Let\u00e2\u20ac\u2122s begin with why understanding trends and their patterns matters to you.<\/h3>\n
1. Best probability of buying low and selling high
\n2. Wealth held in negative trend in jeopardy
\n3. Future plans could be in jeopardy1st PHASE IS THE ACCUMULATION PHASE
\nYou can see from this list that there are advantages for those who can identify the trend and the phases of a trend. Everyone wants to buy low and sell high, but you are up against professionals, so you could say the decks are stacked. But if you just understand some simple patterns, no one will be able to pull the wool over your eyes and you\u00e2\u20ac\u2122ll have the best shot at long term positive results. As they say, the trend is your friend as long as you flow with it.
\nToday, all markets are openly manipulated by the global central banks money printing operations. So ask yourself, \u00e2\u20ac\u0153How can I make investment choices that support my goals?\u00e2\u20ac\u009d
\nBy understanding the true trend, let me show you how.<\/p>\n
How to Identify the Long-Term Trend<\/h3>\n
Have you ever looked closely at a Surratt painting? He\u00e2\u20ac\u2122s the artist that painted by putting down little dots of color and if you look closely, that\u00e2\u20ac\u2122s what you see, little dots of color. But when you look from a distance, you see a beautiful beach scene with people sunbathing and sail boats.
\nThe point is that anything can happen on a day to day basis, but if you really want to understand the truth\u00e2\u20ac\u00a6 you need to have the ability to identify the bigger picture or long-term trend. You need to know if that trend is positive or negative, and which phase the trend is in, that\u00e2\u20ac\u2122s it. It\u00e2\u20ac\u2122s really very simple to identify a long-term trend, though identifying the phases are a bit more nuanced, but possible with a little practice. Then, of course, you have to believe what you see, which is typically the hardest for most people. However, with this basic skill, no one can manipulate you for their best interest. You\u00e2\u20ac\u2122ll have the ability to make choices that are in your best interest.
\nIt\u00e2\u20ac\u2122s easy to assume that most people want a large portion of their wealth in a long-term positive trend, but we\u00e2\u20ac\u2122ve been taught to be comfortable with fiat products and trained to look short-term \u00e2\u20ac\u0153Oh the market went up or down today\u00e2\u20ac\u009d but that\u00e2\u20ac\u2122s like looking at the dots of color, stepping back and looking long-term shows you if a trend is positive or negative and can remove any short term \u00e2\u20ac\u0153noise or manipulations\u00e2\u20ac\u009d.
\nThat\u00e2\u20ac\u2122s extremely important these days since manipulations and theft at the largest financial institutions are openly admitted and fines have become just a cost of doing business paid for by stockholders. What I\u00e2\u20ac\u2122m about to show you is how to read intangible fiat markets.
\nThis matters to you because understanding the trend and where we are in the trend cycle can enable educated choices regarding what, how and where to hold your wealth during any trend. It would also help you determine if any financial person truly understands how to read the trend, which would be of value in a financial advisor, but is NOT guaranteed.
\nFirst of all, time is the way to step back and look at a trend. Let me show you how.
\nThe chart below is of spot gold which is a proxy for commodity gold. The long-term trend indicated in this chart is positive.
\nA positive trend is indicated by a series of higher and higher lows. It may not feel like it if you bought in near a top, like in 2011, and there are very few guarantees that I can give you, but I can give you this one, if you keep getting higher and higher lows, you will ultimately get higher highs. So once you identify the positive trend, position your wealth and relax. If you have more to add, buy the dips, if you don\u00e2\u20ac\u2122t just sit tight. The positive trend is your friend.<\/p>\n
[Watch The Strategy Video Title: The Great Recession of 2008 Was Just A Warning!]<\/strong><\/a><\/p>\n \n Below is a US dollar Index chart and represents US fiat money against a standard basket of other fiat money; the euro, yen, Swiss franc, British pound, Swedish corona and the Canadian dollar. The long term trend indicated in this chart is negative. So now we know that fiat money is in a long-term negative trend with values nearing zero according to the bankers themselves. But how close are we to the end? That\u00e2\u20ac\u2122s the question everyone asks. The answer lies in the phase of the trend. [Watch The Strategy Video Title: The Great Recession of 2008 Was Just A Warning!]<\/strong><\/a><\/p>\n \n This is the Nasdaq from 1971 through the end of 2004. Doesn\u00e2\u20ac\u2122t this look like the general trend cycle chart? OK then, how do you identify the sentiment of each phase? Think about what we\u00e2\u20ac\u2122re being told today, how things are getting better, when they really are not. I believe we are now at the \u00e2\u20ac\u0153Return to Normal\u00e2\u20ac\u009d part of the third phase. Though all of the continued extraordinary tools and policies being used by the global central bankers should be enough to show you\u00e2\u20ac\u00a6things are NOT normal.