Several of you fine folks have written asking for more on my run-in with the "Men in Black." That'll mean no links or the usual charts and such today.
It's an ugly story and ten years gone, but I'll tell you the tale.
And when I'm done, I'll tell you why this bit of ancient history matters more than ever right now — and exactly what you must do about it.
The (Other) Great Crash
All through the summer of 2001, I was monitoring the zigs and zags of the "great decline." I had already called the magnificent double top tech crash of 2000 before it swiped billions of dollars off the table.
Now, the usual idiot cheering squad was trying its damnedest to pitch the usual V-shaped recovery story.
For weeks, though, I kept seeing niggling little signs in the charts, odd twists and turns that kept raising the hairs on the back of my neck.
Come the last week in August, the Nasdaq kicked out a particularly alarming signal...
Bucking the Boss
Selling pressure was coming out of left field, and it forced the index down through a critical node.
First, I did what I always do at moments like these: I alerted the readers of my trading newsletter to load up on puts. But this time around, I decided that it all was looking just too damned bad, so I busted in on my publisher — a notorious pro-market "perma-bull" — and demanded that he send out an all-points sell warning to each and every one of his half a million subscribers.
Needless to say, this did not go over well with a guy whose job depended on keeping his readers buying stocks — and stock letters.
But in the end, I won the argument. At mid-day on the morning of September 10, 2001, he begrudgingly sent out the following alert:
A Move So Gruesome
We were seeing a rally in the NASDAQ today. Don’t, however, confuse that with a RALLY. Rather, it is a completely predictable move from the bottom of the 10-day trend.
Expect this short-lived upward move to peter out between 1,725 and 1,750 when it hits the top of the short-term trend.
Then put your head between your legs and kiss your gains goodbye: WaveStrength indicates this will be followed by a geometrically accelerating arc down toward my target of 1,619, now less than 75 points away.
But beware! 1,619 is no longer the worst thing you have to worry about. I am now working on my next long-term WaveStrength prediction, and my preliminary studies are indicating a move so gruesome, ambulances will be cueing up below Wall Street brokerage windows.
More to follow…
You already know what happened the very next day...
Al-Qaeda flew hijacked airliners into the World Trade Towers and the Pentagon. Heroic passengers forced a fourth plane into a farmer's field in Pennsylvania before the terrorists could drop it on the White House.
For a while, we all thought hell itself had broken loose on earth. I had friends in the Towers. Heck, I had just been there the week before to see colleagues and to pick up some intelligence on the market's weird behavior...
Over the next few weeks, the American security complex scurried about like angry ants, desperate to discover what happened... and more importantly, how they had blown the single most important intelligence task since the invasion of Pearl Harbor.
One of the conclusions they apparently came to was that there had been some kind of vast conspiracy — and yours truly was somehow part of it.
The Knock on the Door
Next thing you know, I am getting paged over the company intercom: "Come to the conference room immediately, and bring your charts with you."
In those days, I did my charting work by hand on giant rolls of heavily-annotated graph paper. So I grabbed up as much evidence as I could carry and scurried downstairs, where I was met by my boss and a glowering agent who presented FBI ID and proceeded to grill me for the next six hours as to who had tipped me off.
The very idea that it was all just an arcane social science called memetics was extremely hard to put across...
In the end, I was warned that I was now on a "very select list," and ought not to do or say such things going forward.
A Relative Failure
The whole story is a damned shame on several levels.
First off, if the FBI had a few memeticists on staff, maybe they would have understood what the heck was going on in time to put a stop to the whole affair. Instead, they chose to waste time pointing fingers and searching for "Reds in their beds." (If you don't remember the pointless witch hunts of the 1950s, ask your parents.)
Second, quite frankly, I feel my 9/10 warning was somewhat of a failure. In the end, I saved no lives... and relatively little capital.
Today, the situation is too damned similar for any sort of comfort.
The usual cheerleaders have been pitching us another ladder to the moon. And for weeks, I have been seeing the chart signs of their complete undoing: Critical averages have reversed, just like they did in 2000; key support nodes have ruptured again, just like they did in 2001.
In 2000 and 2001 (and again in 2007 and 2008), that meant one thing and one thing only: Someone smart was quietly pulling billions out of the market — just before all hell broke loose!
And Modern Troubles
Once again, I have also warned the largest crowd I could find to prepare themselves accordingly.
With any luck, they have used these gains to acquire enough gold to tide them through what may come.
Unfortunately, I can't save everyone. Hopefully, I can help you.
But act quick. Because sooner or later, I rather expect the folks in the black suits to come around and shut me up for good.
In the meantime...
Good luck and good hunting,
Editor, Wealth Daily