18 thoughts on “CHART OF THE DAY

  1. M.D.Cov

    Gary the US Dollar is about to do a “head and shoulder’s” on us and on the cusp of rolling over HOWEVER one can relate the opposite to your subject topic at hand but again can the obvious really be THE obvious for both?

  2. Don Mclean

    Gary, you are way to confident that the stock market is on the cusp of a strong move up to new highs. You are not alone in your conclusions and that is worrisome. Also, notably absent from the media is talk of the possibility that the current correction will lead to a significant stock market decline. All eyes are on the falling oil and Russia’s implosion while the S&P continues to punch one so called areas of support.

    1. gary Post author

      Actually I’m again seeing the perma bears out calling a top again and crash. The same as in Oct. I said this would happen before the correction even started. I knew the perma bears would again start calling a top.

      Intermediate degree sentiment has quickly dropped back to levels almost equal to what we saw in Oct.

      As I have pointed out before that’s not typically how bull markets top. They top when complacency becomes so great that corrections no longer cause any fear. The correction in Oct. and now this little 5% correction both are generating huge amount s of fear and doing it very quickly.

  3. Bob UK

    Gary, I don’t think that cycles, waves, charts or anything else can dictate the price of oil right now – it is a purely geopolitical high-stake game going on with the oil price.

    The price of oil is clearly being used as a weapon to bring Putin to heel or even to his knees. This is clearly orchestrated by the US and the Saudis.

    Even if it was not geopolitical in nature the Arab mindset is all about face and not losing faith – the Arabs are the Klingons of the planet 🙂 They deliberate and take time to make such decisions.

    Having taken the decision to crash the oil price they aren’t suddenly going to turn around and go back on their words just a couple of weeks later.

    IMPO we will get closer to 50 bucks and perhaps break down below it before this is all over.

    Of course, I could be completely wrong 🙂

    1. Roy

      For what it is worth (which is exactly what you are paying for it), I think you are exactly right on all counts, Bob. Oil right now is not any natural market move. Certainly the price will “cycle” in the sense that it will go up some, then down some, then back up, etc. It will find some floor. But the price of that floor and the amount of time it stays there will be determined by powerful political forces, not by cycle theory or any line drawn on a chart. This is about breaking Russia.

      1. CountOfMeltedCrisco

        “This is about breaking Russia”. Ever opened a history book in your entire life, there, Roy? NO ONE “breaks” Russia. Or were those little excursions by Napoleon and Hitler really victories cleverly disguised as defeats?
        Putin – backed by his new Best Friend Forever China – has crafted a trap worthy of one of the Russian chess Grandmasters, and the West – or, rather, the SockPuppet in the White House – has fallen right into it.

    2. gary Post author

      You are correct on that one. Oil went past the normal intermediate bottom timing bands months ago. We are in uncharted waters.

  4. Bruce

    Gary, I’m sure you read Jason’s work on nasty crude selloffs and their eventual rebounds. Basically to summarize, it’s a messy months-long affair with no sustainable V rebounds.

    1. gary Post author

      To be fair there are only two examples and it’s hard to draw any conclusions from only two examples. If Russia were to cave on the US demands and OPEC rewarded them with an immediate emergency production cut we would likely see oil launch $10 higher overnight. The market is primed it just needs a spark to set it off.

  5. arthurk

    Gary, I appreciate your analysis and you are certainly correct as much as anyone else (except $100 oil two weeks ago). I remain basically a fundamental analyst.

    I agree that short-term bearishness is over-done but do not think that the 10% rise in dollar the past 6 months, mostly in Q4, is fully reflected in earnings expectations. Oct selloff was probably due to pre-announcement earnings revisions lower and the late Oct rally due to beating lower estimates. But Jan will see full extent of dollar strength on earnings, so rough Q1 for prices.

    Conclusion, rally into early Jan SPX 2050+, but selloff to Mar-Apr (possible 15% to retest Oct lows), then strong rally as benefits to lower oil prices are seen in economy.

    1. TenYear

      Good points.

      I don’t think the Fed can raise rates at least for another year. I think we are just seeing the deflationary event unfold as a result of the QE ending. I think it is worse than expected by the Fed and that they are more likely to restart QE of some kind rather than raise rates. I keep hearing all of these people saying the Fed needs to raise rates. I don’t get it. I don’t think they can.

      It could be a rough start to the year. The dollar strength is not that surprising but what is surprising is that it took until this year for it to gain strength. Given these situations, I see nothing but pain in the PM market continuing. Unless I’m wrong about the i rates which could trigger a large rally in that sector. But commodities, inflation data, and almost everything still point to deflation.

  6. MMP

    All the garbage on the financial media about the Feds raising rates is just to keep investor’s hopes up; to give the illusion that things will return to normal. Once the market starts going South from bad data, QE4 will be announced. We may see a rally in the short term when that’s announced but once reality sets in about how bad things really are markets will tank.

  7. Roy

    Why is stock charts showing a SPY candle shadow down to 184.45 today? Data error, or was there some kind of flash-crash? Nothing like that on the Naz or Dow.

    1. M.D.Cov

      Added another 12.5% DUST, initial 12.5% DSLV and third position of 12.5% DWTI via limit on well orchestrated technicalities……. Time to hunker down.

  8. K.Gee

    During the supply glut of the 1980s, Saudi Arabia actually cut production by 75% but STILL could not arrest the decline. Their goal now is to avoid making the same mistake so the conspiracy theories are a bit overdone.

    Shale oil ramped up too fast and markets got hooked on expensive oil. If Saudi Arabia had an orchestrated plan then why would their government spending be tagged on high oil prices? Is the Chinese slowdown and EU deflation orchestrated with a US dollar rally also? Impossible. You’re giving governments too much credit.

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