It's Wednesday and that means we meet another investment expert. This time, we're revisited by our good friend and options trader Bryan Bottarelli who's just wrapped up a speaking engagement at the recent Wealth Conference.  

While speaking at the conference, trading expert Bryan Bottarelli stole the show by asking one simple question:  

"By show of hands, how many of you think the market is manipulated?"   

You may find this shocking, but every single person in the room raised their hand.  

Armed with this information, Bryan launched into one of the most insightful presentations we've ever seen. Citing specific examples, he clearly showed how coordinated efforts of the Fed, Treasury, and key market participants (like Goldman Sachs) are used to manipulate the daily movements of the market.  

When you put these events into the proper chronological context, the evidence of market manipulation is indisputable. "Eye-opening" only begins to describe it.  

So let's dive right in with the questions for Bryan about market manipulation and how you can actually find profit opportunities from it. 

Ian: Hi again Bryan. We've sure heard a lot of "buzz" from your recent presentation - especially when it comes to your section about identifying market manipulation. This is something that every one of our members must be aware of. Would you mind showing us how it all works?  

Bryan: Absolutely. The best - and clearest - example began on Thursday, July 9th 2009.  On this day, the S&P 500 (and the Dow, for that matter) where both exhibiting a crystal clear "Head and Shoulders" formation.  

In the world of technical analysis, a Head and Shoulders pattern is believed to be the most reliable trend-reversal patterns in existence. It occurs when prices rise to a peak and subsequently decline. Then, prices rise above the former peak, and once again decline. And finally, prices rise yet again (but not to the second peak), and then decline once more. The first and third peaks form the shoulders, while the second peak forms the head. As you can see below, the S&P 500 chart was clearly displaying this pattern. See for yourself: 

In order to confirm the H&S formation, the SPX must fall below the "neckline," which occurred right around the 875 level (noted in blue above). If this neckline breaks down on heavy volume, then everyone on Wall Street would know to enter into an aggressive short position. After all, in terms of a downside target, a reliable calculation entails measuring the price variance between the peak of the head and the neckline.  

In the case of the SPX, the peak of the head is formed at 956, and the neckline was established right around 875. That's a difference of 81 points. Therefore, the downside price target is calculated by subtracting the price at which the pattern breaks the neckline (SPX 875) by the difference between the head and the neckline (81). Based on this example, the new SPX price objective upon confirmation of a head-and-shoulders formation was SPX 794. 

So, if the Dow and the S&P broke below their respective "necklines" on heavy volume, then the major market averages would've once again began to aggressively sell off. This downside move was literally a day or two away from occurring.  

And that, my friends, is when the manipulation began.  

Here's what happened…. 

The following Monday (July 13th), influential analyst Meredith Whitney came out with an extremely publicized upgrade of Goldman Sachs (GS - NYSE).  Her upgrade was featured on every major financial program in America - which was very, very odd. After all, Goldman Sachs was scheduled to report earnings the very next day. Therefore, for an analyst to come out and publicly upgrade the company ONE DAY before their earnings release is highly suspect.  

Think about it…  

In the world of Wall Street analysts, you never see an upgrade before an earnings release. You always see upgrades (or downgrades) AFTER the results have been posted.  

Why?  

Because in today's market, it's literally impossible to judge how a stock will react to an earnings report.

For example, how many times have you seen a company report blowout numbers - and then aggressively sell off? On the flipside, how many times have you seen a company report hideous numbers - but then aggressively rally because the numbers were "better than expected?"  

The point is that nobody ever knows how a company will react to an earnings report. That's why Meredith Whitney's comments were so peculiar.  

Not only did she upgrade Goldman one day before they reported their earnings, but she did it in front of TV cameras for every major financial station in the world. If she was wrong, it would've been nothing short of career suicide.  

But something tells me that she knew AHEAD OF TIME that she wasn't going to be wrong. After all, the very next day (Tuesday, July 14th), Goldman Sachs announced record-breaking profits of $3 billion in a three month period. Over a two-day time period, the market rallied +250 points. 

AND REMEMBER: This rally temporarily invalidated the Head and Shoulders formation. But that's just the beginning… 

At the exact same time, Art Cashin (who has been a floor trader on the NYSE for 30 years) made live comments on CNBC regarding buying surges in stocks. Art referred to "off-shore" buying on the S&P 500 futures, which is code language for cash dumps by the President's "Working Group" (also know as the Plunge Protection Team) to dictate the market's direction. 

LETS BE VERY CLEAR: This is NOT investment buying. The sole purpose of these massive cash dumps on the S&P futures are to make the markets look good.  

As a result, the combination of these events spills over to larger trading operations (such as hedge funds) who throw fuel on the fire by piling into the market rally.  

