“[O]n Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. …

“…with naked shorts, no physical metal is actually sold…

“Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.

“Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?

“What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.

“Who can afford to lose that kind of money? Only a central bank that can print it.”

“Assault on Gold Update,” Paul Craig Roberts, frmr asst Treasury sect. Reagan Administration, PaulCraigRoberts.org

The recent dramatic Gold and Silver Price Takedown revealed the playing out of Mammoth Market Forces with Effects far beyond the Precious Metals Market. Monitoring these Forces is Essential for Investors going forward.

Among other Effects the Precious Metals Price Takedown demonstrated that the Prospects for certain Key Commodities Price launches soon are better than ever (but of course from lower levels).

It also demonstrated that even higher Price Targets sooner are now in store for these Key Commodities and Gold and Silver.

Why? The recent Cartel (Note 1) coordinated Takedown was effected by the selling of 500 tons ($25 billion) of paper Gold – representing 15% of all annual mine production. Total contracts traded represented about 3,000 tons. If all that were Physical, it would not be feasible, and probably not possible, to make delivery. Only The Cartel or a Major Catastrophe could have created such an 8 Standard Deviation Event!

But in the Real Market, the Physical Market, the Premiums for Physical (over the Paper Spot Price) have been increasing both before and after the Price Takedown. Indeed, Precious Metal Markets Professional Bill Haynes reports that Physical Gold at recent prices is flying off the shelves at a record clip – Buyers exceeded Sellers by 50 to 1. This report is consistent with others from around the World indicating that this Takedown has had the Unintended Consequence of dramatically increasing the demand for Physical.

Thus our recent forecast of “inevitable Takedowns” has been proven correct, although the magnitude of the Takedown surprised us a bit. But we should not be surprised and considering The Cartel’s Extraordinary motivation for the Takedowns. This Extraordinary Motivation reveals much about the Prospects for the Precious Metals and Commodities Markets, and, indeed for Markets in general.

London Bullion Dealer Andrew Maguire provides what is probably the Key Clue. He reports that, after Cyprus, the demand for Delivery of Physical Gold skyrocketed and the London Gold Market had nearly run out of Physical Metal and could not honor contracts for Physical Delivery. Thus Key Central Banks and Governments felt they had to undermine enthusiasm for the Metal (and wipe out speculative longs trading on Margin) by taking down the price. But instead of undermining enthusiasm for Physical, the Cartel Takedown has increased it.

One correspondent’s analysis is probably spot on.

“Andrew McGuire, hospitalized some time ago by a London hit-and-run driver after stating that the gold price was artificially suppressed by …, now says that the latest attack on gold occurred because the London metal market was short gold and unable to honor contracts that called for physical delivery. At around $1350/oz, it suddenly becomes much easier, of course, because many “long” speculators have been ruined.

“Another sender writes:

also, from another trusted source, there is no gold left in Turkey, sold out, coins, bars, etc

“Elsewhere, one hears that physical silver is hard to come by in the US; orders placed now, by best customers, cannot expect delivery for 2 to 4 weeks. The Comex paper price bears little relation to the price of physical metals, which sell at significant premiums.

India and China continue metal purchases.”

Private Communication, 4/17/2013

Clearly, the Fed’s (and other Central Bank’s) Promiscuous Printing of the $US (and other Fiat Currencies) has resulted in an obvious and continuing weakness in the $US  purchasing power in terms of Gold and Silver, were these Precious Metals (and Commodities prices in general) prices not suppressed.

And to a considerable degree the same motivations exist for other Central and allied Mega Banks. The Banking Cartel cannot afford weakness in the World’s Reserve Currency or indeed in other Major Fiat Currencies at this time because they know that the flight into Real Assets would turn into a Major Move toward abandoning their Fiat Currencies.

And if/when the $US (and/or other Fiat Currencies) falls they lose Power and Wealth. From their perspective, their suppression of Real Asset Prices must succeed at all costs. But the fact they acted so dramatically now, demonstrates they are increasingly desperate to prevent obvious commodities price inflation and especially a Gold and Silver Price Spike up. Thus, we still forecast Gold and Silver’s launch should occur no later than our earlier Forecast and quite possibly sooner.

