If the panic continues early next week we could have the setup to finish the drop into the 7 year cycle low with an 87 style crash event.
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If the panic continues early next week we could have the setup to finish the drop into the 7 year cycle low with an 87 style crash event.
A millon dollar question:
Would Gold fall with the stock market or will diverge ?
Gary,do you sense that Gold have already formed a long term bottom or it will bottom this year as the 95% of the analysts is predicting?
It should bottom sometime this year.
If stocks can continue the panic early this week and leave no doubt that there is no recovering from this sell off without another round of QE then gold has a better chance of having already bottomed. If stocks choose the second scenario and the 7 YCL gets pushed out to summer or fall then gold will almost certainly make another lower low.
Thank you Gary.
It is interesting to notice that many Miners are experienced a sort of bull market diverging completely from indexes like xau,hui etc…
It is absolutely unbeleviable what the Australian gold stocks are doing almost completely unnoticed by most.
I don’t know if this is a sign that something is brewing in the PM world.
I think it means gold either has, or is close to bottoming.
Gary, don’t understand how this is investible analysis, basically saying gold/markets could go down Tuesday but then again might go up. The fed may intervene but then again it might not and so on. Would be better for us novices to know what you’re doing, selling gold buying conventional market, or buying gold and selling conventional markets. Little value in discovering the outcome after the event has past except to be able to say that one of the two outcomes was presented as a possibility.
I’m long based on the extreme bullish levels in the COT. When they reach bearish levels then it will be time to get back on the sidelines.
This strategy is worthless for short term or day traders though.
If you want real time entries and exits then you will have to get a subscription. Virtually everything posted to the blog will be delayed.
Gary,
If stocks crash this week….and remain in their low category….. the fed can remain neutral…and still raise the rate…believing the market has bottomed & will remain at a determined level…..right??Not as over valued..
I would think a crash would bring a central bank response just like it has every other time in history.
Thank you for the analysis Gary. If the markets do go into the panic selling this week how does the USD react to this? Does it go down because people will be assuming no more hikes and the probability of QE in the future is more likely? Just trying to wrap my head around this.
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Hi Gary,
Like your video. I assume you are only talking about an ICL that will hold for a couple months in the 1700 levels, before stocks break that low in summer 2016 on their way to major cycle lows into Autumn 2016 or Spring 2017.
With a bear market confirmed in almost every index, following the confirmation in Transports and Small caps last August, don’t u think that we are less than half way into a cyclical bear market that should correct 45-50% from the top? So let’s say from May 2015 to about March/April 2017, and spx correcting to about 1050-1100 levels?
The Central banks really are out of bullets, and just like in the previous cyclical bear markets 2000, 2008…the markets will have to fall much farther before we get the next response from central banks, and I think we are looking at much much lower levels before the next easening cycle in the form of QE4 or some other financial engineering is unleashed by the CB’s to bring us into the next cyclical stock market bull.
Cheers
-Rocky
I think it’s possible the bear could be over very quickly just like it was in 87.
We need it to unfold as a crash, and not a slow grind down.
For those of you pondering what the Federal Reserve can (and cannot do) to stop the current DEFLATIONARY COLLAPSE caused from their self imposed liquidity trap read the link below. Here are the options: NIRP, QE4, Called Monitization, Helecopter Drop all of which they can (or cannot) do with (or without) a crisis and/or an act of Congress. Needless to say, they may pump in liquidity (credit), but they cannot control where it goes. They’re essentially helpless at this point in time! ???
http://www.hoisingtonmgt.com/pdf/HIM2015Q3NP.pdf
P.S. Spend some time downloading/reading the quarterly newsletters on the above website… They’re good! ✌️
Fully agree Gary, I see some solid selling pressure leading up to ECB Thursday, and super mario jawboning as per usual. Maybe another short solid rally (not to the highs) then the market will be down again in time for Janet’s turn. What a shit show! Lower high again, and somewhere in the next few months, real trouble. I fully believe that TPTB are selling out the central banks, to bring in NWO. And I also think Bernie Sanders is their man, therefore they want trouble soon.
