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I’m making the weekend report public this week.
Gary;
Thank you very much for the weekend report video. At the 33 minute mark when discussing the GDX, do you you think the gap in December, 2017, at 19.19 needs to be filled before a meaningful bottom can take occur?
I’ve noticed on your charts you use the simple moving average as opposed to the exponential moving average. Do you find it more accurate in charting>
Thank you again.
New user here. You mentioned that the past QE will create the final bubble. What about the Fed letting the balance sheet mature and decline? Wouldn’t this create a huge downward pressure in the monetary system and downward price pressure in all markets? Do you think interbank fractionalization will simply overpower the reverse QE?
It will take years to drain all that liquidity. They should have started 5 years ago. Now it’s too late. The Titanic is already heading towards the iceberg.
Gary,
Thank you for your graciousness!!!
I will take a pick at it.
Pretty wife is cooking some meatballs with bison ground meat.
And of course, I got a nice glass of wine to drink to the health of all here at SMT!
Cheers!
SM should begin to stabilise soon. Beginning to see positive divergences on charts. Beginning to see breakdowns in uvxy and vix. This is a process and takes time. Expecting the upswing to continue into Monday/Tuesday. This is a prelude to a bubble/parabola? May be. Important to be prepared for both: double top/bubble.
These are the facts: 1. Markets do not run away in the blink of an eye and leave players at the station very often, low probability. 2. It does not pay to focus too much attention on the distant future. 3. We are close to an important buy zone and we can expect a significant advance lasting 3-4 months after the market finds its legs. How high? None can predict the exact future price trajectory. Folks accustomed to making linear extrapolation of the prevailing trend could be disappointed. Markets are alogical and irrational. Best to take it one day at a time.
If they reverse course and put the punch bowl back on the table, SLINGSHOT!
Until then I will wait and see.
Did anyone really think this was sustainable?
Well if you shorten the x axis you can make the chart look extreme. Here’s a more realistic look. Just looks like a normal secular bull market that went through a 9 year bear phase.
You by the way are represented by that dumb money chart.
Jab Jab Punch!
That is not a nice thing to say, Gary.
One could have made the same conclusion in 87 that the market was parabolic.
And a left upper cut followed by a right hook!
Here’s what you would have missed worrying about the stock market parabola in 87.
GMoney goes down in the first 10 seconds of the 1st round like a big ol’ sack of potatoes 🙂
Gary:
The time period in your graph (1987 thru 2000) is far different than the financial conditions today. Charts must be presented in context to be comparable.
For the life of me I don’t know what these supposed dire financial conditions are. Rates are at historic lows, the world is awash in liquidity, debt has been moved from the public balance sheet to government balance sheets (and governments can print money).
The only thing at risk are the currencies, but that’s probably still several years down the road as the bear cycle in the dollar still has 6-8 years to run yet.
How about 20.5+ trillion in debt with 150+ trillion in unfunded liabilities, many state pension funds on the verge of blowing up, record student loan debt, record credit card debt, incomes are at 1990’s levels adjusted for inflation, a gutted manufacturing base, half the country high on either a prescription drug or an illegal drug – need I continue?
As I said the debt is on government balance sheets and governments have printing presses. Real incomes adjusted for inflation are at about the same levels as 2000 (one of the most prosperous periods in history). Median household income is outpacing credit expansion.
We haven’t been a manufacturing economy for decades. There’s just no way we can compete with cheap Asian labor so I’m not sure why bears keep bringing this up. Do they really think the population would settle for a drastically reduced lifestyle to bring back manufacturing?
I’m not sure what percentage of people are high, but with many baby boomers reaching retirement yes this portion of the population is starting to contract the old age illnesses.
The one part I do agree with is education. No sooner did the government start meddling in education than the cost went up, and as long as the government keeps throwing money at it the costs will continue to rise.
Agreed, and with respect to education the quality continues to drop. Many of the most ignorant and foolish people I meet are recent college graduates.
Lol, I am reminded of this cartoon everytime I see these type of posts.
https://youtu.be/UVNHcob3oJg
Traders were fully justified in worrying about the parabolic rise in 1987. The August 25-October 20 crash was a 36% drop in ten weeks. Warren Buffet might not have cared, but those trading the equivalent of UDOW and TQQQ sure as hell cared.
Good points and informative graphics, Gary. Expecting uvxy to pull back to 18 area on Monday/Tuesday next week, followed by an upswing to the 22 area. That could be a good exit point for uvxy holders, and another entry point into tqqq/udow or combo. Interesting times ahead.
I have watched gold for a while and think the market is obviously manipulated. I am wondering why you all seem to want to play in such a market? For that reason alone I wouldn’t go near it.
Thanks for making the report public for us to see the other side of the site. I think you will be proven correct on the call for higher stocks, but the question is can people hang on to see the gains. For example, while the 1987 crash looks like nothing on the chart, it still was a 25% pullback (which if occurred today then stocks are not even half way done going down), and it looks like it took 3 years or so to get back to even. So while it it did get back and then eventually skyrocket over the next 13 years, most people are in this for a short term trade, unless the plan is to hold for a decade.
Probabilities say Gary will be correct, but people have to size positions appropriately to be around for the score just in case stocks aren´t done going down before they run. Personally, I wouldn´t touch 3x etfs with this volatility though they will make some rich (at the expense of those they broke!).
Ok, overlay this chart with today’s S&P. Any comments?
These kind of chart comparisons are of course completely worthless. I have no idea why anyone even bothers with them. In fact one can take just about any chart going up and compare it with another chart going up and then extrapolate an imminent crash.
The difference of course is that the Dow in 29 was exhibiting signs of a bubble, it had rallied almost 100% in just a little over a year.
By comparison the current Dow chart hasn’t even rallied 50% since the election almost a year and a half ago.
I’ve shown what to look for at market tops. Divergences in money flows signalling smart money is exiting. Divergences in the AD line. Usually the banks will start to diverge. Sentiment will be wildly bullish (ROBO ratio will be signalling extreme complacency). Modern market tops occur as megaphone patterns.
Then when the top does come investors will remain in denial for a long time expecting the market to reverse.
As I’ve shown in the video sentiment took a nose dive almost immediately. Nothing like what we see with bitcoin traders who despite all the evidence still can’t believe their magic beans aren’t going to grow again.
