CRASH POTENTIAL

I strongly advise not trying to pick a bottom in the stock market right now. The market is trying to move down into the 7 year cycle low. There is risk this could evolve into an 87 style crash event. Don’t try to be a hero and risk getting caught in that if it were to happen.

161 thoughts on “CRASH POTENTIAL”

  1. mm

    Charts suggesting a possible move to 1900. Just a nice retrace of the October to January move. No reason to think we are in crash mode.

    On a side note: Las Vegas casinos have lost money 7 straight years. ?

  3. Dang

    Also to consider, I think we are on the brink of a H&S neckline at 1880 (ish). I think that would put it at a target of 1650 (ish)…I’m a total rookie, so take it for what it’s worth! 🙂

  4. Grand

    Gary, I think if you put up a chart of the ’87 crash it will be helpful for folks to see the comparison, eh?

    1. Gary Post author

      One way or another I think the SPX needs to get to 1550-1600 this year. Just in case it decides to do it as a crash over the next 3 weeks it’s probably best not to be too quick to go long.

  5. Jay

    I guess my GTC orders to buy GDX in the single digits won’t be getting filled anytime soon 🙂

    (unless GDX gets hit during the potential crash)

  10. AlexP

    now it is very risky buying unless SPX succeeds to break above 1964 in the last 10 minutes of this session in order to totally falsify the breakdown below the 1960 pivot earlier.

    I am stopped out of the FB and STMP pilots with an equity loss of -0.96%

    Still holding LNKD (admirable support at 200dma!) and SLP – A MARVELOUS SMALL CAP ENDURING ALL THIS CORRECTION!!!

  12. Don

    Gary’s warning should be heeded. The S&P is down a mere 8.9 percent from it’s high made last May. A monthly chart demonstrates just how little we have dropped.

    1. ted

      True. But with such a small drop, there are so many bears out there. This means we rally soon! very soon!

      1. Gary Post author

        Way too many bulls in fact. Yesterday the bullish sentiment was still at 47% bulls. That needs to go down to under 20%. And if this is the 7 YCL then it will be an event so horrific as to almost defy imagination. Not as bad as 2009 but way worse than anything else we’ve seen over the last 6 years.

        At a 7 YCL it will need to look like the world is ending.

        1. Dang

          Gary,
          As stated in my comment above….”I’m a rookie”.
          Are you able to tell me where you get the bullish sentiment number? If not I understand…thanks!

  14. Van

    I don’t understand why you expect the bottom to arrive so quickly. I think there needs to be a full bear market played out over 18-24 months. 6 years of bull market doesn’t just get unwound in a few months.

    1. Gary Post author

      For one the 7 year cycle is way too right translated for there to be any real chance of this turning into a sustained bear market. This will just be an event like 1998 that gets everyone on the wrong side of the market and then off we go into the bubble phase. I expect it will correspond with the Fed throwing in the towel and starting QE4.

  15. Ralph Wiederzane

    And I strongly advise listening to the G-man and stay away from stocks, he’s saved us a pretty penny over just the last week alone!

  16. David Silver

    Shanghai Alert:
    Starting tonight they have lifted circuit breakers!
    Bring it on (yum yum)!
    Positions:
    Long miners
    Short crude
    Short US markets

  17. Will

    Holding miners since Dec. Give ’em another week at least? ???

    As for equities, weekly shooting star as of last week’s closing just did what it supposed to do. We shall see how the weekly close after the NFP today.

    Crude oil, don’t be surprised by a strong counter-rally bounce. Quarterly support at $30 would be a hard shell to break! So, price won’t go there in the interim.

    Lastly, continue to HEED the correlated strength in JPY versus gold, miners…

  20. David Silver

    Crude boundzries:
    Ironically Thursday’s intraday low AND high are her boundaries (32.10 -34.09) short the top range
    Headed sub 32.10

    2. David Silver

      Correction:
      Meant 34.26 as her current resistance
      Failed a 3rd time just now
      Key points:
      36.31
      34.25
      32.10

  21. Will

    New Crest Mining, on day-5 of breakout.
    Reminder: last similar rally in Oct 2015 lasted 9 days.
    GDX followed the exact same count last round.

