Let’s just take a look at President Obama’s infrastructure spending proposal in simpler terms. Let’s say the family (the USA) has a big debt problem and many of the famliy members are out of work, 10-15% depending on whose numbers you like. We are looking for ways to fix the mess. A couple of the more important brothers in the family, let’s call them Ben and Tim come up with an idea.

Why you cannot go by today's news to make money or trade the market: for example, today's headlines read "Gold up on further economic concern" and at the same time there are also headlines reading "Stocks rally on positive economic news.' Which one is it? Short answer, neither!

Regardless of the main-stream media's headline news (good or bad), a break of 10,205 on the DJIA and we are looking for a drop / pull-back between 9,500 to 9,477 or a +/- 7% pull-back. The higher beta indices should drop more. That would require a 210-point intraday drop in the Dow and it looks like we might make a late day run for it! Don't say we didn't alert you, for those who have not yet read it, check out our article - Don't sleep on these market rallies.

We have been sharing High Risk Wealth-Alerts issued by the Private-WealthClub since April because we believe the time has come to raise lots and lots of cash! Don't sleep on these rallies, use them to your advantage or as they say, don't look a gift horse in the mouth!

Just last week, Professor Paul Krugman, the Nobel Laureate and devoted Keynesian published a widely reported on Op-Ed article in the NY-Times titled, "The Third Depression." In his article, he stated "we are already in the early stages of a third depression” and calls for the Obama Administration to put out another, much larger stimulus package to forestall the disaster in the making! He compared this so far nameless depression to the Panic of 1873, which was followed by years of deflation!

Since our May 12th Maximum Risk Level #5 High Alert! (final and highest risk level) when the DJIA was at 10,896 to today’s lows of 9614.32 (so far), the broad index and leading economic indicator has shaved off 1,282-points. This is an approximate 12% decline to date in less than 1-trading month. Just prior to our a April 17th Wealth-Alert Level 4 of 5 - Long Term Head~Shoulder's - Raise Cash, Elevated Risk, when the DJIA was at 11,143 the leading index has seen a drop of 1,529-DJ-points or an approximate 14% decline . Since the alert, the indices did not go much high! Our raise cash call was within 1-week of the US equity indices rally highs and we believe those highs should last for some time to come! We purposely we allowed for some reasonable period to review positions to pull the triggers and go to cash with our calls.

Professor Paul Krugman who is also the Centenary at the London School of Economics and an Op-Ed Columnist for the NY-Times, predicts The 3rdDepression !!! You may or may not agree with Professor Krugman’s political biases but do not let that obscure your judgment on the importance of his opinion, his depth of knowledge and economic abilities are unquestionable. He notes some of the very same things we have spoke about regarding depressions and counter-trend rallies back in January in our piece “Market Reflections, Outlooks and Predictions - 2010 The Show Me Year.”

Ever since our call to SELL MARKET RALLIES back in February, the market has had a number of sharp spikes up but with more sharp spikes down!  These intermittent and temporary point increases, have resembled more the convulsions of a heart attack patient than the genuine price action of a healthy market and have done nothing more than keep good old Mr. Retail Investor and Traders alike engaged and holding on for a little mo!