by Trader Rog

Many of us in this business watch the VIX (Volatility Index), which shows what we call “measuring the shakiness of market action” on daily and weekly charts. When we compare accurate opinions from super traders with proven track records to the VIX and then superimpose a VIX Point and Figure chart, we can spot our supposed adventure cycles. These of course are the cycles where we are most likely to discover hard selling and big rallies on the trading calendar.

News events, whether they are fictional media or realilty, can move markets. Just look at what the Labor Department’s jobs report does. Most of us out there with half a brain clearly understand the jobs report belongs to the political machine and Wall Streets’ dominant traders. Some of the old timers on Wall Street and top market analysts are even to the point where they can somewhat predict the jobs report based upon the need for market continuance.

In other words, if we see a weak chart and then perhaps some nasty selling that  hits us hard at an inappropriate time, we just know we’ll get a hallalujah jobs report with  grossly exaggerated high numbers to give us a pop on those good old S&Ps!

Our current VIX Point & Figure chart closed at 15.36. The little rascal hit the basement floor in later February and bounced up to 19.29. That neat lift probably occurred on anticipation of trouble with the sequestration. Our next VIX higher target is 23.00. Beyond that, the longer view target is 32.00. Last fall of 2012, the VIX was busy trading in late August through October near 48.00. That was the cycle where we expected stocks would convulse and they did, but only somewhat. That event was not the Big One or the disaster de jure.

In summary, what these tricky technicals are telling us, is the market action from now to Memorial Day should have one more semi-radical move, taking the VIX to 32.00 (or thereabouts). After that, it should calm down into choppy trends providing day-to-day ennui.

Ennui is defined as a listlessness and dissatisfaction resulting from lack of interest. This is our word of choice for the energy levels of Congress and our Executive in regards to repairing the national budget that is now on the precipice of major disaster. Another example would be our favorite, “We are not ambivalent are we?” Hey. Why don’t you boys take a new junket, more time off, go on vacation and play some golf? “Let ‘em eat Cake.” Those uttering those remarks are going to be eating more than cake and the taste will be beyond barnyard nasty.

Screaming new heights of lethargy are not resolving the ticking economic short-fused bond bombs all over the world. Either that is the desired outcome, or these people are beyond stupid.       We say it must be the desired outcome as we’ve been watching this symphony of destruction too long for it to be happenstance. These boys are constructing a wreck and we know why. They want to steal all the gold on the cheap after the dust settles and install their One World Government and One World Currency.

Surprise! It ain’t gonna work as the stolen trillions are mostly in crummy bonds, allegedly capitalizing central banks. These are what we call real bankers; these guys and gals in the Big Banks holding mountains of fiat paper “assets” and a much larger mountain of toxic derivatives hidden in the back rooms of banks throughout the planet.

Retired elite trader Stan Druckenmillier told Bloomberg News last week the real budget problem is the government’s $3.7 trillion in expenditures. The three big problems within are Social Security, Medicaid and Medicare. These represent 44% of that whole budget, up from 34% in 1990, according to the government’s Bureau of Economic Analysis.

Mr. Druckenmiller told Bloomberg that unfunded liabilities could be north of $211 trillion. They probably are since we’ve heard that estimate bandied about by some smart guys and gals we know in the trading and reporting business. He told us this action equates to today’s seniors robbing from future seniors. We might add that the theft is so grandiose it can wipeout everyone, robbing the futures of all kids, adults, parents and future elderly.

Guess what else? That spending did not even include the worst of the worst coming from Obamacare with a damage bill we cannot even comprehend. The damn thing is expanding like mushrooms; it keeps growing in the dark and no one knows what new scary stuff is yet to be discovered within its 2,700 page tome.

Like Nancy Pelosi told us, “We gotta pass the bill so we can see what’s in it!” Sadly, we are gradually finding out in the unraveling nightmare of threats, red tape, rules, and potential charges of prison time if one violates a stupid law not commonly understood.