The motivation behind the Precious Metals Takedown is clear. In addition to the usual one of not wanting competition for their Treasury Securities and Fiat Currencies, The Cartel clearly wants to hide the structural weakness in the $US, and in their other Fiat Currencies vis-à-vis Real Assets such as Gold and Silver.

Short-term, the Takedown has achieved its desired effect in the Paper Precious Metals Market, but has boosted Premiums for Physical. And the $US is bouncing around just under 83 basis USDX. We recently Forecast when its downtrend likely resumes.

That structural US$ weakness derives mainly from the Central Bank’s orgiastic QE and from the fact that the U.S., Eurozone, Japanese, Chinese, and indeed the International Economy is not recovering. Statistics revealing China’s slowdown are yet another indication of that.

The Falling Price of Dr. Copper, THE Main Economic Health Indicator, and Crude Oil along with weak employment and PPI numbers in major nations around the world, tell us that once again it behooves Investors to methodically begin to move out of $US and Euro denominated Assets and into Real Money (Gold and Silver), and the Aussie $ or Swiss Franc, and carefully selected Real Estate and Essential Food Commodities and related businesses (Stellar Price Prospects for these! -- See notes below re. Recommendations).

Longer term, U.S. Treasury Securities are The Great Bubble. We reiterate: the most telling feature of recent market action was not the recent weakness in the Equities Markets. Rather, it was the flight to the Ostensible Safety of U.S. Treasuries. Were one to short long-dated U.S. treasuries here and hold for the long term, one would almost surely profit. Perhaps the Greatest Mammoth Force in Months to come will be the Bursting of the U.S. Treasury Bubble.

The Bernanke Bond Bubble is not immortal. The current choppy almost imperceptible rise in the yields trend in recent months will accelerate as the months wear on. Thus another Key Signal has been sent recently. The beginning of the end of the $US as the World’s reserve currency is coming ever closer; a matter of months.

Australia and France have already agreed to deal directly with the Chinese in Yuan. And the Chinese have become the World’s largest Gold Importer and Producer.

Regarding Equities, until recently they have kept levitating in spite of weak overall Economic numbers.

It is old news that Fed and other Central Bank liquidity is doing the levitating. But Equities cannot stay pumped forever when the fundamentals do not support them.

Five out of every six S&P companies have issued Negative Guidance.

And the “China Slowdown” news was the catalyst for this week’s Takedown.

Indeed, our Four Wave Equities forecast for 2013, correct thus far, appears to be playing out. The first quarter’s Up (Wave 1) now appears to have topped and to be reversing down as we earlier forecast into Wave 2.

We reiterate, we forecast a (Wave #2) choppy down Move of 5% to 10% over the next few weeks, probably contemporaneous with U.S. Battles over the Budget and Debt Ceiling which are just beginning to heat up. Could it be that The Administration via the “President’s Working Group on Financial Markets” (which, per the 1987 Act, has legal Authority to Move Markets) has an interest in keeping Equities Prices boosted except when Takedowns are useful to pressure Congress? It would not surprise us to see sharp Takedowns as the Budget and Debt Ceiling battles heat up.

The Equities Market is “artificially” elevated as PIMCO CEO El-Erian said. And Chairman Bernanke recently said the QE would keep coming… That is a very Dangerous Situation which may well lead to a Stagflation-induced Crash likely beginning sometime late in 2013, or early 2014. The Fed and other Central Banks cannot keep money pumping as Inflation obviously intensifies.

From a technical perspective, the aforementioned Prospective Bull Rally Top coming later, would complete the Hindenburg Omen Pattern (and Monday’s Equities Drop generated another H.O. Observation by the way), and thus, likely beginning sometime later this year, to be followed by the Cataclysmic multi-leg Crash – the impending Mega-Move of which we speak, and which we think is highly probable. As we successfully did before the 2008 Crash, we will be looking to recommend leveraged shorts prior to that Crash.

