I just received my copy of Institutional Investor magazine today in the mail and there is an IMF special report on how a massive cyber-attack on our financial system is coming. What's interesting is the financial sector as shown in the chart below has been sniffing out risk in its sector since August 2017.
My thoughts are how this maybe similar to how the scumbag insiders of Equifax sniffed out their massive breach and sold their stock before the news became public. Maybe the breach of $EFX is just the tip of the ice-berg on how this is all going to go down (the back door if you will). There is a whole lot of very disturbing evidence in this article that this maybe true and coming from North Korea and China. (Maybe the whole nuclear threat from NOKO is a "look over there" move)
"There are many different forms of an attack, but you've got to think about how a banking institution has been positioned on the internet. They have to interface with customers right?" says Jason Truppi former FBI cyber-special agent.
It's also noted in the article that a global financial institution "war game" (operation Resilient Shield) was not about preventing a cyber-attack, but to rehearse what actions should be taken WHEN a cyber attack occurs on critical banking infrastructure. (So in other words they admit they can't do S#%T about it until it's done.)
According to former FBI cyber agents, a consequence of a cyberattack on a country's economy would send a ripple through all industries (i.e. utilities, energy grids, banking, transportation
You may want to withdraw a week or two worth of cash, just in case. (South Korea (a more advanced electronic civilization than the USA) was attacked by NOKO and people couldn't get to their money from banks for 2 weeks )). Oh and be careful of #FakeNews. More on this later....
Financial Index sniffing out "Risk" ?
2008-2017 financial sector chart. We topped in August of 2017.
Institutional large speculators and managed money are buying Gold again and this time at higher levels than their first buys after the Trump MAGA win. During these last few weeks while Gold has traded down, Institutional money flow has picked up according to the Commitment of traders report. This could help Gold trade back above the $1,350 level, IMHO.
A quick side note: ZeroHedge put out a piece today that Chinese Golden Week has been responsible for weak demand every year from 2013 until the holiday is over. It then tends to bottom after the holiday. (I've never heard of this before and I've also never traded the India demand either)
So I say, Buy with the institutions and if you're front running the traders before they come back from holiday and you get better prices, than great! Of course, if the Chinese Golden Week and Gold relationship is a real thing then you can say that's the reason if you want. I'll stick with the IMF.
Here is the article:
FYI- here was my Gold topped call.
Long term "smart money" is flowing into these stocks. The idea is that if there are a number of top money managers all buying the same stocks, they will support them on any retracement and more importantly, this is the list they are most likely to hold and add to if we enter a downturn in the market. These stocks will also tend to be the first bought after a market correction and outperform the indices on the way back up.
The key is to wait for these stocks to come into your personal risk buy zone, then confirm there is still Institutional Money Flow and then join them. Personally, I close out a position if it drops 10% at any point.
BTW, this same approach works on indices, futures, commodities, forex, ETF's, mutual funds, real estate, fine wine, classic cars, art etc... or anything that follows the auction market process.
IMF track record as of 12/5/16
Notice the S&P 500 has returned at its highest point 10% and the stocks held by the "smart money" tend to outperform.
Uptick 091917 well on its way. Adjust new target to $53.50
We've been in a holding pattern for additions to our long equity positions in Energy since the initial purchases in May to Crude's recent August 2017 high. We continue to trade with a long bias on Crude Futures with a target in the mid 50's. As of 9/13/17 we are less than 4% away from a strong up move in energy. Stay tuned.
I'm excited to be back at the same level where oil was going to $20 according to Barron's and Wall Street analysts. This was the last time I loaded up on oil ETF's, bonds, stocks, and crude futures. That ended up being a trade I held for over a year.
Today, April 27, 2017 we've just entered into that same level in 2016 where institutions and their analysts were telling people to sell but guys like Warren Buffet and myself were backing up the truck.
It's time to start looking for some oil plays long. Here is a link to my full story, as of now: Updated 5/16/17
How to be short-ready for the upcoming downturn
How can you improve your odds of success when selling short a market or stock that’s been going straight up like we’ve seen since November 8th 2016? One way is to spot heavy sell-offs in huge volume on a Commitment Of Traders (COT) weekly chart. The resource we tracked as Institutional Investors can be found here: www.cftc.gov
If a market has peaked in price, it then follows that the supply of shares that large commercial funds are willing to dole out to the public outweighs the amount of shares that current holders and new buyers seek to own. So when the balance shifts from heavy demand to heavy supply, expect a market or stock to fall 5-10% or even more within a single week.
One way to stay ahead of the rest of the crowd and get better pricing is to look at the markets underlying sectors and cap weighted stocks that make up those sectors and markets. When a market leader starts to loose upward support you can spot distribution by analyzing the rate of change in the volume.
COT report from Oct-November 2016
Take note of the large asset managers accumulation.
COT Report from Nov-March
The crowd will continue to buy the dips until it fails. A clue a top is near is when someone comes up with an Acronym for a group of trendy winners. This usually is in the late stages of an exhaustive top. At this time it also pays to be somewhat of a contrarian because by the time an acronym is created such as BRIC (Brazil, Russia, India, China) and its announced by every “analyst” on CNBC or Bloomberg it’s time to start to exit. In fact a number of you reading this now, may not have even heard of the acronym. Today, only India can lure global investors, China struggles with its slow down, while Brazil and Russia are in heavy recessions.
The more recent acronym, FANG (Facebook, Apple, Netflix and Google) is a perfect example of when it’s time to start looking for the exit. If you take a look underneath the hood of these stocks, you’ll find that over the last 3 months, the top money managers of the largest funds in the world have not been buying these stocks. Here is a list compiling the number of top rated fund managers and what they were buying. Notice there are no Facebook, Apple, Netflix or Google.
Let’s say you miss the initial short-sale entry that happened today April 5th 2017. No problem, keep your eye on the order flow as price attempts to take out the recent high.
FYI, The Nasdaq fell from its May 2 2011 peak of 2887 to an Oct 4 low of 2298, a 20.4% bear market correction.
Good luck in this new short.
The following stocks are those being bought by the smartest minds on wall street. Notice there are no FANG stocks.
On December 15th, I posted the following stocks which saw the top Institutional money managers accumulating positions under the radar. These positions were established before the S&P500 ran up post Trump election. In fact they began back in October, well before we knew Trump would be POTUS.
The fact is that when you dig underneath the hood of the broad market and you see IMF otherwise know as "Smart Money" buying or selling, it's best to take notice because they are going to be well ahead of the market and therefore outperform it. Not guessing and following what the Institutions are doing is the hallmark of successful Investing. Just look at the percent gain of each of the names vs. the SPY. For more information, fill out the Indication of Interest form on this website.
The Dow hit an all time high today 2/7/2016 20,155. But If you look underneath the hood of the market and its individual components you can see that only 78% of the stocks were participating. That is down from when the Dow was at 17,800 back in May and 96% of the stocks were participating. Another weak point to acknowledge is that no stock within the DOW is making a 52 week high. How can the index be making all time highs and the stocks are not? This means we are going up without Institutional Money Flow