kweb - ow to make over 1209.16 within a year technical ......kweb - ow to make over 1209.16 within a...

Technical Analysis Millionaire IKWEB - How to Make Over 1,209.16% Within a Year 1


Welcome to the most powerful bonus report you’ll get in 2018. If you’re the type who wants to just get to the trade

without any context, you can just scroll past all 7,000 words to the bottom.

But there’s a lot more than a single investment idea in this essay that you can benefit from. Because, remember...

no matter what the stock market does, you’ll get to keep the value of your education forever. And nobody can

ever take it away.

We Are All the Same

In the financial markets, sometimes prices are manipulated directly and deliberately. A mischievous person, or

group, targets an easily-manipulated security and runs its price up and down, for their private benefit.

Other times, when a major price movement is already happening organically, big shots of the investment world

lean on the already-prevailing trend, pushing it harder in their preferred direction.

This kind of thing happens on relatively modest levels. Like when the stock broker managing only $10m of client

money manipulates one easy-to-move stock from $10 to $8, and back up to $14.00, pocketing a profit in his per-

sonal account. This is pretty easily done by triggering the needed buying or selling of other traders at key technical

price points.

But it happens at much higher levels as well. The biggest players manipulate prices by causing a panic or by

pressuring or manipulating the media to push a particular story. Other times they do it by changing their own

internal rules, or by compelling governing bodies to change “the rules”.

The small-fry manipulators and the top-dog manipulators have one thing in common. They carry off their

schemes by triggering the buying and selling -- that is, the trades -- of other players at key technical price points.

In this essay, I’ll show you a number of well-known, historical examples. We’ll discuss the manipulation that’s

happening in 2018. Finally, I’ll give you a trade I am confident could yield you more than 1,209.16%.

And I’m so confident that this is the case, if I don’t show you at least that amount within a year, I’ll work for you

until the year 2020 at no additional cost.

Important Context - About Me (And My Perspective)

I grew up in New York City, in Queens, surrounded by blue-collar scrapers and hustlers.


My mother and father met at Syracuse University (and left it together... a bit ahead of

schedule) .

My mom’s step-father, a well known Wall street analyst named Jack Roche, got my

dad a job on Wall Street, fresh out of college. This launched his career.

My parents divorced when I was five.

I would visit my dad in Manhattan, where I’d find myself surrounded by famous Wall Streeters. I mention this to

point out that I grew up exposed to both the blue-collar world and the very white-collar, white-shoe world.

Having lived side-by-side with both the elite “silver spoon” Wall Streeters as well as the scrappy hustler Wall

Streeters taught me a valuable lesson -- one that few people get to learn.

I can confidently tell you that there’s no difference between the elites and the scrappers when it comes to their

human nature.

This remains true when it comes to financial market manipulation -- whether at the level of the small stock broker,

or of the top government official and top Wall Street executive.

Wall Streeters and Price Manipulation

Manipulating prices isn’t as “cut and dried” as one may think.

It’s just like many other parts of life, such as politics, where simple-minded lower-level players get caught with their

hand in the cookie jar...

...and then you have your higher level players who seem to be bullet-proof. They seem to get away with every-

thing.

Think about a couple of old adages about lies.: «The greatest lies are embedded in a lot of truth.” “...the use of

a lie so colossal that nobody would believe that someone could have the impudence to propose that it be the

truth.” Scary.

Consider that oftentimes, a price manipulation is already underway. And it can be so powerful and beneficial to


people that they don’t even realize they are participating in the manipulation.

They may consider it in the back of their mind somewhere. And this sort of thing can be found all over the financial

marketplace every day.

“The Tape Never Lies” -- My First Price Correction Payoff

I’ll begin this short story at the end, by telling you how I made a killing from the collapse of a trillion dollar hedge

fund. (As you read the following 20-year old story, note how it sounds much like the one that played out 10 years

later, in 2008.)

Now, my father, excited that his Queens-raised son was working next door to him on Wall Street, would proudly

brag to me about his powerful friends. His racquetball and tennis friends ran in the same social circles as did

ex-Salomon Brothers John Meriwether.

Long-Term Capital Management (LTCM) was a massive hedge fund, controlling $3.75 billion in assets, which was

leveraged about 30 times to control $125 billion.

And since they were trading derivatives (sort of like call and put options), that additional leverage swelled the notional

value of their securities to nearly a trillion dollars.

I began hearing whispers that LTCM was potentially in big trouble, and could potentially have to take some huge

losses.

