising your mind.

You should also be aware of a very common behavior exhibited by humans who have been exposed to the various aspects of modern society. This behavior occurs when an individual overestimates his abilities and knowledge, while underestimating his weaknesses and lack of understanding. This behavior has been coined the "Dunning-Kruger Effect" after two sociologists who described it in a research publication. See here.

Many people today think they are virtual experts on every topic they place importance on. The reason for this illusory behavior is because these individuals typically allow themselves to become brainwashed by various media outlets and bogus online sources. The more information these individuals obtain on these topics, the more qualified they feel they are to share their views with others without realizing the media is not a valid source with which to use for understanding something. The media always has bias and can never be relied on to represent the full truth. Furthermore, online sources are even more dangerous for misinformation, especially due to the fact that search algorithms have been designed to create confirmation bias. 

A perfect example of the Dunning-Kruger Effect can be seen with many individuals who listen to talk radio shows. These shows are often politically biased and consist of individuals who resemble used car salesmen more than intellectuals. These talking heads brainwash their audience with cherry-picked facts, misstatements, and lies regarding relevant issues such as healthcare, immigration, Social Security, Medicaid, economics, science, and so forth. They also select guests to interview based on the agendas they wish to fulfill with their advertisers rather than interviewing unbiased experts who might share different viewpoints than the host.

Once the audience has been indoctrinated by these propagandists, they feel qualified to discuss these topics on the same level as a real authority, without realizing that they obtained their understanding from individuals who are employed as professional liars and manipulators by the media. 

Another good example of the Dunning-Kruger Effect can be seen upon examination of political pundits, stock market and economic analysts on TV.  They talk a good game because they are professional speakers. But once you examine their track record, it is clear that these individuals are largely wrong. But they have developed confidence in speaking about these topics due to an inflated sense of expertise in topics for which they continuously demonstrate their incompetence.

One of the most insightful analogies created to explain how things are often not what you see was Plato's Allegory of the Cave, from Book 7 of the Republic.

We highly recommend that you study this masterpiece in great detail so that you are better able to use logic and reason.  From there, we recommend other classics from Greek philosophers. After all, ancient Greek philosophers like Plato and Socrates created critical thinking.   

If you can learn how to think like a philosopher, ideally one of the great ancient Greek philosophers, it is highly unlikely that you will ever be fooled by con artists like those who make ridiculous and unfounded claims in order to pump gold and silver, the typical get-rich-quick, or multi-level marketing (MLM) crowd.





STOP Being Taken

If you want to do well as an investor, you must first understand how various forces are seeking to deceive you. 

Most people understand that Wall Street is looking to take their money.

But do they really understand the means by which Wall Street achieves these objectives? 

Once you understand the various tricks and scams practiced by Wall Street you will be better able to avoid being taken. 

Perhaps an even greater threat to investors is the financial media.

The single most important thing investors must do if they aim to become successful is to stay clear of all media.

That includes social media and other online platforms with investment content such as YouTube and Facebook, which are one million times worse than the financial media.

The various resources found within this website address these two issues and much more. 

Remember, you can have access to the best investment research in the world. But without adequate judgment, you will not do well as an investor.

You must also understand how the Wall Street and financial media parasites operate in order to do well as an investor. 

It is important to understand how the Jewish mafia operates so that you can beat them at their own game.

The Jewish mafia runs both Wall Street and the media. This cabal also runs many other industries.

We devote a great deal of effort exposing the Jewish mafia in order to position investors with a higher success rate in achieving their investment goals.

Always remember the following quotes as they apply to the various charlatans positioned by the media as experts and business leaders.   

“Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravening wolves.” - King James Bible - Matthew 7:15

"It's easier to fool people than to convince them that they have been fooled." –Mark Twain

It's also very important to remember this FACT.  All Viewpoints Are Not Created Equal.

Just because something is published in print, online, or aired in broadcast media does not make it accurate. 

More often than not, the larger the audience, the more likely the content is either inaccurate or slanted. 

The next time you read something about economics or investments, you should ask the following question in order to determine the credibility of the source.

Is the source biased in any way?  

That is, does the source have any agendas which would provide some kind of benefit accounting for conclusions that were made? 

Most individuals who operate websites or blogs sell ads or merchandise of some kind. In particular, websites that sell precious metals are not credible sources of information because the views published on these sites are biased and cannot be relied upon.

The following question is one of the first things you should ask before trusting anyone who is positioned as an expert. 

Is the person truly credible?  

Most people associate credibility with name-recognition. But more often than not, name-recognition serves as a predictor of bias if not lack of credibility because the more a name is recognized, the more the individual has been plastered in the media. 

Most individuals who have been provided with media exposure are either naive or clueless. The media positions these types of individuals as “credible experts” in order to please its financial sponsors; those who buy advertisements. 

In the case of the financial genre, instead of name-recognition or media celebrity status, you must determine whether your source has relevant experience on Wall Street as opposed to being self-taught. But this is just a basic hurdle that in itself by no means ensures the source is competent or credible.