<\/p>\n Globally, 60 trillion in new money has been added over the last 7 years. We\u00e2\u20ac\u2122re told, and they keep telling us, that they are no longer doing QE. The chart below is from the Federal Reserve dated 4\/29\/15, and shows new money injected directly into the banks as the Fed buys derivative mortgage backed securities, which taxpayers are now responsible for.<\/p>\n Does it look like they\u00e2\u20ac\u2122ve stopped to you? Plus, this is just one area of new money printing. Once Nixon took the US dollar completely off the gold standard, the central banks and governments began a campaign to treat gold like any other commodity. As such, spot gold was pretty much a mirror image of the stock market. These charts show the relationship between the Dow and Gold between 1996, at the beginning of the accumulation phase and 2004 when it concluded that pattern. This pattern is known as a cup formation because it kind of looks like the shape of a cup and indicates that smart money has begun their move. Therefore, gold began its current bull or positive market run.![\"positive](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/gold-fixing.png\")
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\n![\"us-dollar-index\"](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/us-dollar-index.png\")
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\nA negative trend is indicated by a series of lower and lower highs. Here\u00e2\u20ac\u2122s another guarantee, if you keep getting lower highs, you will ultimately get lower lows. Fiat money is the foundation of all fiat money products; stocks, bonds, cd\u00e2\u20ac\u2122s, in fact any intangible financial instrument. That\u00e2\u20ac\u2122s why I say the fiat money trend is the most important trend right now, because, regardless of the manipulations in the stock and bond market making them look as if they\u00e2\u20ac\u2122re in a positive trend, this is the foundational trend and you can see for yourself, it is negative.
\n![\"negative](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/currency-basket.png\")
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\nCan you see the truth? Even in this manipulated market? All fiat monies are in a negative trend moving toward zero even when priced in spot gold. The long-term trend in fiat money is negative because fiat money is designed to lose value over time, but you also need to recognize where we are in the trend cycle. And that\u00e2\u20ac\u2122s where identifying the phases is helpful, though I contend, for a true \u00e2\u20ac\u0153investor\u00e2\u20ac\u009d the long-term trend is likely the most important.<\/p>\nHow to Identify the Phases of a Trend<\/h3>\n
\nEvery trend takes place in three primary sentiment phases (see chart below); Accumulation, Awareness and Panic; thus named because of the prevailing attitude during each phase. Though there can be mini phases inside of the big phases, this graph illustrates those common emotions.
\nTechnical patterns indicate trend evolution, ie cup formations, lower lows, higher highs etc.
\nPrimary sentiment phases and technical patterns combined make it fairly easy to identify the phase of the trend.
\nTypically, the public participates in the bursting of a bubble, as seen in this chart. It\u00e2\u20ac\u2122s one way they volunteer their wealth without knowing they\u00e2\u20ac\u2122re doing so.
\nSo take a good look at this pattern and let\u00e2\u20ac\u2122s compare it to a recent full cycle trend in a fiat money product, the Nasdaq.<\/p>\n![\"bursting](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/valuations.png\")
<\/p>\n![\"NASDAQ](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/nasdaq-e1444759127574.png\")
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\nThe first psychological phase is the accumulation phase. This is the \u00e2\u20ac\u0153dirt cheap\u00e2\u20ac\u009d phase when smart money assumes positions after recognizing that the asset is fundamentally severely undervalued. The asset quietly goes up without too much attention being paid by Wall Street and the general public, and few people participate. It is typically visible through an accumulation pattern such as a \u00e2\u20ac\u0153Cup Formation\u00e2\u20ac\u009d and at a bottom you would likely hear black bearish negative sentiment from the general market. So even if you aren\u00e2\u20ac\u2122t looking at a chart, you would hear people say things like, \u00e2\u20ac\u0153I would never buy another tech stock again, it\u00e2\u20ac\u2122s the worst thing I ever did\u00e2\u20ac\u009d, but in fact, this is the best time to buy, that\u00e2\u20ac\u2122s why the smart money is buying.
\nThe second phase is the awareness phase, where seasoned professionals and a few more sophisticated funds take their positions. The general public begins to take notice and some people participate, driving prices higher at a little faster pace. This is also a more volatile phase, where we could see more substantial daily price swings. It is in the second phase where we can see some painful secondary corrections. Also known as the \u00e2\u20ac\u0153Bear Trap\u00e2\u20ac\u009d
\nIn the third phase irrational valuations and behaviors along with a \u00e2\u20ac\u0153this time is different\u00e2\u20ac\u009d attitude is an easy way for the non-financial person to identify the final phase of any trend. Though most people get caught up in the euphoria of the extremes and irrational behavior can last longer than anyone could expect, the final phase always ends with a huge blow off.