At this point, the media catches on - and you begin seeing articles from The Economist titled, "Is Wall Street Back to Normal?" This gives recreational investors the "all clear" signal to jump back into stocks.  

And the next thing you know, you're left with a busted H&S formation - which leads to an explosive upside move.  

As you can see below, the S&P 500 rallied 10% higher in a 10-day span, right at a key breakdown point. No sane investor would risk buying heavily at these levels. This is pure manipulation. See the result of these actions below: 

Ian: So just like that, you're saying that the powers in charge of this market averted a disastrous downside move by invalidating the Head and Shoulders formation - and bought themselves a rally at the same time.  How can they get away with this?  

Bryan: That's the big secret. You see, not many people know this, but all of the manipulative actions I outlined for you above are completely legal. You see, in response to the market crash in October of 1987, Ronald Reagan signed a law on March 18th 1988 titled, "Working Group on Financial Markets." According to this law, the Working Group on Financial Markets is composed of the following people: 

• The Secretary of the Treasury
• The Chairman of the Board of Governors of the Federal Reserve System
• The Chairman of the Securities and Exchange Commission
• The Chairman of the Commodity Futures Trading Commission

This means you have the two most influential men in the financial world (Secretary of the Treasury and FED Chairman) working hand in hand with the two top people in charge of policing the market (Chairman of the Board of Governors of the Federal Reserve System). Similar to the Chicago mafia in the 1920's, anything goes when the gangsters and the police are all in cahoots.
 

Now, the purpose of Reagan's "Working Group" is this group is to "enhance the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence." 

Did you catch the word "enhance"? 

"Enhance" is a verb defined as follows: 

• To raise to a higher degree, intensify,  magnify
• To raise the value or price

Right there, this order gives the Working Group the green light to manipulate the markets by pushing them higher - all in the name of maintaining investor confidence. But that's just the beginning. In order to successfully fulfill this order, the Working Group is given the following powers: 

• 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.
   
• 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.

There You Have It: The Working Group as full authority to consult with major market participants (like Goldman Sachs) and other clearing houses (like major hedge and mutual funds) to "enhance" the markets - all in the effort of maintaining investor confidence. I simply cannot think up a clearer way to say "legalized market manipulation" than examining the wording contained in this order.  

Best of all, they don't have to report to the President until 60 days after these actions are taken! And even then, if any new legislation needs to be enacted to help them further move the markets, they have influence over that as well!  

In short, the writing is on the wall. The markets are now under complete control of a small group of powerful men.

Ian: Well, you've truly nailed this one square on the head. When you break it down like this, and outline the events in chronological order - backed up with the language from the Working Group order - it's all extremely eye-opening. I can understand why your recent presentation was such a success. Bryan, I truly appreciate your time - and thank you for exposing this behavior to our group of investors. Hopefully, this discussion gives our readers a better understanding of what's driving this market. From a personal side, it has sure cleared up a lot of questions in my mind. Thanks again! 

Bryan: Sure thing! 

*FOLLOW UP: When it comes to market manipulation, Bryan's knowledge has never before been so critical to your personal wealth. So here's what we did. After this interview, we took Bryan aside and made him a proposal. Since we firmly believe that belonging to his Bottarelli Research service is absolutely critical for every investor, we asked Bryan to set up a special "trial" arrangement that gets Daily Profit members (like you) access into his service for a special discounted rate.  

After a few moments, Bryan said that he would be willing to make such an arrangement - but with one condition: You must keep this special rate to yourself. In other words, don't go blabbing to the world that you received access into Bryan's elite group of traders for a heavily-discounted rate. If you keep this secret, then you can now take a 3-month trial membership to Bryan's daily Bottarelli Research service for only $600. That's $33% off the standard rate of $800.

MAKE NO MISTAKE: This is the lowest price Bryan has ever offered for this service, and it'll probably never be offered again. We highly recommend that you take full advantage. While everyone else struggles to survive in this heavily-manipulated market, using Bryan's expertise to turn market manipulation into daily trading profits is truly a "no-brainer."   

To grab one of these discounted spaces immediately, click the link below - and select the special 3-month trial offer noted with a red star: 

https://www.bottarelliresearch.com/subscribe/options/offer/TDH1VKK14V/ 

Or, if you'd like more information on Bryan's elite trading group, take five minutes to review the invitation below. Either way, it's imperative that you begin receiving Bryan's daily trading alerts as soon as possible. Your wealth is too important.  

Once you take a trial membership to Bottarelli Research, you can immediately begin turning a heavily-manipulated market into pure trading profits. Trust us, you'll be glad you did! Full details below: 

http://www.bottarelliresearch.com/options/offer/TDH1VKK14V/

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