It's much more important to carefully examine the track record of your source in depth, looking for accuracy and specific forecasts rather than open-ended statements. You must also look for timing since a broken clock is always right once a day.  Finally, make sure they do not cherry-pick their best calls. Always examine their entire track record. 

Don't ever believe the claims made by the source or the host interviewing the source regarding their track record. 

Always verify their track record yourself. 

The above question requires only slight modification for use in determining the credibility of sources that discuss other topics, such as politics, healthcare, etc.

We have compiled the most extensive publication exposing hundreds of con men pertaining to the financial publishing and securities industry, although we also cover numerous con men in the media and other front groups since they are all associated in some way with each other.

There is perhaps no one else in the world capable of shedding the full light on these con men other than Mike Stathis.

Mike has been a professional in the financial industry for nearly three decades. 

Alhough he publishes numerous articles and videos addressing the dark side of the industry, the core collection can be found in our ENCYCLOPEDIA of Bozos, Hacks, Snake Oil Salesmen and Faux Heroes

Also, the Image Library contains nearly 8,000 images, most of which are annotated.


At AVA Investment Analytics, we don't pump gold, silver, or equities because we are not promoters or marketers.

We actually expose precious metals pumpers, while revealing their motives, means, and methods.

We do not sell advertisements.

We actually go to great lengths to expose the ad-based content scam that's so pervasive in the world today. 

We do not receive any compensation from our content, other than from our investment research, which is not located on this website. 

We provide individual investors, financial advisers, analysts and fund managers with world-class research and unique insight.







Media Lies

If you listen to the media, most likely at minimum it's going to cost you hundreds of thousands of dollars over the course of your life time.

The deceit, lies, and useless guidance from the financial media is certainly a large contributor of these losses.

But a good deal of lost wealth comes in the form of excessive consumerism which the media encourages and even imposes upon its audience.

You aren’t going to know that you’re being brainwashed, or that you have lost $1 million or $2 million over your life time due to the media.

But I can guarantee you that with rare exception this will become the reality for those who are naïve enough to waste time on media.

It gets worse.

By listening to the media you are likely to also suffer ill health effects through excessive consumption of prescription drugs, and/or as a result of watching ridiculous medical shows, all of which are supportive of the medical-industrial complex.

And if you seek out the so-called "alternative media" as a means by which to escape the toxic nature of the "mainstream" media, you might make the mistake of relying on con men like Kevin Trudeau, Alex Jones, Joe Rogan, and many others.

This could be a deadly decision. As bad as the so-called "mainstream" media is, the so-called "alternative media" is even worse.

There are countless con artists spread throughout the media who operate in the same manner. They pretend to be on your side as they "expose" the "evil" government and corporations.

Their aim is to scare you into buying their alternatives.  This addresses the nutritional supplements industry which has become a huge scam.  

 

Why Does the Media Air Liars and Con Men?

The goal of the media is NOT to serve its audience because the audience does NOT pay its bills.

The goal of the media is to please its sponsors, or the companies that spend huge dollars buying advertisements.

And in order for companies to justify these expenses, they need the media to represent their cause.

The media does this by airing idiots and con artists who mislead and confuse the audience.

By engaging in "journalistic fraud," the media steers its audience into the arms of its advertisers because the audience is now misled and confused.

The financial media sets up the audience so that they become needy after having lost large amounts of money listening to their "experts." Desperate for professional help, the audience contacts Wall Street brokerage firms, mutual funds, insurance companies, and precious metals dealers that are aired on financial networks. This is why these firms pay big money for adverting slots in the financial media.

We see the same thing on a more obvious note in the so-called "alternative media," which is really a remanufactured version of the "mainstream media." Do not be fooled. There is no such thing as the "alternative media."  It really all the same. 

In order to be considered "media" you must have content that has widespread channels of distribution. Thus, all "media" is widely distributed.

And the same powers that control the distribution of the so-called "mainstream media" also control distribution of the so-called "alternative media."

The claim that there is an "alternative media" is merely a sales pitch designed to capture the audience that has since given up on the "mainstream media."  

The tactic is a very common one used by con men.

The same tactic is used by Washington to convince naive voters that there are meaningful differences between the nation's two political parties.

In reality, both parties are essentially the same when it comes to issues that matter most (e.g. trade policy and healthcare) because all U.S. politicians are controlled by corporate America. Anyone who tells you anything different simply isn't thinking straight.

On this site, we expose the lies and the liars in the media.

We discuss and reveal the motives and track record of the media’s hand-selected charlatans with a focus on the financial media.  




 

Why Stathis Was Banned

To date, we know of no one who has established a more accurate track record in the investment markets since 2006 than Mike Stathis.  

Yet, the financial media wants nothing to do with Stathis.  

This has been the case from day one when he was black-balled by the publishing industry after having written his landmark 2006 book, America's Financial Apocalypse

From that point on, he was black-balled throughout all so-called mainstream media and then even the so-called alternative media. 