At first, all I cared about was how to profit from the situation. I didn’t know much or care much about the fund

itself. But my ears really perked up once I recognized the name of the fund manager, John Meriwether.

I thought maybe I could get an inside scoop. After all, if John Meriwether didn’t know the “true” story, who

did? However, my mentor convinced me that the only “stories” I should “listen to” were the technical patterns on

the chart.

He told me that, even if the players involved wouldn’t lie to their closest friends, they still might be lying to them-

selves. “But,” he told me, «The tape never lies.” In other words, what you see on the price chart is the truth.

Now, at that time, Bear Stearns acted as LTCM’s clearing firm. I started getting phone calls from well-connected

traders with information about how Bear Sterns appeared to have a lot of money at risk. Then I started hearing


about how everyone around the world seemed to have money invested in this fund, and how they were all be-

coming very nervous.

I’ll spare you a lot of detail about the subsequent intrigue. Just know that Bear Sterns ended up planting LTCM in

the dirt. The buried them. And they nearly took down the entire market in the process.

When they heard that the fund was exposed to potential heavy losses, Bear called in a $500m collateral pay-

ment from LTCM to keep clearing its trades. It became a sort of self-fulfilling prophecy as the margin call sent

LTCM spiraling. Ultimately, the firm lost close to $4 billion and ended up going out of business.

The biggest investment firms around the world had to pool together about $3.75 billion to keep the global financial

system from crashing. (I told you this 1998 story would sound familiar).

Understand, the firms that ponied up that $3.75 billion weren›t suddenly feeling charitable. They all owned LTCM.

Of course they wanted to salvage some of their investments in LTCM. And just as important, they wanted to stave

off the even bigger losses they›d likely have taken in the wake of a trillion dollar unwinding of a fund like LTCM.

It was the same cast of characters that came together in 2008 in a concerted effort to bail out AIG and ultimately

other institutions. Back in 1998, however, there was one lonehold-out. One firm that refused to ante up and con-

tribute to the bail-out fund. That firm was Bear Stearns.

That decision not to participate in the bailout, and the lingering resentment it engendered on the part of the Fed-

eral Reserve and the biggest bankers on Wall Street, would come back to haunt Bear in 2008.

In March of 2008, they seemed to turn on Bear Sterns the way Brutus and his conspirators turned on Julius Caesar!


With heightened fear about whether the world would experience global financial Armageddon, the market be-

came quite volatile, presenting me with lots of huge trading opportunities.

At first, we felt confident that Bear would support LTCM because both parties had invested at least $20 million in

each other. But as the size of the problem became clear, that $20 million became unimportant.

We first heard there could be one buyer of LTCM’s assets. But the “single buyer solution” didn’t happen. Then

there was news Warren Buffett was headed to the table to make an investment. But then that didn›t happen.

Without getting bogged down in detail, just focus on one aspect of this one massive example of subtle price ma-

nipulation.

First, notice the cliche movie-scenario, like what we saw in “Trading Places”, with Eddie Murphy and Dan Aykroyd.

Instead, when it seemed like LTCM was about to knock prices down, Bear Sterns “leaned on that trend” with their

$500m margin-call death-blow.

Investors (attempting to profit from the decline) shorted the heck out of the stock market. And when the bailout

was announced, all those bearish short-sellers were forced to buy back their short positions, causing a short

squeeze and driving prices higher.

These guys all knew the bailout would be announced. Profits were made.

My clients and I happened to profit enormously from it as bottom fishers. I followed technical analysis rules and

used risk management strategies with options, that put us in the position to do so.

I thought that would be the largest short squeeze I would ever experience. I never imagined what we would ex-

perience a decade later.

“Fattened Up For The Kill”

Fast forward to 2007. Major institutional investors were blatantly manipulating the heck out of the stocks of finan-

cial firms. These guys were so ruthless that they were killing their own kind!

The most celebrated victim was Lehman Brothers, which was in the cross hairs of predatory short-sellers. What

these guys would do is “raid” a stock, such as Lehman. They’d take a short position in a stock and then force the

price lower by selling so much of it that it would collapse from all that engineered selling pressure.

And it would seem they had some welcome help from the SEC.


Draw your own conclusions about what follows. But remember what I said at the beginning of this essay about

human nature. I knew people who worked in just about every function on Wall Street. And what I’m telling you

to remember is that those working at and filling every role, from the Fed... to the trading firms... to the regulatory

bodies -- they’re first and foremost human beings.

If you understand how short selling works, you might think that short-sellers would run out of stock to bor-

row. (You first borrow shares of a stock before selling it short, and then later you buy those shares back and

return them to their original owner).

