The Stage Is Being Set For A Possible 3000 Point Drop In The Dow…

The Debt Ceiling Deadline Is October 17th, 2013 And Legatus Is October 8th Through The 17th…Coincidence?

(to watch on youtube: www.youtube.com/watch?v=dZwDHAovXEo)

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Hello everyone…

Red here… back from vacation!

Over the last month or so I’ve been quietly making money in the junior stock market and enjoying some much needed rest.  I’ve been eliminating all the stress of wondering what will the government do next to manipulate the big market by simply not playing it.  It’s too easy to make money in the junior and penny stock market that I just didn’t want to write other post on where I think they will take the S&P500 to next.  Why worry about it when you can make money in the junior market without sleepless nights.

If you read this blog in the hopes of finding that one secret golden piece of information that will allow you catch the exact top (and/or bottom) of the stock market so you can make a huge profit on the move down then you’ll love profiting from all the new junior stock picks I plan on putting out in the coming months.  I’ve been able to successfully align myself with the right connections where we spot this junior pennies just days before they explode higher!

I mean picks like PGSY that we discovered back on 8/30 at .02 cents just before it ran up to .07 for a 350% gain in only 5 days!  That’s HUGE!  I realize that this market might be new to you but not playing it with gains of 50%-100% are common place… and most moves only take a couple of days!  I’m in love this market market as it so easy to make money in it now.  The connections I’ve aligned myself with are able to spot practically every winner in advance of them exploding upwards.

You see, there are “tale-tell” signs that show up before hand and the pro-traders I’ve surrounded myself with in this market know EXACTLY what to look for to find every one of these winners.  Again, I’m not trying to sell on making money in the junior market instead of the big market, as if you are killing in there then congratulations.  But if you read this blog because you’re not making money regularly trading the nasdaq, s&p, russell, dow, etc… then YOU need to make a change!

Yes, yes, I’m going to give you an update on what I see in the big market in the coming weeks but I’m personally going to stick to trading these incredible junior picks I’m getting.  Think of it like this… we bears (that’s most who reads this blog) have been like small fish (maybe 1-2 feet long) swimming in the big bad ocean looking for food and trying not to get eaten from all the huge sharks around us (wall street market makers and manipulators), while I just escaped and found this nice quiet pond of water (the junior stock market) with nothing but small 1 inch minnows swimming in it just waiting to be eaten by a big fish like us!

If you align yourself with successful people and follow what they do then you’ll become successful too…

I’ve do just that in the past month by making the connections with other successful traders in this junior stock market, which is something very few will ever be lucky enough to achieve.  But you my dear reader are now one of the lucky ones as you will get access to all these HOT junior stock pick (some Nasdaq too) in my newsletter. So unless you have your own connections (like may Jim Cramer is your buddy) in the big market you’ll going to still be a small fish swimming in the big bad ocean of sharks… unless you decide to join me in my quiet little pond?

This coming month and many months afterward my partner and our connections will be finding many more new winners BEFORE they explode higher and we will be giving them all to YOU in the newsletter so you can become a WINNER too!  The coming bear market expected is something that is hugely positive for the junior stock market as traders flock to them in times of uncertainty… which is what I’m expecting in October and November of this year.  Of course next year appears to be worst… which is GREAT for the junior stock market!

If you’re not on my newsletter you’d better get on it asap as the coming turbulence in the S&P500 is going to make the junior stock market just that much better.  Kinda like the farmer restocking the pond with fresh new minnows!  Don’t get eaten by the sharks, come take it easy in the pond.  You can join here: http://reddragonleo.com/newsletter-sign-up

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The coming stock market crash…

So everyone is wondering if the stock market is still going to crash in October?  And the answer is… “define Crash?”  If by crash you mean a total collapse like in 1929 and what Lindsey Williams speaks of in his messages he gets from his elite sources, I’d so NO.  If you mean will it have a 2,000 or 3,000 point drop in the DOW, I’d say YES.