Trust me, when the top comes I will be one of the few who will be trying to get people to sell (like I was at the bitcoin top). You and everyone else will be telling me that stocks will never go down.
With highest respect Gary…. you also tried to get them to sell BTC at around $3,500 just before it rocket launched to $20,000. And at all points between. You didn’t call the top. You still owe me a burrito on that one 😉
Gary,
Are all of your reports for private members in video format?
I agree on gold being a no play, and if miners lead like they used to, gold could get smoked soon.
No. Most are written reports.
Thanks
The $USD may throw us a little bit of a curve ball here.
http://stockcharts.com/h-sc/ui?s=%24USD&p=W&st=1980-01-01&id=p63202322454&a=576957858&listNum=1
dessertsun999
Thank you for the informative chart and insight.
In contraposition, it is worth noticing that when the USD is heading down, after breaking support, it has printed more than two waves down. The current uptrend motion and RSI appear weak.
Thus it is not cast in concrete that USD will keep moving up, perhaps a bit more.
That the USD will affect negatively the miners is not cast in concrete either. They did not care about USD going down.
$UST2Y appears to have arrived to a plateau to wait for the March FOMC. Thus gold may not be hit by the yields in the short term.
The miners need to correct the drop, it was overdone.
By then USD may continue diving.
Of course, Gary wants to have all the aces on hand and is the right approach as the subs must trust him.
Many accounts depend on Gary’s wisdom.
He is also going for substantial runs and not for crumbs.
Of course the other side of the coin would be to miss a good run.
Exactly. Everybody is bearish about USD, while the chart looks bullish. USD looks good for now.
There are some similarities between the bubble of the ’29 and now.
We might be at point 4 in the ’29 chart above,
On the ’29 bubble, it had started at a plateau at 100 and peaked at 400.
It took 4 1/2 years to evolve. Point 3 is at about 300, a gain of 200%, and point 4 is about 10% lower.
If we set a plateau around 1000, the current SM peaked at 2900, or a gain of about 200%. I has been running 9 years. We would be at point 4 now after the 10% drop.
If the law of similarities holds, the SM could go to 4000. That is about 33% gain from the peak at 2900.
If we get again to 2900 one must ask the question, shall I take the risk to get 33% in view that a loss of 33% could easily take place.
Don’t think so? What is amazing was the decay of the crash of the ’29. Money evaporated, it crashed below the plateau of 100.
Beware of the law of similarities 🙂
The 1929 crash occurred because the Fed contracted the money supply by fifty percent. That will not happen now. The fundamental trigger to anticipate is the beginning of defaults involving the hundreds of trillions of dollars in ultra-high leveraged derivatives. When you start to see stories about derivative defaults, it might be time for your crash.
The last stages of the ’29 crash happened early in 1929 and to peak and fall in October.
Following on the similarities, it is suggested that till the end of spring we will be oscillating around 10%.
To take off by the summer and crash hard in October.
But the current bubble, if at all, is taking twice as much time, so it may linger till next October.
Gary, very nice comprehensive video. Thanks for making it available. Agree with most of it. As previously posted personally favor a strong rally, a trip south, long consolidation rather then a near term bubble scenario. Fear of missing out vs. fear of going lower with us for a while. Also hoping for a changing of the guard in market leadership from FANG to inflationary late cycle sectors (commodities). Doesn’t sound like you think we are there yet.
Good luck and keep it coming.
Hmmmm. In the past twenty years, the S&P 500 has never traded above its fifty month upper Bollinger band, until the past few months. While it has come back to touch the band, it is still stretched to the upside despite the correction.
Justsaying
Interesting that bull markets tend to hug the bollinger band all the way up in bull markets with occasional pullbacks to the 20 month moving average.
During the Nasdaq bubble price stayed above the Bollinger band for 5 months.
I said the FIFTY month Bollinger Band, not (if I have read the chart correctly), the twenty month.
Justsaying
Gold to $1269? I can easily see this happening. http://files.constantcontact.com/fc828692501/05ff508c-4341-45e9-bb66-0979cd5eee21.pdf
You know you can just post charts now instead of links?
Thanks, yes I see the choose file option now.
Thanks for this free weekend report
Gary, beings its Sunday I thought I would post some material to ponder on over the weekend;
I have been wondering lately just how many PM investors understand what is really going on. I am going copy and paste part of an article that was written 5 years ago that I saved because I wanted to follow the progression of events as they unfolded.
Right now, the US Dollar makes up 2/3rds of the worlds global reserve currency. This is because nearly every oil-exporting country in the world exclusively sells their oil in dollars, so nations are forced to hoard large amounts of the dollar.
There are two countries that don’t sell their oil in the dollar: Syria, and Iran.
If these two countries joined forces, got Venezuela on their side, maybe a few other countries, and then made an economic treaty with the BRICS nations, an acronym for Brazil, Russia, India, China, and South Africa, to buy their oil in a currency other than the US dollar, the economy would collapse
All countries in the world would send their massive hoards of the dollar back to the Fed in exchange for whichever currency replaces it. The value of the dollar would shrink dramatically and the Fed would be forced to take steps to shrink the money supply to stem massive inflation. The raising of the Federal Funds rate would mean that there would not be enough new loans created to pay off old loans (which is necessary, because there is always more debt in the economy than there is money, because money is created with interest attached, from the very beginning we are all indebted to a small cabal that sits behind the federal reserve). The defaulting of loans would lead to a chain reaction that would collapse the $700,000,000,000,000 derivatives market. In addition, the Fed wouldn’t be able to mindlessly pump money into the economy anymore such as with their current policy of quantitative easing.
In 2001, Iraq began selling their oil in the Euro. We invaded.
In 2010 Gaddafi proposed a new currency called the Gold Dinar to replace the dollar for oil sales. We bombed the shit out of his country and caused a regime change.
Syria moved away from the Dollar in 06 and Iran in 08. That is what this is all about. There are other geopolitical objectives, sure, such as the pipeline that Syria signed with Iran instead of the US friendly Qatar, but the Petrodollar is the king. It is literally the only reason the dollar and US economy is stable. The entirety of the Western financial elite need the Petrodollar system and they are willing to go to war and kill millions to defend it.
Some food for thought: how are they able to keep discussion about the petrodollar completely out of the mainstream media and politics? Hundreds, maybe thousands of people acting in concert to lie to the American people for another war. And they will do the same for Iran.