You might also think that the stock raiders would risk running out of investment capital if they dumped millions of

shares onto the market with “short-sale orders”. If they ran out of money to back their short-sells, wouldn’t they

be at the mercy of new buyers running the price higher, causing them to take massive losses?

Well, if everyone played by the rules, yes.

But rules are often ignored by the elite.

There was a wave of “naked shorting”, meaning the raiders didn’t borrow the shares before shorting them, like they

were supposed to. They were just entering sell orders and the computers didn’t know the difference. Most of

these people didn’t get caught because the system in service at the time was too sloppy to keep track of them.

And as for those stock raiders risk of running out of cash to sell that stock short?

Well, shockingly...amazingly... insanely... the SEC came to the rescue by abolishing something called “the up-

tick rule”. I’ll explain that rule in a minute. And there’s a bit more about it in one of the Bearish Trades articles I

published around the time this all went down.

http://www.truemarketinsiders.com/article/detail/4789/profit-from-disaster


But here’s the set-up...

Everyone who understood the financial markets knew there was a real sh*t storm on the horizon. Excuse the lan-

guage please but I did sit here for a few minutes searching for a more appropriate term. A more appropriate term

doesn’t exist.

I (and my team at the time) rushed out a 100+ page report (which included seven ways

to profit) about the coming credit crisis, and the real estate meltdown that was looming

due to the crisis in mortgage-backed securities.

It was called “Tycoon’s 7 for ‘07” (which I just now realized is interesting, because this

latest program is called TAM 2020 because of the year 2020 and the fact I›m offering

20 profitable bearish trades).

The storm began in earnest in the summer of 2007. But I saw it coming, and wrote about it, in December 2006.

Also, in 2006, George Bush was trying to talk the market down by gradually bringing the situation to light.


It was no accident when, that same year, Bush nominated for Fed Chairman the foremost expert on the Great

Depression, Ben Bernanke, who was then confirmed by the Senate.

Then, in the summer of 2007, with the stock market at its then all-time high, I got the call...

It was my father.

He told me his friends in high places were being kept at their firms over the weekend, and that the SEC, in a raid-

like fashion, was going from firm to firm (in his words “with a baseball bat”) and auditing the biggest brokerages

and hedge funds.

This was the beginning of the public unearthing of the ticking time-bombs that would soon destroy the global

financial system.

It was in the midst of this over-heated environment that the SEC, well aware of both its own investigations... and

its pending deep-dive into the books of the biggest mortgage backed bond holders...

... decided to abolish the up-tick rule.

Here’s an excerpt from a 2008 article I wrote about the above: “How to make sure YOU don’t own the next Bear

Sterns”:

Long story short, in order to prevent an institution’s ability to manipulate a stock’s price lower by applying

continuous selling pressure to a stock, the SEC created the “uptick rule”.

The rule dictated that you couldn’t sell-short a stock until the stock traded at a price that was above the

last traded price.

In short, the abolishment of this rule gave institutions the power to “lean” on a stock’s price, thus triggering

other investor’s automatic sell orders. This leads the way to massive panic selling, which can cause a stock

to drop at a much faster rate.

http://www.truemarketinsiders.com/article/detail/5140/how-to-make-sure-you-dont-own-the-next-bear-stearns

http://www.truemarketinsiders.com/article/detail/5140/how-to-make-sure-you-dont-own-the-next-bear-stearns


Remember, I had just written a report about the coming crisis when I saw this uptick rule abolished.

This massive price manipulation involved a large number of institutions using the same type of leverage that was

used 10-years prior by Long Term Capital Management. This was when we were being fattened up for the kill.

I realized what was happening. So I created my first technical analysis course (launched in November 2007). I

knew I had to teach people about my approach, and my proven ability to profit from declining stocks.

My track record was great, because I took advantage of the huge price manipulation I saw going on.

My average return per trade was more than 20%, with an average holding period of 61 days. This was mostly due

to bearish trade recommendations, including some on Bear Sterns and virtually all of its competitors.

Then, the SEC changed another set of rules, all but unleashing the stock raiders on the declining shares of bro-

kerage and real estate firms.

You see, hedge funds used to be able to value their real estate at the price at which they assumed they’d be able

to sell it. But now, they’d have to value those assets at wherever they could reasonably expect to sell at the time.

(By the way, real estate prices had already begun collapsing).

On top of everything, the SEC raised margin requirements. This essentially meant that investors and trading firms

had to either come up with the cash to support their positions, or sell out of them, adding even more downside

pressure.