Based on what I’m seeing in the charts we have either already completed or will complete in the coming early days in October the very large Primary wave 3 up from the 1074.77 SPX low in late 2011, which sets up the stage for a Primary wave 4 down that only has to remain above that 1074.77 low of Primary wave 2 down to be a valid Primary wave 4… which is one hell of a drop!  I’m not expecting anything remotely close to tanking that far down but instead I’m simply looking for the gap up open from January 2nd, 2013 to be the target zone bottom.

That’s somewhere between 1420 and 1460 on the SPX, which is also about a 3,000 point move down on the DOW from the current high.  However, I’m not sure if the high is in yet or not?  Inside this large Primary wave 3 up we have 5 Major waves and we appear to have completed the 5 Major wave up at the recent 1729.86 high… but it’s possible that we still have a little more to go yet.

Naturally there are smaller waves inside the Major wave 5 up as well, which started at the 1627.47 low.  Since it’s a 5th wave it too will likely have a 5 wave pattern inside of it.  I currently can see a 5 wave pattern up from 1627.47 to 1729.86 which all makes up a the 5th Major wave up inside Primary Wave 3 up, which “if so” will complete that large wave and allow for a Primary Wave 4 down to start.

The timing of a huge wave down starting soon and the coincidental timing of the debt ceiling deadline… and the Legatus meeting is something bears need to be very aware of.  The charts only say we are about to see a Primary Wave 4 down start (which can easily be 3,000 DOW points) but add in the other events that happen to be timed out to occur with the topping of the Primary Wave 3 up and I’d say we have really great odds of a big move down coming this October.

As for a date…

It depends on whether or not we have topped at the recent 1729.86 high or not?  While I can count 5 waves up in this final Major Wave 5 from the start of it at 1627.47 there’s also the chance that those 5 smaller waves are just some type of A wave and the recent move down to Friday’s close at 1691.75 SPX wave a B wave down… all still inside that final Major Wave 5 up.  This leaves us a smaller C wave up yet to come inside Major Wave 5 up… and that should then complete Primary Wave 3 up from it’s start at 1074.77 in 2011.

So, if A = C then we can guess at the final high by adding the points moved up in the A wave to the coming expected low of the B wave (which I think we’ll see Monday October 30th, 2013).  And since that A wave started at 1627 and ended at 1729 we have about 102 points, which added to say around 1680 for a estimated low on Monday (for the B wave down still inside Major Wave 5 up) that puts our upside target for the C wave up around 1782 (102 points added to 1680).

Personally I think that’s too much to expect and I’d be more likely to believe that we’d have a shortened C wave that just barely goes above the 1729 high… maybe we get to 1750?  I just don’t see 1782 with the current debt ceiling news hanging over the market right now.  I guess if the news media comes out and says “all is well, we feel positive that we’ll reach an agreement before the October 17th deadline” then the market “could” relax and rally up that high.

But time is running out as October is coming upon us very fast now.  It just doesn’t look like they will have enough time left to produce another big wave up before that deadline date hits.  A shortened wave C up to complete Major Wave 5 up and Primary Wave 3 up seems more likely.  There’s a lot of “negative divergence” patterns showing up on different time frames in the various indicators (like the MACD’s, the Histogram Bars, etc…) which tells me we “could” already be topped?

If we are already topped…

Then we have started the first wave 1 down inside of Primary Wave 4 down.  This move looks about done with a little more downside possible on Monday before we can expect a wave 2 up to start.  If this is the case then by this coming Friday October the 4th I’d expect the wave 2 up to end and allow a wave 3 down to follow the next week.

This should be a tricky period as after a 5 wave pattern down happens it will have made up a likely Major Wave 1 down inside Primary Wave 4 down.  This means we could bounce up hard in an ABC Major Wave 2 up that could possibly come from a positive announcement on reaching some type of agreement about raising the debt ceiling or extending it into a future date.  So if we see that happen on the 17th I’d expect a rally until the 22nd with that date being a likely top for Major Wave 2 up because it’s a “double eleven” date… and you know how they like to use the power of Numerology in the market.