In sum, the Economic Fundamentals of the USA, Eurozone, and Japan, collectively 53% of the Global Economy, including Debt HyperSaturation, ever higher Unemployment, and Economic Stagflation have not disappeared. And the Fiat Currency “war” among them has only just begun. And Cyprus Precedent and the Italian Election Stalemate and Portugal’s Continuing Decline remind us that Eurozone problems are still very much with us. Italy has the third largest economy in the Eurozone.

And Dr. Copper’s swoon is telling us the Equities Rally is built on Sand and Fed Paper. This is what the multi-year Hindenburg Omen Chart Pattern is also telling us.

In sum, the Equities Markets are treacherous and we counsel being very careful regarding long positions.  As we earlier indicated, a Sector by Sector analysis is best. Some will rise and some fall dramatically. (See Notes 2 and 3 below.)

One Final Caveat regarding the Equities Markets: Several Negative Events could cancel any further Monetary Inflation-induced Rally.

It appears ever more likely for example, that there could be a sudden flight away from the $US – could cancel any such Rally. And war with North Korea or intensified War in the Mideast could do it as well. The flight away from the U.S. Dollar could happen any time (see above).

Contrary to bemused opinion, Wars, especially Nuclear Wars, are not good for long-term Economic or Market Health – Skilled Workers and Valuable Capital are destroyed. Stay Tuned.

One other Key Mammoth Force to observe is the Crude Oil Price. We repeat that the Crude Oil price tells the truth (i.e., is harder to manipulate). And, along with Dr. Copper, (and contrary to the artificially (and until this past week) elevated equities Market) the truth it (and Dr. Copper) has been telling recently that the Economy is weakening.

One should ask: if the Economy is strengthening, why are Crude and Copper declining?

The Rush to buy Physical Gold, even after the Paper Price Takedown and the fact that the S&P recently broke down out of its Uptrend Channel, shows us that Fed Policy is, once again, failing to help the Real Economy, and is instead helping mainly their shareholders/owners, the Mega-Banks.

David Rosenberg capsulizes well one likely consequence of Failed Central Bank Policy.

“The central banks can try to provide as much liquidity as possible to the marketplace, but the problem is that liquidity is already in abundance. The central banks are now resorting to force-feeding an obese man (hence the ‘puking out’). The real risk is actually that investors begin to sense that the central banks are starting to lose their credibility…which is what happens when policy fails.”

David Rosenberg, Gluskin Sheff

It may well be that the Central Banks are boxing themselves into a Corner of their own making –their Excessive Saturation of Sovereigns and citizens with debt leaves Massive Debt Write-offs/Repudiation – the Icelandic Solution – as the increasingly likely Sole Option.

Mammoth Force analysis is immensely useful and indeed essential to Investors.

Best regards,

Deepcaster

April 19, 2013

Note 1: We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster’s December, 2009, Special Alert containing a summary overview of Intervention entitled “Forecasts and December, 2009 Special Alert: Profiting From The Cartel’s Dark Interventions - III” and Deepcaster’s July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds" in the ‘Alerts Cache’ and ‘Latest Letter’ Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.” Attention to The Interventionals facilitated Deepcaster’s recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.

Note 2: Our earlier 4 wave forecast is playing out thus far, as forecast. But first…

The recent dramatic Gold and Silver and general Commodities Price Takedown demonstrated that the Prospects for certain Key Commodities Price

– launches soon are better than ever (but of course from lower levels) and

– that even higher Price Targets sooner are now in store for these Key Commodities.

Why? The recent Cartel coordinated Precious Metals Takedown appears to have been effected by the selling of 400 tonnes ($20 billion) of paper Gold – representing 15% of all annual mine production. Total contracts traded represented about 3,000 tons. If all that were Physical, it would not be feasible, and probably not possible, to make delivery. Only The Cartel or a Major Catastrophe could have created such an 8 Standard Deviation Event!

But in the Real Market, the Physical Market, the premium for Physical (over the Paper Spot Price) have been increasing both before and after the Price Takedown. Indeed, Precious Metal Markets Professional Bill Haynes reports that Physical Gold at recent prices is flying off the shelves at a record clip – 50 to 1.

