Fed Rate Drop Prediction

One of the financial luminaries I follow closely, and highly respect, has sent out an alert saying, 

“If the equity markets cannot be calmed before opening tomorrow, Tuesday, January 22nd, you will witness the greatest financial crisis of all time. So far the Chairman of the Fed and the President bombed out as badly as one could.* This necessitates Herculean measures in order to prevent the Dow from opening down 1000 points tomorrow morning. If that was to occur, I assure you the Four Horsemen will have ridden down Wall Street.” Jim Sinclair. 

He says either the Fed will announce an emergency 1.000% cut in the rate before the markets open at 8:30am CST or the market will suffer its biggest single-day point loss in history, surpassing the 650 pt drop after 9/11. 

The dollar (US Dollar Index) is UP as money managers are diving out of the markets and parking the money in cash (dollars). This is driving DOWN gold and silver. This is temporary. Gold is going to $1050, then $1650 and taking silver with it. 

If you want to invest in something that goes up when the NYSE goes down there are some “inverse indexes” that do just that:Symbol = DOG  “SHORT DOW30 PROSHARES” Symbol = SH   “SHORT S&P 500 PROSHARES”  

There are also two inverse indexes that are leveraged to provide DOUBLE the rise if the market falls:Symbol = DXD  “ULTRASHORT DOW30 PROSHARES” Symbol = SDS  “ULTRASHORT S&P 500 PROSHARES” 

I’m not jumping in yet as I think the Fed will cut rates rather than let the market drop (at least for a few days). 

*Bernanke announces he’ll supply all the liquidity needed for the markets. DOW drops 300 pts. Bush sez “tax refunds for everyone!”. DOW drops 60 pts. 

◊◊◊◊ As of today: Gold @ $871.25, Silver @ $15.77 ◊◊◊◊

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