Miami, FL (PRWEB) February 13, 2012
The cover of Barron’s this past weekend proclaimed ‘Dow 15,000’, and ‘Dow 17,000 is a 50/50 bet’. The Top Gun Options trading team believes this prediction is fundamentally flawed and explored both sides of this bold prediction to help investors of all levels make an informed choice about where the market is heading.
Follow this link to see the trade that made over $1500 or 67% in under 2 days, and Top Gun Options new bearish trade on the SPY:
Written by Gene Epstein, the article titled ‘Enter the Bull’ often quotes the well-known Wharton School finance professor and author of Stocks for the Long Run Jeremy Siegel.
Their main argument is that history is on their side.
The Barron's article stated “Based on cyclical patterns of market history, the odds are better than two chances in three that the Dow Jones Industrial Average (DJIA) will reach 15,000 or higher over the next two years. Based on the same cyclical patterns, there’s about a 50-50 chances that the Dow could hit 17,000 or more.”
Citing Mr. Siegel’s stock market performance data dating back to 1871, the market reacts in a cyclical manner, known as the ‘rubber band’ cycle of expansion and rapid collapse. The stock market saw healthy double digits returns last year but was muted by domestic and European issues.
Top Gun Options looks at a wide range of market data to gather intelligence. The founder and CEO of Top Gun Options, Matthew 'Whiz' Buckley, said "Barron's needed to roll out the worn disclaimer of past performance is not an indicator of future results."
To see a bearish trade on SPY click here: http://topgunoptions.com/advanced-alert/
Buckley continued, "Greece will most likely fail in its austerity efforts, as will other European nations like Italy who are accustomed to living the high life - bloated civil services with equally under-worked and bloated workers and pension plans. These sovereign defaults will be followed by the United State’s own Greece and Italy – California and Illinois". Buckley believes that with their bloated budgets (the state of CA is over $25B in the red) and the federal government will be 'forced' to bail these sates out. Buckley summarized, "Seems ‘fair’ right? States like FL who have no state tax, compared to CA’s 10% ‘right off the top of your paycheck tax’, do not have issues like CA. The Golden State spends over $12.5B in benefits for illegal immigrant services. That’s nearly $1500 per legal resident in the state, including children. Seems only ‘fair’ that the other 48 states and their taxpayers, each with their own issues, bail out these states before they go bankrupt right?"
Top Gun Options believes Mr. Siegel's hypothesis does not take into account the unemployment and housing issues which are forecast by the government and independent sources such as the National Association of Realtors to remain high. Based on these sources, the Top Gun Options trading team believes unemployment will remain above 8%, which was not supposed to occur according to the Obama administration based on bailouts and QE 1 and QE 2 (quantitative easing). Rising foreclosures will remain clouds on the market horizon, Buckley believes.
Top Gun Options predicts that the federal debt situation will worsen. Buckley said "Bleeding the DoD *Department of Defense) budget down to rubber bands and popsicle sticks won't fix the problem while we pay for 99 weeks of unemployment insurance. Give the unemployed computer training, health care and a sense of self by having them serve their country instead of the other way around."
According to the Wall Street Journal 'Obamacare' will devastate small businesses. Companies are flush with cash but not hiring because they don’t know if they’ll be the next target of a Washington regulation or law. The Catholic Church got blindsided last week with Obamacare edicts and the contraception mandate but according to the Journal the Obama administration retreated last Friday, while Catholic bishops remained skeptical. "By what authority does the President of the United States seek to impose this immoral policy?" Bishop Thomas J. Tobin of Providence, R.I., asked in a statement. "This is the United States, not North Korea."
Buckley, a former naval aviator with 44 combat sorties over iraq believe that 'Overseas, Israel will attack Iran because the United States has become the Barney Fife of the world. 'Stop! Or we'll say Stop again!'. We’re going to wake up one day to news of an Israeli strike and oil will go to more than $200 a barrel as the Middle East explodes and Israel endures daily attacks, and Assad, shifting attention away from his domestic troubles, will also attack Israel."
Top Gun Options shows investors of all levels that there are 2 sides to every financial hypothesis, especially in investing, and investors need to decide on their own what they believe is right.
According to the Financial Times there are additional domestic and international concerns to be aware off before investors go all in thinking Mr. Siegel's article in Barron's is correct. According to Mr. Siegel markets histrionically tend to go up over time. In the interim investors can potentially profit from the resulting volatility in the market.
Top Gun Options placed a great Advanced options trade on Thursday that made over $1500 in less than 2 days, with the potential to make another $3100. It was a bullish trade on volatility (VXX), meaning the market would retreat and volatility would go up – they tend to have an inverse relationship. Follow this link to see the trade and see their next trade on the SPDR S&P 500 (SPY): http://topgunoptions.com/advanced-alert/
Top Gun Options believes the market has had a decent run over the past 5 weeks and is going to take a breather, especially as February 15th approaches. According to the Wall Street Journal this is the deadline Eurozone officials have placed on Greece to cut an additional $428.6M in debt or face the potential of a default on March 20th. February 15th is also the day important Eurozone economic numbers are reported.
Doug Robertson, Advanced Top Gun Options trader and owner of Blue Water Analytics in Miami, who placed the winning VXX trade last week and placed the new bear call spread on SPY in the Advanced Model Portfolio believes that we're in for more trouble. "No one can wave a magic wand and make these issues go away. So as the market swings in either direction, we plan to profit from it".