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It’s too dangerous to short stocks with the Fed trying to protect the market, but it’s way too late to get suckered into buying and risk being the greater fool when smart money bails. If you are long you better have a trailing stop working. 

5 thoughts on “CHARTS OF THE DAY

  1. gary Post author

    BTW the dollar has formed a swing low today. It’s late enough in the cycle that this could be a cycle low and the short term trend is ready to turn back up.

    Make no mistake the long term trend is still up, and has been since May of last year. The only question is whether or not the dollar formed an intermediate degree bottom in early May or whether it might have one more push down to the 200 day moving average before it turns back up.

    But for trading purposes one should be long the dollar as the secular trend is up. Counter trend trades are risky as the surprises usually come to the upside in bull markets.

    So no John I will not be shorting the dollar. Not as long as it remains above a steeply rising 200 DMA.

  2. Dan

    You’re right, this is a tough market to swing trade. No time to play big. Silver keeps randomly tanking, but miners are holding up for now. I’m still hanging on to part of my GDX position after cashing in some profits yesterday.

  3. Jonathan

    If stocks are breaking down, the Fed is worried; if stocks are breaking out, the Fed is worried. It must be kept in the range!

  4. Frank

    I believe we saw the diagonal triangle end on May 20. Since then we must be in a wave 1 down. What would give this shallow drop and waves that are 3’s and not 5’s? I believe we have seen wave 1 and 2 of a leading diagonal down. I know it sounds nuts, but it would give the gentlest rollover at the top, and this is the top of all time, come on. There’s nothing after this but falling down stairs for a long time.

    1. gary Post author

      The 7 year cycle is extremely right trasnlated. That doesn’t lead to a long drawn out decline. That kind of pattern leads to a sharp drop and then reversal.

      Maybe the next 7 year cycle develops as left translated after a bubble top. Then we could get the long drawn out decline you are looking for.

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