The information is mostly hidden in political obfuscation and double-talk. Kind of like political cost savings is proclaimed as “lack of spending in the future.” Didn’t these ignoramuses ever go to housewife budget school?

In that training, you add up the bills and income and once the bills are paid you have a surplus if there is money left over. If you don’t have enough to pay the bills you stop spending and get smaller on the outgo side. This is not rocket science. Their congressional budgeting nomenclature sounds like a tongue-in-cheek intellectual rampage.

Since the national government can print digital bonds and currency with impunity, the game can last as long as the players have faith in their fiat paper. Since Benny is now buying back as much as 60% of his own auctioned paper trash, we would suggest D-Day (Debt Finality Day) is quickly approaching.

If you pay attention to what larger Big Boy foreign nations are doing to manage this nonsense you can envision a very bad outcome.

The 50 USA states have to balance budgets by law and they cannot issue and print any new currency. They can sell bonds but that game is about finished as their credits are stinkers. This is true unless you are in presidential pet states like California where they receive an Obama helper check of $75 million a month, or in Illinois where there are no rules or any budget reality. The President takes good care of his Illinois buddies as they groomed him for the job he holds right now.

Our Northern Advisor cautioned that these people can continue this game indefinitely as they hold all the cards: political power, money, bonds, asset origination ability and a powerful lapdog media.

Well, we say that’s true… but we also think the parasites have drained all the life out of this game and have in fact overdone it. If they steal just enough from the system to have great power and fun while the “system” lives on… they win. However, in the current example they have gone way too far and a myriad of existing global tripwires are way too many to dodge.

Which one trips them up and wrecks the movie? There are so many we can’t count them all. The new currency wars (obvious in Japan and not so obvious in other nations) would probably be a good choice. However, we think the bond markets run by independent traders will shoot these markets in the head by doubling interest rates when central bankers are least able to pay them. Then, they must relinquish all control and the outcome of that occurs as Yield Mayhem. You can smell this coming by watching the longer-view futures bond trading in further out months on Chicago exchanges.

Budgeting By Monthly Crisis

“As I understand the process, a budget continuing resolution by Congress is used as a temporary measure to authorize current spending levels until a new budget is passed. There has been no new budget since Obama was elected, and the spending level certainly has not been frozen since the last official budget was adopted either. It is the new way of running things. The Constitution is no longer a part of the decision process loop.” –Trader Tracks Newsletter Northern Advising Consultant

This is a great summary of current problems by our top advisor. We agree and this is just one more nail in the economic coffin of inflation, morphing into hyperinflation. That’s our take on the scenerio. It’s not the end of the world, but it is an international cleansing, long overdue. As we trade deeper into the 2013 calendar, watch the VIX Index to provide some clues.

Hard Assets Are Best Investment – Not Fiat Paper

It is obvious to us that hard assets are the answer. It all starts with physical gold and silver.

Somebody please tell us when global bond markets crash for good and we’ll tell you when this can all get better and we start over again, maybe with a gold-backed currency.– Trader Rog, Roger Wiegand

Roger Wiegand is the writer of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and long-term traditional stock shares and futures and commodities trading with specifics for individual trades. Contact Amberleigh at wavelengthpublishing@gmail.com for a free week sample of Trader Rog’s insights and predictions via his exciting new daily audio subscription. Find more information at www.letustrade.net.

Roger also is a regular contributor to The Korelin Economics Report (www.kereport.com) the highest rated daily Internet radio program listened to throughout the world, dealing with politics and hard assets. He is also a regular guest on the Weekend Edition of The Korelin Economics Report, which airs on radio stations across the USA on Saturdays and Sundays.

Contact Amberleigh at Trader Tracks Newsletter in our beautiful Northwest publishing offices for a complimentary copy of our latest newsletter or visit our website for a free sample: www.wavelengthpublishing.com. Call 1.360.296.1953 for details. You can e-mail Amberleigh Brownson at wavelengthpublishing@gmail.com for more information.