Think about that for a moment now.  If we are in a Primary Wave 4 down (that can go 3,000 DOW points down easily) and inside that large wave we complete a Major Wave 1 down (into the 17th for the positive news outcome regarding the debt ceiling) and further completing the Major Wave 2 up by the 22nd then we are looking at a Major Wave 3 down to start inside a Primary Wave 4 down.  That my friends should look like a crash wave!

This is again just speculating but it’s a strong possible count if we have already topped and they announce some positive news on October 17th about the debt ceiling issue.  You remember November of 2012 when the market sold off in front of the first time we experienced this debt ceiling issue and once it was raised we quickly bottomed at 1343 and rally hard into the rest of the year and into the first half of 2013.

We should expect the same to happen again once they actually announce the raising of the debt ceiling for the 2nd time.  But, it seems likely that they will play around for awhile and not make that agreement until after we have sold off into the 1420-1460 SPX zone to complete this expected Primary Wave 4 down.

The question is, how do to do it?

Delay, delay and delay is the answer I believe.  You tell the news that we politicians are working hard to resolve this issue and get a bill passed to raise the debt ceiling limit as soon as possible… but we don’t have a deal yet.  However, we are going to agree to extend it until late in November (again)… which tells the market to sell off until that period when they agree to raise the debt ceiling just like they knew they were going to do anyway.

It’s all just a dance timed out perfectly to allow the market to correct hard in a Primary Wave 4 down scaring the hell out of traders and getting every bear in the world on board short… which then allows them to squeeze the bears up into early 2014 for Primary Wave 5 that finally will end the entire bull rally from the 666 low in 2009… and further allow the real stock market crash to begin!

These are the possible moves that are likely coming in October and while I’m not sure with one or which way they will play out I do feel confident that a Primary Wave 4 down will start at some point this coming month.  It could already have started or we could have on more higher high still coming?  Regardless, we should still bounce some next week into Friday October 4th.  It will either end up being called wave C inside the final 5th wave up to complete Primary Wave 3 up, or it will be wave 2 up inside Major Wave 1 down inside Primary Wave 4 down.

Therefore, the logical thing to do is to watch and see how high the market bounces into the end of next week before shorting.  If they some how spin something the law makers say next week to sound like a deal on the debt ceiling will be made soon then the pressure will then let up on the market and we could see a decent move up.  I’m still NOT expecting a move to 1782 but a slightly higher high over 1729 is possible.  Of course it could fail to make it and fall just under 1729 and make either what we could call a double top area or some other Fibonacci retracement level that is 10-20 below 1729.

I would welcome a squeeze up to make a new high as that makes it easier to fall when it rolls over as the bears would have been stopped out.  But I can’t control what they decide to do with the market between now and October 17th, instead I’ll just be listening closely to their buzz words (as Lindsey Williams likes to call them) for clues.

We all know that they WILL raise the debt ceiling limit, but when is the question?  There will be mixed signals from law makers as the play the dance to move the market in the direction they want.  But come October 17th I’m NOT expecting them to say “we’ve decided to raise the limit”, but instead I am expecting them to state something positive to squeeze out the bears with a rally into the 22nd (this assume we make a 5 wave move down into the 17th to create Major Wave 1 down).

However, if they have not went down into the 17th in a Major Wave 1 but complete that wave the week or so prior, thereby rallying up with Major Wave 2 (inside it should be an ABC pattern of waves) and the topping out before the deadline date, they should say something negative like “we’ve not reached any agreement yet and will be setting up another deadline in late November”.

Naturally you can expect the markets’ reaction from a statement like that to be very negative, so we’d see that Major Wave 3 down inside Primary Wave 4 down start immediately!  Again, that would be your crash wave!  This all assumes the plan is to continue down some more to make the Major Wave 1 and then back up into the 17th for the Major Wave 2 completion.  This plan suggests the high for Primary Wave 3 up from 1074 is already in at 1729 and we have already started the first Major Wave 1 down inside Primary Wave 4 down.

