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Crash Imminent Warning Removed By NIRP Crash Indicator

The NIRP Crash Indicator’s signal changed from its pre-crash or crash imminent Orange to its Yellow cautionary reading level on the close of the market on May 9, 2016. The signal had gone from Yellow to Orange prior to the U.S. stock market’s opening on April 28. During the eight day period that the indicator’s reading was Orange ended on May 9, 2016, the S&P 500 went from 2095.15 to 2058.69, a decline of 1.7%. The signal went to Orange from Yellow because the exchange rates of the yen versus both the euro and the US dollar had stabilized during the week ended May 6, 2016. Additionally, both the euro and the dollar appreciated by more than 1.1% versus the yen on Monday May 9, 2016. Please note: For the NIPR Crash indicator to change from the crash imminent Orange or a crash Red reading to Yellow requires that the exchange rate between the yen and dollar be stable for an extended period of time or that the dollar and euro advance significantly versus the yen. An increase in the indicator’s reading from Yellow to Orange requires a steady advance or a significant one day advance for the yen versus the dollar. The NIRP Crash Indicator was developed in February 2016, from my research on the Crash of 2008. My research revealed the metrics that could have been used to predict the Crash of 2008 and its V-shaped reversal off of the March 2009 bottom. See my Seeking Alpha “Japan’s NIRP Increases Probability of Global Market Crash” March 4, 2016 report. The metrics are now powering the indicator. Information about the NIRP Crash Indicator and the daily updating of its four signals ( Red: Full-Crash; Orange: Pre-Crash; Yellow: Caution; Green: All-Clear) is available at www.dynastywealth.com . Since inception the NIRP Crash Indicator’s signals have proven to be very reliable. Throughout the entire month of March, the signal for the NIRP Crash Indicator had remained at the cautionary Yellow and the S&P 500 experienced little volatility as compared to the extremely volatile first two months of 2016. For the month of March, the S&P 500 increased by 4%. The indicator’s reading went from Yellow to Orange after the market’s close on Friday April 1, 2016 . For the following week ended April 8, 2016, the S&P 500 experienced its most volatility since February of 2016 and closed down 1.5% for the week. The signal’s second Orange reading occurred before the market’s April 28, 2016 open. From the Thursday, April 28 open to the Friday, April 29 close, the S&P 500 declined by 1.2%. The S&P 500 (NYSEARCA: SPY ) and the Dow 30 (NYSEARCA: DIA ) ETFs closing at their lowest prices since April 12, 2016 on April 29. See also my SA post “NIRP Crash Indicator’s Sell Signals Very Reliable for April 2016″ May 3, 2016. The primary metric powering the NIRP Crash Indicator are sudden increases in volatility for exchange rates of the yen versus the dollar and other currencies. The significant appreciation in the yen versus the dollar in 2008 accurately predicted the crash of 2008, and the recent declines of the markets to multi-year lows in August of 2015 and February 2016. In my April 11, 2016 ” Yen Volatility Is Leading Indicator For Market Sell-Offs ” SA post and my video interview below entitled “Yen Volatility Causes Market Crashes”, I provide further details on the phenomenon of the yen being a leading indicator of market crashes. The rationale for the for yen volatility or its appreciating significantly versus the dollar being a leading indicator of crashes is because the Japanese yen and the U.S. dollar are the world’s two largest single country reserve currencies. For this reason, the yen is the best default safe-haven currency utilized by investors during any U.S. and global economic and market crises. When crises unfold, historically the U.S. dollar — by far the world’s most liquid and largest safe-haven currency — is susceptible to dramatic declines until the storm has passed. Savvy investors know that the U.S. is, unquestionably, considered the world’s leading economy and markets. They know that upon a crash of the U.S. stock market, the initial knee-jerk reaction would be a simultaneous crash of the U.S. dollar versus the world’s second leading single-nation currency. The yen is currently the default-hedge currency. Even though the euro, arguably, ranks with the U.S. dollar as the world’s top reserve currency, it is not the preferred hedge against the greenback. The euro is shared by 19 of the European Union’s member countries that have wide-ranging social and economic policies, and political persuasions. For this reason, and also because Japan is considered to be one of the most fiscally conservative countries on the planet, the default currency is the yen. The U.S. dollar does not experience extended crashes versus the Swiss franc and the British pound during times of crises because each of the underlying countries has economies much smaller than Japan’s. From my ongoing research coverage of the spreading negative rates and the devastating effect that they could potentially have on the global banking system, the probability is high that the major global stock indices including the S&P 500 will begin a significant decline by 2018 at the latest. My April 11, 2016 article entitled, “Negative Rates Could Send S&P 500 to 925 If Not Eliminated” , provides details about the potential mark down of the S&P 500 likely being in stages. I highly recommend you also watch my 9 minute, 34 second video interview with SCN’s Jane King entitled “Why Negative Rates could send the S&P 500 to 925”. In the video, I explain the math behind why the S&P 500’s declining to below 1000 may be the only remedy to eliminate the negative rates. The video also reveals some of my additional findings on the crash of 2008. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

