Stock Market 2016

I think the 7 year cycle low still has unfinished business. One way or another, either through a normal stair stepping down correction, or a market crash if the government continues to intervene in the markets, stocks still need to fall further before the next leg of the bull market can begin.

65 thoughts on “Stock Market 2016

    1. Bud E Fox I

      Bear Market in SP500, in my view.
      SP500 2134 high as May 2015.
      NY A/D line not making new highs.
      World economics and politics, more neg.
      NY New highs, no longer expanding.

  1. Will

    Newcrest mining is on its 2nd day of breakout from its BIGGEST vertical resistance from 2011’s peak…this current move in overall miners should have more legs in the interim.

  2. David Silver

    Mr. Savage:
    Given the steep drop open of most equties (many testing 50dma), I think we got another mini flash crash correction
    V bottom recoveries occurring mid day to closing.

  3. Will

    New crest mining on day 2 rally after its breakout. Last time this happened in Oct and it rallied and peaked on day 9. GDX also peaked on day 9 at the same time back then.

    This time could be similar, but, we shall see…note also that SPY / GDX ratio is turning and firmly on the down again.

  4. Chris

    Who likes to guess what happens to the market next? I just know if it is bearish, yesterdays doji will give way today. For NDX, according to box play target, the target for a full box play is 4200 ish. ie, 200 pts drop.

  5. AlexP

    End of stock market correction is VERY NEAR, anyway nearer than many would believe.
    ICL to be set on Friday or early next week the latest !


    1. AlexP

      …I am going to stay out of shorting stocks, it’s become too risky, there are signs of good health in this market behind the pessimistic, dismal veneer.
      Cheetah-like waiting for the next and last leg down of this intermediate correction to come shortly.

    2. Gary Post author

      I’m going to suggest we probably can’t get a bottom until the next FOMC meeting as this began right after the rate hike. But if the market isn’t allowed to produce a true bloodbath phase sell off that pushes sentiment to true ICL extremes then we are unlikely to get a strong move back up and will continue to whipsaw for weeks.

      1. AlexP

        Morning, Gary! We are kinda’ getting in tune medium turn.
        I am convinced of an ICL to come in the next days.

        As to what lies beyond that, I remember I only made one reference in December in a reply to Chris (the one with a small C, “chris”), namely that after the ICL around JAN8 I see a fight at pivot 2104 which may produce a shakeout with a bull trap to new historical highs (SPX>2135).
        I can only suspect that that breakout may occur in March and that it will be proven false, just as you now suggest: ranging market medium term.

  6. chris

    Ya, I am scalping both long and shorts. Dare not position like few days ago. Waiting for low risk set up to present itself. Dun wanna lose my profits

  7. AlexP

    …anyway, Gary, this year is going to be a difficult one, difficult at least for trend traders like us.
    It will be marvelous though for swingers and in general for range-bound-markets traders, like Chris as he describes his swings and scalps above.

    This anticipation of a difficult stock trading in 2016 alongside with the US recession of 2017-2018 have been the stick that have driven me out of stock trading and into real estate now, while enjoying the carrot of low real estate prices and structural changes here at home.

    1. Gary Post author

      Difficult year for sure. The 7 YCL still has more work to do before the next leg up can begin.

  8. chris

    Ya man. Just now nikkei plunged 200 points from cash close, I covered. Note huge bounce, I resorted. Crazy market for crazy person

    1. AlexP

      yes, USX moves cast a risky glance to me at least and lend that risk to gold too.
      today’s moves in stocks also show indecisiveness with a slight bullish angle; clearly stocks are risky too right now.
      100% cash looks so cozy, as cozy as lying in bed on a frigid winter day in Bucharest 🙂

    2. Gary Post author

      I contend that the dollar has never been the force driving gold down. It just makes it easier for the bears to hit gold.

      1. AlexP

        I don’t know, Gary, most of the time gold has acted as a hedge for USD weakness as proven by the negative correlation btw the two which has been interrupted only temporarily on rare occasions out of which many could be attributed to underlying demand from central banks.

  9. Chris

    Gold is slapped down again. Only glad i had enough of it. If it consolidates til 3rd week of Jan, i have seen it rally sometime in Feb. So, may try buying again then. Assuming it doesnt crash or rally before then.

  10. Chris

    If crude oil cant rally on middle east tension, i have an advice. Forget about crude oil rallying.

  11. tulip

    excerpt stewart thomson 321gold

    ent has not reduced its debt, and seems uninterested in doing so, even with ridiculously low interest rates. The Fed gave the US government more than enough rope to hang itself. It kept rates low and engaged in a bizarre QE program, for an extended period of time.

    Now, the Fed has raised rates, and it will keep raising them until the US government shows a willingness to get its financial house in order. The small business private sector has nothing to fear from higher rates. In fact, higher rates are probably going to create a bank lending boom in this part of the private sector, while the public sector goes into its greatest debt crisis in history.

