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Catching a Falling Financial Knife

Cyprus Deposits Theft Bank Run Trigger for Stock Market Drop?

Stock-Markets / Stock Index Trading Mar 17, 2013 - 07:25 PM GMT

By: Nadeem_Walayat

Stock-Markets

Financial SHOCK and AWE has sent the Greek cypriot population into a panic as the Government of Cyprus upped the anti in the game of systemic theft of wealth from savers / all depositors by virtue of the Governments announcement to steal an average of 10% of ALL bank deposits in Cypriot banks as part of a Euro 10 billion bailout plan, including declaring a bank holiday to prevent bank runs whilst the fine details are worked out as to exactly who will have what percentage stolen from their bank accounts.


Your Savings are NOT SAFE

Following the financial crisis of 2008, governments all over the world stepped forward to prevent bank runs Northern Rock style by guaranteeing deposits upto Euros 100,000. The news out of the Cyprus now means those guarantees are worthless. This is a warning to depositors of all nations as it implies that ANY future bank bailouts will also imply some direct loss (theft from) depositors. At the end of the day governments that are bankrupt cannot guarantee anything! That means ALL of the Euro-zone PIIGS.

The Cyprus Bank Run Contagion WILL SPREAD Because the likes of Spanish Banks are STILL BANKRUPT! The People of SPAIN Understand this, they also now understand that they are NEXT to have their savings stolen by a state that cannot guarantee anything! Refer to one of my earlier articles on what to do to protect your savings from being stolen - 03 Dec 2011 - How to Protect Your Bank Deposits, Savings From Euro-zone Collapse Financial Armageddon

This is a quick update as I will be writing at greater depth early next week with regards how to protect against the theft of wealth from savers to protect the bankster elite which I have been warning of for the periphery sovereigns for several years and repeatedly suggesting that all PIIGS depositors should move funds out of periphery banks and into either hard assets or the likes of German bonds (26 Nov 2010 - Euro Debt Crisis Bankruptcy Bailout Queue, Protect Savings & Deposits From Banks Going Bankrupt! ).

For countries such as UK the theft has been just as great as what the Cypriots are expected to experience as the theft has been STEALTH by means of high inflation that equates to approx 14% STOLEN from UK savers over the past 4 years i.e. the amount that savers have lost after REAL Inflation (CPI+1.5%) and Taxes (20%) as savings interest rates have been artificially depressed by the Bank of England so as to funnel wealth into the bankrupt banks and monetize the governments large budget deficit. All cyprus is doing is stealing 10% directly because as being in the euro-zone it CANNOT PRINT MONEY AND INFLATE as the UK and US have been doing.

The news out of Cyprus will clearly hit the financial markets hard, such as stocks and periphery bonds as it is expected to spark a flight to safety Monday on contagion fears of being replicated in the likes of Greece, Spain, Italy and Portugal, which implies this could be THE trigger for the anticipated reversal in stock market trends towards a significant correction as forecast in the Stocks Stealth Bull Market Ebook 2013 and Beyond (FREE DOWNLOAD) as illustrated below :

Other manifestations of the flight to quality will likely see the Euro plunge and Sterling and the Dollar rise including their bonds.

Dow Trading

The Dow on Friday closed at 14,514, down some 25 points on the day and has run far beyond that which anyone could have imagined even a few weeks ago, my original expectations of March 2011, that's TWO YEARS AGO! was for the Dow to target a trend to a new all time high of 14,200 before encountering significant resistance, that target has been more than achieved with the market giving an extended opportunity to bank profits on what has turned out to be an exceptional 4 month bull run since the mid November low off of 12,471, up 16.5%.

Given the existing over-extended state of the stock market trend and the negative news out of Cyprus / euro-zone, I would be very surprised if the stock market rally resumes Monday, instead I am banking on a series of SELL Triggers being triggered where my initial SHORT trigger is at Dow 14,465, which I expect to be triggered in EARLY Trading. The next trigger is at Dow 14,415, which I expect will also be triggered tomorrow.

Ensure you are subscribed to my ALWAYS FREE NEWSLETTER for how to protect your wealth from crooked governments engaged in money printing fraud and outright theft Cyprus style, also see in my latest ebook Stocks Stealth Bull Market 2013 and Beyond (FREE DOWNLOAD).

Source and Comments: http://www.marketoracle.co.uk/Article39527.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2013 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of four ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series.that can be downloaded for Free.

The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

despe906
19 Mar 13, 05:07
VIX alternative

After Sunday evening big gap down, DJIA futures retraced all the losses - the process started at European session open. The 5m charts gave some solid buy signals on DJIA, SnP, Nikkei and Ftse indices. Was it predictable? Well, the initial push at the Europe open was up, then the rest was a simple continuation after a pullback in a trend. The sentiment is still bullish and first signs of a correction are yet to come.

My vix alternative - 'market oracle' at google trends seems to be going a bit lower.

http://www.google.com/trends/explore#q=market%20oracle&cmpt=q


Nadeem_Walayat
19 Mar 13, 08:20
Trading Extreme Risk

Hi

Yes, trading is extreme high risk, the best traders in the world are not going to be profitable more than 60% of the time, anyone that says otherwise is LIEING!