ETF Update: Social Media Sentiment And Millennials Get Their Own Funds

Welcome back to the SA ETF Update. My goal is to keep Seeking Alpha readers up to date on the ETF universe and to gain some visibility, both for the ETF community and for me as its editor (so users know who to approach with issues, article ideas, to become a contributor, etc.). Every weekend, or every other weekend (depending on the reader response and submission volumes), we will highlight fund launches and closures for the week, as well as any news items that could impact ETF investors. There was a lot to cover from the last three weeks, so let’s dive right in. Fund launches for the week of April 18th, 2016 Guggenheim launches an ETF focused on low correlation (4/19): The Guggenheim Large Cap Optimized Diversification ETF (NYSEARCA: OPD ) is a smart beta fund designed to provide optimized diversification to the U.S. large-cap equity market. By investing in a portfolio of 100 to 120 holdings that have a lower correlation to a large-cap index the ETF hopes to deliver higher returns than a standard large-cap index. As described by William Belden, Guggenheim Managing Director and Head of ETF Business Development, in a press release, “combining differentiated return streams from lowly correlated stocks may provide the potential for attractive risk-adjusted returns.” Global X invests in Catholic values (4/19): The Global X S&P 500 Catholic Values ETF (NASDAQ: CATH ) offers investors a way to be sure their investments are considered acceptable under social responsibility standards, as designated by the United States Conference of Catholic Bishops. For further analysis on CATH, please read Religion Meets Investing In This New ETF , by Dave Dierking, and ETF Investing According To Your Religious Beliefs , by David Fabian. Sprott launches an ETF that watches social media for holdings (4/19): The Sprott BUZZ Social Media Insights ETF (NYSEARCA: BUZ ) tracks an index of U.S. stocks which rank highest in terms of bullish investor perception from insights derived from the social media collective. The “social media collective” being Twitter, Facebook, LinkedIn, YouTube, Flickr, Reddit, etc. “This ETF brings together the powerful combination of social media and big data analytics. Not only does the Index measure investor sentiment, it also identifies and ranks social media members who have historically been the most successful in their forecasting accuracy,” stated John Ciampaglia, Head of ETFs at Sprott, in a press release . For further analysis on BUZ, please read A New Social ETF With Seeking Alpha Data Used For Index Selections , by Brad Kenagy. Deutsche Asset Management expands its Comprehensive Factor ETF line up (4/19): The Deutsche X-trackers FTSE Emerging Comprehensive Factor ETF (NYSEARCA: DEMG ) targets five factors for investing in emerging market equities: value, momentum, size, volatility and quality. This is following the path laid down by the Deutsche X-trackers Russell 1000 Comprehensive Factor ETF (NYSE: DEUS ) and the Deutsche X-trackers FTSE Developed ex US Comprehensive Factor ETF (NYSE: DEEF ), which were both launched in 2014 and 2015 respectively. Amplify ETFs launches its first ETF (4/20): The newcomer is starting on a recent hot topic, online shopping. The Amplify Online Retail ETF (NASDAQ: IBUY ) targets an index of companies that generate at least 70% of their revenues from transactions in the online retail, online travel or online marketplace spaces. While the fund does cover international companies, 75% of the holdings will be weighted to domestic firms. For further analysis on IBUY, please read Amazon Is Not The Only Name In Online Retail , by Jane Edmondson. iShares launches an ETF for investing in positive global impact (4/22): The iShares Sustainable MSCI Global Impact ETF (NASDAQ: MPCT ) tracks an index of public companies whose products and services aim to address major social and environmental challenges. As stated by Jane Haines, Managing Director and Head of Equity Index Products for the Americas for MSCI, in a press release , “based on MSCI ESG Sustainable Impact Metrics , a new framework aligned with the Sustainable Development Goals (SDGS) adopted by the United Nations, the index weights securities by companies’ revenue exposure to sustainable impact themes and excludes companies that fail to meet minimum ESG standards.” Fund launches for the week of April 25th, 2016 Fund launches for the week of May 2nd, 2016 REX Shares launches 2 new VIX ETFs (5/3): The REX VolMAXX Long VIX Weekly Futures Strategy ETF (NYSEMKT: VMAX ) and the REX VolMAXX Inverse VIX Weekly Futures Strategy ETF (NYSEMKT: VMIN ) are actively managed funds that invest in near-month VIX futures. “We believe VMAX and VMIN are exactly what sophisticated investors have been asking for: exchange-traded funds that get closer to spot VIX,” said Greg King, Founder and CEO of REX Shares, in a press release . Weekly expirations for VIX futures were introduced by the CBOE in July 2015. For further analysis on VMAX and VMIN, please read Is The Holy Grail Of VIX Investing Finally Here? by Stephen Aniston. Global X targets millennial spending habits with a new fund (5/5): The Global X Millennials Thematic ETF (NASDAQ: MILN ) will track an index of stocks that have a high likelihood of benefiting from the rising spending power and unique preferences of the U.S. Millennial generation (birth years ranging from 1980-2000). Rather than focusing on a specific market category, MILN will invest across a broad range of industries that align with the spending trends of millennials. All companies included are domestic and have a market cap of at least $500 million, with an average daily turnover for the preceding six months of at least $2 million. This is the first ETF to give investors access to the spending habits of a generation, but now that the idea is out there I would be surprised if it was the last. Fund closures for the weeks of April 18th, 25th, and May 2nd 2016 Global X GF China Bond ETF ( CHNB) Horizons Korea KOSPI 200 ETF (NYSEARCA: HKOR ) Have any other questions on ETFs or ETNs? Please comment below and I will try to clear things up. As an author and editor I have found that constructive feedback is the best way to grow. What you would like to see discussed in the future? How can I improve this series to meet reader needs? Please share your thoughts on this first edition of the ETF Update series in the comments section below. Have a view on something that’s coming up or a new fund? Submit an article. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.