Stocks are Heading Higher

Stocks are Heading Higher

Stocks are heading higher. And I’m seeing the usual nonsense starting. Stocks are not rolling over and heading down to the lows. The S&P is 19 days into its daily cycle and in the timing band for a half cycle low. Watch the RSI when it gets oversold, start buying. (There is even a chance the PPT steps in and halts the correction prematurely).

I’ll point out again that the intermediate trend line has to be broken before the intermediate cycle can have any chance of topping. How many times must traders see this before they catch a clue?

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60 thoughts on “Stocks are Heading Higher

  1. Gary Post author

    Folks, markets don’t go straight up indefinitely. There has to be corrections along the way. Small profit taking events. Normally one occurs around day 18-25. The S&P is on day 19.

  2. Dan

    How are those biotechs doing? As usual, calls for a central bank bubble phase near the highs go down in flames.

    1. Gary Post author

      Not a chance. Bio tech is just following the market down into a HCL.

      You will be wrong again just like you were at the bottom in gold and the bottom in oil and the bottom in stocks.

      You really need to study cycles and sentiment so you can start catching these moves.

    2. Bill

      Are you serious Dan, or just a typical forum troll? Let’s see your calls , you know all those failed gold going to $500 calls… Clown .

  3. Stevie

    Looks like the dumb money nailed it.
    Options expiring next week are up 50-200% across the board.

    1. Gary Post author

      I guarantee before the intermediate cycle in stocks tops, probably in May, LABU will be up at least 100% and maybe 200%.

      This is why retail traders lose money they get caught up in trying to day trade every move instead of focusing on the big picture.

      1. MuffinTop

        Gary — Why are people so freakin stubborn?

        The Market shakes up, and out come the Drama Queens 🙂

        1. Gary Post author

          Retail traders are emotional, overleveraged, and rarely make a plan. It’s why they lose money more often than not.

          1. Jacob

            So after dragi blew his load today and stocks went down, you don’t think this is a big deal? What do you think, stocks down into the fed meeting, then up?

    2. JJ

      Steve, could you kindly point us out to someone who is correct 100% of the time? Thanks in advance.

    1. Gary Post author

      My guess would be yes, and that’s probably when one would want to scale out of the rest of their precious metal positions.

  4. Dan

    This will be a topping process so no plunge right away. Could make marginal new highs up to 2040 SPX or so as it chops around.

    Volatility will be back in the second quarter with a vengeance.

  5. Gary Post author

    And this is exactly why I keep preaching that it’s dangerous to short the stock market. The PPT can stop corrections. You are fighting an opponent with an infinite supply of money.

  6. Alexandru Popovici

    I’ve just shorted SPX at 1988 – a pilot position in SPXU which I’ll grow latter.
    It is a very small risk entry with a lot of reward potential.

    Planning to increase my long-gold and short-SPX positions after FOMC.

    1. Gary Post author

      I would argue that would be the worst time to increase as that’s when the dollar cycle is likely to form a final ICL. That should trigger a rally in stocks as the dollar comes out of its ICL and a drop into an ICL for gold.

  7. Duncan Smith

    Forget looking at a one year graph of the S&P 500 ,have a look at a graph stretching back to 1994. The rounded top which is presently forming, and which peaked in August last year looks disturbingly like the the peaks of 2000 and 2007. Also take a look at the mac D for the maximum time frame(All). To be clear i’m not clear on which direction it will go, but i don’t like the look of that chart.

    1. Gary Post author

      Like I said the ROBO ratio isn’t even close to signaling an intermediate top yet. Dumb money retail traders are buying puts hand over fist. They need to get fleeced before stocks can put in a top.

      1. Stefan

        In a monthly chart it’s crystal clear that Spx is rolling over, however I do not expect a crash until later this year. Why not in August/September like last year?

  8. Hillarys Cattle Futures

    Gary: How about an update on Currencies????? … there’s been some big unexpected moves in intl. currencies that have reverberating effects … can you shed some light?.

    1. Gary Post author

      Looks to me like the dollar is going to move down into a final ICL over the next 4-5 days.

      That being said the currency wars are in full swing and who knows when an intervention is going to occur. I’m positive the Fed intervened today to keep the dollar suppressed ahead of a possible rate hike next week, assuming they can get the stock market back above 2000 by that time.

      1. marina

        That means stock and gold still go in the opposite direction next week. If May Stock top and gold bottom. Again opposite. When will the go up together?

        1. Gary Post author

          I think soon the dollar will start moving lower into the next 3 year cycle low and both stocks and gold will go up together. In case you haven’t noticed both stocks and gold have been rising together for the last 4 weeks.

  9. Barney

    Took some profit on the vix.