    Larger companies that trade on the NYSE will be affected by higher rates. That’s because the stock buyback boom fueled by low interest loans is finished now. Corporate price/earnings ratios were kept at moderate levels by these buybacks, and so the ratios may begin to rise quite quickly. That could cause a panic amongst stock market money managers.

    Please click here now. Janet Yellen has repeatedly suggested that she sees signs that inflation will rise over the medium term, but GDP growth will remain sluggish.

    That’s a recipe for stagflation, and if banks begin moving money out of the Fed and into the private sector, the rising velocity of the US money supply could turn that stagflation into a major concern.

    When stagflation appears, the risk-on asset of choice is gold and silver stocks! Please click here now. Double-click to enlarge this daily Newmont chart. Newmont began the trading year with a great upside breakout. Volume increased, and that’s healthy technical action!

    1. AlexP

      two reasons:
      – yesterday at the beginning it was too oversold very short term
      – now it grows thanks to defensive sectors while offensive ones either are in red or at best under-perform.

      both of these arguments indicate that this respite (slight growth) is very healthy for the last leg down to come 😉 it is just like the shooting has halted while “bears” are reloading their guns

  12. David Silver

    SA was a golden sell today at the open (below 9.75 now bearish) unfortunately sold yesterday
    Crude API report due hence bottom influx pivot point support (make or break) watching cery closely
    US Indices looking bearish now (PPT?)
    Close to going into cash if the latter continue

    1. David Silver

      I hear API will be bullish
      Chartist I follow wrnt bearish today
      I still think watching 36.31 is key as well as lower trendline wedge still holding.
      What to do what to do
      Last two sessions held but intraday she went lower today and now 36.22ish

  13. David Silver

    Failed breakouts
    36.31 breakdown
    Sold longs went short
    US Markets:
    PPT double bottom
    Holding longs

  14. David Silver

    Current wave 32.99 Target 1
    Bear market rally within the two?
    Final wave 27.14 Target 2 bottom?

    1. Gary Post author

      Maybe a marginal breakout but it’s too late in the intermediate cycle to have follow through.

  15. Tech_trac

    Given the spike in the TED Spread since DEC, I opt for a “CRASH SCENARIO!”
    Funny, considering all the bearish mkt letters I read, not one has commented on this rise in so short a time & with such a considerable lag from the HY plunge to 2008 levels.
    Merely catchup?

    1. David Silver

      Chris exactomundo my friend!
      Nasdaq gap fill journey in line with your S&P call!
      Long NFLX going into earnings via gap fill
      Shorted 1 tranche of crude midday
      Looking to complete another ANY spike towards 36.31

  16. Will

    Gold, on day 2 after yesterday’s “breakout” from vertical resistance since Oct 2015’s peak…counting the no. of days for this sustainability


    1. David Silver

      Amen William,
      Need to unload my NFLX on the “next pop”
      Put them into shorting bonds(inverse bear ETF’s)

  17. David Silver

    MISLEADING bullish API report after the close spikes crude higher (seasonality)
    MY magic breakpoint aka 36.31 is NOW her resistence (coincidentally spike dies @ 36.31)
    Today’s lower intraday was her tell tale
    Lower than 34.53 (32.99 seems way to close/thinkin’ 27.14?)
    New York MM’s may take her higher @ at the open just outside of 36.31 for a fakeout (primetime for 2nd short tranche)

  18. Rocky Balboa (@rockybalboaa)

    Hi Gary,

    Found your site through a recommendation on another blog.

    Happy to be here.

    What are your thoughts on Gold not rallying and breaking out above the 1088 resistance despite the macro turmoil and China issues?

    I for one have been positioned long eyeing a rally to 1150 ish in January, (10% from the 1045.5 bottom), which is typical usually of Gold in January. But things haven’t gotten moving just yet it appears.



  19. chris

    Looks like more fierce downside til at least end of the week. And for those darlings FANG, Amzn googl, with false moves comes fast moves. So the selling could get worse.

    And according to Armstrong, market volatile til Feb. Armstrong vs Alex . The battle of the ‘A’sses!!!

  20. David Silver

    Overnight futures just plummeted:
    Gold spike
    Crude lower
    Time to bail out of stocks?
    TLT tradeoff?

  21. David Silver

    Perhaps Tuesday’s open was paramount to clear longs?
    Crude success:
    Catch myself buying and shorting at influx points but in reality should do the opposite
    For example:
    Buy at broken lows rather than breakout highs (buy near highs/happens to the best of them)
    Sell at breakouts rarher than sell at breakdowns (preserve and lock in profit s/something is better than nothing/hard to pinpoint lows and highs)
    New strategy going forward (2016 resolutions)
    Just reevaluating where I went wrong Q4 2015.

    1. Al

      David, my thoughts on oil for you. IF I was taking this trade. The risk reward favour being long via technicals. I pulled up USO as a proxy so forgive me I’m not sure what you use as a tool but it will equate. You have around a $2 upside exit to approx 25c risk downside. Get out on a daily close below $10.50.

  22. Frank

    I think we are going down big right now – a wave 3 – maybe 2 to 3 times the August drop. It’s about time!

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