Juyst saying but…I found an interesting parallel between the YCL of NQ continuous contract in Feb 2016, and this one: they both have almost exactly the same length in price: 874 pts in 2016 and 879 pts now. If we would have a perfect parallel between those 2 dates (which is not mandatory by any “rule”), then prices would make a slightly higher high in the coming days/weeks, then correct again, slightly lower than the low of last week- but that, I think is unlikely if we just started the vertical phase. Still, almost exactly same correction envergure between 2 yearly or intermediate cycles tell me we are done here with this correction
The progression of events since this article;
Venezuela—- After announcing that Venezuela oil would be priced in Chinese Yuan the U.S. government has put severe economic sanctions on the country and the country is in a devastating hyperinflation as we speak. Large masses of Venezuela people have been leaving the country because they are starving. The maximum withdraw from an ATM machine has been 10,000 bolivars, the equivalent of about .05 cents in U.S. money.
Russia/China—– The two countries have agreed to use the Yuan to purchase oil. To eliminate any reservations in the world about China using their own currency to purchase oil the Yuan it will be backed
by gold from the Shanghai Gold Exchange for energy transactions so the currency truly is, “as good as gold.”
Iran; The war drums were beating loudly for quite some time on the premise of Iran creating Nuclear weapons but world pressure has stemmed military conflict up to now. Iran is trading oil in the Euros.
Arizona Senate Passes Bill To Allow Tax Payments In Bitcoin
“…sending a signal to everyone in the United States, and possibly throughout the world, that Arizona is going to be the place to be for blockchain and digital currency technology in the future.”
ZERO HEDGE feb 11
That out to drive demand sky high. Hahaha!!! I especially like how they claim it will make Arizona the center of the blockchain universe, and the whole world will know.
Lots of hot air from politicians trying to capitalize on the mania, but around 2 months too late as the bubble has popped. I think Arizona made gold and silver legal tender again, and to no effect, but the Hopium pipe is still lit and coming around again, bitcon to $1,000,000 by March!
The next time anybody whines about the banksters manipulating the COT’s and stealing peoples money look no farther than your own government if you live in the U.S. The United States government is willing to kill or starve untold millions of people to defend the U.S. currency to the bloody end. When we lose the privilege of being the worlds reserve currency life as you currently know it will no longer exist. There will be no reason to buy U.S. bonds that pay little to no interest. There will be no reason for the world to hold a huge float of U.S. dollars because goods & services will be transacted in something other than the dollar. In other words, there is no reason in the world why anybody will give us a free ride anymore. People better wake up and realize that the post dollar world will be unrecognizable for most Americans.
Well I think you may be just a little to bearish. To begin with if the reserve currency does change it’s not going to just switch to the euro or the yen or even the Yuan. At most the reserve will become a basket of currencies and the US dollar will make up the largest portion of that basket because we have the largest and most liquid bond market on the planet. In fact no other country is even vaguely close to the size needed for governments to park huge reserves in.
So the dollar isn’t going away anytime in the near future. I do think the dollar is entering a bear market, but based on history they have lasted around 7-8 years. So the really scary part of the bear is still several years away.
Gary, this is just a documentary of world events. I let the markets dictate my trading obviously but I am just trying to frame the economic landscape that we find ourselves in. As far as the immediate future goes I am waiting on the bond market. We have 2 trillion in bonds that are about to be financed at higher rates but that is just the very beginning. When the bond market breaks down everything else is going with it. That is where this whole thing is going to go sideways imo.
It would be interesting to know if Gary gives credit to this analysys:
https://spockm.com/
It is the silver/gold ratio vs SPX
Bob Hoye one of the better gold analyst. Unfortunately, tend to agree. The next gold bull lies down the road around the next corner, it’s business as usual.
At least Bitcon is not as bad as Davor, from $177 to under a penny in only 3 weeks. LOL!!!
https://www.zerohedge.com/news/2018-02-10/cryptocurrency-lender-davorcoin-defrauds-investors-out-millions
The suckers crying about their losses are priceless, they can´t believe a return of 48% per month wasn´t real. All the idiots have congregated in the magic bean space, soon it will be an embarrassment to admit you had anything to do with electronic tokens. I have never seen so many people get ripped off in so many ways as the token scheme.
Haters are gonna hate.
Want to listen to an interview of the person who accurately predicted the VIX blow-up and what he predicts next? Here you go: https://www.macrovoices.com/podcasts/MacroVoices-2018-02-08-Jared-Dillian.mp3
Start listening at 50:00
Enjoy, and if I helped you to preserve your capital – you’re welcome.
Byzantine meander to rationalize Bitcoin @ $25K June & $50K EOY……
Similar to creative approaches utilized by parents everywhere & everyday to get kids to eat their peas.
Nobody can predict a crash. Its impossible to call. There will be those who claim after the fact, ‘they called the last one’, but when you look at their trail of so called “calls”, they called the crash a 100 times. What they really did was, call it both ways. They just hid their ambiguity. The problem you have here and now, is that the risks of holding the S&P are so utterly high, and so many people are focused myopically on it, they are missing far better opportunities, and won’t see them until its far too late. The next bear market will be nothing like the prior bear markets. 1st, we have never witnessed this level of monetary printing in history ever. There is no precedent for this. People try to come up with analogies, but they can’t. And they refuse to believe that they can’t find anything like it. Second, we have never seen ever, these levels of debt in nearly every single country or area of economic activity. Everyone has borrowed so far into the future at such gargantuan levels, to produce so many over-valued equities, that its going to take decades to ever repair it. The next bear market will not only be the worst in everyone’s lifetime, not from any crash that takes, but from the lack of appearance of crashing. You won’t even know your capital is being destroyed on a daily and hourly basis. You will see oscillations, that occassionally give the appearance of stocks going down, but with the way indexes are made these days, and the perpetual destruction of capital and issuance of debt, just being in the market will create untold losses for you until its too late. You can get a more localized feel for this by being in 3x ETF’s. They are simply leverage bets on the future, and compressing time. Anyone attempting to keep you in this market, and then claiming they will know when to tell you to get out, is merely a false prophet, who will later repent when its far too late and you have lost most of your wealth. Its an age old strategy and before there was the internet, there were letter writers doing the same thing. The worst part is they even actually believe in their own sooth-saying, and simultaneously castigate others. You are going to lose at least a decade of wealth, by being in the S&P 500, or in the Dow. Worse you will miss out on much greater opportunities that are not even being discussed.
