Yesterday’s rally was quite convincing so I assumed the normal intermediate cycle parameters weren’t going to apply. The sell off today is signalling that they “will” apply (barring an intervention by the PPT in the next few days).
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Barring an immediate intervention by the PPT we should see a completely normal 50% retracement in the S&P (about 1875).
There is 0 chance the bull is done though as many are calling for. Like I noted in the report the bull can’t expire until we start making lower intermediate lows. That isn’t even going to be close to happening.
The next reason is just logical. Does anyone think that the Fed is just going to stand on the sidelines and watch the market collapse after having printed trillions to prop it up? Of course not. We can’t get a final top until the Fed does QE4 and the market gives us a blow off top.
Presumably if they do do QE4 that means even higher general stocks? But what about gold and silver Gary – would more money printing change your view about gold going to get slaughtered next year?
In theory it should be good for gold but then QE3 should have been good but it triggered a bear market.
The RUT has a failed intermediate cycle, correct? Has 2000 stocks vs 500, so wouldn’t think that would be good.
Actually historically the divergence in the Russell hasn’t led to long term declines like it would seem. On the contrary the longer term results are very positive.
Very nice analyis, thank you!
We broke through 1904 in SPX today.
So do you think a bull attack is imminent within the next week/next 2 weeks or so?
Best wishes from Germany!
we should be pretty close. I’d like to see at least a 50% retracement which would be about 1875.
Gary,
On Friday’s show you said that if there was massive panic selling next week the Fed would step in and announce QE4.
If the markets plunge enough to where margin calls are triggered, would even QE4 make a difference?
I think it would make a big difference and give us the final blow off phase.