Intermediate cycle bottom: More patience

Based on the rather tame sentiment levels and only modest oversold conditions I expect we still have 2-3 more weeks before the final intermediate cycle bottom.

75 thoughts on “Intermediate cycle bottom: More patience”

  2. David Silver

    Oversold yes in the US markets (intraday low today entry point)
    Oversold no for crude (just recently topped out Monday) perhaps overnight low will trigger?
    Monumental event for gold and miners
    USD down
    Bonds down
    Treasuries up
    Crude tanking as I type (Thursday New York MM open may be orchestrated)

  4. David Silver

    Christmas gift:
    Futures down huge again
    Crude tanking
    Gold soaring
    Buying the open in US equities (sift through tonight’s candidates) NFLX??
    Clearing my crude short and switching long
    Holding miners

  5. chris

    looks like that gap won’t fill. It’s hard to say what will happen, but I see that the s and p support at 1974 in the futures has broken, and now I see 1950 a likely profit taking zone. Perhaps, 1800 will be here sooner than we think.

  6. David Silver

    Thanks William and Chris:
    It just feels like a TRUE “blood in the streets” environment on this 3rd go around.
    Besides crude just hit MY target and with Mr. Savage’s Bollinger band crash for BOTH, it does too give some ultimate credence
    Just woke up from a nap caused by my “all nighter” here in my time zone (gonna do some serious homework NOW)
    Cheers boys

  8. David Silver

    Looking for clues for direction:
    S&P 1967 was taken out (is this an undercut low buying opportunity OR another crash in the making?) maybe not worth making a hero call here until a swing daily low confirmation
    Crude 32.99 violation (been a HUGE fan of the 32.99 bottom in low fan since 2015 and well here it is!) 32.79 undercut low buying opportunity OR is it a sign that 27.14 is in the cards sooner than later. Tim Knight thinks the $20’s for sure.
    What to do, what to do
    Going to watch the open for a crude decision
    Pass on the US equity trade idea
    Hold gold miner for sure (no brainer) and yet ANOTHER sign that a crash may be imminent
    Equity ideas:
    XIN (ironically a Chinese real estate company technical turnaround story/breakout)
    ANY semiconductor inverse ETF to choose from (screams money)
    The night is still young with ideas and trade changes my friends

  9. Will

    XAU (weekly) – banging on its vertical and horizontal resistance at $1,100…critical test, will it succeed?

  10. ChrisG

    Monkey God, I think for stocks you are wrong already. Most likely NYSE 200 wma going to break and the war going to be fought below it. Spx could really go to 1920 ish.

  12. David Silver

    Doc is finally wrong:
    He bought crude @ 34 for a bounce
    Good omen
    Also was bearish on gold!
    Good omen

  14. Dan smith

    With oil now plummeting like a lead balloon, it’s only a matter of time before the rest of commodities follow.

  17. Will

    Crude oil, on quarterly chart, it is approaching its “quarterly” support line since 1980s at $30. This is both a mega-support from horizontal and vertical support sense..

    I doubt $30 will be broken so easily and thus the chances of all other commodities to implode are also relatively limited for now…

    This could be a capitulation for crude oil per se…

  18. AlexP

    no way SPX at 1875
    now it is just noise on stock markets caused by Chinese Government’s copy-paste 7%-drop automatic halt.

    it looks as if the Chinese copy-paste pretty much everything they can get their hands on from the West: now that their authorities saw that the Americans had put a 7% break on SPX they thought to copy-paste that too automatically (i.e. without too much thought given to it) as if the volatility of Shanghai Index can be compared to that of SPX …
    That unwisely small break on Shanghai Index spooks world’s traders now and raises volatility artificially than had the Chinese authorities let the market fall by, say, -11% on Monday and, say -10% today.

  19. David Silver

    William thanks man will be focusing on her $30 line for sure
    Alex S&P futures sub 1940! Mayday truncation alert aka 1976

  20. chris

    David, I’ve been riding this down since 1969, covered at 1941 and am looking to re enter upon any signs of weakness. This seems like a blood bath set up.