The Dow has triggered two clear sells off of the high, the sells hold as long as the prev high is not breached.

Yes, your MO graph closely reflects MO earnings :), I guess a lot of competition has emerged. If I did not enjoy operating this site, I would have ceased doing so several years ago, but... then how would I express my ANGER and OUTRAGE at the Politicians, banskster scum and the crooked financial sales industry that pretends anyone can trade, when in reality perhaps only 5% will be successful.

Best

NW


Nat
19 Mar 13, 16:37
sell triggers

Hi Nadeem,

Just curious. What timeframe are you basing your sell triggers above on? Is it the 5 minute timeframe? Why such a low timeframe? Doesn't this increase your risk of getting stopped out due to noise? May I ask where did you place your stop losses - how far above the previous high? I understand that time is a fractal so no need to explain that.

Are you basing your sell triggers on the immediate lows or the resistance of the previous highs? e.g. sell trigger 1.

(I personally had been waiting for 14300 to be triggered to indicate a top was in but hey I'm just a newbie)

Lastly, I wonder what degree of probability you think a similar situation to Cyprus arrives at our door? Is this likely? I understand the argument that we have already effectively been hit by probably a 25% tax to date due to QE and currency debasement.

Why has the US bought 1.5 million hollow bullets for Homeland Security and 2500 armoured tanks? Are they expecting something sinister in the future too?

Right from the very start of the sovereign debt crisis, I always expected the US would be the last to fall as USD is still the reserve currency and has the deepest debt markets. The pound will fall before the dollar does imho. This is why I imagine the US markets and USD are doing so well at the moment as world capital continues to flow into America right now. Capital always seeks safety first and then hides when Governments run out of other people's money.

Smart move Nadeem putting your cash into property. You got a significant amount of your hard earnt capital into a private asset. You are not the only person doing this currently.


despe906
20 Mar 13, 04:35
A pro-trader

Nadeem,

It’s not your fault that people search for oracle only when fear creeps up their minds. I don’t think there is a lot of valuable content out there on the web as accurate in terms of analysis and forecast as your articles. I post links to your articles on FB whenever I agree with you, which is most of the time. I am sure that Marketoracle is helping a lot of people all the time.

This little google tool shows what’s going on in the world quite well: ‘pope’ spiked in 2005 and now. ‘Jesus’ is stable with spikes every April and December. ‘Vaccine’ shows a spike in 2009 when media didn’t want people to concentrate on the economy too much. ‘Savings’, ‘travel’, ‘car’, trading’, investing’, ‘stock market’ are all drifting lower. ‘Unemployment peaked in mid 2010. ‘Myspace’ declined to a sleeping point. ‘Google’ is on the rise. ‘Vagina’ shows no sign of weakness.

Trading is the most difficult job in the world and I am sick whenever I see an ad ‘become a pro-trader in a week’ showing a smiling face of a good looking guy, ‘a pro trader’.

The best trader in the world, Jesse Livemore became the richest man in the world, then lost it all. Officially no one knows how, some blame the FED policies, some say he listened to a friend’s advice again. I know what happened, because I spoke to him in a dream:) He told me that ‘trading is not about the rules’. (At that time I worked hard to maintain discipline in application of my rules). What then is more important than disciplined application of trading rules? He said :’ State, mental state. To be able to see options and choices, to be able to make the best decisions, to read the market. Awareness and knowledge only amount to nothing! A loss, a win, a strong conviction, personals problems - all affect your mental state. Lack of patience limits your trading arsenal considerably. When you beat the market and become the richest man in the world, you’re a different man. You cannot imagine what this kind of success would do to you. Your arrogance cripples your trading abilities, your lack of flexibility takes away rules you should use, so that in the end only two options remain : all or nothing’.


Nadeem_Walayat
20 Mar 13, 21:14
Dow Trading

Time frames - 5 min, 15min, 1hr, 4hr, 8hr.

Stop 14565.

14,300 too far for trading, it's all risk vs reward - 100 points for 1000 points.

Cyprus - UK - The risk is always increasing - So I reduce my exposure to the risk by cutting what I have in banks and put into harder assets which I have been writing about for several years.

It all boils down to ones risk of ruin and controlling it which is something the politcians do not understand which is why we are still in crisis 5 years on!

PROPERTY - Yes, since the start of 2012 parking 50% of my wealth in property now enables me to sleep well at night :)

TRADING - Yes, trading is more a state of mind then technical tools, and you can only achieve that by under standing risk vs reward. My goal is not to expect to make a profit on every trade but to ensure that the potential reward is far greater than potential risk at least X3. I am more than happy to make money on 6 out of every 10 trades because the winners tend to be many times the losers in points banked the most extreme case example was the 1987 crash, where on one trade my risk was 40 dow points for 700 point reward.

The number of wins vs losses does not count, instead what counts is risk vs reward. The problem is many traders are psychological focused on trying to win every trade. Which is why I don't like to talk about FIGHT CLUB, I mean TRADING, because most people just do not understand becasue they are looking in the wrong direction.

Best

NW


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Catching a Falling Financial Knife