Our recent forecasts of “inevitable Takedowns” has been proven correct, although the magnitude of the Takedown surprised us a bit. But we should not be surprised and considering The Cartel’s Extraordinary motivation for the Takedowns. This Extraordinary Motivation reveals much about the Prospects for the Precious Metals and Commodities Markets, and, indeed for Markets in general.

So have we hit bottom in the Gold Price? And which Key Commodities have Stellar Price prospects? We answer these questions, comment on Cartel Motivation, and make a Buy Recommendation in our latest Alert “Our 4 Wave Forecast Accurate So Far; Buy Reco; Forecasts: Gold, Silver, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, Equities, Crude Oil, & Key Commodities”  just posted in ‘Alerts Cache’ at www.deepcaster.com.

And we just made a Buy Recommendation with great Profit Potential.

Note 3: So far, our earlier Four Wave Forecast is playing out.

But we expect the current Wave 1 move to last only for a very few more days, if that, in one Key Sector. Then we forecast a Reversal into Wave 2, which we expect to be sharp and dramatic and to last a few weeks. It will be an opportunity to make significant profits but will generate significant losses for the unprepared. And after that the Wave 3 Mega-Move which we earlier forecast should follow.

For us, the interesting characteristic of this Forecast is that virtually all the Factors – Fundamental, Technical, Interventional, Economic, Financial, and Political support it. They do not guarantee its realization, but do suggest it is a high probability.

To consider this Forecast and Opportunities for Profit and Protection, read our latest Alert just posted, “Wave #2 Impending; Forecasts: Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, Gold, Silver, & Crude Oil” in ‘Alerts Cache’ at www.deepcaster.com.

And, fortunately, we now have an excellent entry point for an essential Hot Commodity.

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I hope you didn’t get caught off guard this past Monday with the broad market sell-off.

If you did, you need to really think about risk management and having a good investment strategy in place so that you can avoid or minimize the impact of a market correction.

And if you think that stocks will rally, don’t be so sure, because the current market climate is tricky and remains highly vulnerable to another correction, which, of course, could be much bigger.

You need to get rid of that invincibility feeling that’s probably stuck with you during the recent rally.

Success in trading and investing has nothing to do with bravery. Taking a risk to make big gains makes sense and has its place, but after the advance we had, you also need to be prudent and hedge your gains against the highly likely and bigger correction that’s still to come.

You need to have a viable investment strategy.

Taking some profits off the table makes sense, but you also need to protect your outstanding positions.

The sell-off on Monday indicates how nervous the market is, and don’t let anyone tell you otherwise.

So it’s an opportune time to remind you that you all need to hedge just like professional money managers.

My favorite investment strategy to protect gains is the use of put options as a defensive hedge against market weakness, or something that is called a protective put, or put hedge.

There is no special knowledge required. And it’s quite simple and easy to execute.

Think of this strategy as akin to buying insurance on your home, car, life, or other valuables. You wouldn’t be caught without insurance protection on your valuables, so why can’t you apply this to your stocks?

Under this investment strategy, investors may be bearish or uncertain and want to protect the current gains against additional downside moves in the stock or the market with the use of index put options on the DOW, S&P 500, or NASDAQ.

A logical investment strategy is to buy puts for stocks and/or sectors.

If you had exposure to gold, you could have protected yourself from the recent major sell-off that saw gold prices fall from above nearly $1,600 to below $1,400 in a few sessions. A good investment strategy would have been to buy put options on the Philadelphia Gold & Silver Index, which tracks 10 major gold and silver stocks.

And if your portfolio is heavily made up of technology, you can buy puts on the NASDAQ. For example, you can buy put options in PowerShares ETFs (NASDAQ/QQQ), a heavily traded put used for defensive purposes.

I hope the selling on Monday reminded you of the current vulnerability in the market.

The bottom line is that safety is the key to a good investment strategy, and having a put hedge makes sense.