    So, counting continues.

    1. William

      Stupid Chinese’s ban on substantial shareholders selling to just 1% of their holdings + new circuit rule breaker = freaking zombie market.

      Mind you, the crash in China week-to-date is largely NOT so fundamentally driven, my view! I reckon it wont happened like that if the above rules were not set in the first place.

      So, market can turn bullish again…but are “deciding” where to, and therefore, the volatility you see now!

      2. Bud E Fox I

        IMO…Shanghia, and to a greater degree
        Shenzen have always been, a gambling market.
        In my view. Been, there. Done that.

  28. Will

    Much like in Aug 2015, if you look at the daily price action closely, the sell-off was triggered by the U.S market NOT China.

    Likewise, the next real big down will be from the U.S, NOT China.

  29. Will

    Does anyone know what website is good for saving/sharing charts without resorting to having create a blog?

  30. Will

    Dave,

    SA has effectively broken out on its “monthly” candle vertical downward resistance from the peak in 2010…very positive energy here man! This is 1st time ever on the monthly chart!

    1. David Silver

      Will although I didn’t like her tape action for the last 2 hours of trading like you said she is on a monster mission:
      Calculated forecast of 12.90!???
      Profit taking end of day as should be across the board
      Crude:
      If it weren’t for Wesnesday weak tape action I would’ve been ALL over crude long with pinpoint lucky premeditated buy and sell points that would’ve made me a pure genius but distractions persuaded me to wait due to truncations across the board.

  31. AlexP

    William/Will, totally agree w/ you on stocks. A lot of unnecessary volatility due to a too squeezed a breaker in China.

    Now that the Chinese market shows some predictability, US markets will return to normal –> WAITING FOR THE SWING LOW IN NYSE COMPOSITE IN ORDER TO GO LONG FULL MONTY, I.e. beyond a few pilots.
    SPX should have held the 1967 level, actually should not have even touched it yesterday…

    PS: I am not so sure about gold: I would sell gold today as USX delivers its daily cycle low.

  32. AlexP

    ….actually NYSE composite needs only a rebound of +1.4% in order to deliver the swing low 🙂 quite feasible today
    Likewise, such a jump in stocks would also place SPX above 1964 that I commented in my last post here yesterday –> the level required to be taken out in order to invalidate the breakdown below 1960 yesterday intra day.
    So, LET’s HUNT THAT SPX=1964 AND THEN THE SWING LOW IN NYSE TODAY ! It should prove bountiful 🙂

  33. Will

    Yo Dave, crude baby’s next resistance watch at $37-ish…the baby is jumping as far as i can see!

    1. David Silver

      William crude’s my baby?
      Pivot points:
      27.14?
      32.10
      32.99?
      34.26
      36.31
      38.12
      40.05
      43.54
      48.87
      She had her day Thursday to shine but ol’ CRB has a date with her @ 160 (just 4 sessions since downtrend)
      My best guess:
      34.26 tops out and revisits 32.10 for a confirmation temp support then off to 36.31 tops then eventually 27.14 FINAL low
      Shanghai close 1.97% but sorta pathetic if you think about it. US markets still technically damaged and a date with S&P 1875 in due time. Relief bounce to 2010.20 MAX

  34. ChrisG

    Alex, go look through history. During pasts years January, gold still rally despite us$ huge strength. It’s just a seasonal gold thing

    1. AlexP

      Gold might continue its jump but with USX to resume its upside movement into a new daily cycle next week, a long-gold trade seems too risky to me; there will be less risky trades around, such as long stocks/USX.

  36. Will

    If you think USD is gonna rally higher in the interim, just a gentle reminder here, that DXY closed December month with a “monthly hammer” pattern.

    If the weekly shooting star was enough to bring down equities, let alone a “monthly hammer” on DXY…

    So, Baby DXY is gonna fall this time before getting up and walk again…slow down baby and take care.

