"PinnacleDigest.com"

As promised last week, we have an exclusive interview with Mark Leibovit, a Pinnacle Digest affiliate and a leading authority for our staff when technically analyzing the stock market and gold market. Mark Leibovit, CIMA, is Chief Market Strategist for VRTrader.Com. His technical expertise is in overall market timing and stock selection based upon his proprietary VOLUME REVERSAL (tm) methodology and Annual Forecast Model.

Mark was awarded, by TIMER DIGEST, the #1 Intermediate Market Timer for the ten year period of December 31, 1997 to December 29, 2007. He was also previously ranked the #3 Gold Timer in the U.S. by that same publication. Simply put, Mark Leibovit is one of the best at what he does - timing the market.

You may have recognized Mark Leibovit as one of the ten "Elves" on Louis Rukeyser's Wall Street Week television program where he served as a weekly consultant for 7 years through 1996. He also appears as a regular Market Monitor guest with Paul Kangas on PBS' The Nightly Business Report. He is a frequent guest on several other radio and television financial programs around the U.S. and has appeared on both CNBC and CNN, Bloomberg and CBS in Chicago.

We hope you enjoy our exclusive interview with Mark as he shares his insight on some very important issues within the market.


PD: Why did most economists fail to see the crisis coming?

Mark: The question should be when do economists ever get it right? I often criticized Alan Greenspan in my commentary (for twenty years) and compared him to a New York taxi-cab drive - slamming on the accelerator and then slamming on the brakes and then back on the accelerator. This crisis did not come because economists failed to see it anymore than investors in Bernie Madoff's money management program was in suspect. If someone wants to steal from you, they will steal from you. Here, we had the largest US brokerage firms, banks and other financial institutions creating, leveraging and selling worthless paper to hapless investors around the world. Even Alan Greenspan admits that he didn't understand the nature of the financial instruments that were being sold. The bigger question is, where are the indictments even among government officials? You won't see 'em. Just as Madoff likely paid off politicians, Hank Paulson and his buddies at Goldman Sachs have hijacked our government. See the Glenn Beck interview below:

Glenn Beck Explains Goldman Web



PD: Lately there have been many stories released about the US entering a recovery. Do you believe the economy really is headed for a recovery in the 3rd and 4th quarter of 2009? If not, when do you think the economy will begin to recover?

Mark: As a stock market trader or investor, it is irrelevant whether the economy ultimately improves or not. Those who bought on my March 4 Volume Reversal ™ 'Buy' signal made enough money in the weeks that followed that the economy's ultimate performance was not even an issue. The market is its own creature, living and breathing in manipulation, rumor, innuendo, hope and fear. We all know the market is a leading indicator. In this sense, it might be foretelling a recovery, but with the Plunge Protection Team, Geithner, and Bernanke pulling the marionette strings, the effort here may be to have the cart pull the horse getting enough people to 'believe' things are getting better whether they truly are or not. My job is make money in the market. The reality of the economy is another story altogether.



PD: With inflation on the horizon, why do you think gold hasn't performed the way many expected in 2009(trading higher than $1,000 an ounce)?

Mark: First of all, the gold market is manipulated. This is not sour grapes. Paul Craig Roberts who was Assistant Secretary of the Treasury in the Reagan administration said recently: "How long can the US government protect the dollar's value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price? Given the incompetence in Washington and on Wall Street, our best hope is that the rest of the world is even less competent and even in deeper trouble. In this event, the US dollar might survive as the least valueless of the world's fiat currencies." There is no level playing field out there. Do you think Bernanke wants to see gold soaring? Of course not. The 'paper' market, i.e., GLD, IAU and SLV along with the COMEX futures have been fertile ground for market manipulation. Investors are hoarding gold and silver, physical supplies are tight, yet the 'paper' market languishes. It's clear to me that something is 'rotten in Denmark'. One other thought is that we are likely still in a deflationary environment. Banks are hoarding cash, the consumer is saving for a rainy day, asset values may still be still shrinking, etc. Also, to raise cash sometimes you have to throw the baby out with the bathwater - the baby being gold.