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One of the most closely watched parts of the global financial system is the Chinese economy. I don’t need to tell you that the economic recovery in America and the rest of the world is quite sluggish. Many had hoped that China could help propel the global economy higher; however, there are now concerns that this might not occur.

What Others Are Reading : Tech Stocks

Recent data on the Chinese economy are signs that economic growth is not accelerating. For the first three months of 2013, the Chinese economy posted growth of 7.7%, a lower rate than the fourth quarter of 2012, in which the Chinese economy grew at 7.9%. (Source: Yao, K., et al., “China growth risks in focus as first quarter data falls short,” Reuters, April 15, 2013, accessed April 16, 2013.)

The Chinese economy is a huge player within the international financial system. If the nation was to regain its economic growth rate of the past, this would have a substantial impact on many people and companies around the world.

The Chinese economy posted industrial production growth of 8.9% year-over-year, below expectations of 10% growth. Power generation was up only 2.1% year-over-year in March, and steel output declined 3.2%, both below expectations.

Don’t forget, China is a huge buyer of many raw materials, including copper and iron ore. This latest data is additional evidence that economic growth is not accelerating, and investors need to reallocate their portfolios in accordance with this information.

One slight positive note was that retail sales within the Chinese economy increased 12.6% year-over-year in March, above expectations of 12.5% and higher than the recorded 12.3% increase for February.

The Chinese economy is undergoing a massive transition. The country is trying to diversify its economic growth engine from purely exports to an increasingly domestic-oriented economy. This can have positive benefits for American investors, as U.S.-based firms are increasingly selling to the growing middle class in China.

What is clear: the commodity super cycle we’ve seen over the past 10 years appears to be ending, with the Chinese economy shifting away from economic growth based on producing basic items such as steel and toward an increasingly service-oriented economy.

This to me indicates that many of the raw materials that people have invested in over the past decade by way of economic growth within the Chinese economy might not see the same profits over the next decade.

Instead of investing in iron and copper ore, I would look to firms that can sell their products in China. Economic growth will continue for the Chinese economy, but it will be at a slower pace and in a different format.

Retail sales continue to grow in the Chinese economy, and the middle class will expand over the next several decades. I would concentrate on firms that can benefit from this shift in economic growth.

We all know that car sales are already huge within the Chinese economy, and this sector will only continue increasing. Many restaurant chains have already begun expanding within China and, as the average person within that nation continues to have higher levels of disposable income, I see this trend set to continue as well.

Just because economic growth isn’t running at the levels we’ve seen over the past decade anymore doesn’t mean there aren’t investment opportunities. Quite the contrary; there are always opportunities, only they are not always obvious.

The Chinese economy will continue growing, albeit at a slower pace, and there will be plenty of investment opportunities. It just takes a little more work, but, then again, making money is never easy.

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With the market hitting all-time highs, many investors are wondering how investor sentiment can be so positive when job creation is still not as strong as it should be. This divergence between the financial markets and the real economy cannot last forever.

Investor sentiment has been propped up by the Federal Reserve, which is trying to prime and ignite the U.S. economy. While job creation is certainly better now than it was a few years ago, there is still much more work that needs to be accomplished.

One very visible sign that the economy is not running at 100% capacity was the recently released retail sales data. For March, retail sales decreased by 0.4%, although this did follow a very strong February that showed a one-percent gain. A survey of 85 economists by Bloomberg had a median forecast of zero (unchanged) from March. (Source: Kowalski, A., “Retail Sales in U.S. Declined by Most in Nine Months,” Bloomberg, April 12, 2013.)

Job creation obviously plays a very important role when it comes to retail sales. And remember that like most developed nations, a vast majority of the U.S. economy is based on consumer spending.

In this case, investor sentiment might have become too bullish on retail-oriented stocks. If job creation does not accelerate, we could see a further impact on discretionary spending, which would break down investor sentiment throughout this year.

However, this recent retail sales data might have been a blip, as the trend is still fairly strong. Remember that one data point does not make a trend. Following stronger-than-expected data earlier in the year, a pullback was expected due to the sequestration and higher payroll taxes.