  37. David Silver

    Friday’s Theory:
    Futures UP significantly and why not.
    Should drive gold and market down in unison
    PERFECT time to buy more miners AND another short tranche on the Indices (pick your poison) from the open to 10AMish
    US will not be dictated by China or vice versa they are BOTH on their OWN agenda to doom (we then trail lower and maybe in the red?)
    Crude is doomed either way especially with her “tape action” NOW
    Gonna set the alarm clock half an hour before the open to decide my NEW added positions
    Current positions:
    Short crude
    Short US markets
    Long miners

  38. AlexP

    on GOLD: Baron Rotschild said that the quintessence of his trading success was that never bought at bottoms and always sold too quickly.

    USX will fall today after jobs report. It may extend its fall into Monday.
    That fall cannot bottom below the 95.60 level I kept mentioning in DEC.
    It should lend good strength to gold to around my target of 1145.

    On the other hand…what is to happen with USX past Monday ?!
    I pretty much think USX will move higher and that makes selling gold today into great strength an excellent decision from risk management perspective 😉

    2. David Silver

      Sounds super logical Alex Mahalo!?
      William I am so mesed up here in Hawaii:
      I am a vampire and sleep around 12 midnightish
      Wake at 4am (when needed)
      Market opens at 430am
      I start work at 830am
      I take a nap around 4pmish
      And do it all over again
      Mind you I sleep with my smartphone and dream of prophecies of my positions and wake up time to time to check on things
      Been amped since 96′! Hasn’t been a day good or bad or busy with life that I watch Wall Street numbers.
      Then there’s modern tech with my glued on smartphone 24/7
      Cool how we all cover the globe:
      Alex (Romania?)
      You (Malaysia?)
      Mr. Savage (Las Vegas)
      Me (Hawaii)
      Chris and others ?

      1. AlexP

        yes, my mate 🙂 I am from Romania.
        It’s fantastic: you are trading since ’96! At that time I was 17 in my 3rd highschool year, diligently learning English for the TOEFL and SAT tests to run for Ivy League entry. My grades here in Romania were not good enough for me to qualify though for full scholarship as I needed (my parents had no money), so that my Wall Street dreams remained only dreams, TRADING WAS A FANTASY at that time 🙂 driven by the newspaper article on Barings’ default.

        PS: I can only suspect that ChrisG (aka former “chris” in small caps) is from Germany…

  40. Gary Post author

    This is why it’s hard to make money on the short side. Markets go down differently than they go up.

    The counter trend rallies always look convincing and they suck traders back in too soon.

    Still sticking to my guns. Sentiment needs to get alot more bearish before we can have a final intermediate bottom. These counter trend rallies are what prevents sentiment from getting bearish too quickly.

    IMO this is just a bounce out of a Bollinger band crash. Once it’s run it’s course, back down we will go.

    1. AlexP

      …or one could draw a Keltner envelope with parameters 10, 2, 10 and clearly see that any closes below the lower band were very short-lived 🙂

      AAII’s sentiment was very bearish historically on Wednesday and now it should be even more (bullishness maybe as low as 15% or so).
      Obviously AAII and sentimentrader.com use different approaches to gauging sentiment

      1. Gary Post author

        The AAII sentiment is just one of many indicators used to make up the intermediate optimism index.

        Like I said, you can’t determine overall sentiment with just one tool.

  41. Dan

    Metals smashed again overnight. Just comical at this point. Some people are doing well picking quality juniors but its not for me.

  43. ChrisG

    Bcos I trade dax? Lol. Nope. I from a little red dot where property agents are dying, car salesman dying, stock brokers dying, and Bankers dying country call Singapore. Lol

  44. ChrisG

    Strong payroll = FED continue to raise rates in this difficult environment. Market hates it , sell off, risk off mode soon? Maybe this could be the scenario

    1. AlexP

      I strongly disagree, Chris 🙂
      Main Street strength will override FED tightening fears!
      This is the reason why stock markets have consistently, cycle after cycle, have continued their bull rides for many, many months during FED rates increases as long as that monetary policy proved to be accommodative

  45. AlexP

    Ultra-hawkish jobs report + market reaction underscore my expectations:
    – stock market has completed its process of psychological adjustment to a new FED behavior marked by tightening its monetary policy –> WAY TO GO IS UP
    – USX will move lower to fulfill its daily cycle responsibility in a final profit-taking event to baffle its young, rookie bulls (“why is the buck down on such a bullish jobs report?!!”)after which next week …. GOLD BUGS WATCH OUT GREENBACK POWER!