With very rare exception, you aren't even going to hear him on the radio or anywhere else being interviewed.  

Ask yourself why. 

You aren't going to see him mentioned on any websites either, unless its by people whom he has exposed.  

You aren't likely to ever read or hear of his remarkable investment research track record anywhere, unless you read about it on this website.

You should be wondering why this might be.

Some of you already know the answer.

The media banned Mike Stathis because the trick used by the media is to promote cons and clowns so that the audience will be steered into the hands of the media's financial sponsors - Wall Street, gold dealers, etc. 

Because the media is run by the Jewish mafia and because most Jews practice a severe form of tribalism, the media will only promote Jews and gentiles who represent Jewish businesses.  

And as for radio shows and websites that either don't know about Stathis or don't care to hear what he has to say, the fact is that they are so ignorant that they assume those who are plastered throughout media are credible.

And because they haven't heard Stathis anywhere in the media, even if they come across him, they automatically assume he's a nobody in the investment world simply because he has no media exposure.  And they are too lazy to go through his work because they realize they are too stupid to understand the accuracy and relevance of his research. 

Top investment professionals who know about Mike Stathis' track record have a much different view of him. But they cannot say so in public because Stathis is now considered a "controversial" figure due to his stance on the Jewish mafia. 

Most people are in it for themselves. Thus, they only care about pitching what’s deemed as the “hot” topic because this sells ads in terms of more site visits or reads.

This is why you come across so many websites based on doom and conspiratorial horse shit run by con artists.

We have donated countless hours and huge sums of money towards the pursuit of exposing the con men, lies, and fraud.

We have been banned by virtually every media platform in the U.S and every website prior to writing about the Jewish mafia.

Mike Stathis was banned by all media early on because he exposed the realities of the United States.

The Jewish mafia has declared war on us because we have exposed the realities of the U.S. government, Wall Street, corporate America, free trade, U.S. healthcare, and much more.

Stathis has also been banned by alternative media because he exposed the truth about gold and silver. 

We have even been banned from use of email marketing providers as a way to cripple our abilities to expand our reach. 

You can talk about the Italian Mafia, and Jewish Hollywood can make 100s of movies about it.

BUT YOU CANNOT TALK ABOUT THE JEWISH MAFIA.

Because Mr. Stathis exposed so much in his 2006 book America's Financial Apocalypse, he was banned.

He was banned for writing about the following topics in detail: political correctness, illegal immigration, affirmative action, as well as the economic realities behind America's disastrous healthcare system, the destructive impact of free trade, and many other topics. He also exposed Wall Street fraud and the mortgage derivatives scam that would end of catalyzing the worst global crisis in history. 

It's critical to note that the widespread ban on Mr. Stathis began well before he mentioned the Jewish mafia or even Jewish control of any kind.

It was in fact his ban that led him to realize precisely what was going on.

We only began discussing the role of the criminality of the Jewish mafia by late-2009, three years AFTER we had been black-listed by the media.

Therefore, no one can say that our criticism of the Jewish mafia led to Mike being black-listed (not that it would even be acceptable).  

If you dare to expose Jewish control or anything under Jewish control, you will be black-balled by all media so the masses will never hear the truth.

Just remember this. Mike does not have to do what he is doing. 

Instead, he could do what everyone else does and focus on making money. 

He has already sacrificed a huge fortune to speak the truth hoping to help people steer clear of fraudsters and to educate people as to the realities in order to prevent the complete enslavement of world citizenry. 

  

Rules to Remember

Rule #1: Those With Significant Exposure Are NOT on Your Side.  

No one who has significant exposure should ever be trusted. Such individuals should be assumed to be gatekeepers until proven otherwise.  I have never found an exception to this rule.

Understand that those responsible for permitting or even facilitating exposure have given exposure to specific individuals for a very good reason. And that reason does not serve your best interests. 

In short, I have significant empirical evidence to conclude that everyone who has a significant amount of exposure has been bought off (in some way) by those seeking to distort reality and control the masses. This is not a difficult concept to grasp. It's propaganda 101.   

Rule #2: Con Artists Like to Form Syndicates.

Before the Internet was created, con artists were largely on their own. Once the Internet was released to the civilian population, con artists realized that digital connectivity could amplify their reach, and thus the effectiveness of their mind control tactics. This meant digital connectivity could amplify the money con artists extract from their victims by forming alliances with other con artists.

Teaming up with con artists leads to a significantly greater volume of content and distraction, such that victims of these con artists are more likely to remain trapped within the web of deceit, as well as being more convinced that their favorite con artist is legit. 

Whenever you wish to know whether someone can be trusted, always remember this golden rule..."a man is judged by the company he keeps." This is a very important rule to remember because con men almost always belong to the same network.  You will see the same con artists interviewing each other,referencing each other, (e.g. a hat tip) on the same blog rolls, attending the same conferences, mentioning their con artist peers, and so forth.

Rule #3: There's NO Free Lunch.  

