Well today we get more nonsense about “fat fingers” hitting Citicorp’s stock.  Sadly the media never makes mention of high frequency trading by hedge funds, dark pools and other institutional investors.  They story is about mythical “fat fingers.”

Members may have been frustrated over the past two months with the EWS defensive position.  The market has done little in the past two months but the models and other factors remained more bearish.  Today was a pretty big downward break we have been expecting.  The EWS, Sector, Delta and RS models have all been defensive in advance of this downturn.   These tools as well as the soon-to-be announced Gold Model is designed to hopefully protect investors from these recurring “fat fingers.”  Our guess is hedge fund billionaires had “fat fingers” from the lobster and caviar bought with small investor’s mutual fund money and small IRAs. 

We will have the new EWS update shortly.

We have a Power Investor chart below of the SPY, which is the SPDRs or S&P 500 Index ETF.  Note that the market keeps hitting a support floor of $105 or 1050 on the S&P 500.  The SPY’s price is just the S&P 500 Index divided by 10.  Well the SPY keeps hitting that $105 floor.  Oct 2009, Nov 2009, March 2010, black Thursday May 6^th, three more days in May, and now twice in June and it closed below it today.  It looks like the S&P 500 has broken through that resistance or floor of 1050.  

The next floor or support may be $90 for SPY or 900 on the S&P 500.   We will have more items for members to look for as far as warnings.  Members will know it has to do with moving averages.  If you are not a member – you can join by clicking the ORDER button on the top right hand corner.  Alternatively, you can do nothing and continue hoping. 

Another ominous sign is the Baltic Dry Index that measures ocean freight rates for bulk goods dropped 40% over the past month.  It is a proxy for China’s economy.  The two-year Treasury is at 0.61% as investors flee to the “safety” of Treasury securities.   This level has not been seen since the Great Depression. The bond/credit markets are always ahead of the curve or an early warning signal of economic slowing.  Be very careful in bond funds because if inflation takes off with interest rates, there will be trouble and lots of losses in bonds and bond funds.

Gold Model Coming Soon  June 29, 2010

We mentioned we will be launching the Gold Model soon.  It has been in private operation by Frank Lardino for over a decade.  This service will be for members paying $229 and $259 a year for membership.  Frank has also been developing a new asset class security with a group, which will be announced before the end of the year.  Frank believes the Gold Model, EWS and this new asset class will be the best defense for investors in these uncertain times. 

The nonsense of “fat fingers” and other foolishness ends up harming individual investors.  Frank is working with our staff to develop more proprietary tools to help protect investors from those “fat fingers.”