  46. ChrisG

    Based on charts, it’s bearish. Based on several good market timers I follow, it’s bearish. And mind you, they are pretty good. A lot more correct than wrongs

  47. ChrisG

    My study says gold has an important weekly tag at $1104 ish. If closed there today, likely next week continuation. If US sell off today, look for early next week big sell off, then a capitulation for a big bounce. But just a bounce before new lows.

    1. AlexP

      no selloff in stocks, correction is over, the adjustment process of market’s psychological setup is over, the only way is UP

  48. AlexP

    STOCKS MARKET SHOULD HAVE COMPLETED ITS PSYCHOLOGICAL SETUP ADJUSTMENT 2 DAYS AGO WITH SPX BETWEEN 1967 AND 1985.
    The process was derailed and slipped for one more day on artificially increased volatility and noise yesterday due to Chinese 7% too low a break which drove world’s traders into no man’s land wondering in confusion “where is the Chinese market’s bottom?!!”

    1. tim

      monday will be another day down to resume correction if not turned around today.
      dollar up today so stocks may not make to close without selling off.
      oil is starting back down as I type

    1. AlexP

      do not look at SPX to make your analysis; look at NYSE Composite –> there you will see a marvelous bullish divergence of NYSE Index with its weekly RSI and not only 😉

      1. Gary Post author

        A weekly close under support will be bearish for the market going forward, and the weekly stochastics still have a long way to fall before getting oversold.

  50. AlexP

    Victor, do you remember SLP ? 🙂
    It’s breakout on huge volume (relative to its daily average) –> I am having an add on the pilot position I called 2 days ago 😉

    1. victor

      My plan was to sell miners today on up day… and switch to SLP… waiting for a better position in NUGT but … ) : for now, profit cut in nugt a more expensive SLP…, should do it yesterday…

  51. ChrisG

    Just read , great job growth?? But record number of multiple job holders!! Average wage also drop. Just like in 2008

  52. AlexP

    Folks, do you remember me talking yesterday about the spx=1960 support ? 🙂
    Well, the market tested it today and dropped immediately as it touched it –> it was normal.
    Now SPX=1947 and it is going UP :
    – to take out the 1960 level,
    – to take 1964 and totally invalidate yesterday’s breakdown due to the Chinese authorities 7% mayhem
    – cater the swing low in NYSE Composite
    AT THAT POINT I’LL BUY STOCKS TO MY BRIM!
    Good luck!

    PS: USX is going down, as I also predicted, despite the hawkish jobs report 🙂

  53. AlexP

    VICTOR, PLEASE BELIEVE ME: SLP is not expensive!
    take it as you still can; I have 20% exposure in it: 10% two days ago and today another 10%.
    I plan on taking another 8% to a full heavy load 28% weight (usually I do not take more than 25% per ticker) after the NYSE Composite swing later today

  54. AlexP

    SLP hitting for the moon 😀
    LNKD is behaving magnificently too.

    uuhaaa! NYSE Swing-low, come to me, baby! I know you are there, I can see you with my excellent intuition, you just have to show me only your naked ankle and I’ll charge on you 🙂

  56. tim

    plain to see all the calls being made by the board will shake out most of you during this correction,
    sad but it is necessary to learn

    1. David Silver

      FAR from the truth IMHO
      Look each person here is absolutley without a doubt unique in their own way
      Too early for you to be drinkin’ son

  59. David Silver

    MaY Day:
    US stock market tape action signaling a possible CRASH
    I’m serious
    Think Mr. Savage and Soros alike are correct!

  60. David Silver

    May Day 2:
    Perfect storm brewing:
    Gold spiking
    USD plunging
    Oil plunging
    NatGas spiking
    Volatilty spiking
    Equals US market CRASH

  62. David Silver

    Same EXACT saiky candle being printed today as Tuesday’s relief
    Next week could very well set up for a crash
    PPT savior delays it from today

  64. AlexP

    FOLKS, LADY MARKET IS THROWING AWAY ITS WINTER CLOTHES, STOCK MARKET IS CHANGING ITS STRUCTURE.
    The only defenssive sector still outdoing broad indexes is that of utilities BUT on the other hand treasuries are getting thrown away by smart money as evidence of selling on strength has errupted on treasuries market.