Whenever something is marketed as being "free" you can bet the item or service is either useless or else the ultimate price you'll pay will be much greater than if you had paid money for it in the beginning. 

You should always seek to establish a monetary relationship with all vendors because this establishes a financial link between you the customer and the vendor. Therefore, the vendor will tend to serve and protect your best interests because you pay his bills. 

Those who use the goods and services from vendors who offer their products for free will treated not as customers, but as products, because these vendors will exploit users who are obtaining  their products for free in order to generate income.   

Use of free emails, free social media, free content is all complete garbage designed to obtain your data and sell it to digital marketing firms.

From there you will be brainwashed with cleverly designed ads. You will be monitored and your identity wil eventually be stolen. 

Fraudsters often pitch the "free" line in order to lure greedy people who think they can get something for free. 

Perhaps now you understand why the system of globalized trade was named "free trade." 

As you might appreciate, free trade has been a complete disaster and scam designed to enrich the wealthy at the expense of the poor. 

There are too many examples of goods and services positioned as being free, when in reality, the customers get screwed.  

Rule #4: Beware of Manipulation Using Word Games. 

When manipulators want to get the masses to side with their propaganda and ditch more legitimate alternatives they often select psychologically relevant labels to indicate positive or negative impressions.

For instance, the financial parasites running America's medical-industrial complex have designated the term "socialized medicine" to replace the original, more accurate term, "universal healthcare." This play on words has been done to sway the masses from so much as even investigating universal healthcare, because the criminals want to keep defrauding people with their so-called "market-based" healthcare scam, which has accounted for the number one cause of personal bankruptcies in the USA for many years.  

When Wall Street wanted to convince the American people to go along with NAFTA, they used the term "free trade" to describe the current system of trade which has devastated the U.S. labor force.

In reality, free trade is unfair trade and only benefits the wealthy and large corporations.

There are many examples on this play on words such as the "sharing economy" and so on.  

Rule #5: Whenever Someone Promotes Something that Offers to Empower You, It's Usually a Scam.

This applies to the life coaches, self-help nonsense, libertarian pitches, FIRE movement, and so on.

If it sounds too good to be true, it usually is.

Unlike what the corporate fascists claim, we DO need government.

And no, you can NOT become financially independent and retire early unless you sell this con game to suckers.  

Rule #6: "Never argue with stupid people. They will drag you down to their level and then beat you with experience." –Mark Twain

Following this rule is forcing the small and dewindling group of intelligent people left in the world to cease interacting with people. 

You might need to get accustomed to being alone if you're intelligent and would rather not waste your time arguing with someone who is so ignorant, that they have no chance to realize what's really going in this world. 

It would seem that Dunning-Kruger has engulfed much of the population, especially in the West.     

Start Here

A Lesson in Market Forecasting

Before I begin, I would like to say that most of you will need to actually study this article. You will need to read it and reread it.

You will need to look at your own charts of the Dow and think back what was happening at the time in order to extract the most from this piece.

The reason I say this is because first, it is a bit involved.

Second, I am not so sure I was able to explain things as clearly as I would have liked. It is extremely difficult to explain rational for things that rely largely on instinct and know-how. But I have tried to do so.

While you might disagree, I can assure you that I have made every effort to simply this analysis as much as possible.

That is why you won't see all kinds of lines flying all over the place on my charts.

The fact is that if you really understand technical analysis, you should be able to illustrate and detect things using a simple analysis.

I have found that technicians who get carried away with numerous indicators and lines drawn all over the place really don't know their craft as well as they may think.

I can tell you that I have even seen CMTs (Chartered Market Technician) that don't really know what they are talking about, illustrating that this designation does not necessary mean anything beyond a basic understanding. The same is true of the CFA designation in my opinion. 

I don't know about the CMT requirements, but I do know the requirements for the CFA are quite demanding. Regardless, the best training in my opinion is practical experience.

 

There is no specific formula that ensures success in the investment process other than hard work, commitment, the ability to learn from your mistakes, and many doses of humility. 

 

Before you begin, always remember that is something that is complex is has been made easy to understand or not difficult to get through, than it is most likely not accurate.

 

As well, if it is too easy for you to understand, then you aren’t being pushed enough. And if you aren’t pushed, you will never improve your skills and understanding.

 

Either before or after you begin this piece, I recommend you spend some time studying my 3-part market forecasting tutorial article. This article was originally published on July 18, 2008, prior to the launch of this site. Therefore, it was on other sites that have since banned me and removed my content so as to try to erase my track record.

 

I just ran across this piece and have posted it on this site in the archives.

 

When you read it, you might notice that the first part is similar to the tutorial I presented in my SEC complaint on WaMu. I included this in my complaint knowing that the SEC investigators are clueless, so I want to guide them through my analysis.

 

Okay now, let's begin.

Those who have been following me for some time will recall that I first discussed the possibility of Dow ~6000 in my 2006 book, America's Financial Apocalypse.

Since that time, I released numerous articles into the public domain warning of a market collapse.
 