PD: In respect to gold, where do you believe investors will find the greatest upside (gold mining stocks, ETFs, or physical gold)?

Mark: You have to be diversified. History says gold shares do well in a deflationary environment, the classic example was Homestake Mining. Money invested in HM in 1929 gained 35% a year - $10,000 invested in 1929 appreciated to $65,000 by the end of 1935. I am recommending holding the physical metal and the shares. When inflation finally kicks in, both will do well and even if deflationary pressures worsen, I don't see Gold much below $700 in a worst case scenario.



PD: If you could only purchase one precious metal (as an investment for the next 5 years) either gold or silver, which would it be? And why?

Mark: Gold is the new currency. It is the ultimate store of value. Ancients saw it as providing 'healing' powers. My choice is gold!



PD: How interrelated are US Treasuries and the price of gold? How do you see this relationship developing over the coming years?

Mark: I don't try to tie markets together. This is how you get yourself into trouble. Gold wasn't supposed to go up with the stock market, but between 2003 and 2008 they were pretty much in sync to the upside. Lower bond prices, i.e., higher interest rates suggests a stronger Dollar and lower Gold. We've seen gold and the Dollar rally together as well. Common sense says foreign debt holders want to be out of the Dollar due to corruption and mismanagement of our government. Though the 'powers that be' may attempt to stage a rally in the Dollar, its direction does not affect my thinking for gold



PD: There has been a lot of talk about a new world reserve currency. Do you see that as a possibility, and if so, what do you think the new world reserve currency could be?

Mark: The rumored 'Amero' is an unlikely outcome, barring revolution in this country. If the 'Tea Parties' we witnessed in April resume and unrest grows, then we may have to rethink the Amero possibility. Meanwhile, Canadians are far too proud and independent. I cannot imagine their willingness to merge their currency with their neighbor to the south. Mexico, however, has more to gain, but merging with the Dollar will almost guarantee that your Dollar has become worthless - more reason to own gold and even more reason to own gold outside the US and perhaps North American altogether. Maybe, Australia?



PD: With the DOW above 9,000 and the S&P above 980, do you feel they have gone too high too fast?

Mark: Perhaps, but the TREND is up. I am on a 'Buy' signal. The Dow Industrials could easily see 10,300 and even perhaps 11,300. Time cycles current suggest that the equity markets could zig-zag higher into the summer of 2010. If I'm correct, we can revisit that scenario at that time. Short-term, I would be a buyer of any dip. If we rally to 10,300 before fall, then I would be more willing to side with the bears, but even then it may only be for a nice trade. The Plunge Protection Team has to get the markets higher, has to convince investors that the economy and housing are improving. To accomplish this they will take the markets higher and along with their allies in New York, financial press will put 'lipstick on the pig' wherever and whenever they can.

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Mark Leibovit's Annual Forecast Model has gained increasing notoriety on Wall Street as a predictor of future market movement. Released each year in early February, it has accurately pinpointed market highs and lows. It's claim to fame began back in 1987 when it predicted the ominous stock market crash nine months in advance. It also forecast the 2000 bear market and in February of 2007 he was quoted by Christopher Farrell "I think 2007 will be an OK year with a lot of volatility, and on balance, the market will be up until fall. I'm not too happy with the market after fall and going into 2008. Be careful."

Not surprisingly, Mark predicted, almost to the exact month, when the market would retreat into this long recession.

We strongly encourage you to visit Mark Leibovit's site VRtrader.com. And for all you Gold Bugs out there, you'll definitely want to visit his site dedicated to predicting the movements of the yellow metal, VRgoldletter.com.

Visit Mark's VRtrader.com Channel for more of his insight and future predictions

VR Trader Channel

Have a great weekend!