  21. Gary Post author

    I said that the interventions back in Aug. and Sept. would ultimately just cause another market crash. It’s starting.

    Now the question is will the powers in government just stay out of the way and let it play out naturally or will they continue to try to intervene in the market like China is doing and make it worse.

    One way or another the 7 year cycle low needs to shave off at least 38% of the rally from the 2009 low.

    There’s no need to try to pick a bottom until the end of the month. This panic is just beginning.

    2. AlexP

      no way, Gary, there is nothing behind the veneer to indicate a prolonged panic.
      now there is unwarranted pessimism, it is just noise, end of correction is round the corner and it will not come thanks to any FED intervention but to market’s natural adjustment to a new psychological setup.

      Stocks will grow fairly unscathed up to pivot spx=2104.
      Things will have to be re-analysed at that point.

      1. AlexP

        …if you want, now it is the mirroring wording of what was disseminated around in OCT-NOV-early DEC –> stocks are in a bubble! don’t miss the train!

        at that moment I warned that truth lies in the middle.
        I render the same warning again: DO NOT GO PENDULLUM-LIKE, FROM ONE EXTREME TO ANOTHER! here’s the bubble!…oh no…here’s the beginning of the panic!

      2. Gary Post author

        As of yesterday sentiment was at 47% bulls. We need to get that down to 15% bulls. Then we will have panic.

        The bullish percent index on the NYA was at 40% yesterday. At the 2011 low it was 15%.

        The stock bond ratio was at -.7 yesterday. At the low back in Oct. it was -4.

        We have a long way to go before we see real panic.

  22. ChrisG

    Alex, you could still be wrong about 1875. Bcos your 1967 will be wrong today. Armstrong and Gary is on the same page. When you read his blog, you sender bearishness till Feb

  24. AlexP

    Gary, you speak about sentiment NOT being to a level so extreme as to warrant an ICL.
    Please consider AAII’s sentiment variance vs. SPX’ variance during the last week ending yesterday.
    Starting from this, if you consider the level of EXTRA pessimism added today upon yesterday’s level, one could say without being too wrong that, should AAII also draw another poll right now, BULLS would not raise more than 18% (vs 22% yesterday) and BEARS at least 44% while assuming that only 2% would leave NEUTRALS’ zone to join the bears.
    So, AAII’s bulls:bears now of some 18%:44% … I would find that pessimism pretty extreme enough to call an ICL

    1. Gary Post author

      The intermediate optix adds together multiple sentiment indicators to give an overall sentiment level. Sentiment can’t be judged by one indicator or survey alone.

      As of yesterday the optix was at 47% bulls.

  25. ChrisG

    I am long gold and equities index. I am just praying hard stock futures doesn’t take out days low. Else I have gotto cut most of it.

    1. AlexP

      praying and in general believing in God is a spiritual must (atheists are spiritually naked people in search of a desolated desert of would-be superior realism) but as to trading it helps only to provide the requisite level of serenity.
      Otherwise, the stop loss should suffice 🙂

      as to me, just in case it happens that I am wrong on ALL 4 positions I opened yesterday (42% portfolio weight) so that all stops are touched, the cumulated capital at risk for me is 2.6%. Thus, I will take the -2.6% loss and…that’s it 🙂

  26. David Silver

    @ Open
    I’m adding a short position to the US markets at the open.
    Holding miners
    Holding crude shorts
    Panicville just begun
    Mr Soro’s thinks it’s 2008 all iver again!

    1. AlexP

      yes, and Mr. Soros will buy this bottom with both hands 🙂 🙂
      it would not be the first time he does it; the last time he did it quite profitably was during the EU sovereign crisis and retailers also went mad into ultra-pessimism that “Mr Soros said that” while markets …. we all know what they did

  27. tim

    oil and general markets should turn as chevron and exon makes a new low from last aug, both had a yearly low with huge volume same day oil and markets turned late aug

  28. David Silver

    Alex I’m thinkin’ gold AND miners sniffed this demise ahead if time
    Hence my reasoning across the board

    1. AlexP

      David, watch out: central banks usually buy gold at the end and beginning of years –> it is during these periods that USX and gold de-correlate.