I will leave you with this. The only thing that has kept these markets propped, period, has been QE. There has continued to be $2.5 trillion in QE (that we know of, and likely more that is unknown), every single year for the past 3 years, and even more QE per year before that. Most of that has been largely destroyed, with the net outcome, being an additional $26 trillion of new debt, JUST in the past 2 years. Think about that for 1 moment. Only $5.0 trillion in QE, but $26 trillion in new debt. Total global debt is now $233 trillion and growing. It could be $245 trillion, and the number keeps haven’t caught up with reality.
Just was just to keep these markets propped, and in fact, the NYSE only represents $19 trillion in value, and thats 27% of ALL global equity value. The entire globe is losing the race. Worse, is that $233 trillion in debt, has the lowest interests rates ever in the history of the planet. Rates only have one way to go, and the debt only has one way to go: DEFault and total destruction. It will not take much debt destruction at all, to completely wipe out capitalization of every stock on the planet, because these stocks are directly hinged to debt in every single case. There are so few companies of any meaningful size, who have zero debt, and very very very very few individuals who have zero debt. It will in fact only take a slowing of the acceleration of the issuance of debt. Note the word I’m using- acceleration. That is key. Because since 2009, its the rate of issuance of debt that has kept any semblance of the appearance of ‘growth’ keeping markets propped. So not just new credit issuance (or just more debt), but the debt had to be issued at ever faster and faster rates to keep this jig up.
So what greater fool is going to keep a) issuing new debt, knowing the odds of re-payment are between zero and none, and b) what greater fool is actually going to buy that debt ?
Stocks are merely a symptom of the insane levels of debt issuance, and rate of debt issuance. I’ll give you one last local example. My own state, Illinois, has more than $130 billion in debt. They had $15 billion in outstanding and lapsed bills that had not been paid, and they raised taxes to cover the woefully underfunded pensions, which now are only 35% funded. So what did they do ? They issued more debt (at a whopping 9% interest rate), to pay on part of the outstanding bills, that went unpaid, because they could not keep up with the pension payments, and could not keep up with debt payments, and again this is occurring with super low interest rates. Those outstanding bills were from private companies or even public companies who are trying to stay ‘whole’. Many have gone out of business, and so the state just hopes more keep going out of business, so they don’t have to pay the full $15 billion. The raters like Moody’s and S&P, should have rated this state, an F- years ago, and declared it worse than 3rd world junk, but no, they are complicit in allowing more debt to be issued. No business should do business for service to provide to Illinois unless they are paid in full upfront. Multiply Illinois times hundreds of population centers around the world, that are just like this, to get your $233 trillion in global debt. If you think stocks are worth holding in this environment, then I pity your children, and families. It takes an ego the size of the Empire State building to say you can predict when to get out of stocks, and when and how you can call a top, and get you out before the next crash. The ‘crash’ is more than likely underway folks, may be very subtle, and has been, and you don’t even realize it, and you or big ego’s will argue every which way to Sunday, that there is no crash of your wealth underway, and that you can get out in time. Good luck with that one.
wow…
Bravo…..I was hoping to start a serious dialog about the current state of the grand illusion. I’m glad to see somebody participate. Today is Sunday, no immediate trading concerns……just a time for reflection as to where the hell we are on the map!
TLDR
https://cointelegraph.com/news/us-arizona-senate-passes-bill-to-allow-tax-payments-in-bitcoin
Apparently the State of Arizona is a bit more bullish than some about bitcoin and cryptos.
You failed to mention this;
The Arizona bill, which advanced in a 4-2 vote by a House committee Monday, states that gold and silver should be legal currency not subject to tax or regulation as property.
I was on Netflix a couple of days ago looking around for something that looked good to watch. I came across a title, “Banking On Bitcoin”. It is an hour and twenty three minute video. All I can say is Wow! There is a lot more to Bitcoin than I was aware of, it is quite the eye opener. It is worth the time it takes to watch it. It is also on YouTube but you have to pay to see it.
Careful BBK !
That’s how it starts. 😉
Gary, thanks for making the video public. I was wondering what happened to your previous hypothesis that with the YCL other things would bottom at the same time such as the euro, oil and a reversal in the yen. The dollar is sitting exactly at the megaphone trend line resistance right now, wouldn’t you expect a reversal around here before forming a double bottom at the bear market trendline in the euro, just like the double bottom that was possibly formed in the yen on Friday?
I’ve mentioned a few times on this blog how I like to use AREAS OF CONFLUENCE to time a possible ENTRY and/or EXIT, using a combination of Support/Resistance, Channel Trendlines, Pivot points and Fibonacci Levels. This is not an ‘exact’ science by the way but 9 times out of 10 everything lines up nicely, especially if Sentiment and/or Momentum is in your favour.
Coincidence? Or psychology..? I’ll let you decide.
OIL UPDATE — Crude bounced off the 100EMA on Friday (didn’t quite make it to the 100DMA) which coincidently lines up with a prior channel trendline. A bounce back up to Resistance which also coincides with a channel trendline and the 50%Fib is likely next week.
I exited my SHORT on Friday and picked up some JNUG, but will reload if the bounce reaches my target 🙂
You know you drew the same line that I drew. I’m totally reloading shorts on oil if I can get my hand on it. Probably coinciding with a short on the euro when it bottoms on the dollar bear market trendline. Probably the reason why gold won’t rally during that time will be yen weakness is my guess.
Did I, Lol?! Sorry I didn’t notice.. Just typing away 🙂
In my opinion TA is self fulfilling. It works because enough traders are seeing the same thing and acting upon it.
This is somewhat true, but in this case we are biased for the reason that the COT in the euro, dollar suggest that there needs to be a reduction in the bias of traders before another rally occurs in both. Them coinciding at the same just seems to make sense. I have no particular macro reason for this to occur, just based upon sentiment and TA gives some guess as to what might be a good entrance (upon a break of resistance of course).
This is why I keep telling people to spend time understanding “People Psychology” instead of wasting energy trying to find reason through the Fundamentals.
I can’t say this enough.. The brain needs reason but the underlying “Mover & Shaker” is the emotional undercurrent of the retail trader — forever and always.