\nUnderstanding that the third phase is irrational, let\u00e2\u20ac\u2122s see if I can put the current fiat markets into perspective for you in a bottom line kind of way.<\/p>\nFiat Money Markets<\/h2>\n
\nIn addition, there are, at this writing, now 14 countries issuing debt with negative yields. So you are paying to loan those governments money. By the way, Poland just joined the negative yield club and they confiscated private retirement plans to reduce debt in 2013.
\n![\"negative-yeild-rates\"](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/negative-yeild-rates-e1444761164631.png\")
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\nGenerating inflation while depressing interest rates forces people into more risk, so you have stock markets making new highs at the same time the global economy is declining. In addition, because of these central bank actions, almost daily, we are being warned about the illiquidity in the markets and Janet Yellen, our current Fed Chair, keeps telling us the stock markets are overvalued. So when something happens that scares people and they want to sell? Too bad, so sad, that wealth is now locked in those markets. Think back to 2007, did you know the markets were going to freeze the moment that happened? The ITM army of precious metals consultants pays very close attention to the markets on a daily bases and WE didn\u00e2\u20ac\u2122t know the second before it happened. Though we did know SOMEthing was going to happen, because technical indicators had told us several months before, just like indicators are telling us now. And you won\u00e2\u20ac\u2122t know just before it happens this time either. But now, at least you know how to identify the trends and phases.
\nSo thinking about those three charts I just showed you, and I could certainly show you lots more, do fiat markets seem extreme to you? Welcome to the third phase.
\nIn terms of fiat currency life cycles, the blow off would translate in the hyperinflation and financial system reset that central bankers have been talking about. That lies in our future, but in our present it is well documented and openly admitted that central bankers are manipulating every market. Want the stock market to go up? Tell Wall Street that central banks will create new money and buy stocks with this new money. Want interest rates to go down? Tell Wall Street that central banks will buy all the new debt governments can create in order to push interest rates down. Want spot gold to go down? Just have banks sell lots of gold that does not nor ever will exist. I believe where the fiat markets are now is the return to normal part. And this is the quiet, just before the storm.
\nThe normal non-financial person sees a rising stock market and thinks this is a good thing, and leaves their wealth in these extremely overvalued stock markets. They see interest rates at basically zero or even less these days, and take more risk for a little more yield not realizing they\u00e2\u20ac\u2122re risking their principal in the process. If you lose your principal, how will you generate income? And by the way, that income is what helps you maintain your standard of living, so when people see spot gold drop, they stay away from physical gold and leave their wealth vulnerable. When did you decide to be a speculator instead of an investor? That is what fiat markets are these days.
\nAt ITM we know the cure for the fiat money disease is good money gold. Therefore, it would make sense, particularly in these manipulated markets, that as the fiat money dies, gold could be used as an indicator of the fiat money trend evolution. So let me show you why I say that.<\/p>\n1st PHASE IS THE ACCUMULATION PHASE<\/h3>\n
![\"1st](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/1st-PHASE-IS-THE-ACCUMULATION-PHASE.png\")
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\nAs a fiat money trend indicator you can notice that, generally, when the Dow went up, gold went down and vice versa. On October 9, 2002 there was a shift in behavior which is also called a decoupling, whenever a decoupling happens, it is a signal of change and from there forward spot gold moved independently of the Dow. That was also the signal that the currency war between fiat currency (dollars, euro, yen etc.) and good money (gold and silver) had begun in earnest, but we were still in the first phase when nobody talked about gold, but the smart money accumulated quietly. In August 2004, the cup formation came to conclusion and we were off to the races! Can you see what\u00e2\u20ac\u2122s actually called a handle breakout? The accumulation pattern is one of the most powerful patterns because it takes a long time to form and it shows you there is a very strong base built.
\nThis is the pattern we\u00e2\u20ac\u2122ll be looking for to tell us when it is time to begin to shift our wealth out of gold and into income producing assets.<\/p>\n2nd PHASE IS THE AWARENESS PHASE<\/h3>\n
![\"2nd](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/2nd-PHASE-e1444761818552.png\")
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\nThis chart is a relative performance chart comparing some fiat monies vs spot gold from January 2000 through April 2006. Notice that when the dollar (blue line) went up, spot gold, the Euro and the Yen, moved down and vice versa. These moves were almost in lock step until June 9, 2005, when gold jumped and shifted its behavior against all fiat currencies. You might also notice that after the decoupling from stocks when gold began to retake its rightful position as a currency, it outperformed all of the other currencies in its move to behave independently of them. This was abnormal behavior at that time and a very strong indication of a decoupling or shift. That shift told us we were moving out of the first phase and into the second, awareness phase. With more participation, trading volume increases in the second phase.
\nSPOT GOLD DECOUPLES FROM PHYSICAL GOLD<\/p>\n
![\"PCGS](\"http:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2015\/09\/vs-spot-price.jpg\")
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