It’s a Bear Market!
Do You Know What To Do With Your Money? Critical New Tools For Surviving & Profiting From
The Global Financial Crisis

The following article is written by William Bradstreet Stewart of ICE, and was published in Trader’s World Magazine:

In these dangerous times of economic crisis, with the world teetering on the brink of Global Financial Meltdown, too many people simply remain either in denial about the true nature of the situation, or in the dark as to what to do to preserve their remaining capital, and what investment strategy to take for the near and long term future. It has become apparent that the advice of Wall Street firms, the Federal Reserve and the US Government is at best useless, if not intentionally misleading or thoroughly corrupt, so where does one now look for guidance and direction?

People are losing their homes while watching their jobs and life savings evaporate before their eyes, and in so doing, are realizing that the complex investment vehicles, multitudinous hedge funds, and long taught strategy of “buy & hold” sold to them by investment advisors are completely tenuous if not thoroughly delusional. Sure a “buy & hold” strategy may work in a 20+ year bull market, like that experienced from 1985 to 2007, or over a 60 year lifetime of investment, but in a bear market, or in the more moderate time frames in which most people invest, such strategies can serve either to produce no returns at all, or significant losses, depending upon when the assets are purchased and sold. Take a look at the 1960’s -1980’s where the market sputtered up and down within a trading range for 20 years, and think about how these strategies would have served the average investor during those times. If such a market were to occur again today, do you have any idea what to do?

People are now beginning to realize that the concept of an ever expanding price valuation in the financial and even real estate markets, within a time range shorter than 20 years, could be a complete myth, as is evidenced by a study of the past 100 years. There are long periods when the markets make very little upside progress, and one must consider whether we may not be entering into such a time right now, and if so, what can one do to make money or even just to survive? We would like to show you some tools which we think will help to answer these questions.

The following chart presents a cycle model of the S&P 500 from 2000 to 2036, created by Daniel T. Ferrera in his book, Wheels Within Wheels: (Red line = Forecast, Blue line = Current market)

If there is any chance that this cycle forecast is correct, it shows that we have entered a Bear Market with projected bottoms potentially as far out as 2022, before the next bull market begins again. Other cycle models created by Mr. Ferrera, based off of the Dow Jones, project the potential bottom in 2016-2018, sooner, but still a long way off. Other more conservative models we have seen, at best, project the next major bottom around 2013. Many of these models do project a short 1 year to 18 month bear market rally, which we have been seeing of late, but the expected highs are not overly impressive, probably nothing much more than those we’ve already been seeing. If there is any chance that these forecasts are true, all those now looking for a bottom in the markets to begin investing again, could be sadly disappointed with the future results of their investments over the next, at least three, if not 10+ years.

It is often repeated that there is no likelihood of seeing a bottom in the financial markets until the real estate market has bottomed. Anyone who lived in California in the 1990’s, and watched while NOTHING sold for 6 years, while all the leveraged investors who had built their fortunes since the 70’s went bankrupt, will understand that we are nowhere near a bottom in real estate. In fact current statistics on housing prices imply that things will probably get a lot worse before they seriously improve. And if that is true, it certainly does not bode well for the economy and markets in general. If this is the case, what are people to do to make money for the next 10-15 years?

We suggest two answers to this question, first, gain an education which will give you a better insight into the markets than has been provided by the mainstream financial advisors, and second, LEARN TO TRADE! Though we may not see new highs on the Dow and S&P for another 15 years, this does not mean that there are not incredible money making opportunities in front of us all right now, if not some of the greatest opportunities ever presented in the history of the markets. One just needs to know how to take advantage of them through foresight and strategy.

The following chart presents a blow-up of the S&P 500 cycle model presented above for the time period from 2000 thru 2008. This model was published in Dan Ferrera’s Wheels Within Wheels in 2002. It perfectly called the 2002 bottom, the ensuing bull market, and nailed the October 2007 top to within 1 week. Those who had this book, and followed this forecast were out of the markets at the perfect time, at an all-time historical bubble high, and many have been short the entire way down. What a shame it is that the larger financial institutions do not avail themselves of such pertinent knowledge. Had they done so, we may not have seen the massive collapse of the banking and investment industry, and along with it, much of the global economy. And Ferrera’s forecast extends out for almost another 100 years, to 2108, past the time that any of us will even likely be alive.