Oh Gary, do you see and chance a rally starts before the ECB meeting, or highly likely it tanks early in the week? Early in the week would lead to your solid surge in gold to $1145 level, but, if super mario delivers for the stock market, gold will keep going aswell, cheers
I don’t think there is any trade either long or short in the stock market at the moment.
I’m kind of leaning towards just staying in cash until the S&P reaches 1550-1600.
Why would you not trade the move down to 1550-1600?
Because the Fed has a printing press and one could wake up one morning to an annoucement that they are doing a temporary 100 billion QE to stablize the markets.
Ha, you must hate it when people ask questions in your update section without watching the wrap. Great analysis, answered my questions, cheers mate
A wise trader once said, “surprises in bull markets are to the upside” and while it’s too early (since we don’t have confirmation of anything) to tell if the gold bear ended in December, contrarians have to love the asymmetric risk/return profile of gold/silver producers at these price levels given the fact that NIRP may force trillions of fiat currency toilet paper into hard assets like gold/silver rather than being taxed in the banking system. Given the deflation in oil, steel, wages… If gold/silver can hang in at these levels the YOY comparables in non-U.S. gold/silver producers gets better in 2016 and beyond if the weakness in their respective fiat currencies persists. That said, nobody, and I mean nobody, individual or institutional owes these gold and silver producing companies in size at this time, nobody! ?
Euro Dollar Bets On NIRP Since % Liftoff:
http://www.zerohedge.com/news/2016-01-17/here-stealthy-way-some-are-betting-market-crash
Hi, Gary, very nice presentation! Just now I’ve looked at it – took some time off away from my computer – it’s great to shift from the e-world back into the person-to-person classical world once in a while.
I completely agree with you while voting for the latter scenario in stocks as being on high probability for 2 reasons:
– a break on NYSE Compiste’s 200Wma is followed by extensive period until a final bottom (minimum 8 weeks and usually at least one year)
– the ECB is most likely to increase its QE to EUR 70 bn per month from 60 now (to drag gold and miners to new lows, as I’ve already commented).
I would have one slight change to that –> namely I think the ECB meeting will be the catalyst of a new intermediary cycle and that we are about to or have already touched the ICL.
But that’s not really important.
The important things are:
– we have to stay away from stocks for a lengthy time
– time to short gold is quite likely close to us as USX will produce a bull trap.
Gold needs much more than a 4 day rally to qualify as an intermediate degree rally. As I’ve said before one of the qualifiers to confirm an ICL is that price has to break the intermediate trend line. So price can’t start an intermediate decline before it even breaks the trend line. At best it could finish an ICL, but not start one.
One could make the case that gold is ready to produce the last 5-10 days down into a final ICL, but it isn’t starting a new 15 week decline.
The reason this qualifier has to occur is because technical traders need to get on the wrong side of the market before the trend can reverse. That happens when the trend line gets broken. And it works in both directions, both up and down.
So gold can’t start a new intermediate decline until that trend line breaks. At best it can only finish an intermediate decline that is getting very mature.
Or gold puts in a DCL very soon and rallies for another 2-4 weeks, breaking the trend line and pushing sentiment well into bullish territory, and reversing the bullish COT levels. Then the intermediate cycle could top and roll over.
Here is a tutorial on cycle analysis.
Could last Friday’s sell-off in most miners be just a manifestation that the market is “smelling” more QE from the ECB?
And, How will equities take it this time?
It’s so hard to tell what is “real” and what is a setup in the metals sector. It is so heavily manipulated. This has the feel of a setup similar to what happened in August.
The volume in DUST is not confirming a sustained move down is starting in miners.
Crash event is unlikely. Far more likely a meandering rally to a lower high over then next few months to shore up excessively negative sentiment, before the next leg down in a longer bear market over the summer. You may want it to be over quickly, but the slow grind of time is a essential component in unwinding years of misallocation.
Hey Gary……really great job with your blog. I am a complete novice when it comes investing (I’m an organic chemist), but I’ve been watching your videos over the last few weeks to get a sense of what will happen with the markets.
Question……do you think it would be a wise decision to buy stocks (specifically in biotech for long-term investments) when they hit their lows during the predicted ‘crash’ in the next week or two at the end of the 7-year cycle? I’m guessing this bottoming out will coincide with the S&P 500 hitting 1550 that you mention above? Thanks so much for any input.
Paul