    Additionally, VOLUME IS RAMPING –> retailers are stupidly selling as sheep are moving in a herd while smart money are keeping their bags WIIIDE OPEN buying them.

    CAST AWAY ANY STOCK SHORTS YOU MAY HAVE!

  66. AlexP

    …beautifull intraday inverse head & shoulders in stocks with neck at spx=1951 🙂
    bullish data keep on adding up and up, again and again

    1. David Silver

      Alex she might fail here
      Daily candles growing ominious and mediocre at best for a precursor of more downside to come

  71. ChrisG

    Problem is Asia had an up day today. In bear market after one up day, sell off subsequently. Smart money knows Asia may sell off big again Monday. Why buy tonight?

  72. AlexP

    Transports for the first time diverging from broad indexes; transports index has also failed to render a new low.
    Falling wedge forming in intraday SPX; wedge started to be charted at 12:03am EST

  74. David Silver

    Alex me sold TOO early?
    S&P 1875 MINIMUM coming to a theater near you (get oit your popcorn)

  76. ChrisG

    Yen did not have such closing above MA for many weeks. Monday likely bloodbath. Go look at nikkei futures Chicago and you know. Huge selling despite US not selling off a while ago

  77. AlexP

    Guys, it is not denial: the intraday falling wedge has just rtansformed into an EXTREMELY POWERFUL FORMATION: BULLISH WOLF WAVE with entry point #5 at 1934.47 !

    I can see constant buying on weakness, the pattern of the market has changed, guys !

    1. tim

      you keep losing money by the announcements you keep making,
      if someone did the opposite of what you are saying it looks to be the right move

      1. David Silver

        Tim really how so?
        I’ve documented my buys for today with time stamps:
        Go back and read them
        Bought NatGas long
        Bought Miners
        Holding positions prior day:
        Short US Markets
        Short crude
        Long miners
        Nuff said Tim
        Yes 4th quarter had bad mojo BUT 2015 as a whole up HUGE

  79. AlexP

    the points of the bullish wolf wave are at the following minutes new York time:
    1=12:03
    2=12:28
    3=13:25
    4=13:40 and
    5=14:41 with SPX=1934.47 as I said 😉
    and UP Lady Market goes 😀

      1. Gary Post author

        I doubt it. I’m going to go out on a limb and say we test the August low next week followed by a bounce and then a bloodbath phase into the last week of January when that support breaks.

        1. AlexP

          yes, Gary, all bullish signals have formed and have been systematically invalidated, day after day.

          Holding to the LNKD pilot (stop loss at 215) and the SLP position (stop loss at 9.48).
          They have endured the rout this week very well, not to mention that SLP has grown.

  81. AlexP

    David and Chris, you have been right omn stocks today: rout has continued.
    I haven’t added anything more since the swing low in NYSE Composite has not come.

    PS: on the other hand, the buying on weakness is fabulous

  82. David Silver

    My money’s on Mr. Savage
    Who commendeered Alex’s account is the REAL question
    Ted Knight sees S&P 1577 for 2016 low
    Finallly back on my “A” game
    Been in a 4th quarter 2015 slump
    Poker too (Games this weekend, think I’m going to win)

  86. Dan

    Smart money buying? More like delusional retail buying US stocks all the way down and shorting volatility. lol. Just read the Stocktwits streams.

  87. Dan

    Up big on puts so I added some silver for a swing, nice risk reward. Missed the junior miner train.

  88. David Silver

    2016 prediction:
    SUNE will file for bankruptcy (ill advised timing of buyouts and debt)
    Shockwaves throughout:
    Stock market
    Energy sector
    High yield junk bonds

  89. Will

    Strengthening JPY = Weakening Equities.
    $NYA weekly candle = Pathetic
    XAU weekly candle = Bullish engulfing
    GDX weekly candle = no clear pattern, but with positive bias to follow XAU

    Net-net, holding on to the glittering rocks for now.
    ???

