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Gregory Mannarino
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I started my financial career working for the securities and trading arm of the now defunct Bear Stearns before thedot-com bubble. I am an active trader of the capital markets. I have published several books pertaining to finance, global economics, and equity trading; My most recent book is... More
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TradersChoice.net
My blog:
MarketReport
My book:
Money Matters.
  • The Specter Of A Major Stock Market Event Is Here. High Probability Of October Crash. 29 comments
    Aug 8, 2014 1:56 PM

    Today is August 8th 2014.

    If you are familiar with my work as a trader of the capital markets, then you are familiar with my discussions of how I employ many tools to help me navigate this complex endeavor.

    On August 2nd I wrote a piece here on my Seeking Alpha Instablog outlining how the CBOE SKEW Index was predicting a stock market rebound. Further on August 5th, I wrote another segment discussing how despite the recent stock market sell off a singificant move higher was very likely. (Please see my previous Instablog segments with regard to the articles I mentioned above, it will shed light for you on today's blog).

    For me it's like this. When too many people are on one side of an equation Im looking to get on the opposite side of that trade. Pundits on the financial channels were screaming that the market was now in for a major correction. I came out publicly saying it was nonsense, and the market was going higher.

    Today the market as I said it would, is bouncing off it's 200 day moving average and I believe we are now entering the final phase of the Elliot Wave Principle. As such a very dark cloud is looming over these capital markets, but there is huge amounts of cash to be made with this knowledge.

    I will break down a brief outline of the Elliott Wave Principle for you here.

    The Elliott Wave is simply a pattern of 5 waves, 3 impulse and 2 retracement waves followed by a corrective phase of 3 more short waves (A, B, and C). Waves 1, 3, and 5 are bullish waves, 2 and 4 are retracement (bearish) waves. Although the Elliot Wave has it's naysayers, time has proven this "theory" to have a certain degree of validity. I simply use the Elliot Wave Principle as a guide.

    Below is a year to date chart of the Dow Jones Industrial Average. I have outlined for you the current Elliott Wave pattern. It appears as I have predicted, we will bounce off the 200 day moving average and begin the 5th impulse wave. This 5th impulse wave should more or less correlate with the length of impulse wave 1, then begins the "corrective" A,B,C. wave segment. By looking at this chart we can gauge that there is a high probability of a major market event occurring in or near October.

    Keep in mind that the month of October is notorious for market crashes. October 1907, October 1929, October 1987, October 2014??

    (See chart below).

    (click to enlarge)

    We can capitalize on this knowledge. If we are now entering a 5th wave as I believe we are, a lot of cash can be made on the long end of this market. Further, we can also choose when to exit these long positions and consider shorting the index.

    Did you like this article? Then please share it.

    Thank you, Gregory Mannarino.

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Comments (29)
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  • doodlebug73
    , contributor
    Comments (2) | Send Message
     
    We have IRA /401K investment in gold and silver. Meaning we don't physically have it yet. Should we take the penalty and close it and get our gold and silver physically now?? I am afraid of the govt confiscating it from Goldline when markets crash.
    8 Aug, 02:09 PM Reply Like
  • smokey4dubb
    , contributor
    Comments (2) | Send Message
     
    if u don't hold it u don't own it
    9 Aug, 01:51 AM Reply Like
  • smokey4dubb
    , contributor
    Comments (2) | Send Message
     
    if u don't hold it u don't own it!
    9 Aug, 01:51 AM Reply Like
  • johnsme
    , contributor
    Comment (1) | Send Message
     
    If I may help, I cashed out all my IRA's from my brokerage firm at the end of 2013-14,
    meaning I cashed out half and direct deposited the funds into my regular account in cash on that day, the remaining half was "transferred in kind" in the shares I held, to my regular account and subsequently sold Jan 1,2014. The "settlement date" is the key to when any tax liability will be recognized.
    So I paid the 10% penalty on ALL proceeds at the time of closure in December 2013, however, I paid ORDINARY taxes on each half for each taxable period.
    ORDINARY INCOME is how your IRA will be taxed upon retrieval. Therefore, if you have losses in that taxable period, you can use those losses to OFFSET your taxes paid against the ORDINARY INCOME of your IRA you cashed out.
    I ended up paying around 15% total, since I had carryover losses on trades to OFFSET the ORDINARY INCOME of the IRA cashout.
    It's NOT as SCARY as you think when understand what I just said here.