Two warnings that stand out in my mind were in May 2008 (my first article into the public domain) and in August 2008
 
The first article, Stay Clear of Traditional US Assets, provided a big picture as to what has happened in the US over the past several years.
 
The overall message was to stay out of traditional US assets, as the title states. The only exceptions I made was for healthcare and oil. Let's have a look at some excerpts of this article:
 
"With rare exception, investors should stay clear of traditional asset classes. If you haven’t already done so, you’d be wise to invest in commodities, gold, oil trusts, and foreign currencies (Yen and Swiss Franc). In addition, investors without short investment horizons should have some exposure in China and Latin America. Keeping cash on hand is also advised. When the market sells off, you may choose to buy in.
 
But don’t expect it to last. Buying the U.S. market after sell offs and moving to cash after rebounds is the best way to navigate this storm. A buy-and-hold strategy will crush most investors. Once rates begin to soar, Washington will no longer be able to suppress inflation data. At that point TIPS will be a good investment.
 
Over the next decade, I expect gold, select foreign currencies, oil trusts, TIPS, Chinese and Latin American equities to significantly outperform the U.S. stock market. Watch out though, because if things get really bad, the entire world will be affected. But that will represent a buying opportunity in Chinese and Brazilian equities.
Finally, I would advise investors to consider taking some type of short position in financials pretty soon, preferably with an ETF, such as UltraShort Financials ProShares (SKF)."
 
You'll notice I also stated that gold would perform well. You should not confuse that with my criticism of gold in my 3-part article, Fool's Gold.
 
I hope you understand the point I was making with this later article.  
 
The August 2008 article, Get Ready for the Earnings Meltdown, warned investors about a collapse in earnings.
 
At the time, everyone else was focused on the banks. I had already warned about the banking collapse, so I was focused in the next phase; a collapse in earnings which would lead to a collapse in the market.  Here are some excerpts:
 
"You Can Run But You Can’t Hide
Standard & Poor’s earnings estimates for Q2, Q3, and Q4 of 2008 are -11%, 40%, and 60% respectively. Remember, this the same S&P that rated the mortgage junk AAA. It will also be the same S&P that will end up issuing drastic revisions in earnings once the bottom falls out. But that won’t help investors after the fact.
 
You have to realize what lies ahead and react accordingly. With about 65% of the S&P 500 companies having reported Q2 earnings, the results have not been so bad, with about 70% having beat the 2007 mark. In fact, as the pundits love pointing out, “if you remove the problem child – the financials, S&P earnings have increased by 10%.”  
 
"Regardless of the estimates or hype, a double-digit gain from non-financials is impressive — in any economy," said Howard Silverblatt, S&P's senior index analyst.
 
Sure it’s impressive when the Fed has been in a printing frenzy. Well guess what? You can’t remove the financials from S&P earnings. With about 92 financials in this index of 500, we are talking about 16.7%. Also consider that earnings were aggressively revised downward so as not to disappoint.
 
More important, how well do you think earnings will be down the road with the heart of the economy – the financial system - collapsing?
 
Distance Yourself from the Herd
Please do not forget that Washington through its rebate checks, and the Fed through its endless printing of money, have made their most desperate attempts to delay a recession. While they have failed in my opinion, the real severity is coming soon. Make no mistake about it, S&P earning estimates for Q4 won’t even come close to estimates. By the time Washington reports the required (and laughable) “two consecutive quarters of negative GDP” it uses to officially acknowledge a recession, it will be too late for investors who followed this herd mentality.
 
Continued problems in the credit markets combined inflation will create a drag on earnings. This will accelerate corporate bankruptcies by late 2008, only to soar thereafter. Perhaps the only force that will help earnings will also be the force that ultimately takes them down - inflation. You can’t inflate your way out of a recession, nor can you consume your way out of one either. And Washington is about to learn this first hand.   
 
Sure, it’s possible that we will see the market rally over the next couple of months. If so, you would be wise to sell. More aggressive traders might consider shorting it entirely once it tops out based on the 1-year resistance trend line. It’s also possible that the Dow will break down below the 10,731 lows it made a couple of weeks ago.
 
Only time will tell. It all depends on when the consumers fall and companies start to revise downward. Throughout this difficult period, you would be wise to keep in mind where the slope of the DJIA lies. Eventually, the Dow will follow this slope. It’s just that simple. Don’t try to make it more difficult than it really is. 
 
 
 
 
Now that you know the other side of the picture, you should be better positioned to navigate the market through 2008. As I have been advising for several months, you should sell on rallies and only buy after sell-offs if you’re a really good trader because the market is trending downward. The few investors who had the luck or insight to liquidate their portfolios many months ago might be better off waiting for more clarity. The correction in oil will most likely continue, but that will represent a buying opportunity. I will continue to buy more oil and healthcare. Everything else in the U.S. market is a lost cause for now."   
 
 
Now I want you to focus on the statement I made at the end of this excerpt regarding the slope of the Dow.
 
I did not specifically state what I meant by this because I had discussed it in at least one or two previous articles. I also discussed it in detail in America’s Financial Apocalypse.
 