A glance at historical charts reveals the path most chose to take.

And then it happened. I can remember this like it was yesterday...

My long-time neighborhood friend and partner, Wayne Mulligan (currently CEO of Crowdability) was my firm’s

COO at the time. He strode into my office looking like he’d just swallowed 10 shots of Cuban espresso. “Jamie

Dimon just rolled up on Ace Greenberg (the then-CEO of Bear Stearns) all like ‘Yo, run your whole firm! I’ll take

that for $2.00. Got any problems, you can talk to my man Bernanke. Good look’n out, Homie!’ And that’s that.”

He was joking, of course. Wayne doesn’t really talk that way.

For those who don’t get the street slang, it’s the kind of thing you might hear as you were getting mugged in an

alley by a neighborhood bully that everyone knew not to mess with. Wayne was referring to the fact that a firm

considered untouchable, or “too big to fail,” had been allowed to fail. And had gotten itself swallowed up by

the real untouchable: JP Morgan.

It was the biggest news I had heard since Bear Sterns backed away from LTCM in 1998 and said “let them fail”.

Everyone remembered. And the stock had traded from the triple digits, just one year prior when I put on my

bearish trade (put options) down to... $2.00!

This left the question - What are the implications? Were all major firms now “touchable”? Or was the Fed just

setting an example?

Was it a financial death blow disguised as a major save? Or was it a major save that appeared to be a death

blow?

This trader’s opinion: The fact that the world still can›t definitively answer the above question reflects the level of

sophistication these particular manipulators brought to bear.

Over the next 12 months, from March 2008 to March 2009, it was anybody’s guess as to when or how quickly this

series of plays would morph from market chaos into one of the largest transfers of wealth in history.

Of course, the greatest lies are the biggest lies and the more truth a lie has, the better it is. It was about 99% true -

the financial world was collapsing. Nobody could expect precision or fines from the «guardians» of the economic

order. If some blood was shed, who›s to say it wasn›t honest “collateral damage?”


In the chaos of the trauma unit, it can be hard to tell if Doctor Jones stepped on that important hose accidentally...

or on purpose.

Former Goldman Sachs CEO, and then-Treasury Secretary Hank Paulson stood at the world podium, and as-

sured everyone that all would be fine -- this while wearing a look of fear I hadn’t seen since the time I nearly ran

him over with my car, right outside our office.

(Full disclosure: He worked in the Goldman building, across the street. I was a 24 year old hot-shot, new-money

punk who occasionally drove like an idiot. The roads around the NYSE and Goldman were terribly small and torn

to pieces in many places.)

After the market was both naturally hammered as well as manipulated lower, this became the perfect set up for

the next major manipulation and the biggest transfer of wealth I’ve ever seen...

Tricking the Computers (and You) Out of the Market... Permanently

After the stock market crash of 1987, as prices were collapsing, most individual’s couldn’t get in touch with their

brokers. And even if they could, their brokers couldn’t get in touch with floor traders to sell their stock.

Wall street had stopped answering the phone, ignoring calls from clients and brokers. Individual investors came

out of this experience with a deep distrust of stock market investing in general. Many felt it was for the elites only.

That’s why, 18 months later, only 13.1% of U.S. investors were directly invested in the stock market (not counting

passive retirement funds like 401Ks, pension funds etc.).

By contrast, when the stock market was still relatively popular at the beginning of 2001, the participation rate was

up to 21.3%.

Even though 2008 was ten years ago, it still lives fresh in the minds of those who were shaken out. So, once

again, there’s a low participation rate because of the fear associated with stocks. As a result, most individual

investors have not participated in the astounding stock market gains since 2009.


Still too afraid to get involved, as of early 2018 (before the February correction), only 13.9% of U.S. investors are

directly invested. If this describes you, I think the upcoming manipulation can help you make up for “lost ground”.

You’ve Been “Bear Sterned!”

Here’s the scoop on the last massive manipulation...

Notice the red dotted line in the chart, above. It begins at the 2002 - 2003 stock market low and extends to the

right for six years. In November of 2008, the stock market benchmark, the S&P 500, had moved down to that

same price level.

Most experienced investors were suggesting that if the S&P 500 was able to move below the 2002 - 2003 lows,

then the market was going to lose a heck of a lot more value.

It did, in fact, decline below that support level very quickly, first in November 2008. It then almost immediately

recovered with a bullish reversal higher.


In fact, even though the S&P 500 did continue much lower a few months later, in March 2009 (about the day my

son, Lincoln, was born), the “true stock market” had mostly bottomed out after a meeting of big bankers that

occurred in November 2008.