     

    Been there, done it.
    Sittin' on shiny now with all of it. :)
    I am my own bank.
    9 Aug, 01:56 AM Reply Like
  • stuch77
    , contributor
    Comment (1) | Send Message
     
    yes. forget about confiscation if tshtf. goldline won't have enough gold to give everyone in a major rush from there clients to all cash in and want there physical gold.
    9 Aug, 04:28 PM Reply Like
  • Ag Hammer
    , contributor
    Comments (2) | Send Message
     
    Before you cash it out and take it in the backside from your plan administrator AND the government/IRS, look into setting up a precious metals IRA LLC.

     

    Basically you create a holding company to hold PHYSICAL PM and YOU become the administrator of your own PM.

     

    Advantages are huge, no tax penalty bc you are just moving your $ from one retirement vehicle to another. (To one that you now own and control!!)
    No withdrawal penalty paid to your current 401K administrator. Expenses for setting it up and running it are tax deductible.
    10 Aug, 02:36 PM Reply Like
  • End the matrix
    , contributor
    Comment (1) | Send Message
     
    Doodlebug73 *** cash it out ASAP !! The first place the Government will go is IRA/401k and safety deposit boxes AND YOU CAN TAKE THAT TO THE BANK !!!!!!!!
    8 Aug, 04:40 PM Reply Like
  • doodlebug73
    , contributor
    Comments (2) | Send Message
     
    Thank you!! Calling Monday!!
    8 Aug, 04:57 PM Reply Like
  • Ag Hammer
    , contributor
    Comments (2) | Send Message
     
    Before you pull your money out of your 401K & ira ' s and take it in the backside by your account administrators and the IRS, take a deep breath.

     

    If you just cash out before "retirement age" you will pay substantial penalties!!

     

    You can own and physically hold precious metals in a IRA LLC. Basically you create your own PM holding company in the form of an LLC. Then you transfer your $ from your current 401K and IRA (NYSE:S) into your own holding company. Then you buy all the PM you can w that money and have them delivered to you.

     

    Obviously you will need a safe place to store them. The cost of a good safe and any other administrative expenses are tax deductible through YOUR new company.

     

    Look into it before you make the same mistake I did--UGH. I'm still paying on a loan I took out just to pay the tax penalties for being hasty.

     

    You still have time.
    10 Aug, 02:37 PM Reply Like
  • hahnsgarden
    , contributor
    Comment (1) | Send Message
     
    So if the stock fall does that mean the end of a dollar?
    8 Aug, 04:51 PM Reply Like
  • 25 year elliotician
    , contributor
    Comment (1) | Send Message
     
    If your going to do a wave count Greg, dont start where your chart starts. You need to go back to the bottom in 09 to start counting waves. There is also a bradley model turn which hit exactly on July 16th, which is another chart you should consult. You also fail to mention that this could be only the A wave correction, with B up to follow then a Major C wave lower likely. Would only be a bit more cautious in the prediction you made. That being said, Greg, Love listening to you on you tube where I listen to what you have to say, daily. Do agree with most of what you say, but disagree that market going to another high at this point in time. Rally now is temporary and going lower.
    8 Aug, 04:56 PM Reply Like
  • Gold_Finger
    , contributor
    Comments (2) | Send Message
     
    Greg,

     

    I don't know anyone who can accurately use Elliot Wave to predict where the market will go in the future. They always use Elliot Wave *after* the correction or *after* the bull run and exclaim "See, Elliot Wave worked!".

     

    It is a lot like staring at an inkblot. Ask 3 Elliot Wave experts to read a chart, and you get 6 different answers. You might as well be reading tea leaves. :-)
    8 Aug, 05:20 PM Reply Like
  • Gold_Finger
    , contributor
    Comments (2) | Send Message
     
    For what it's worth, I agree with "End the Matrix". There is no upside to owning paper gold, either in paper bullion or gold mining stocks. When people find out COMEX and LBMA have no gold, the physical gold price will shoot up and ETF's and will crash. If you can't hold it, you don't own it.
    8 Aug, 05:21 PM Reply Like
  • Ethics-
    , contributor
    Comments (78) | Send Message
     
