Pre-Market Alert: The Working Group

Proof of a Manipulated Market

Dear Bottarelli Research Member,

Good morning. For those who attended the Taipan Wealth Conference this past week, I enjoyed meeting you face-to-face. For those who were not able to attend this conference, I think that a breakthrough idea was discovered – which I’d like to share with you right now.

You see, as I began my speech, I asked the group (by show of hands) how many people thought that the market was manipulated. Every single person in attendance raised their hand.

Throughout my presentation, I gave clear examples of how the U.S. government, in conjunction with the Treasury, Fed, and major market participants (such as Goldman Sachs) use powers given to them by Ronald Reagan’s March 18^th 1988 law titled “The Working Group on Financial Markets” to dictate directional moves. This is what I refer to as “manipulation,” and the purpose of these moves are to instill inventor confidence. At some point, I’m sure you’ve seen examples of this yourself.

NOTE: I’ve attached the language of the entire Working Group law below. If you read through it, I think you’ll become very aware of who is controlling the market right now.

Now, the most important point is this…

In order to prosper and survive in today’s heavily influenced market, we must alter our way of thinking. In other words, we now must think like the government. That’s the only way that we can position ourselves ahead of the incomprehensible market moves that we’ve been seeing lately. After all, the Working Group is currently doing whatever they can to maintain investor confidence. From a trading aspect, we’ll play their game while remaining as fully informed as possible.

Starting today, we’ll begin thinking like a government official in charge of maintaining investor confidence. In my view, this new perspective is the only way to justify, accept, and profit off these truly unprecedented market conditions.

On that note, I also gave a blueprint for the next 6-8 months in my presentation. Within this blueprint, I gave three (3) primary market moves, which are as follows:

• Move #1: Sometime soon, we will get a sharp market sell-off (at least 10%). Perhaps the sell-off in the Chinese markets, now spilling over to the U.S. indices, is the beginning of this move?
• Move #2: This sell-off will get bought up once again, thus giving the bulls the confidence to spark a rally for the remainder of the 2009 calendar year (10% to 20% rally into the close of 2009).
• Move #3: Just when every investor gains the courage to once again jump back into the markets, and all the “cash on the sidelines” that you hear about gets reinvested, we’ll resume a powerful decline that pushes the market aggressively lower. This sell-off will probably begin in late Q1 of 2010 or early Q2.

Using this guide as a blueprint, combined with our new thinking process, it should help us to get our trading back in order.

From a trading perspective, our KSS August 50 Puts (KSS TJ) traded up to $1.00 this past week, which triggered our pre-determined sell order. This position is closed. At the same time, our NTES August 45 Calls (NGH HI) was also closed when the stock dropped $4.00 after reporting earnings that were not received well on Wall Street. Sold. This leaves us holding the OIH September 105 Calls (OIH IA) which traded well into the profit zone Thursday and early Friday morning. If you locked in your gains, nice trade. If not, I’ll continue to monitor this position.

As always, I’ll keep you fully alerted to any new trading opportunities. Until then, I strongly urge you to read through the language of the Working Group order. Never before have these powers been in plain use than right now. When you see who is involved and the powers they are given, I think our new trading strategy becomes crystal clear. Take a look…

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:

Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:

(1) the Secretary of the Treasury, or his designee;

(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;

(3) the Chairman of the Securities and Exchange Commission, or his designee; and

(4) the Chairman of the Commodity Futures Trading Commission, or her designee.

(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.

Sec. 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation’s financial markets and maintaining investor confidence, the Working Group shall identify and consider:

(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and

(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.

(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.

(c) The Working Group shall report to the President initially within 60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.

Sec. 3. Administration. (a) The heads of Executive departments, agencies, and independent instrumentalities shall, to the extent permitted by law, provide the Working Group such information as it may require for the purpose of carrying out this Order.

(b) Members of the Working Group shall serve without additional compensation for their work on the Working Group.

(c) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions.

Sincerely,