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AGAIN I WOULD STRESS THIS ISN’T A SHORTABLE MOVE AS THE FED WILL TRY TO KEEP THE MARKET PROPPED UP AND THE MOVE INTO THE 7 YCL COULD TAKE LONGER THAN I EXPECT.
With rates staying near zero for the foreseeable future, the only trade is to be long U.S. equities. Beyond that, the markets cannot be traded with any success.
Hindsight is 20/20. and the tools one uses, is
especially important – because that is where the
faith in one’s system lies…Bud
I’ve been saying – the definition of the resolution of an EW diagonal triangle is to return to the start point- the Oct low (1820 SPX) – and that’s just the start! The show from 2009 is over and down, down we go. And I hope the FED can do nothing but, ultimately, scare people.
So potentially buy now for a run up to 5132 and then sell/get out of the markets until a bigger correction in June/July… then get back in and ride that run up to Septemberish… and then get out of the markets again?
Just can’t help thinking that we are already near the top… and the downside potential is far greater than the upside.
I’m going to take a small trade long for another move up to 5132 but not a very big position. Pure and simple the intervention Thursday morning that prevented the DCL from completing the correction screwed us. Now we have to wait till June or July for the larger ICL before we can really go in with full positions.
In the meantime nat gas is still early in a new intermediate cycle, and if oil can correct back down to the mid 50’s it should still have one more leg up before rolling over and heading back down to 35-40 later this year.
So there are still tradable setups while one waits for the inevitable stock market correction.
I would not be going long Monday. Last
Fridays technical are suggesting a long position,
is a low risk investment…
correction; not a low risk investment…
Too late in the DC and IC to get long. Could work, but where do you put the stop? How much do you bet? What’s the risk / reward? The safe play is to wait for the set up. And the set up is a clear cycle low. One will happen. Eventually.
I’d like to make money in oil or gas, as Gary is planning to try to do. I work in the industry; you’d think I could trade it. But I haven’t done the homework on oil price like I have on S&P price, so I can’t buy a long position here with confidence. Oil is in a downtrend. I have learned my lesson about trading against the trend. I’ll keep waiting for the S&P to give me the set up.
Friday definitely screwed us. It was all setting up so nicely until Friday morning…
Is it possible that Friday is/was just a blip and that this week we get a continuation of the decline to create the low?
(Yes, I know – all things possible. Just thinking out loud).
I got my fingers crossed, Bob. But not holding my breath.
But what about all that QE? It’s been a tool for the FED that’s worked for years. Why won’t it work next time?
It may keep working, which is why one can’t short the market.
Gary, I wonder if you follow the COT reports for S&P. This week shows something I don’t remember ever seeing. Large + small specs total only 7k shorts versus average 20k-40k shorts ( = commercial longs).
To me tis looks like extreme complacency, therefore very little risk of shorting.
Commercials are regression to the mean traders. When they get bullish it’s usually best to follow them.
They covered a whole bunch of shorts last week. It’s one reason why I want at least a small position long just in case the Nasdaq does breakout and just keeps going.
Gary,
If we don’t get a correction now and Nasdaq blows through 5,132 – what is your next target up for it ?
If that were to happen I would have no earthly idea where to anticipate a top as we would be entering the parabolic phase.
5133?
According to Martin Armstrong this will be a blip down on the screaming highs that are coming. When the BOND markets collapses in Europe the masses will be putting their money in the Stock Markets and the US dollar..after that look out below..
dollar is up today, 95.25 is enough for correction and it should go down now or we should consider that final bottom was made last week ?
My prefered scenario is for one more cycle down after a 5-7 day bounce. But there is a small chance that the dollar put in an intermediate bottom.
Good grief, this – the markets – is so confusing 🙂
No it’s not, man. We are too late in the DC and IC to get a sustained move up. Strength is being sold. Move down into DCL and hopefully ICL is coming soon. We are building a nice rounded top on a RT DC and IC. The cycle low is coming, and it will be a safe buy, and safe bet that the next cycle makes new highs since this cycle was RT. After Friday, today was refreshing. It gives me confidence in the interpretation above. Friday asked a question that I had not expected about the cycle count – today hopefully began to give the answer that I wanted and expected. Buying opportunity is coming. Hold your fire until you see the whites of their eyes.
Just based on the McClellen oscillator it looks like that was a DCL even though it wasn’t allowed to break the cycle trend line.
china cut rate. –>>$crb
Gary, it would seem that FED is constantly disrupting your cycle analysis . Have you considered adjusting your paramaters to coincide more closely with reality?
The S&P dropped down into the cycle low exactly when it was due. The only thing missing was the rescue Thursday morning that prevented the S&P from breaking the cycle trend line. The Nasdaq and Russell however did break the trend line. So other than one small nonconfirmation everything happened right on cue.
Have you noticed that S&P500 stops at 2118ish every time? Worth shorting this index imho. It’s almost like 2118 is a physical limit for S&P. I am placing my bearish bet soon.
Yes classic technical analysis, we are going down to test old highs at 1550, also worth shorting of course.
Cycles tells us that this scenario could play out in less than 6months, with a sharp decline in November.
I am hoping that everyone has noticed, and that rejection of that level, plus a hard correction away from it, makes the move into the CL an inevitability.
It would be great if the S&P comes back down far enough to break that trendline Then we could get a true DCL.
Might be happening this morning. Time will tell. If this was a first DC of a new IC, I’d (reluctantly) go with your interpretation that we just had a CL that was artificially aborted, even though RSI never got down low enough and the cycle trend line did not fail hard enough. But we are late in the IC, and now is not the time for that kind of unexpected strength. Now is the time for unexpected weakenss. Which is what the futes are showing right now. I still have faith that a clear cycle low is ahead. DCL or ICL? We’ll have to make that call as it unfolds.
If we could get a waterfall decline over the next week it could still qualify as an ICL as long as it retraces at least back to 2000 or a little lower.