In the months after that big-banker-meeting in November ‘08, more and more stocks started moving higher and

breaking above key historic resistance levels (price points).

I’ll get back to this very important tide-shifting meeting in a moment. The key point to note is that’s where

the real stock market bottom happened.

But the world’s largest institutions literally hadn’t yet gotten their “fill”. They still wanted to take a nice fat bite out

of corporations in the U.S. and abroad, while prices were at a 52% discount to the all-time high set one year prior.

The real.. actual... bullish reversal that had gotten underway after that meeting, in November 2008, had to be

masked. The world couldn›t yet know that the clouds had parted and the sun was about to shine again. Not yet

anyway.

I spotted the bottom, and I started writing weekly articles about buying Chinese ETFs and stocks, like Baidu.

The only reason the S&P 500, and other major averages, declined even lower in March 2009 (even when most

stocks did the opposite) was because the largest companies, which have a much bigger influence on the major

stock averages, were still in decline.

Major institutional investors continued pounding large companies such as Johnson and Johnson (JNJ)... Micro-

soft (MSFT)... and Exxon Mobil (XOM), because those are the stocks they use to “paint the tape”. Those are the

stocks that determine what the stock market charts look like.

So, by continuing to sell those stocks, institutional investors tricked the world into thinking markets were still tank-

ing, and tanking below some very important price levels, to boot.

This is the opposite of what happened from 1998 - 2000. Back then, institutions pushed the biggest, most

heavily weighted stocks higher so it looked like markets were strong -- the illusion being maintained by the fact

that the major market averages, like the S&P 500 and Nasdaq, were pushed higher. The true market top was in

1998. That was the market top investors were NOT able to see.

And this is how the manipulation allowed the big institutions to snatch and grab stocks from individuals at dirt


cheap prices in March of 2009. I’ll come back to that in a minute but let’s first rewind to November 2008 -

the true market bottom. This was the real bottom that most people were NOT able to see.

The true market bottom in November 2008 happened right around the time Treasury Secretary Hank Paulson,

together with Ben Bernanke, invited nine CEOs of the world’s largest banks into a private meeting. They brought

in cots and said nobody leaves until they find a solution.

At this time, Paulson forced nine of the worlds largest banks to accept government funds, most likely in an effort

to project a sense of strength, a unified face and a potential path to stability.

Most people with any interest in the financial markets know about this meeting. There’s a movie about it called

“Too Big to Fail”. I recommend watching it.

But, to me, this event was a lot more like the movie “The Usual Suspects.”

In it, a legendary and mysterious criminal mastermind named Keyser Soze contrives to have five of New York’s sly-

est criminals arrested, all so that they’d be forced to spend several hours together in the same jail cell.

They all knew of each other’s reputation. So, inevitably, they hashed out their next heist together, and continued

down that path.

The wily Keyser Soze knew that a crew like that, in the same room, would naturally “talk shop” and that talk would

lead to action.

The heads of these nine major banks - typically fierce competitors - also knew one another.

Not only did most of them have past business relationships (totaling billions of dollars) with each other, but they are

“Primary Dealers”, or trading counterparties of the New York Federal Reserve. That means they traded Treasury

bonds with the Fed, as the central bank implemented its monetary policy.

These bankers are expected to make markets for the New York Fed, as needed, and to bid for Treasuries in all

Treasury auctions. In other words, these guys have a very strong relationship with the Treasury and the Fed.

So let me ask you...

Do you think it’s plausible that these nine bankers... the head of the Federal Reserve... Hank Paulson, the ex-chair-

https://www.youtube.com/watch?v=LRQJZBsAR9g


man of Goldman Sachs and Treasury Secretary... were all in the same room and didn’t hash out any money-

making trade ideas?

Well, the stock market truly bottomed out in November ‘08 when that meeting happened...

And then, through March ‘09, the world’s largest institutional traders pushed the major averages below that key

2002 - 2003 low. That triggered lots of computerized automated trading systems into dumping lots and lots of

stocks. This created a massive supply side, pushing prices lower, for some of the biggest purchases ever made

by the world›s elite.

Other large investors who weren’t members of “the old boys club” saw the market break below that level and they

sold short!

They took bearish positions, since they thought they could profit from what appeared to be a “certain” downside

move. This short selling created even more supply side for those elite boys club members - they were just sitting

there with giant vacuum cleaners, sucking in all of that cash from unsuspecting investors. 401K funds, pension

funds, 529 college savings plans, IRAs, individual accounts, joint accounts, custodian account - regular people›s

life savings - all got SOLD.