The other scenario is that we still haven’t topped for Primary Wave 3 up and we are head to possibly 1750 SPX or so into the end of next week or even into early the following week.  Then as the days count down toward the October 17th deadline the market starts Major Wave 1 down inside Primary Wave 4 down as it waits for the announcement concerning the debt ceiling.

On that date the law makers decide to extend the limit for another month pushing the deadline into late November.  The market rallies from the relief of the news to make the Major Wave 2 up inside Primary Wave 4 down.  Then on October 22nd the market exhausts its’ rally and realizes that the debt ceiling issue still hasn’t be solved yet… and panic sets back in causing Major Wave 3 down inside Primary Wave 4 down to start.

Bata-a-bang Bata-a-Boom!

There you go…

Likely top for Major Wave 2 up inside Primary Wave 4 down should happen on either October 17th or the 22nd.  Then Major Wave 3 down starts inside Primary Wave 4… and that my friends the the wave down you want to ride!  It’s the surfers dream wave that happens once or twice in a lifetime (found during hurricanes and tsunamis… which coincidentally is the same thing it will feel like in the stock market I believe).

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Will the next market crash happen before or in mid-October?
… update from Ali

Hi folks!

I know it has been a quite while since I last posted on the blog, talking about the market plunge due in early August and such. Yes, actually my bad! You see I project most of the turning points but I really did a bad job projecting the crash. I knew for sure, the market would put in a top early August and it really did but that would not lead to a collapse or anything. You see, with a lot of people already being aware of August 2013 being a critical month, new energy was added to the market, changing the harmonics. On top of that, the Fed was also aware of the market being so close to the plunge so they did their best to hold it up through a lot of money printing. Then at that time the market was also traded by “Big Dogs” to attract as many buyers as they could.

The current situation is fooling everyone one now. You might think, no war with Syria, no war with Iran, positive GDP numbers and the stock market will go to the Moon but here are the real issues, the debt ceiling drama and budegt deficit crisis. You see, the drastic measures to avoid hitting the debt ceiling will probably be exhausted in mid-October and also the budget deficit will likely soon go all over the press.  In addition to the current economic issues, we also have a monsterous “New Moon “ coming on October 4^th. Generally, October is going to be a difficult month for everyone and I suppose we are in for a rough couple of months.

Now I would like to turn your attention to the S&P500 weekly chart.

As you see, I have plotted the 20-day moving average to indicate the moving support and resistance levesl. Not that I apply such method in my market analysis but I am simply doing this to indicate a very important support level at 1656 area on the weekly chart. You see, the prices will likely soon hit it, then bounce a little bit. I assume it will be a weak attemp to make a higher high. Whether the market is able to make a higher  high or not, the next attemp will be so weak. DO not let it fool you!  All you would want to do is to wait for a “set-up bar” to form, then short the market without hesitation.

May you profit handsomely,

Ali

Email: afiroozi (at) rocketmail (dot) com

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Red

P.S.  Another reason to expect a bounce is the goverment shutdown that happens (or doesn’t happen… which is what I think will happen) that is set for September the 30th at midnight.  That’s Monday of course and there is supposed to be a vote that occurs on it at 8pm EST tonight (Saturday the 28th) while I’m writing this post.  So kind of agreement should cause the market to rally.  Maybe it is announced later tonight or possibly Monday after the close?  Don’t know which but once it’s announced (and again, assuming it’s positive) we should rally from the government remaining open for some future extended time period.

References:

http://www.legatusmagazine.org/conferences/

http://www.reuters.com/article/2013/09/25/us-usa-fiscal-debt-idUSBRE98O0LU20130925

http://www.news10.net/rss/article/258858/2/The-government-shutdown-explained