    "Elliot Wave" a self-evident truth that requires no proof?
    8 Aug, 07:21 PM Reply Like
  • Sheldon Sutherland
    , contributor
    Comments (92) | Send Message
     
    Great article Greg, thanks.
    8 Aug, 07:25 PM Reply Like
  • JMoore1977
    , contributor
    Comments (2) | Send Message
     
    If we get a big drop I like $TVIX for some leveraged gains.
    8 Aug, 07:27 PM Reply Like
  • JMoore1977
    , contributor
    Comments (2) | Send Message
     
    Greg what is your preferred method of going short? Leveraged play like TVIX? If we do get a major correction in October TVIX could hit somewhere between 70% and 100% or more.
    8 Aug, 07:28 PM Reply Like
  • worldiscrazy
    , contributor
    Comment (1) | Send Message
     
    Greg
    I'm just a simple minded guy . The way you explain the markets and what's going on is perfect for me .!!keep up the great work !!your my go to guy every day for updates everyday :-)
    8 Aug, 07:29 PM Reply Like
  • Molycorp52
    , contributor
    Comments (14) | Send Message
     
    100% of my IRA is in bonds. should i put it in equities? if so which ones?
    9 Aug, 12:58 AM Reply Like
  • kmartinez33
    , contributor
    Comments (2) | Send Message
     
    Greg,
    When the market crashes, will we see a dip in Gold and Silver as well, or will Gold and Silver rise as everyone looks to put their money in something safer?
    9 Aug, 01:51 AM Reply Like
  • kmartinez33
    , contributor
    Comments (2) | Send Message
     
    Greg,
    When the stock market crashes this Fall, do you think there will be a temporary dip in Gold and Silver as all equities are loosing value, or will Gold and Silver rise as everyone is looking to put their money elsewhere?
    9 Aug, 01:52 AM Reply Like
  • CmoneyFat_Atlanta
    , contributor
    Comments (18) | Send Message
     
    Likewise, Is TVIX good play for this type of event...what is best why to leverage in a huge correction? Thanks
    9 Aug, 01:52 AM Reply Like
  • drudometkin
    , contributor
    Comments (5) | Send Message
     
    To people asking what happens to gold and silver when the stock market crashes? Look at 2008 gold and silver prices. They crashed big time. I remember because I own gold and silver I bought in early 2008 and trust me the metals were viewed as UTTER TRASH to most people in late 2008.
    9 Aug, 11:35 AM Reply Like
  • Douglas Murray
    , contributor
    Comments (4) | Send Message
     
    Hi Greg fantastic article!!! Be Prepared!!!!
    9 Aug, 02:56 PM Reply Like
  • Liddius G Stonner
    , contributor
    Comments (5) | Send Message
     
    This guy has been continually wrong for the last year... yea sell in June and walk away was a brilliant move. Summer 2013 Greg M was wrong also, he was calling for a crash back then and the market proved him wrong. My point is, call for a crash all the time, when it does happen you look brilliant.
    9 Aug, 09:24 PM Reply Like
  • westmc45
    , contributor
    Comment (1) | Send Message
     
    I am screwed I have over 200k in a TSP that I can not move offshore till September 10………I moved it to the G fund for now as the S and I funds kept dropping. Even with a drop of $.35 I loose like 4K in a week. Anybody else have this TSP (its the GOV retirement plan) ……………Let me know what moves your making
    9 Aug, 09:25 PM Reply Like
  • Jason Bic
    , contributor
    Comments (8) | Send Message
     
    Awe man, been there done that one buddy. I was conned into setting up a TSP account and had nothing but problems with it. Good luck trying to close it mate if you do.
    10 Aug, 10:39 AM Reply Like
  • Thesavvyinvestor
    , contributor
    Comments (158) | Send Message
     
    I am Canadian and I buy my physical gold and silver from Silvergoldbull.com in Alberta. 6 methods of payment and whatever you ordered arrives via Fedex in a few days. And I hide it in my house.
    11 Aug, 05:19 PM Reply Like
  • TBKV
    , contributor
    Comments (21) | Send Message
     
    Broad market crash didn't come, only for Market Vectors Gold Miners ETF, that one is down 20% in october.
    31 Oct, 09:26 PM Reply Like
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