Looking back now, it was probably a poor judgment call to assume everyone understood what I meant, but hey, what can I say, I’m certainly not perfect. You should have read the book.  
 
In fact, given how accurate the book has been as well as the fact that it will remain valuable for years to come, you’d have to be crazy to not have read it.
 
Of course, that’s just MY opinion for whatever that’s worth.
 
I suppose investors are too busy reading all of the new books that dramatize the collapse but do nothing to arm you with the insights they need to navigate this storm.  
 
That's usually the type of behavior to expect from investors who have been brainwashed by the media.
 
Here’s a chart from America’s Financial Apocalypse, showing a (rough) slope of the Dow.
 
 
 
 
As you can see from the chart, the slope passes through the 5500-6000 region (adjusted for 2008).
 
Over the next seven months since the August 2008 article, the Dow imploded by about 45%, from about 11,500 to 6400.
 
Then in March 2009, when the Dow was 6500, I released another article into the public domain that advised investors to begin buying. 
 
While I felt there was a good possibility of the market to go lower, I emphasized the need to start buying now.
 
This was the first all out market buy signal I had ever given. Here are some excerpts of this article:
 
"What should you do? If you are a long-term investor, you should gradually start buying into the market in small increments. Only the best names, companies with little or no debt and market leadership; companies that pay cash dividends; dividends that are relatively safe (check free cash flows, debt levels for starters).  
 
If I think it’s going lower, why am I telling you to start buying? If you try to pinpoint the bottom, you will miss everything.
 
Will we see a rally? Of course. When? I would say a rally could come soon. But once again, no one knows. Anyone who claims to know is a fool. You have to take things day by day. I’d expect such a rally to be triggered by some relatively trivial news or data set. Wall Street will make a big deal over it looking for an excuse to rally. The forces in play are setting up for a rally. Focus on market psychology and don’t waste time on this VXN and VIX rubbish…..they are coincident indicators. Technical analysis is fairly useless right now.
 
What happens if you start making money soon after you buy, say if a rally occurs? Sell, sit back and be patient. Let more bad news come in and see how the market reacts."
 
You should check that I was not recommending investors to buy in at 9000 or 8000 or 7000 like many others.  If you keep telling investors to buy over and over as the market falls over and over, without then you really missed the call, right?
 
Of course several others kept warning investors to stay out of the stock market because it would go lower and lower. And the same guys have insisted that the market will collapse throughout 2009, missing a 65% surge. 
 
Now, we come across a more difficult period of market forecasting.  Here, I want to show you some things hoping you will add to your skills, rather than relying on the Wall Street hacks and gold bugs. If you listen to either of these extremists, you will fail miserably. 
 
What prompted this article?
 
I recently received an email from one of the newsletter subscribers and I wanted to respond here because it was their question that made me realize many people might be looking at the stock market the wrong way.
 
The individual asked if I was going to issue a special report to update subscribers on the potential of a market collapse (note that this person was not asking me to respond to a question via email because I do not respond to such questions). 
 
Granted, this individual had not yet received the latest newsletter. And as subscribers know, in February, I warned of the potential of a technical breakdown in the market.
 
At the time, the problems in Greece were of big concern. 
 
However, I concluded that I did not see any definitive signs (at that time) of a break down, although I stated the need to remain cautious, as you will soon see.
 
But, since that time (early February), the stock market rallied from around 9900 to 10,750 since that time; in about five weeks time.
 
That should have been a signal to investors that a market collapse is now a virtual impossibility at this time, unless some type of crisis occurs, or a string of very bad data.
 
As many of you realize, the issues in Greece have since subsided a bit. However, the situation in Greece and other European nations is likely to be far from over.
 
So it struck me that this individual, like everyone else, has most likely been reading articles scattered throughout the Internet that keep talking about a market collapse.
 
Let me be clear. These individuals have NO IDEA what is going on. 
 
They have no idea how to forecast the market.
 
They have no idea about anything as far as I’m concerned.
  
They are following the doomer crowd which has the intention of pumping gold and smashing the dollar.
 
Understand that these are the same individuals who keep saying the market is going lower ever since the he rally that began in mid-March 2009.
 
And they kept scaring investors every day for every month in 2009 that the market would collapse to new lows.
 
This caused many individuals to miss out on the biggest market rally in several decades. 
 
You need to remember that the next time you decide to pay attention to what they say. In the end, you determine who to listen to. 
 
You are putting your assets at risk if you pay attention to what they say. 
 
Take a look at their track record and you will see they have no idea what they are talking about. 
 
They are all over the Internet on virtually every financial site and blog you run across.
 
They are only qualified to rehash the financial news of the day, so you might want to remind them of that. Doing so will send them the message that their attempts to alter investor sentiment are not only futile, but have been noted.
 
You should understand that the stock market does not fall for a reason.
 
And it certainly does not crash without a very good and very big reason. 
 