I wouldn’t say that it’s necessary based upon people psychology. I am an engineer by training and realize that investing is a zero sum game where someone must lose money for someone else to earn money. I find the concept of dumb money giving smart money just something that makes sense, and that it is a lot easier to take a little money from a lot of people than a lot of money from a few people (not that the latter doesn’t happen from time to time).
Gary,
For your information and for this board, Chris Ciovacco in his latest message as of the market close on Friday 02/09/2018 says that a very important level on the S&P is 2558. If S&P closes below that level on Friday 02/16/2018, then he will make significant adjustments to protect capital in the accounts that he manages. However, he feels that this down move is a correction in a bull market. He also says it may take two months or more to find a bottom.
http://xtrends.org/?p=7438
Interesting analysis. He pretty well forecast this crash 2 weeks before. He says put/call ratio is still much lower than after most sig corrections implying that a lot of people are not fearful..I dont sense any real panic either.
Everyone and their dog expects a bounce next week..the contrarian in me says one more drop of 5-10 percent and tht will trigger the real fear.
I suspect he called it two weeks before that, and two weeks before that, and two weeks before that…
He made some very good points. I agree with him regarding the lack of fear. Too many are overly confident that this recent market event was a flash in the pan and that things will return to “normal” soon.
The dumb money is panicking just like they always do at the bottom of corrections.
The ones that aren’t panicking are the smart money, the traders that know what they are doing and don’t trade emotionally.
Smart money can still go higher and dumb money lower..
THIS x 1,000,000.
Past years are LITTERED with “no way sm keeps going up” types.
Everything the banks/Fed/gov, etc is aligned with keeping the sm up.
Everything.
Objective view here because I’m on the Mayflower. I think both SM & Bitcoin are gonna go Ape**** this year.
Gary disagrees on the BTC part but as far as SM goes he has been VERY prescient throughout.
We can still go a fair bit lower compared to other bottoms on that one..
http://www.wallstreetwindow.com/2018/02/one-really-bad-thing-stock-market-now-mike-swanson-02-09-2018/
Here is another interesting take..investors still not scared..my impression again is that everyone is so used to buying the dip that they expect the market to just take off..will be interesting to watch how the next montn or two unfolds. Perhaps it means that investors will throw caution to the wind and just bid stocks up again and then we have a huge crash in the fall..
I guess you didn’t see the smart money – dumb money confidence charts
Great update, Garry. Thank you.
I’m nor bullish, nor bearish, therefore I expect a sideways movement for now. Consolidation.
Gary,
Thank you; this Weekend Report video was exceptionally detailed and great presentation.
Reminded me of a graduate school course in college. I am sure the thinking troops appreciate it and the dumb money will do whatever they are emotional about regardless.
Question on stocks: SPX has tagged the 12-mps MA; do you think DJIA(around 22,800) and NASDAQ(around 6500) should also do the same before the fat correction lady sings the final aria?
I see Oil exactly as you described and I have been saying that $49 beckons and is pulling oil down.
Danielle DiMartino thinks we are in a period of inflation and deflation co-existing in different sectors of economy and finance due to the distortions caused by the QE saga. Quite odd.
The Dow and Nasdaq have been stronger than the SPX. They may not have to tag the 12 MMA.
Gary drew a different line, but I realized when I was looking at the chart that the low coincided with another line… the uptrend since 2016
Dazed, don’t fool yourself. You have intentionally draw a line that pass through the candle rather than touching the low…
You must have more pixels than me 🙂 jk I’m on a 4k screen, but I suppose I drew that sloppily.
Chart
THIS may start a huge rally Monday!
Trump to Unveil $1.5 Trillion Infrastructure Plan Monday
Was/Is this manufactured Correction?
IMF Chief Lagarde: Global Markets Seeing ‘Necessary Corrections’
Read Full Article Here Newsmax.com
Mohammad El-Erian: Correction can put markets on a firmer footing.
https://www.newsmax.com/finance/mohamedelerian/things-know-market-selloff/2018/02/10/id/842620/
Gary, you make a good case and all seem 100% to follow looking at other risk in the market. As we all know that the market is not today to past history considering bank integration of money flow with all the banks and debt with all on the brink considering the leveraged derivatives. One key would be the money flow or lack.
Lynette Zang chief market strategist highlight one thing that was key to stability that was not as important in the past as now, in the past which can be key is money lending between banks indicating the banks confidence in others to lend. This brings us to liquidity and the stress on the banks to history at this point. 3.5-3.8% drop at this point can bring insolvency in banks like Deutsche bank or JP Morgan.
Now since 3 January the banks trust in lending to each other dropped lower than before 1980!!! The banks are clever money? So theis would have a mojor Liquidity effect. But here is a huge setup for a domino effect if inter-bank loans drop and thee have no trust of banks honoring. Liquidity is on the brink for all banks before bankruptcy!! So Gary considering charts then this could be a blackswan event that would possibly make data relevant as you have said in the past. Chart reflect the past. But we in a new ball game. The other point is that the is money outflow is not reflecting where it is flowing into?
THE BANKS ARE GETTING OUT FIRST: WHERE DID ALL OUR MONEY GO? | Lynette Zang
https://www.youtube.com/watch?v=IRTOCNqcX_0
The 26 of March Chinese stock exchange are going live with GOLD, YUAN, OIL interchange on the market with futures, being the biggest buyer of OIL in the world now. The reserve status of the petrodollar which guaranteed the dollar as reserve currency (and demand of keeping dollars as a reserve) through OPEC would start to disappear and an the escalation in devaluation of the dollar by demand will rocket. Russia is included in that game, which is the demise of the dollar and no basket of currency will have an influence on that market with GOLD introduced back as a key currency basis. The oil in middle east, Yemen and all destabilization wars is due to this fact. This $ bear and all relevant info can be much more in the short term and a guarantee of the medium term chaos to escalate from this possible SM drop but the writing is on the wall as all see it for the dollar. So bounces might be short lived in the dollar
Lynette Zhang owns a mail order gold & silver coin outfit.
I DO think that’s quaint & nostalgic etc….,
But her credibility like other hucksters in that arena is equivalent to that of chicken McNuggets. The veracity of both…….is extremely dubious.
“Lynette Zhang owns a mail order gold & silver coin outfit.
I DO think that’s quaint & nostalgic etc….,
But her credibility like other hucksters in that arena is equivalent to that of chicken McNuggets. The veracity of both…….is extremely dubious.”