Another interesting data point was that the Producer Price Index (PPI) dropped 0.6% in March, the largest since last May. Again, this did follow a strong February gain of 0.7%.

A very troublesome sign is that even with all the money printing occurring, inflation is nowhere to be seen. If we look at various markets, including copper, they’re all telling us that there is very little underlying demand, as prices continue to drop.

With job creation being relatively sluggish, this leaves no room for wages to increase. The worst-case scenario is if deflation were to take hold. This would have a tremendous impact not only on job creation, but also on investor sentiment.

The problem with deflation is that both businesses and consumers will continue to delay purchases, as prices aren’t increasing. This has been one of the problems that Japan has suffered from for over 20 years.

Another large threat is, as always, the politicians in Washington. These politicians have done little—if anything—to help job creation, and in reality, they’ve created many hurdles due to the uncertainty we are placing on the economy and increased regulations.

While it’s always better to have positive investor sentiment for an economy, at some point, the underlying fundamentals of increased job creation need to come to fruition.

We will need to see several more months of accelerating job creation before it translates into higher retail sales. Until that point, I would urge caution for any stocks that are involved in the discretionary retail market.

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With capital shifting into the perceived safety of blue chips and large-cap stocks, small-caps and technology stocks have been declining on the charts.

Given the advance so far this year in the equities market, it’s understandable to expect some hesitancy.

The Dow is up 13.4% as of April 12, and it’s on pace for a gain of 47% on an annualized basis.

I doubt this will happen and expect market adjustments in the equities market along the way. The same goes for the S&P 500 and the other key market indices.

Small-caps in the equities market have also fallen off since the end of the first quarter.

At the back of the pack is the technology sector; but there has been a lack of strong leadership from any sector, including the semiconductor, Internet, and technology sectors, in general.

What Others Are Reading  :  Technology Stocks

The following chart shows the recent movement of the three sectors (semiconductor, Internet, and technology) since March and their sideways direction.

Chart courtesy of www.StockCharts.com

Without any leadership in the equities market, the NASDAQ and technology stocks will continue to drift. However, there are some opportunities for speculators searching for contrarian situations.

The Internet sector is flat and lacking a clear direction.

In the stock chart below, the First Trust Dow Jones Internet Index (NYSEArca/FDN) fund shows the sideways channel that has been in place since late January.

Extrapolating on this data, I don’t see any strong and clear signs of a breakout at the top channel line, but if you think longer-term, there are opportunities in the equities market.

Chart courtesy of www.StockCharts.com

The “Best of Breed” in the Internet sector is Google Inc. (NASDAQ/GOOG). The stock was trading above $840.00 in early March amid wide speculation that Google would inevitably become the first $1,000 stock in the equities market. Time will tell if Google really is the stock to break $1,000. Remember that Apple Inc. (NASDAQ/AAPL) was also speculated to be the next $1,000 stock in September 2012, and here we are now with Apple precariously sitting just above $400.00.

Chart courtesy of www.StockCharts.com

As the risk-taking in the equities market increases, we could see a move into Internet stocks that have missed out on the advance.

Two contrarian Internet plays come to mind—Groupon, Inc. (NASDAQ/GRPN) and Facebook, Inc. (NASDAQ/FB).

Groupon has surged 23% since I highlighted the stock as a contrarian play back in early March. Whether the stock can move higher will depend on its ability to fend off the competition and increase stickiness on its site.

A more intriguing pick is Facebook, simply because it has more than one billion subscribers and is showing growth in its mobile advertising strategy.

Note: the information contained in this article is not to be construed as advice to buy any stock; rather, it is meant to provide examples of a good investment opportunity in the equities market.

Read More  :  Technology Sector at the Bottom of the Pack: Time to Give Up on These Stocks?

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When interest rates are as low as they are and consumers begin to hold back on their spending, you have to wonder about the prospects for the retail sector going forward.With the higher taxes on those earning over $400,000 and other tax increases as a result of the sequestration, we may be seeing some evidence of reduced spending.