Just because the market is overvalued, or because it rallied by 65% in less than a few months does not mean it will collapse back down.
 
Certainly there will be retracements, as they are normal. We have had several retracements over the past eight months. 
 
As a matter of fact, while the market does not fall for a reason, it can rise for no particular reason.
 
In order to understand that, you need to realize that there is always an inherent upward pressure on the stock market that is much stronger than the downward pressure.
 
Why might this be? 
 
First, the amount of cash that can only take long positions is much larger than the amount of cash that CAN take short positions. Notice I said “can.” That means that the shorts can also go long.
 
In addition, there is a much larger amount of cash that MUST remain primarily invested in the markets at all times, so this adds to the upward pressure in the market. Over the past couple of weeks, the gradual rise in the market has been due to no real news in my opinion.
 
Instead, what has caused this rise has been the inherent upward pressure funds have placed on the market. 
 
Alternatively, one could argue that it has been the easing of the crisis in Greece that has been responsible for the gradual and sustained rise in the stock market. 
 
So now, let me show you some excerpts of my discussion of the stock market since late January so you can understand this better.
 
First, I want to post the conclusion I made from last month’s (February) issue from the market forecasting section. Note, at that time the market was flirting with a breakdown in a somewhat important technical support area. Let’s have a look….
 
“CONCLUSION: Based upon what I see today, there is no clear evidence indicating that this correction is the beginning of one that will cause a reversal in trend. However, I feel that the chances of this are quite good.
 
The market could certainly rebound next week and we could even see new highs in a few weeks, although I do not see this as a likely event (a rebound is possible, but new highs are not likely, at least right now).
 
However, ask yourself what the upside is from here. It is not much. At most, we are looking at maybe 10% or 11% from the year based on current levels, BUT ONLY BASED ON the absolute best of scenarios (which I cannot see happening). In contrast, the downside risk is significant, although has a much wider range at anywhere from 15% to 30% over the next 12 months.
 
As well, the upside since my 10,800 forecast (reached on Jan 19) from here is much less, at around 3-4%. So, unless you are a short-term trader you might want to consider setting this one out, even if the market mounts a strong rebound next week. If you have been a subscriber for at least a couple of months, you should not have been exposed in the market by much.
 
One final note. Due to the rapid sell-off, it is entirely possible that the market will rebound on Monday, even if the downward trend is forming (i.e. selling pressure continues next week after Monday). This is a normal reaction based on the selling that occurred late this past week.
 
But you should not necessarily interpret that as an escape from downward pressure. It could represent an exit for selected positions. If we do see continued selling on Monday similar to what we saw on Friday, it could be a big problem.”
 
 
Now let’s have a look at what has happened since that time to see if I anything has happened causing me to change my analysis.
 
I’d like you to review the charts below, also taken from the February issue. Note that these are just excerpts. The full analysis is contained in the three reports I released for subscribers of the newsletter.
 
First, I begin with some excerpts from the January 24th Risk Management report.
 
“It should be quite clear that the market was looking for any reason to sell off after mounting a massive ~65% rally in 10 months. As you can see from the chart below, while there were a few corrections during this period, each was countered with a stronger rebound, sending the DJIA to new highs.
 
So a correction was bound to happen at some point, right? 
 
In fact, the correction could continue and still would not necessarily signal a reversal in trend. 
 
If anything, the recent sell-off is healthy for a market that is way ahead of itself. A continued sell-off would be even healthier.
 
The only problem is that the bears have been waiting on the sidelines for several months, so they could pile in on the short side to escalate the downward momentum.
 
Also, note that while each previous correction was by about the same amount, the current one has occurred over a shorter time frame. This is something to pay attention to because it hints at the POSSIBILITY that this time things MIGHT be different.
 
Furthermore, there are negative stimuli in the air triggering the sell-off; mostly the thought that the market is ahead of itself and the economy is NOT really in recovery mode. These are all very valid points to consider.
 
Note also that earnings thus far have been quite good from several companies (GOOG, AMD, JPM, INTC, etc.) while forward guidance has been generally quite optimistic, especially from some of the big banks.
 
On the other hand, earnings from companies that are on the leading edge of the economic cycle have not been so good (AA).
 
You should keep in mind that during periods of uncertainty, when the stock market does well, investors undermine the problems, choosing to focus on GREED. But when the stock market does poorly, they often PANIC.
 
Based upon the run the market has had over the past 10 months, combined with no real improvements to the economy, investors with a significant percentage of their portfolio invested in the stock market (which hopefully does not include you) should consider reducing their exposure considerably.
 
By now, you should realize that deciphering market direction is not so simple.
 
There is no way to determine what will happen in the future.
 
The best we can do is lay out the most relevant data and go with probabilities.
 
And of course, things can change on a daily basis, which makes the analysis even more complicated. So, let’s continue.
 
Below is the same chart as above, updated since January 24th.
 
What do you see?
 
 
 
 
I’ll show you what I see in the next chart.
 
First, I show a chart from a special report I released on January 24, 2010. Then I will show you my analysis since then.
 
