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Stock market has been in a bubble since the fall of 2011, IMHO. We could have parabolic blow-off phase, but the key is to be nimble and not overstay one’s welcome.
Exactly, Jay.
Gary is right that surprises come to the upside in bull markets. But there is a massive downside surprise coming one day. Maybe this Intermediate Cycle… maybe not. The key is to be quick to buy swings that you think indicate bottoms, and quick to stop out, and then quick to get in again if indicated. In other words, be nimble and not overstay one’s welcome.
There is plenty of money left to be made in the broad market. And plenty to be lost for those who trust the bull too much.
One could make the case that the bubble phase began at the start of 2013. That’s the point where the market stopped stair stepping up and just began a perpetual rally with little if any corrective moves. If that is the case then a 100% move from that starting point would suggest a top around 2800 on the S&P.
Does anyone have any views on the news that the Arabs will be happy if oil goes to 40 bucks? Arab stockmarkets have been tanking today.
No news on that Bob that I’m aware of. It would be interesting to know who is dumping all of it though. The Soviets might have something big brewing.
Gold should have a big move Monday and Tuesday I would think.
Hi Gary,
Wouldn’t it be safe to say one must measure risk vs. reward and from your charting perspective there is clearly considerably MORE downside vs. upside……. what is your logic here? Furthermore the US Indice’s parameters are quite stretched in comparable to your historical calculations.
FWIW — M.D.Cov
I think I would disagree to some extent. First off the Fed has been pretty clear that they are going to protect the stock market. That takes away a lot of downside risk. Traders know that any real correction is going to bring out QE4 and back up the market will go.
And I would also note that the biggest and fastest gains come in the last 6 months of a bubble. Seems reasonable to catch at least some of that. Especially when we have a clear target at Nasdaq 5100. Not too mention the market hasn’t even broken out of it’s trend channel yet.
If the big players are ready to put in a top they will probably do it by forcing the market above that target and drawing in the retail crowd so they can hand the bag to them.
REALLY appreciate Gary for your comments which I respect more than pretty much all that I follow professionally.
Let me throw this at you:
Nasdaq in essence has perhaps another 10% MAX upside right? Okay doesn’t that reflect the odds as a bad omen IF I was a “betting ma” in which I am .
1% DOWN this week then 10% UP vs. 29% (based on my conjecture) DOWN.
P.S. Where do you see Oil bottoming……. $40ish???
Thanks Gary!
M.D.Cov
I want to catch that 10% 🙂
The bottom has fell out of oil. It is capitulating now. There will likely be a bounce of some degree very soon even if it is not the ultimate bottom. The 1.1 trillion spending bill means that Gold is going to 2000 oz. probably within 12 months.
Those dumping oil must be hoarding cash or throwing it at equities…we could see 6 months of straight up buying in equities while Gold moves sideways before the stock bubble pops and money flows back into Gold.
Or not. I’m very surprised gold is not moving up today. Especially after that 1.1trillion spending bill passing and the global economic weakness that is seen.
Gary, you are one of the few advisors to be totally bullish stocks at the moment. And so far great catch. I observed long term charts (starting by yours on this page) and saw one intriguing thing: I haven’t seen ANY stock market major top without it being accompanied by a major Oil top. So am I wrong assuming that the current bull market has still WAY to go North as Oil hasn’t even started climbing again. In other words, a good stock market top warning will be only when and if Oil start topping way above 100, right?
Now a parallel question: if that is true then shouldn’t we see exactly the same with Gold: should start rising seriously anytime soon to be in synch with stocks. Because what I observed above was also true for gold: major tops in stocks were accompanied (not always, but often) by major tops in gold?
Thank you for sharing a great work Gary.
FWIIW, FTSE listed miners are all down again in London today – Monday lunchtime.
Gary your S&P 2020 theory has been truncated……. What is your rationale?
Parameters for a swing have been eased. Be fast to buy when the swing happens this week, and fast to dump if the stop is hit.
For a while there I did not stop out late in a cycle on the theory that the bottom had to be close so why stop out only to re-enter. I learned my lesson on that. However much I may trust the market (and while I this market in the short term, I do not in the long term) I will never again let a swing be negated without stopping out. Still, at 40-something days, we are getting in the timing band for a nice buy here. Not 100% that the next swing will not be a false one, but you definately buy the next one.
Metals triggered my stop losses now 25% in inverse oil ETF’s and 75% cash……. Hate metal trading at this confusing juncture. ZERO confirmation on entering long positions for equities.
Be patient and at least wait for a swing in the stock market before buying.
Like I said… too late to get into metals for this DC. Let this DC bottom and see where GLD is, then buy if it has made a higher low.
As far as equities: patience, the confirmation is coming. I’d have bought a hard lower open that immediately reversed today, even if it didn’t complete the swing. But what we got is even better… more cleansing. Hopefully we’ll get our swing at a better price than today’s close. And probably this week. When we do, that will be the time to buy. Keep a stop loss in place. You can never turn your back on the market no matter how sure a thing it seems to be. Be ready to sell in 20 or 25 days or 10% gain from the DCL, whichever comes first and always depending on nothing bad and unexpected developing. You could hold longer, but I am pretty focused on not overstaying my welcome (as Jay warned).
This market will be hard to trade again one day. For now, take the free money and keep an eye on gold.
Roy IF you’ve noticed gold AND silver has had lower lows AND lower highs evident in the GLD and SLV charts: http://stockcharts.com/freecharts/gallery.html?s=gld
http://stockcharts.com/freecharts/gallery.html?s=slv……. BOTH below 50 DMA.
Hence my interests for the record long in November, then short in early December then swithed long again and NOW cash. Metals aren’t my “cup of tea” figured I’d gauge her by my technicalalities but to no avail.
Got an itchy trigger finger on my 75% cash. THANK God for my DWTI, it has made me “pretty pennies” indeed.
WOW did anyone see JNUG??? WTF? CRUEL market……. think it’s a tell for the miner’s future of demise IMHO.
Roy, It is a great strategy, I will keep an eye on technical turn around next Bradley day.
It’s Gary’s strategy, and it is kiling in this market. Nothing works forever. As long as this is working, work it. And today is the day to work it. Made my buys and set my stops. This should be the DCL. Fingers crossed.
Bought some DUST via limit: Â Gold miners are doomed…… 12.5%
Bought some SJB: High yield junk bonds will crash……. 25%
DWTI: Â 25%
Cash: 37.5%
Market bear may be underway