The U.S. Department of Commerce said retail sales in March contracted by 0.4% on both a headline and an ex-auto basis, which was below the Briefing.com estimates of flat sales and 0.3%, respectively. This was the second decline in retail sales in the last three months.

While it may be premature to assume a new downtrend for retail sales, I wonder if the decline in take-home pay for some Americans has resulted in less consumer spending.

Or, it may be the softness of the jobs market that is making consumers nervous. With only 88,000 new jobs created in March, the jobs numbers must have had some impact on consumers and the retail sector.

Even consumer sentiment appears to be fading a bit as evidenced by the Thomson Reuters/University of Michigan Consumer Sentiment Index reading of 72.3 in April. This reading represented the worst reading since July 2012, and it’s well below the 76.0 estimate by Briefing.com and the 78.6 reading in February.

According to my estimate, the retail sector continues to be full of opportunities, but you also need to be careful on what retail stocks you buy.

You would have been sideswiped if you bought J. C. Penney Company, Inc. (NYSE/JCP), as the company posted horrible results and subsequently fired its CEO. Rival Macy’s, Inc. (NYSE/M) or Nordstrom, Inc. (NYSE/JWN) would have been better choices.

The chart below of the SPDR S&P Retail index shows its recent breakout on the chart on an ascending triangle, coupled with rising relative strength.

Chart courtesy of www.StockCharts.com

In spite of the March readings, it’s way too early to make a judgment about the prospects of the retail sector. Three months doesn’t form a trend, and the retail sector isn’t coming to halt.

I favor both discount stocks and big-box stores, while I also like Michael Kors Holdings Limited (NYSE/KORS) in the luxury space. A contrarian situation in the luxury retail sector is Coach, Inc. (NYSE/COH), which is struggling just above its 52-week low.

As we move forward, I continue to believe there are excellent opportunities in the retail sector, but you need to be careful when selecting the stock.

Click here to visit :  Don’t Be Fooled by the Retail Numbers—Just Be Selective

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For many years, people from all over the world have been envious of the economic growth in the Chinese economy. Since leaders of that nation have transformed the Chinese economy from purely state-controlled to more capitalistic, China’s growth has been astounding.

Looking back, it is easy today to think of the Chinese economy in terms of the allocation of funds for long-term investing—hindsight is always 20/20. However, the trick is to look forward over the next decade and determine the most likely scenario for long-term investing possibilities.

What Others Are Reading  : Technology Stocks

A common complaint by outsiders regarding the Chinese economy has been the use of cheap wages to increase its competitiveness. It is true that the Chinese economy has benefited greatly from much lower wages than many other nations around the world. Additionally, the size of the working population is huge.

However, it appears that the demographics and costs are now beginning to shift against the Chinese economy, and those interested in long-term investing might be able to create a portfolio that will benefit from this change.

The Asian Development Bank (ADB) recently noted that wages adjusted for inflation have more than tripled over the past decade in the Chinese economy. Additionally, new labor laws have increased costs for businesses to hire and fire people. (Source: “China surging wages threaten economy’s competitiveness, ADB says,” Bloomberg, April 9, 2013.)

Additionally, ADB reports that wages are being pushed higher, as the pool of working-age people shrinks. Because the one child policy has been in place for so many years, China is entering a troubling demographic scenario, as there will be far less people available to work in the future.

According to Bloomberg, currently in the Chinese economy, there are 525 million people who are 15–39 years old and available for work; that’s a decline from the 557 million just five years ago. (Source: Ibid.)

Over the next decade, which is an appropriate timeline for long-term investing, we will most likely continue to see substantial wage increases in the Chinese economy and a decrease in the number of available workers. This will push producers into other nations that could benefit from this changing demographic scenario.

So when considering long-term investing that will benefit from this massive shift in the Chinese economy, look at which nations are able to accommodate producers and are close enough to the larger markets.

The U.S. is still the largest economy, with the Chinese economy growing rapidly. Mexico has become an extremely important component for the U.S. economy. Because of the increase in wages within the Chinese economy over the past decade, the gap between China’s workers and Mexican workers has declined. Plus, the increase in speed of transport between Mexico and the U.S., along with lower transportation costs, should continue to benefit Mexico over the long term.