This upsets me so much. And I don’t even know if I’m supposed to be mad. But when I think about the whole


“little guy” verses institutional thing...

That’s why I don’t mind writing about it, and that’s why I am too disgusted to stop myself from writing about the

players involved. Publishing this sort of thing for so many people could hurt my career, or worse. But whatever.

If this doesn’t make you angry, then consider what happened next...

As the pressure of buying up all of your stock became so overwhelming that it reversed prices higher... the short

sellers realized they were on the wrong side of the trade. They, too, entered massive buy orders to exit out of

their short positions, causing a huge short-squeeze. That›s why you see such a sharp - practically vertical - pulse

higher in March and April of 2009.

Now Let’s Discuss The Next Government Gift

I wouldn’t even wait.

Typically, you get two major opportunities every four years, both in the same year, to make over 1,000% because

of government shenanigans.

I’ve already described it to you in my recent presentation.

During mid-term election years, things tend to go badly for the party that holds the White House. It almost always

happens. And this year is a special year because President Donald Trump has been very good for this stock mar-

ket. Love him or hate him, I don’t really care - I’m not here to discuss politics... I’m here to make people money.

The guy has been good for stocks, so I’m happy.

He attended the same school I attended in Forrest Hills Queens, so that’s kind of cool. And he’s from the neigh-

borhood that’s one neighborhood over from mine. I also had a quick fist fight with a neighborhood punk, when I

was a kid, who would later go to prison for stealing Trump’s mom’s purse right from her arm!

Back to my report...

Since the market has been so excited about Trump, and since it seems there’s a good chance Democrats will

take the House of Representatives, this year can rattle stock prices more than usual. This is a good thing for us.


I’m going to try to call the next several bottoms for you or at least get close. I already called the first bottom in

February.

Typically, the market experiences dips or corrections in the first couple of months of the year. Then strengthens

around April, followed by more dips or corrections around June. Then, it typically strengthens and dips again,

forming a bottom around October. That’s what happens, on average, of course. Every year is different.

We have no way of knowing when this will happen, or if we’ve already seen the worst of it. Contrary to what some

may believe, market manipulation doesn’t always get put in place by the institutions.

Often there’s already a story “in the air” that helps fan the flames of market volatility.

Let’s look at examples of this, during each of the last three mid-term election years...

http://www.truemarketinsiders.com/article/detail/13899/buy-the-rsi


In 2010, the deep Horizon BP oil spill was happening while the European debt crisis was coming into play (a crisis

created by Goldman Sachs because they helped Greece and other countries hide their massive debt levels... until

they surfaced... blowing up Europe and sending the region into Chaos.)

In May 2006, gigantic institutions, who understood the situation with the coming credit crisis, started unloading

stock. Many thought it was the beginning of the end and started selling short. But when they were proven wrong,

they had to cover, which caused a bit of a short squeeze. You’d see an acceleration in the momentum in the

upward pulse into 2007 because of it.

What about 2018?

We have already seen a whole lot of volatility. I would be blown away if it just faded away. That’s just not going


to happen.

Since we are currently in the lower end of the trading range for the year, I wouldn’t wait for lower prices to make

the trade I’m about to share with you.

With such a low direct participation rate in the stock market on the part of U.S. families, it’s pretty unlikely that we

are at, or have seen, a bull market top.

With the country as well as the international investment community so bullish regarding the Trump administration’s

affect on the economy... I think the next major bull rally is likely to be above average - save for any catastrophic

events or events that are especially out of control.

Strong bull markets tend to happen once the weak investors are shaken out of the market, because when scary

volatility shakes people out of the market, what’s left are those investors likely to hold their stocks through thick

and thin.

When semi-bad news hits, they buy more or hold. When bad news hits, they buy more or hold. When devastating

news hits, they tend to buy a lot more.

The term “climbing the wall of worry” means there needs to be something for the stock market to overcome, in

order for it to climb. It’s easier to climb a steep staircase than a super steep inclined hill.

Prices experience sharper advances when we have short-squeezes where short sellers must cover (buy back)

their positions. Those sharp advances, created by short sellers, make the stock market more enticing to the

spectators, so they get in.

The fast money (uncommitted stock holders) starts getting in, and these weak investors are eventually shaken

out. The mid-term year -- this year -- is when shares get shaken out of weak hands.

I believe this year will likely provide two things:

• A nice clean market for 2019, with nice strong shareholders who’ve weathered the volatility storms of 2018...