She doesn’t do any business at all. You’d have to be an absolute fool to buy any bullion coins from her when you can go to one of the bigger bullion houses and cut a deal to pay much less of a premium over spot.
Also, with a wire transfer or an ACH I can have the coins in under 5 days. It will take you a month to get the coins with her.
Her selling gold is completely symbolic.
https://mobile.twitter.com/itmtrading_zang?lang=en
LMAO.
Symbolic like a mafia goon who wears a pinky ring perhaps?
Forgive me for being so reality-based.
Now how about looking at facts she present and comment on that with some intelligent comments
Worth noting and concerning.
There aren´t any hucksters in the BitCON scam, that´s for sure. LOL!!!!!
One thing bitcon is good for is now you can get scammed across borders and lose everything without even knowing who took your money, like we see happen each week with a new exchange, hackers, etc.
Because of ROI.
I’m similarly NOT curious as to what JP Morgan has to say about silver.
Where I’m from & where I’m going context is king.
This is universal. It’s not just because I’m on…….
The Mayflower.
Hucksters selling gold coins to people that are up in years with their “scary” tales are akin to lifeguards throwing anchors to those drowning in the deep.
Lynette Zhang is zerohedge for people that don’t have internet.
Americano is getting vocal again, must be time for bitcon to take another leg down. Blind as a bat, trying to drum up demand for his magic beans that were developed to ease transactions, as if the world didn´t already have electronic money changing hands. When I wire money from one brokerage account to another, it now shows up within 2 hours, zero transaction fees, too. And there is SIPC protection as well, see how much money the Mt Gox victims get back.
Americano would be best served not trying to attack gold to make his bitcon argument, bc bitcon fails terribly in areas where gold shines. He is so narrow minded he thinks it is gold he is competing against, totally ignoring all the direct competition bitcon faces from competeing electronic tokens. Meanwhile, they aren´t discovering new commodities daily. It is becoming funny to watch him go broke while cheering all the way to zero. I was correct about $6K bitcon before a bounce, and I will be correct that bitcon will approach zero.
If bitcon were a currency as the bulls purport, a currency still in not an investment, you don´t invest in dollars, or yen for returns. If somebody wanted to make money off blockchain technology, it should be done through the stocks in the group. What kind of currency loses 70% of it´s value in a month? Currencies like the Venezuelan Boliver or Zimbabwe toilet paper.
Somehow we are supposed to think a guy who got it all wrong to the point he is scarred from 2011 now has the answer key, when he chased the last bubble to catastrophic losses. And now he says bitcon with TRIPLE by June, after it´s bubble has collapsed and it is very deep into bear market returns. His predictions weren´t changed in the least after the collapse surprised him, a sure sign of denial. No fool like an old fool!
Venmo does it instantly. Money fransfer
Unless there is a big reversal in the futures before the open we are going to form a swing low today.
¨Cryptos have been a wonderful speculation for the few that managed to cash in. But for many it has been a disastrous Ponzi scheme that will end in tears. Cryptos have nothing to do with real investments and even less to do with wealth preservation. There is nothing wrong with having a small flutter in a speculative instrument. Sadly though, many buyers of cryptos have been tempted to buy on credit and are sitting on major losses.¨- Egon von Greyerz
And some are all-in on these ¨tokens¨, plowing their retirement funds into magic, electronic beans. Wise move.
This is an aggregate graph of about 6000 stocks accross several indices and it shows a hammer pattern on Friday. So if we get a violent rally today in the morning, I think we’re good.
All that happened was a retest of the breakout.
Agreed! Am going to buy today.
Things could still get a bit woobly depending on the inlation figures to be released on Tuesday for the UK and Wednesday for the US.
And it´s feeling like we might see an early morning, one last time, flush in stocks which could be bought.
The euro still needs to break this trend line. I would hold off on buying metals until the daily euro cycle bottoms (dollar cycle tops).
Good morning,
Hopefully we have a great day today.
There is now a divergence on the TSI as well as one on the NYMO.
There was also a divergence on the VIX during Thursdays and Friday’s lower low.
Daily divergence as well with RSI(5), which usually marks a reversal
If they don´t sell off stocks soon, looks like we´re home free!
There will be an attempt to sell the rally this morning. If we come back and make a higher high later today then the odds are high the ICL is finished.
Which would also be confirmation that the YCL low is in, correct?
Yes. All cycles bottom together. So when an ICL bottoms it is also a YCL.
If the bottom is in on SPY you may still not get the rocket launch out of it. It could chop up and down to build a base like the chart you did some time ago.
Minority opinion: Bull not dead but the high of year lies behind us a long correction ahead. Perhaps the less skin one has in the game the happy you will be. Going to wear people out.
It’s too late in the intermediate cycle for that. We are on week 25.
If we were on week 15 I would agree with you.
Hope you’re right, for me less is best.
I had 11.5K JNUG shares left overnite.
Could not take the heat to leave them on the table.
Despite my bullishness, I see a lot of weakness in JNUG.
Indeed it can further dive.
Just left 2K JNUG shares on the table.
And 3K GDX shares,
We will see.
Good trading to all.
Is it important for us to know how many shares you own?
I think Gary is right. We’re gonna get a swing low and continue.
We’re getting the selling of the rally as expected. If we turn and take out the morning highs then the odds are good the correction is over.
Too chicken.
Sold the remaining 2K JNUG shares.
Go JNUG. Nice to have a day where I’m not staring into the abyss. There will be good days and bad days, but Gold is destined to go up in 2018. I hold because I’m not smart enough to know in advance which days will be up and which days will be down. Only guaranteed way to not miss out on any gains is to hold. It’s not glamorous and it’s not easy on the emotions, but it works.
Amen! lol
The NQ futures need to get over the 200 MA on the 30 minute bar chart, keeps pushing up against it and over, but coming back below. It should be off to the races after that, the morning selling is behind us.
So, question for those who are smarter than me: Any idea when we can expect the bid/ask spreads on options to narrow back up a bit? Is this just a feature of the return of volatility to the market? Some of these spreads are huge. TIA.
For the longer term in a retirement account I got back to XLE with 460 shares.
I also added 1K GDX shares for a total of 4K GDX shares.
The SM run has been going for 9 years.
It just simply does not fit that the correction will last one week.
Likely many weeks.
Stock market is going up since 1900’s
So what ??
Wrong.