Knowing that most mainstream analysts, advisors and hedge funds have utterly failed in every way to help their clients avoid this financial disaster, it leaves the individual to his own means to attempt to navigate the dangerous waters of today’s markets by himself. Obviously, there are materials available to such individuals that will assist them in this quest, books like Ferrera’s Wheels Within Wheels or his yearly financial outlooks, but one is still left with the need to learn how to effectively trade these modern markets. It's one thing to have a general cyclic indication of market expectations, but an entirely different thing to know how to take advantage of and trade those insights in real time. If Ferrera's S&P Forecast is even close to being correct, we are in a Bear Market for the next 10-15 years, or best case scenario, we'll see a sideways trading range for most of that period, like we saw in the 1960’s -80’s. In this kind of market, the "buy and hold" strategy taught to most investors will be worse than useless, so people need to find a new way to make money in these volatile and uncertain times. The ONLY way to do this is to learn to project, in advance, turning points and to trade them! With people losing their jobs everywhere, it’s comforting to know that a trader works for himself, so has no fear of losing his job and joining the ranks of the unemployed, if he can trade!

For the trader, these highly volatile markets offer one of the greatest opportunities in history to generate unimagined returns. With the kind of volatility we have seen in the last two years, with intraday swings of 100’s of points on the Dow, and some stocks jumping and collapsing by 50% almost overnight, those who know how to forecast and trade such swings have the regular opportunity to generate returns that would have taken decades in times past. Such trading requires the ability to pinpoint exact turning points on a daily and even intraday level. Or for a more intermediate term investor, projecting the turns on a daily and weekly time frame is all that is needed to catch the general trend of the market as it bounces from its high to low within a trading range. This is not as complicated as one may think, for with the right tools, foreseeing and trading the intermediate trends of a trading range is almost obvious. Many professional traders do this all the time, but generally the process is not taught to the common investor or beginning trader.

If one asks professional traders what the most fundamental necessities required to make consistent profits in the markets are, they will generally all boil their expertise down to a few key fundamentals. These fundamentals turn out to be, first and foremost, good risk management! Second, effective tools that clearly identify future turning points, specifically, highly tradable points after which a significant market movement transpires. And finally, techniques which identify price level entry points, exit target points, and techniques for trend determination. It is somewhat universally agreed upon by successful traders that if you know WHEN to take your positions, WHERE to enter and exit your trades to maximize profits, as well as where to place your stops so as to limit your risk without getting knocked out of your positions, and HOW to determine the nature of the ensuing trend, that you will be successful in your trading endeavors.

Many people spend a lifetime studying numerous trading books and courses without ever finding a consistent means to achieve their desired results, though really with the right direction and proper material they could probably surmount this obstacle without great cost or difficulty. The first step is in learning to favorably bias the risk/reward equation. One must develop a “statistical advantage” before even beginning to trade, through applying both account management skills, followed by consciously biasing the risk/reward ratio of one’s trading strategy. This is really the only way to make a living in the trading business. Everyone always talks about the upside of trading, believing that with unlimited potential for gain and limited losses, that it’s inevitable that given enough time and resources you will eventually hit it big. However, in reality, success in this endeavor is very low, because nobody truly understands how to properly apply these principles of risk management when they first begin trading. Even many long time traders have never mastered these most fundamental ideas, and that is what separates the successful traders from the unsuccessful.

Again, it is Dan Ferrera who has clearly realized that this problem lies at the core of most failed trading attempts, and with this in mind he developed a specialized trading course, The Keys To Successful Speculation, which directly addresses these issues, clearly laying out the principles of risk management in direct and simple terms that any beginning trader can quickly master and apply to their trading. Most people just don’t realize that it is this side of trading that is blocking them from success. Ferrera’s Keys provides the “statistical advantage” through risk management that will allow a trader to skew the risk/reward equation in their favor all the time. He then teaches an advanced variant of W. D. Gann's Swing Trading system which will teach any trader to swing trade any market with great proficiency and success.

Along with Ferrera's Keys, we have another tradung course, Market Vibrations, which presents Gann's secondary and more advanced trading approach, what we call Leveraged Position Trading. Rather than trading the short term daily and weekly swings like with Keys, Market Vibrations instead seeks important intermediate to major trade setups, from which one expects a significant trend. It teaches a safe optiosn strategy, safe that buying stocks or underlying markets, which allows traders with small accounts to generate large returns like Gann did back in teh early 1900's where he turned $250 accounts int $12,000, the equivalent of turning a $25,000 account today into over a million dollars. To do this one must be able to generate leverage in safe way, and this course teaches how to do that.

These two courses alone will provide the tools necessary to allow most analysts to trade the markets with a positive succes rate, and to take advantage of the incredible opportunity the volatility of today's markets presents. Whether you are a conservative investor or speculative trader, these tools will allow you to call turns and trade the short or long term trends of the market, whether it is going up or down, while allowing you to limit your risk and while maximizing your returns. This kind of trading may be the only way for the individual investor or trader to make money over the coming decade of unstable markets and crumbling economies.

Related Pages About Daniel Ferrera