    1. Will

      Yen $XJY Index => decisive breakout of its horizontal resistance on its “weekly” candel…very bullish for YEN.

        1. David Silver

          Worst in HISTORY William (BAD omen)
          Good for gold (thinking Mr. Savage MIGHT be right here for a bottom)
          Synergies are confluent

      2. Al

        Will, that would suggest bullish for gold with the correlation of the two for multiple years at this point. Also bad for the stock market and the carry trade?

  90. Don

    Gary, for what it’s worth, I find your calls on the stock and currency markets to be quite good whereas your calls on gold, at least over the past three years, not so good. Why don’t you stick with what your good at and forget trying to forecast gold? I don’t see how anyone can call the gold market given the extreme manipulation that market is subject too.

    1. Gary Post author

      We’ve done OK at catching bear market rallies in gold. We are up 15% for the year with the latest trade still working. (yes I know the year is done but since the trade opened in Dec. I’m going to count it.

  91. David Silver

    Felt the same way during the summer but boy did me prove me wrong.
    Why dont you just do the opposite if you feel that strongly?
    My money’s on Mr Savage

  92. AlexP

    This is bad. I expected the correction since late OCT but it is worse than I have thought.
    NYSE Composite just broke decisively its 200 WMA…..this is bad.

    A strong bounce should come sometime next week but it will fade away.
    Statistically this bear market is here to last many, many weeks — we are at the end of the kondratieff winter, the spring of the next k-wave has yet to start

  93. AlexP

    ….I will skip any swing low signals, I am not buying stocks even if this will mean passing by the STRONG bear market rally to commence next week.
    I will just run my current LNKD and SLP holdings through the rally unless I get stopped out and incur an additional -2.5% loss on my equity.
    THIS IS BEAR MARKET APPROACH, I am switching gear after today

    1. David Silver

      Hey the REAL Alex is back!
      Welcome back ol’ wise one?
      Sunday Shanghai meltdown
      Monday ensue crash implications for the week
      Prepare to bait and switch as fast as you can say
      Poka dotted Polock peanut pizza peach pig
      This means ALL facets of investments for countertrend directional moves.
      Positions:
      Short crude (one large tranche)
      Short US markets (one 10% tranche/came THIS close @ the open I swear/would’ve made me a pure genius) Last night’s banter as well as buy the miners @ open but didn’t hence NO post to verify pre open)
      Long miners.(two tranches)
      Long NatGas (one time double down) no bearing effect next week)

      1. AlexP

        🙂 morning, David!
        yes, indeed. You, Gary, Chris from Singapore and the other Chris have been right: this correction is worse than what I had been expecting!

        All this will have ripple effects through world economy: Japan’s frail economy may get dragged into this too. To be seen.
        I will stay out of any market altogether and let swing traders and scalpers to ride the bear market rallies to come. For me, CASH IS KING.

  96. ChrisG

    Dow potential pattern:

    Early next week drop to 15800-16000, bounce then drop to trendline at 15k ish. Trendline of Oct 2014, and Aug 2015 low.

    1. AlexP

      Yes, Chris, you are right. Opportunity to dump stocks during the bounce to start Tuesday/Wednesday. Selling now would not be appropriate unless stops touched.

  97. Blue

    Hi AlexP,
    Im interested in the company SLP that you brought up here. I’ve been purchasing some shares of SLP and think it has a bright future. Why do you think it is worth investing in SLP and how big risk is it as of today to own SLP?
    They are about to release their 1 Quarter earnings 14 january. Do you expect good news?
    Kindest regards

    1. AlexP

      Hello, Blue!
      FUNDAMENTALLY –>
      1) I do not expect something fantastic on their next quarterly earnings but rather on the next one as it will incorporate the first results of their newest software release this month which will prove a major catalyst for them –> it is most likely a breakthrough software for drugs effects simulation!!!

      2) It benefits a major institutional sponsorship –> Jim Simons’ Renaissance is investing heavily in it, time after time, buying and buying …. they must know something…that new software must be something great indeed !