NQ handily above that 200 MA on the 30 minute chart now, nothing but clear skies ahead, and nothing to do but sit back and watch the free money roll in!!! 🙂
Monthly breakout/retest.
Good analysis as usual from David Frost. He still thinks we have some lower lowers in the next few days/ weeks before turning and going higher. Goes over some details as to why he believes that.
https://www.youtube.com/watch?v=2zkxUwI9v2M
Dead cat bounce in the miners, or something more? Its looking pretty powerful at the moment.
25000 Dow resistance
Close Over it, and it’s the “All Clear” signal.
NASDAQ 7000 same as above.
Oil could go to 55 on 4th wave down still.
Gold’s revenge today.
Today could become a +900 Dow points day.
Trump’s Infrastructure plan also fueled this and helped stocks.
Despite the current JNUG run to $13.75 it is still weak.
Gold is at $125.75.
JNUG should be around $24.
The chart JNUG/GDXJ shows the beating of JNUG.
Of note is that the 50 and 200 MAs are about to cross.
We’ve made the higher high.
Odds are now good the bottom occurred on Friday.
A higher high in …..?
The stock indexes.
YEs. But not looking like a slingshot will happen. It may grind out for the rest of month
It´s easy money now!
We are having one of those everything is up days. Bonds, gold, Stock market all up nicely. SM ripping higher in a big hurry. I think we have more downside coming but what do I know?
Nice up day in QQQ and our orig Quest is down pretty big today, crazy how they play with the options!
The volatility premium is coming out of the options.
Ok, just bought 3000 LABD @ 3.64. I think this rally is way over done. The bios, in particular, seem ripe for more down side.
I would not be shorting anything at 56 days into a daily cycle, with a divergence in the TSI and the NYMO. The risk is too great that the bottom has formed.
And let me remind everyone that the first 10-18 days out of an ICL are typically extremely powerful, often gaining 6-8%.
This particular ICL really stretched sentiment and price far to the downside. That’s exactly what is needed to slingshot back in the other direction. Everyone gets on the wrong side of the market and then they get caught when the secular trend resumes and it creates a huge short squeeze.
The NDX has already gained 6% off the bottom and this is only day 2.
We could see a 10%-15% move during the first 10-18 days of this IC.
So your saying NDX has only maybe 5% or so to go before it tops
“during the first 10-18 days of this IC”
10,000 is going to be a piece of cake. Recovering the all time highs will likely occur in the first 10-18 days of this new intermediate cycle. The cycle itself should continue to rally for 12-20 weeks before topping.
JJ: Why the Biotechs? I don’t disagree, just wondering why you think they are going to fall.
The bottom is in barring some kind of news event.
Without some kind of news related catalyst we won’t be going back down.
If this turns into the slingshot like I think it will, then 10,000 before July will be a piece of cake.
A slingshot will confirm to every retail trader that there is no risk and that will start the buying panic that drives a bubble.
Slingshot, may be. July is probably it. Market plays its movie in time and space. No point in speculating about the slingshot high for tqqq. We will know when we get there. tqqq enters trending mode, minor dips notwithstanding. Short term bounce in gld and its tango partners? Bearish posts missing today.
Its going to need to sling shot, since 10,000 is still a large percentage gap! I’m still feeling pretty good about the bet.
The inverse volatility ETFs have taken a big hit and are not coming back in a hurry. What a farce.
I don’t know why you think this is a farce. I showed you how late it is in the intermediate cycle. I showed you the divergence in the McClellan oscillator. I showed you that dumb money was all piling onto the short side of the market.
Classic signs of an impending bottom.
I was referring to the inverse volatility ETFs being a farce. They have no intrinsic value what so ever.
There is plenty of risk. The retail investors didn’t have enough time to get scared. They are diving into this rally with both feet. My broker (ITRADE) tells me they have been swamped by applications for new accounts.
You need to take another look at the dumb money confidence chart.
Also, vix does not shoot up to 50 every other day. We have to go back all the way to 2015 to see a vix reading of 53.
I’ll tell you who is nervous about their humongous portfolio of American stocks: the Swiss Bank.
most anticipated bounce and market bottom in history????????????
Seems the majority are the smart money
You also need to take another look at the dumb money confidence chart.
Nice rally in gold stocks today but it’s hard to get excited considering how many times they have failed. Maybe this time…
Don,
GLD is in the timing band for a DCL
gary why is it that I get a message at bottom of post saying click to edit with a timer
It means you have a certain amount of time to edit your comment if you wish to make a correction.
ok. that’s interesting. enough time to change your mind on a market call LOL
Is your post visible on the board during this hour.
thanks Gary
Gary,
Could we put the NASDAQ 10,000 mantra into DJIA terms?
If NASDAQ 7000 is DJIA 24, 800
Then NASDAQ 10,000 is DJIA 35,500 ?
If NASDAQ manages to close above 7000 for a couple of sessions, it is the “All Clear” signal.
SAME with DJIA above 25,000.
NYSE volume is 36% below Friday’s level
Nasdaq volume is 33% below Friday’s level
Think it was an analyst/ analysts on Puplava’s podcast and maybe Gary too, who said historically rallies often start on seemingly low volume, FWIW.
Heavy volume is usually a good sign, but it’s not an absolute requirement. I often like to see a very heavy volume day at the exact bottom as a sign that the banks just entered positions. But if it doesn’t occur I’m not going to assume the rally will fail quickly. If sentiment and cycles are lined up then volume becomes a very very distant third confirming tool. Certainly not anything that would cause me to go against the other two more dependable tools.
Lack of volume is no excuse not to trade a good cycle setup. Many rallies start and progress on low volume. Just because a rally doesn’t meet an outdated requirement isn’t confirmation that the rally will fail quickly or that one can’t make money on the rally. The recent rally in miners was a good example. It didn’t meet the strong volume requirements but it still produced a respectable 20%+ rally.
Bluebellkid: I noted the low volume also but we have seen plenty of sustained low volume rallies. Maybe it’s time to re-evaluate that old school thinking about the the necessity to have high volume to support market advancement. That hasn’t been the case for years.
It’s not low volume it is just tracking a lot lower than Friday and the confirmations that tend to be more successful have higher volume than the trading day before not high volume just higher than Friday. And research shows that confirmations that are more successful come 4 – 7 days later. Doesn’t mean this cant work.