Within Asia, I would diversify my portfolio when it comes to long-term investing by looking at various emerging market nations, such as Malaysia, Indonesia, and Thailand. All of these countries have exchange-traded funds (ETFs) that allow someone interested in long-term investing to accumulate exposure at a relatively low cost.

Additionally, I would diversify my long-term investing portfolio by adding an upmarket investment like Singapore. The Chinese economy will continue to grow, and this will produce significant amounts of wealth. Much like other nations, the wealthy like to diversify their investments, and Singapore is a growing hub of international business and offshore banking. Think of Singapore as the Asian version of Switzerland. In fact, many clients of Swiss banks are now moving funds into Singapore and other locales, as Switzerland is facing increasing pressure to lower secrecy regarding tax avoidance and evasion schemes.

The Chinese economy will suffer growing pains, as do all nations. However, when it comes to long-term investing, there will be plenty of opportunities to build a well-diversified portfolio that will benefit from the continued growth of the Chinese economy for many decades.

Read More : Major Shift in Chinese Economy Opens up Long-Term Investment Opportunities

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Apple Inc. (NASDAQ/AAPL) has been punished in the financial media and on Wall Street, having lost its edge. Trading above $705.00 in September 2012, the stock has snapped back to reality, recently declining to a two-week low of $419.00 on March 4, 2013.

At the current price, there are arguments on both sides regarding whether Apple is worth a gamble or if it is the beginning of a new downtrend below $400.00.

In my view, the business landscape for Apple has become much more competitive. You have “Android”-powered devices accounting for a large portion of the smartphone market. This is mainly thanks to the overwhelming success of Samsung Electronics Co. Ltd.’s “Galaxy” series of smartphones and tablets. I have both an “iPad” and a Galaxy phablet (a large smartphone with the capabilities of a tablet). I must admit after using the iPad for a few years, I actually find it much better than the Galaxy.

Yet the market is still mixed.

While the iPad remains the dominant tablet, Apple’s reign in the tablet sector is clearly in jeopardy; but in my view, until a better tablet surfaces, the company will continue to produce the top tablet.

Investment manager Ken Fisher increased his holdings of Apple by 58.12% at prices ranging from $420.05 to $549.03, with an average price of $467.05. (Source: “Ken Fisher Buys Apple Inc, American Express Co, Coinstar, Sells America Movil, Petrobras, Visa,” Forbes April 11, 2013.)

The chart of Apple below shows a bearish descending triangle. The $400.00 level is a key support level. Yet a good quarter could easily turn the tide and drive the share price higher, based on my technical analysis.

Chart courtesy of www.StockCharts.com

For investors, there may be a contrarian buy at this point. The reality is that Apple is far from dead, but at the same time, it really needs to add to its current arsenal of devices.

The “iPhone 5” needs a remodel to compete with Samsung’s “Galaxy 4,” which is challenging Apple in every area.

The speculation on the Street is that the next-generation iPhone, or “iPhone 5S,” will simply act as a bridge between the current iPhone5 and the expected launch of the “iPhone 6” in 2014. The iPhone 5S is widely expected to incorporate a few changes, but for a complete redesign, Apple users will have to wait for the iPhone 6.

Yet for Apple, the company will need to continue to deliver innovative products to keep ahead of the curve. By “curve,” I mean Samsung.

So until this happens, Apple could be under some pressure. But longer-term, I continue to like the prospects for the company.

The company reports its fiscal second quarter on April 23, and based on the whisper numbers, the earnings season could provide an upside surprise.

The whisper number for earnings is calling for the company to make $10.63 per diluted share, ahead of the current Thomson Financial consensus estimate of $10.13 per diluted share. (Source: WhisperNumber.com, last accessed April 11, 2013.)

So while many are calling for Apple to fall, I’m on the contrarian side and feel the stock will be a long-term winner—but you’ll need to ignore the short-term hurdles.

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