      3) It pays dividend at a great yield

      TECHNICALLY –> IT LOOKS PERFECT! SHOWS CONSTANT ACCUMULATION. IF WILLIAM O’NEIL OR DARVAS WOULD WRITE SEQUELS TO THEIR BOOKS, I AM CONFIDENT THEY WOULD PUT SLP’S DAILY CHART THERE TOO –> IT MAKES A THEORETICALLY PERFECT BUY-ON-BREAKOUT CANDIDATE FOR A MOMENTUM TRADER.

  99. tulip

    gary,
    al korelin just quoted you on the postma segment… I don’t believe his quote was correct..

  100. ChrisG

    For gold, I think for its bear market to potentially end, watch a January end closing. If it’s above $1150, that could be it

  101. AlexP

    Short-term forecast based on 5 ingredients: (a) the positive correlation btw USX and stocks, (b) stocks are oversold, (c) both USX and stocks are late in their time bands to print DCLs, (d) stocks have produced lows shortly after closing below the lower Keltner (10,2,10) envelope and (e) stocks produced strong bounces after having decisevely penetrated 200Wma:
    – USX and stocks to complete their daily cycle declines, hence DCLs, on Monday (for stocks it will also be an ICL)
    – stocks to begin a POWERFUL bounce on Tuesday as USX will also climb into its new daily cycle –> bounce likely to test SPX=2104
    – USX will break above 100.72 and thus leaving a right translated YC behind and also 3-YC
    – USX break above 100.72 will fail as SPX will get close to spx-2104 pivot
    – gold and miners to be strongly hit during all this period –> there is a 6th ingredient supporting all this: GDX left a swing high yesterday.

    Time to go long miners and gold as well as to short stocks will be ONLY AFTER WE SEE WEAKNESS IN USX AFTER ITS BREAKOUT ABOVE 100.72.

    1. Gary Post author

      Actually both stocks and the dollar still have quite a ways to go before printing their cycle bottoms. Stocks should have 15-20 days and the dollar has a long way to go before it breaks the intermediate trend line.

      ICL’s in stocks almost always occur at the same time as an ICL in either the dollar or the euro. One or the other is always under extreme stress at a market bottom.

      So no bottom in stocks until the dollar breaks the intermediate trend line, prodices a bloodbath phase, and then forms a swing.

      This is why I keep saying to stay on the sidelines right now. This market is dangerous. Extreme right translated cycles almost always end in some kind of crash scenario and the current 7 year cycle in stocks has been very extreme in it’s right translation. And it was made even worse by the interventions last year to prop up the market after QE ended.

      1. tulip

        Gary, Have you read Adam Hamilton on 321gold this Friday….
        he has an interesting take & believes they hike….what Im a bit confused about is
        your timing for another QE…..
        Thank you

  102. David Silver

    I 100% agree!?
    Think his wife or kid hackes his handle again ?
    My thoughts:
    Friday’s tape action mirrored one another (USD and atock futures)
    USD delivered a bearish daily candle Friday
    USD downtrend NOW to 94 in time hence the weakness in the stock market
    GDX as a whole Friday was just typical peofit taking but the astute snapped up fire sale prices on metals amd miners late in the day
    S&P 2000 is a has been historical event IMHO
    Tasty Trade’s Ted.Knight calling for 2016 forecast to 1577 while Best Stock’s Now Bill Gunderson says 2150!
    Me felt last year eventual bttom cleansing to Nov 2013 lows of 1767.99
    Next week lows MINIMUM 1875

  103. David Silver

    FWIW:
    The VIX is mirroring inverse Chinese and Russian ETF’s with breakouts galore
    Silver:
    Will be scouring the globe for the best possible silver miners this weekend
    NatGas:
    Bottom is in with mamoth V shape recovery process (much like crude will produce soon)
    Monday.addition:
    Silver miners (buying @ open from unscathed Friday fire sale opportunity)

  104. ChrisG

    I agree with Gary. Alex is still too bullish on stocks bounce. Also for gold, this bounce may have more leg. It could rally for another or even 2 weeks. This is January guys. January bounce for gold is usually 2-3 weeks!

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