Market Outlook: The Dow Industrial Average peaked on October 9, 2007 at 14,164. The correction (crash) that followed bottomed 18 months later on March 9, 2009, at 6,440 - a decline of 54.5 percent. A bear-market rally followed with a gain of 53.7 percent to 9,990. This rally occurred while second quarter corporate profits fell 35 percent and revenues fell 15 percent. There is no fundamental reason to support this market move, it was a strictly technical.

A very similar pattern occurred in 1929. The Dow crashed on October 29, 1929. The Dow Industrial Average fell from 381.17 to 198.69 November 13, 1929, a decline of 47.9 percent. A bear market rally followed between November 13, 1929 and April 17 1930. The Dow gained 48 percent! Sounds familiar! Then a 46 percent decline unfolded between April 17, 1930 and December 16, 1930. From a peak of 381 in 1929, the Dow finally bottomed in July 1932 at 41.22 a total decline of 89.2 percent.

Corporate insiders are the world's smartest investors, they know more about their companies stock than anyone else. Corporate insiders have been aggressive sellers of this bear market rally since March 9th. In August, corporate insiders sold 31 shares for every single share they bought. They believe future sales and profits will not support current stock prices. This rally is finally at the top and might push to 10,800 on the Dow and 1,150 on the S&P 500.

It's time to sell all equity positions both foreign and domestic. Sell all long mutual funds and stock holdings. Using a buy and hold strategy will be a disaster. The Global Stock Markets will crash between now and 2012. The only safe positions are 30,60,90 day Treasury Bills. Both long and short term interest rates must rise to attract buyers of the record amounts of U.S. Treasury Debt. The bear market rally is over.

Here are several reasons why the market will crash. The housing market has not bottomed. More pain is still ahead. The commercial real estate market has rolled over, and is down 35 percent through August 15, 2009. Consumer debt is $14 trillion, which amounts to 135 percent of after tax income. The banks will have to write off all three categories of debt. Another banking crisis will swamp the FDIC. Only five U.S. banks are listed among the world's 50 safest banks; #32 The Bank of New York Mellon, #39 JPMorgan Chase, #42 Well Fargo, #47 U.S. Bancorp, #49 Northern Trust Corporation. Over the next several weeks we will continue to add to our short ETF trade recommendations.

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