  29. ChrisG

    Nice bounce. I bought more during the panic before market opens. Now they can breathe. China suspends circuit breaker. Nice move. Hope bounce more

  31. Don

    Gary, you have been unusually quiet about gold this past week. Actually, so has everyone else. Gold a 1106 at the moment.

  32. Dan

    Another blatant criminal ramp at the open. Laughable. They sure are desperate to keep this thing from crashing.

  33. ChrisG

    Gold, we have already said gonna at least bounce to 1145 ish.

    And why this bounce in index? Bcos futures already hit its box play measured moves. Cash index is slightly short of it. But it’s good enough.

  34. AlexP

    it’s no rigging, the market is behaving quite maturely considering the damage provoked by the Chinese with their 7% stop.

    I AM EXPECTING SPX :
    – to rise to about 1974 and then
    – to fall to around 1960.
    If the 1960 support holds, then wait for SPX to move above 1974 or whatever will that intra-day high will be.
    If this happens THEN THE ICL WILL HAVE BEEN LEFT BEHIND

  35. AlexP

    ……so nice! 🙂 I can make a bet that today will end with a hammer candle or the like (eg, dragon fly) in stocks 🙂

    tomorrow’s Empl.Sit. report will produce the swing low in stocks to signal today’s (day 36) spx=1954.47 as ICL

  36. Doodoo

    WTF, gold still above 1100 and equities are bouncing but miners sold back down …………. i don’t get it

    1. AlexP

      yeap, Chris!
      SPX hit 1972 – close to the 1974 I called above 🙂 🙂 and now should retreat close to 1960, as I said –> THIS IS THE LAST TEST TO PROVE WE ARE IN A NEW INTERMEDIARY CYCLE, STOCKS SHOULD HOLD THAT TERRITORY AT 1960 OR MAYBE NOT EVEN TOUCH IT

  38. ChrisG

    In case you guys wonder why this bounce, indices have tested 61.8% fib retracement. Certainly not the spot to short. Rather it’s a place to cover

  39. crawford

    Crap! … I never thought SPX will go below the BULL FLAG pattern I mentioned yesterday. 🙁
    Bad call on me.

  40. AlexP

    FOR THOSE OF YOU WHO HAVE MISSED BUYING STOCKS AT THE OPENING TODAY BUT STILL ON CASH, wait for SPX to go lower first: now at 1976 is too high, it will have definitely a pullback before surging INTO POSITIVE TERRITORY TODAY.
    Yes, stocks will print a GREEN candle today 😉

  41. Gary Post author

    This is what ICLs do. They trick people into buying too early.
    Early buyers need to get run over at least 2-3 times before the final low and longs need to completely panic at the magnitude of their losses before we get the final bottom.

    I’m sticking to my guns the optic needs to get below 20% bulls.

    1. james moffett

      Gary — so you are saying it’s too early to buy SPX now at 1963? And thus wait until optic for bulls gets below 20%? Where are bulls % today?

      1. Gary Post author

        I think it’s too dangerous to try and pick a bottom until sentiment gets washed out. Since left translated cycles almost always make lower lows I wouldn’t try to pick a bottom until the SPX breaks below the Aug. low. And then wait for a swing . There is potential for a massive crash either with this ICL or the next one.

        One doesn’t want to risk getting caught in another 87 style event if it were to happen.

  42. David Silver

    Alex will she hold at 1960 or fail is the 64 thousand dollar question.
    BTW nice top calls Chris and Alex!?

    1. Gary Post author

      Don’t be a hero until we get into the timing band for the cycle low and until sentiment gets washed out.

      That shouldn’t be until the end of the month.

  50. AlexP

    nope, 1960 support was broken; it is no man’s land now: both shorting and buying are risky now.
    To buy this market we need to see the market above 1970 again, otherwise stay out

  52. Paul

    I really hope you were just bloviating about buying the bottom today Alex…
    Since your post, the market has dropped another 200….

    Seems to me anybody with sense would appreciate Gary’s wise words:
    “There’s no need to try to pick a bottom until the end of the month. This panic is just beginning.”

  53. 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.

  54. Will

    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.

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