• A few great buying opportunities. I obviously don’t know if we will see much lower prices, providing us with

a better buying opportunity. But what I think is: we are already well off our highs, and that makes this what’s

likely to be one of the greatest opportunities we will see in years.


The Trade

Of the four years in the presidential election cycle, the mid-term year (this year) is the weakest... and the following

year, the pre-election year, is the strongest.

The gain from the mid-term low to the following year high is enormous. Follow the red line, from October, on.

That’s the mid-term year, on average, over the last 11 election cycles for the Nasdaq.


From the October low to the end of the year is a very sharp gain, but that gain continues back over on the left side

of the chart, with the green line.

Let’s back up for a second to discuss the mid-term year.

Market’s hate uncertainty. That’s why from August 2015 through election day was the longest correction in stock

market history.

Institutional investors, who control the stock market, couldn’t get a strong sense of who would end up in office.

Then, once we had our president elected, market’s went on a strong solid uptrend.

But the congressional mid-term election fighting and mudslinging, along with the fact that there’s usually a shake

up in who controls the house and or senate, creates uncertainty and market volatility.

This is very frightening for those who don’t expect it. In fact, the fear can shake weak investors out of the market.

But it can be a huge windfall in profits for those who know the deal. And you’d better believe there are investors

in congress who just love the fact that their words have such an impact on prices.

The average gain from the mid-term election low to the following year’s high for the Nasdaq Composite is just

over 70%.

I believe this time around it will be much more than that because the mudslinging is already horrific... and then we

will be back on track.

And, as you probably know, the different sectors within the stock market behave like lots of little stock markets,

with their own agendas.

That means, if the NASDAQ gains 70%, there will be sectors that gain less than 70% and sectors that gain more

than 70%.

The average dispersion in annual percentage performance in the 11 major S&P sectors, just as Technology or

Financials, is approximately 40%.

But, narrowing the focus, the average dispersion in annual performance is closer to 190%. (For example, if the


worst-performing sector is down by 30% and the best-performing sector us up by 160%, the dispersion is 190%.)

I play this gain differently every four years. This year, I think there is one extremely high profit potential position

that pulls together all of the strongest parts of the financial markets.

Over the last 24 months, Technology has been the second best performing major sector.

Technology has been the strongest major sector for the last 12 months and most likely will continue to be for some

time.


The strongest sector, out of the 41 narrow sectors, is the Internet sector.

Now, for several years, the U.S. equity market has been the strongest out of the six major asset classes.

These asset classes are:

U.S. Equities

International Equities


Commodities

Fixed Income

Cash

Currencies

U.S. stocks have held the #1 spot for two years.

But what quickly became the second strongest last year, and has been getting closer and closer to the first place

position is: International Equities.


The strongest part of the International Equities asset class are Chinese Internet stocks.

So I’m bringing you:

* The strongest asset class...

* The strongest region within it...

* The strongest Major sector (Technology)...

* The strongest narrow sector within it (Internet)...

* And playing it during the strongest timeframe within the 4-year cycle.

And this sector’s strongest optionable ETF is the Kraneshares Trust China Internet ETF (KWEB).

Now you might be saying to yourself: “What about the fact this isn’t a fund full of U.S. stocks? Isn’t the U.S. mid-

term election what tends to cause this strength?


I understand your point. But do keep in mind three important facts:

1. The U.S. still leads global markets. If the U.S. is strong then chances are China will continue to be strong.

2. Emerging markets, especially China, has been stronger than the U.S. markets lately.

3. China is known for manipulating markets. And Donald Trump is now “shaking the panda bear”. Or poking it.

Or something. My feeling is as the trade war gets underway, or as the U.S. and China kiss and make up, each

region will feel competitive as to who will have the better, stronger economy.

My feeling is that competition among the two (currently egotistical) economic giants is good for the growth of

much of the global economy.

By my estimates, the mid-term low to the pre-election year gains will yield north of 1,209.16% for a particular type

of call option on KWEB.

There is a very specific, very specialized strategy that I think safely gets us that 1,209.16% and I’ll tell you about

it now...

You may be familiar with the only other trading guidance service I run, CheckPoint Trader.

The way we will seek to generate this gain is using the CheckPoint trading technique on KWEB. This will also give

me a chance to showcase this method so you can see its power and decide if it’s something you want to get into


on a larger scale, down the road.

If it takes longer than 1-year for the stock market to hit its 2019 high, then perhaps the gain I’m seeking won’t

happen within 12 months. We shall see. If that’s the case, at least you’ll have my guidance until 2020.

We will be using an options strategy that’s as basic as it gets. Getting approval for this type of trade is very easy.