Regret to say IBD methodology is tedious and cumbersome. There are other methods which are more effective. Price is king and rate of price rise/fall is the key. Volume is just secondary. In spite of all the hoopla about their IBD 50 and IBD 20 high growth list, I have not seen many instances where their single stock plays have done consistently better than tqqq or ndx components like nvda. Their leader board and swing trades are not that great either. Sampled some of their free subscriptions, but had to terminate well before the expiration date, as it is so time consuming and the output is not commensurate with the input. All that one needs is a subscription to stock charts and the ability to use their scan engine effectively. Plus, the ability to use effectively some of the tools given in books by Alexander Elder, Sam Weinstein and others. It is not practical to trade the market based entirely on some body else’s opinion without individual due diligence . Just my experience.
It has taken me years to learn all that I have from IBD and you learned it all within the trial subscription period – WOW! you are good or maybe I’m just slow. NVDA by the way is number 7 on IBD’s Top 50 stocks list. IBD is a very usual tool, and they teach you how markets work based upon 50 years of computer generated research and not just their opinion. It has served me well.
The problem I have with that is that we no longer have the same kind of environment that existed over the last 50 years. Markets evolve.
That means what used to work in the past often doesn’t work in our modern markets. One has to be able to adapt to changing market environments. If that means jettisoning the tools and strategies that used to work in the past and adopting new and different strategies Then so be it. Those that can adapt the quickest survive. Those that can’t go extinct. This is just the nature of the world. Everything changes, and it’s been this way for the last 3 1/2 billion years.
Uh oh
This thing is falling into the close…
Double top at 24,750 and down it went…
NAZ closed below 7000
We are not out of the woods yet..
Looks like just a retest of the morning spike. I see nothing scary. Mcclellan oscillator looks good, high yield is up big.
That was an encouraging day if you own some Jr. miners. When all the guru’s turn bearish, buy. Prefer gold, oil and industrial metals over the general market. As previously posted think we’re in for a slog ie. difficult times. Inflation
Nice enough close. The swing looks good in the SM.
Close was weak a bit…luke warm.
Naz could not close above 7000.
We are not out of the woods yet.
The major stock indexes still have to prove themselves that a new uptrend is in the works. Nasdaq and NYSE volume was lower from Friday’s above-average levels. The put/call volume ratio shot up to 1.26. Readings above 1.15 indicate excessive fear, and excessive fear has been seen at many market bottoms in the past. The Accumulation/Distribution Rating for the DOW is down to E, the worst possible. A number of distribution days from Jan. 30 through Feb. 8 (four higher-volume declines with percentage declines ranging from 1.1% to 4.1%) were indicative of heavy institutional selling that will most likely take some time to repair.
A look back at the Nasdaq in August 2015 when it crashed more than 15% in five trading sessions offers some perspective. It showed two straight big gains on Aug. 26-27, but the index eventually met with resistance at the 50-day moving average. After another pullback, the index rallied above the 50-day line, resulting in a short-term tradable rally that was eventually met with more selling.
The point is that when the market goes through bouts of institutional selling — not mild institutional selling but heavy institutional selling — it usually takes some time for the selling to run its course. When institutional buyers start coming in from the sidelines again, that’s when you’ll see chart setups and new leaders emerge.
interesting comparison blue with 2015 period. Particularly as a few months later there was a deeper retest before things got going
The glaring difference of course is that 2015/16 was a multi-year cycle low. That kind of action is to be expected at that degree cycle decline.
It’s way too early for the next multi-year cycle low so it’s not rational to expect this correction to behave the same way the 2015 correction behaved.
We have the setup right now to trigger the parabolic phase of a bubble. We have a lot of new mom and pop traders coming into the market. Many bought at the recent top and got knocked out for a loss during the ICL. If price recovers the all-time highs very quickly (by the Humphrey Hawkins address at the end of the month), then it’s going to signal to these investors that there really isn’t any risk in the market. That has the potential to unleash a wave of unsophisticated buying. The kind of buying panic where traders are willing to get in at any price no matter how wide the spreads. That’s what drove the bitcoin bubble, and the same mentality of no perceived risk will drive a stock market bubble as well.
I’ve been warning that we are likely setting up a slingshot move as the quick sharp correction got everyone bearish and on the wrong side of the market. This is exactly what we needed to create the conditions for a final parabola.
Exactly and something to be aware of. I don’t think we are out of the woods by any means. I do think a tradable rally is presenting itself. The Nasdaq and DOW didn’t make it to the 200 day but the S&P 500 did and rallied off that level. That in itself is a good sign. I believe we can at least get back to the 50 day. What happens after that is anyone’s guess. The markets have taken a pretty good blow and to think all the selling is done just like that doesn’t seem likely.
So what positions have you taken, considering the above?
Another good sign that the bottom has probably been struck. Dumb money continues to get more bearish even after a reversal and follow through.
On the other hand smart money continues to become more confident. Do you think your odds of making money are better by following the banks and sophisticated hedge funds that know this business in and out? Or do you think it’s better to follow mom and pop traders that have no idea how the markets work and just let their emotions dictate how they trade?
Haha, I thought all the dumb money already went into bitcon.
Nope — That’s the “super duper dumb money” which is a whole other kind of indicator 🙂
Gary, I was wondering what your take is on this. Going through the history of events for this indicator, i noticed that a.) There was one time where this was wrong (when AIG collapsed and the market started really dumping), and b.) That the peak in the smart/dumb money confidence difference normally peaks on the bottom. However, this time this difference is continuing to expand even after what looked like a tradeable bottom which is particularly odd.
WOBBLY CLOSE TODAY IN STOCKS TOWARDS TH END OF TRADING
Wanted to sell UDOW after-hour trading but I missed the window!
Like I said today too, I did not like the way it closed today, was behaving wobbly in last 30 mins of trade and then it closed under 7000 on NAZ after being above it half of the day. Not reassuring.
There is just not enough pain yet, this has more to go on the downside it seems.
Will most likely watch tomorrow’s opening and liquidate UDOW on any sign of tip toeing or hesitancy in stocks like today’s closing was.
Nobody pretended that it would go up every in a straight line. It might take a lot of days before the trend switch back to strong bullish trend. I tend to think a few days before we reach 25200 dow jones, a small pushback, 1-2 more week to reach ATH, a small pushback then a breakout. Probably 3-4 weeks.
If we close strongly above 25,000 Dow and 7,000 NAZ; it will be the “All Clear” signal.