As you can see from the first chart below, I have denoted several selloff-rebound areas since June 2009.
 
Notice that each selloff occurred over about the same duration and by the same amount.
 
 
 
 
But shortly thereafter each selloff the market made new highs (if you count the June and July selloff-rebound periods as one). In other words, the bullish trend remained intact because no critical support areas had been violated.
 
In the same chart above, I showed the selloff made in mid-January 2010, to around 9900. This was a critical selloff. You will recall it occurred as pressure was mounting in Greece.
 
Next, I show some charts from the market forecasting section of the February newsletter, released two week later. As you can appreciate, the selloff at that time was certainly cause for concern.
 
 
 
The next chart shows some similarities in the most recent selloff with that which occurred back in the June-July period of 2009.
 
While the short-term trend had reversed, a critical support region had not been violated.
 
This implied that the longer-term bullish trend was intact.
 
 
 
 
In the next chart, I provide a closer look at the most recent selloff in the first week of February. Notice that it is trending upwards.
 
 
 
 
 
In the March newsletter, I continued with this analysis.
 
In the first chart of this series, I have circled three important regions. This chart is the same as the ones on the previous page, except it is current.
 
Notice that each encircled area shows the market sell-off, followed by a rebound.
 
In the first two areas, you can see the rebound led to higher highs not long after making the short-term low.
 
In the last and most recent area, you can see that a new high has not been made even after several trading days.
 
 
 
 
 
In the second chart in this series, the red arrows show the approximate deceleration of the market sell-off. The green arrows show the approximate acceleration of the market rebound.
 
 
 
 
 
The third chart shows the same data, except the important areas are now encircled in green.
 
As well, you can see that I have drawn support/resistance lines (in brown).
 
 
 
 
 
The important take away from this chart is that it would appear that even a sell-off down to the 9500 region would NOT necessarily signal a reversal in trend.
 
However, we really need to look at a shorter time-frame.
 
The following chart shows this. As you can see, the 9800 region is fairly important.
 
 
 
 
 
 
  
 The next chart shows the DJIA over the past three months. I wanted to show you this chart so you can appreciate that this critical index has just about filled the gap since selling off fairly hard from mid-January to early February 2010. 
 
 
 
You might note that the February newsletter was released on February 9th, precisely when the DJIA made recent lows.
 
In that issue, I warned investors to be very careful due to what looked like COULD be EARLY signs of a trend reversal, although I concluded there were NO signs of a reversal at that time (recall the "conclusions" I posted above). 
 
I also stated that due to the recent sell-off, there could be a rebound but I did not feel we would see new highs anytime soon. 
 
Have I changed my mind? 
 
No.
 
However, I am not as bearish (for the short– to intermediate-term) due to the current issues in Europe, but only for that reason.
 
But that only matters for short- to intermediate-term traders.
 
The situation in Europe can change in a heartbeat.
 
Will the DJIA rebound fully, leading to a new high?
 
It is impossible to make such a prediction at this time.
 
I would say that much of the near-term drivers determining whether or not this will happen will come from what happens in Europe because that is currently (and likely to remain for some time) the biggest momentum driver.
 
Some of you may have wondered how I chose to draw some of the support/resistance lines since there are many possibilities.
 
Understand that I do NOT go strictly by technical analysis. I adjust for other variables to help in the selection of the best trend and support/resistance lines.
 
Anyone who uses technicals strictly as a tool (even for short-term trading) is making a very big mistake.
 
Finally, understand that market risk for the DJIA influences the market risk for China and Brazil’s stock markets. 
 
 
You can see the final analysis of my market forecast, as well as much more – an average of 60 pages of unique analysis every month - by signing up for the newsletter.
 
As subscribers know, I have called every single major market move with 100% accuracy since the newsletter was released. Prior to that time, my market forecasting record was virtually flawless as can be verified by reviewing the articles released into the public domain. 
 
Who else do you know of has this track record?  
 
 
Those who read America's Financial Apocalypse and Cashing in on the Real Estate Bubble (2007) were not only alerted to the catastrophe we see today, but were provided with SPECIFIC ways to profit that have yielded over 100% gains since then. 
 
See here for some examples.
 
I can guarantee you the chapter on the real estate bubble alone (chapter 10) serves as the most detailed and comprehensive analysis presented from any book solely dedicated to this bubble.
 
If you want access to institutional-level research, analysis and investment guidance, subscribe to the AVA Investment Analytics newsletter today.
 
If you want a chance to make $100,000, check this offer.
 
 
Mike Stathis is the ONLY investment expert who has no vested interests in his insights. Unlike others, he does not sell gold or promote gold vendors to benefit in some way, nor are his insights serving as a marketing piece to generate investment clients from the retail public. Moreover, he does not sell advertisements. No source that provides credible content sells advertisements.
Finally, he is NOT a perma-bear. Therefore, he is the only expert who has both predicted all that we see today and whose insights are pure and detached from vested interests.  
 
 
 
 
 

 

 

 

 

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