This is a straight call option purchase, and it involves trading a call that is lower on the risk side of things.

I used this strategy since launching in November and the positions are up dramatically. One gained over 400%

in just three months.

The position will be adjusted over time. Once-a-month, we will check on the position to see if it needs adjust-

ment. The position will be a long-term position that we will maintain through thick and thin.

We are entering this position at a pretty low point for the year, so far.

I’ll get into the analysis in a minute.

But to understand the plan, you need to know we will maintain a bullish position for the entirety of the next 12 - 20

months (I’m thinking we get the gain within 12 months, but I say 12 - 20 to give room for the end of the pre-elec-

tion year.)

There are about 250 options contracts that trade on the particular position I’m going to discuss. And there are

currently only 5 out of those 250 that are appropriate for this strategy.

As the position moves up and down throughout the year, the option that we own will either remain the appropriate

option or it will become inappropriate.

When it becomes inappropriate, we will adjust the position so we get out of the option and into a more appropriate

option for this position.

This is why we call the service CheckPoint Trader. Once-a-month, we “check” our bullish positions and we basi-

cally nurture it. We adjust as needed.


The Trade:

We want to own the KWEB November 50 call, currently with a mean price of $11.40. Whenever you read this,

the price will probably have changed. So the best way to play it is to get into the position even if it’s gained or lost

25% of its value. It’s still going to be a good position.

The way to enter is with a limit order. Enter the price at the mid-range between the bid price and asking price

of the call option.

At the current mid price of $11.40, each call option will cost $1,140.

Now do note that if KWEB pushes much higher, it will also provide us with an opportunity to pull money out of the

position at some of the monthly checkpoints.

Position Sizing

Without my giving a huge lesson on options pricing, suffice it to say that each type of option contract is very dif-

ferent. With the specific type we are using, the amount of leverage the option has is pretty straight forward, to

where I can give you rules to calculate what works best for you.

The rule of Smart Leverage is to own 1.3 call options for every 100 shares of KWEB that you would have otherwise

purchased.

But since you can’t buy 1.3 calls, you can only buy whole options - 1, or 2, or 3 and so on - you have to decide

what’s best for you.

Basically, to make this behave sort of like a stock position or ETF position, you would consider the dollar amount

you would invest into a stock or ETF and then divide it by the price of the stock or ETF (in this case it’s an ETF)

and then multiply by 1.3 and then divide by 100.

For example:

KWEB is at $59.00.

An investor who would normally invest $5,000 into a position would do the math like this:


$5,000 / stock price 59 = 84.74.

84.74 x 1.3 = 110.

110 / 100 = 1.1 call options but since you can’t buy 1.1 calls, the investor probably wants to stick with 1 call.

Another example:

KWEB is at $59.00.

An investor who would normally invest $25,000 into a position would do the math like this:

$25,000 / stock price 59 = 423.72

423.72 x 1.3 = 550.84.

550.84 / 100 = 5.5 call options. But since you can’t buy 5.5 calls, the investor would have to decide whether to

round up to 6 or down to 5, depending on the appetite for volatility.

Let’s take another look at KWEB.


This chart, showing KWEB since January 2016, has the momentum indicator, called the Exponential RSI, at the

bottom. You don’t need to be an expert in charting to see that when this indicator gets below that 30-line, it’s

usually an indication that KWEB is near a pretty decent buying opportunity.

I drew the white arrows to make that more clear.

The RSI buy signal is seen when it moves from below to above 30. Right now it’s sort of bouncing around 30.

If you look at the actual price chart, above, you can see the fund is at the low end of its recent trading range, which

is from about $60 - about $70.

Every month, I’ll send an update on this position, treating it like my CheckPoint Trader positions. So you’ll get to

experience what my other service is like.

Many of those who signed up with CheckPoint Trader didn›t have a great understanding of it, but people trust me

because I have a long history of treating people well and doing well on investing. After a few months passed, I›ve

received lots of positive comments from subscribers who quickly began catching on.

So if you don’t “get it” right away, don’t worry. You will soon.

I hope this has been a pleasure to read. I know it’s a lot longer than I originally thought it would be. I try to keep

my subscribers educated, not only on what’s currently happening in the financial markets in terms of relative

strength, but also about how the markets work behind the scenes, on Wall Street, and how the financial markets

of the past came to shape the markets of today.

My fingers hurt from typing. I will now go toss a football around with my kids.

Trade Safely,

kweb - ow to make over 1209.16 within a year technical ......kweb - ow to make over 1209.16 within a...

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