InTheMoneyStock...'s  Instablog

Next week, the markets will put in a near term top. Yes, it is that simple to see if you know how to read the charts. The proprietary PPT Strategies clearly show a top followed by a pull back in the first week of February. The play book is as follows. Stocks should gap higher Monday before turning choppy and weaker the rest of the week.

Just to give some background on past calls and profits. I stated at the start of 2013, the markets would push higher to the 1500 level on the S&P 500. This level corresponds to $150.00 on the SPDR S&P 500 ETF Trust (NYSEARCA:SPY). On Friday, the SPY closed at $150.25. This completed a perfect call. At this point I am turning to a more bearish view not only because the master target was hit, but because of other concerning factors. Let me lay them out below.

1. Mutual fund inflows continue at twelve year highs. Mutual funds are the primary investment tools of the average investor. Throughout history, when the average investor piles into the market, a top is very close.

2. The media is pumping the bullish view equal to each of the last major highs in the markets before a 10% correction.

3. The greed index tracked on CNN Money is at 94. The highest it can go is 100 and the lowest is 0. Excess greed and complacency signals a top or near reversal.

4. The VIX (Fear Index) is trading at levels not seen since just before the financial collapse.

5. Friday, the NBC Nightly News lead with a story on how great the markets were and how average investors were jumping back in, fearing they will miss the big run higher. Note. The markets are already up over 100% off their 2009 financial collapse lows.

6. Many stocks like 3M Co (NYSE:MMM), 3M Co (NYSE:MMM), The Home Depot, Inc. (NYSE:HD) and Amazon.com, Inc. (NASDAQ:AMZN) are at all time highs. Are things that good to warrant all time highs?

These factors plus the proprietary PPT Strategy calculations say a top will be put in next week, followed by a strong pull back in the markets. The average investor is jumping in and will be raped once again, as in the past.

Related: SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) and PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ).

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

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Apple Inc. (NASDAQ:AAPL) closed at $500.00 per share on Friday, January 18th, 2013. This was options expiration. If you think this was a random coincidence, please crawl back in your hole and continue drinking the cool-aid. You are beyond help and will continue to lose your hard earned money.

The third Friday of every month is options expiration. To truly understand this scam you must understand the each side of the options trade. First, who sells options? Institutions are the primary sellers of options. They sell puts and calls and charge a premium for each one sold. Now, who buys puts and calls? The small investor buys options in hopes of scoring big gains. They look at it as a way to use minimal amounts of money (because they do not have a lot of money) to possibly double or triple their 'investment' in a short amount of time. This is almost always a suckers bet and almost all of these average investors who play options, lose most if not all their money.

Next, you need to understand how the institutions maximize profit on these options they sell. As I said before, they charge a premium for each options sold. Whether a call or a put, they all have a strike price they are sold at. The strike is the value the buyer is betting the price will be above for a call and below for a put. In the case of Apple Inc. should a call be bought with a strike price of $500.00, the buyer would only make money if the call closes above $500.00. The more above $500.00, the more profitable the option becomes on options expiration day. The same thing occurs with puts. If puts are bought with a strike of $500.00, the buyer makes money the lower it goes below that key $500.00 level. Lastly. an option will expire 100% worthless if it closes at the strike price. If this happens, the institutions maximize profit by taking the entire premium. Each options expiration, this means millions of Dollars to institutions as pure profit.

The scam concludes when institutions analyze and isolate where a stock MUST close to maximize profit. They push a stock to that level using their billions of Dollars and rape the average investor who plays the options in hopes of hitting a home run.

Apple Inc. saw a close of $500.00 per share. This was not a coincidence on options expiration Friday. Apple is also one of the most highly optioned stocks by the average investor because few can afford to buy 100 shares or more at its current price. Therefore, they gravitate towards options as a cheaper method to play the stock. This means the ultimate screwing will occur and it did occur. The institutions isolated where they needed to close Apple to maximize profit and took care of business. The little investor always loses and this shows it once again.

Learn more about Wall Street scams and how to avoid them and profit by joining the Research Center. Take the seven day free trial and finally learn how to profit in the stock market.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

As we all know, the public has really not participated in the stock market since the 2008 credit and banking crisis. Since that point in time, the public has developed even more of a sour taste for Wall Street. Events such as the flash clash, LIBOR manipulation by the banks, high frequency trading manipulation, the MF Global bankruptcy, and of course all of the home mortgage scandals have caused protests, and almost a hatred for Wall Street by many in the public.

Mutual fund outflows have been occurring by the public investor for the past four years. Most hard working people now believe that the stock market is rigged by the large banks. Writers such as Matt Taibbi and others have demonized many of these large financial institutions for their antics and abuses that occur in the stock market all of the time. There are now many websites, bloggers, and publications that follow and track rules that are being broken by the large Wall Street firms all the time. Usually, these big firms just get a slap on wrist and continue with business as usual.

The bank bailouts since 2007 have caused outrage in the streets. The Occupy Wall Street movement started to take on a life of its own last year. Prior to the Occupy Wall Street movement was the Tea Party which stood up as a fighter of government bailouts. Texas congressman Ron Paul has been outspoken on the Federal Reserve Bank and other central banks around the world. Many people in the public are now wondering how printing money out of thin air can continue to prop up asset prices and help the economy. The Federal Reserve claims that its monetary policy will help create jobs and boost the economy. Others believe that the central bank is simply a way to help prop up the banks, which still have a lot of problems.

Here is another problem with these large banks which give Wall Street a black eye. It is the upgrading of stocks and indexes at extreme highs. Here are some examples, Goldman Sachs Group Inc (NYSE:GS) upgrades light sweet crude to $200.00 a barrel when it was trading around the $145.00 level in July 2008. A few days later oil tops out at $147.00 a barrel and plunges down to $33.00 a barrel in January 2009. Perhaps this upgrade was just an honest mistake. In August 2011, J.P. Morgan Chase & Co (NYSE:JPM) upgraded the price of gold to $2500.00 an ounce. Gold tops out in September 2011 at $1923.00 an ounce and falls as low as $1523.00 an ounce in December 2011. Perhaps this upgrade at a high was simply just another error by the so-called smartest people on the street. However, I sincerely doubt that. In November 2007, almost every major Wall Street firm was upgrading Google Inc (NASDAQ:GOOG) when the stock was trading over $700.00 a share. The projected price targets were over $1000.00 or more for Google stock. That stock dropped more than $300.00 points in just four months from that peak and even further throughout 2008. It seems that these Wall Street firms are really good at picking tops in leading stocks and commodities - sarcasm. Another recent example just occurred in Apple Inc (NASDAQ:AAPL) when the stock was trading around the $700.00 level in late September 2012. As many of you already know, the stock declined by $200.00 points in less that two months from that high. If you were following along with our analysis over the past five years, you would have been on the right side of the calls mentioned above. The most notable of which, the real estate and market bubble burst of 2007; we are well documented for alerting our viewers of this event well before it happened.

So the moral of the story is, learn how to use the charts and don't listen to anyone. The charts are the only reliable way to have a chance when it comes to trading these markets. Obviously, all of these large institutions need to have someone to sell to when it comes to these upgrades at extreme highs, otherwise it would make no sense to buy when everyone is already in the market. Who is left to push the stock or commodity higher? Why don't they ever seem to upgrade these equities at the lows? That is the million dollar question, we can only guess it is because it makes the big Wall Street firms millions and steals money from the uninformed individual investor.

Nick Santiago
InTheMoneyStocks.com

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