    Loaded 50% on short s&p / dow x3 etf.

    Just to keep my dust and short gold x3 etf company. Still looking to pick up dust at $3 but probably will not get a chance.

    Time will tell.

    Really interesting reading your posts and ideas.
    And it will be even more interesting to see how it pans out.

    1. Gary Post author

      100% long in the stock portfolio. Until I see some sentiment extremes I will stay long stocks. And right now sentiment is dead neutral and the COT is very bullish.

  10. Hillarys Cattle Futures

    Looking forward a couple months (to May specifically) … do we get the “Sell & May & Go Away” effect in the stock market this year?.

    1. Gary Post author

      I would say yes as that will be in the timing band for stocks to drop down into their next ICL.

  11. Aj

    I would say this again that stock marjet is headed to 1750 before 2060.

    Rarely is Gary wrong but I think the futures rollover stopped the collapse today.

  12. Ty64

    Considering taking position in LABU tomorrow…I’ll keep it small and only buy $1000.00 worth. If my timing is way off and the stock drops 33%, I’ll probably buy another $1000 worth and let it ride…win or lose.

    I know Gary doesn’t recommend DUST. But, if DUST drops below $3.00 before the FOMC meeting next week, I may take a position in DUST. Whenever buying DUST–no matter what the trend, I’ve always kept it small. Never take a sizable position in DUST…it’s not worth the risk–what-so-ever….IMO

      1. Ty64

        Thanks for the chart…I’ll look your chart over some more later…I just take small positions in DUST from time to time…just for the fun of it.

        I never take any serious positions in DUST…I sorta got a taste for it when I was a Premium member on Gary’s site…a day trader on the forum side of the Premium membership is fairly good at taking daily positions on DUST / NUGT…he post trading positions in real time…win or lose.

        Since I’m 100% out of my trade-able position in the miners right now, I’m waiting for a possible correction in the miners before I re-Join Gary’s Premium membership…I would want to have access to view the Model Portfolio before I would jump back into another trade-able position in the Miners.

        I still have a position in the metal sector and so I’m not concerned to much if the miners go to the moon, but that position is long-term and not to be traded. 🙂

  13. Duncan Smith

    Although the PPT have the ability to “try” and prop the market up, I don’t think this intervention will be permanent. They haven’t been able to influence the chart and avoid a topping process, and the Chinese(ppt) clearly haven’t stemmed a crash . The S&P has clearly began to turn and has formed an almost perfect roll over. Looking at short term chart it could reach 2030, and if there is a breakout above that level then i would become more bullish. What makes me nervous is how similar the chart is now to pre 2000 and 2007/2008 crashes . The technical s are almost identical. I would say the markets fates was sealed last summer when they peaked, and we are in a pre crash phase. Anyway will see come September, i’ll keep my “dumb” money on the side lines for now.

    1. Gary Post author

      If one just looked at charts what would you say is happening with this chart?

      If you said the market was topping then see what followed.

      This is why I don;t just follow charts. They lie to you at major turning points. This is where you need other tools like cycles, sentiment and the COT.

      What the powers that be have proven is that they can create bubbles. They haven’t however shown any ability to stop the bubbles from imploding. It’s time for the next bubble.

      1. Duncan Smith

        Yes the market was topping and the S&p crashed big time in 2000, and in 2008 , that’s what followed.

        1. Duncan Smith

          As I said 2030+ i’m bullish, if it hits 2030 and retraces the crash is still on.
          “If one” who are you the queen!!

  14. Alexandru Popovici

    🙂 Gary, by looking at the former chart you set in your last reply I would answer that, after so catastrophically low level for MACD and high level for DI+, these oscillators would require the underlying SPX to produce a lower low, hence a bullish divergence before we could think of the end of the bear market in stocks 😉

    PS: massive selling on strength in stocks accompanied by a lot of hesitation at the 200dma of many indicators. If to all these technical data you add an overheating US economy, I’d rather be out of stocks for the moment and even shorting them with a small capital at risk, as I am actually doing right now 😉

    1. Alexandru Popovici

      …as an appetizer of the many bearish data (while I think we still are in a bear market, I do not exclude a higher high to produce a bull trap next week), take a look at IWM – at its daily price movement and at its volume chart, what do you see? I see an almost rugby ball, perfectly symmetrical, mirroring trends, with red candles accompanied by big volumes.
      Isn’t that nice 🙂 and menacing at once ?

  15. Walt

    Like I said yesterday , a shakeout of weak hands , when the dow & s&p sold off all day into their support levels 1965-1975.

    1. Alexandru Popovici

      do not jump the gun, Walt 🙂
      if stocks market moves to a higher high, that will be a bull trap; overhead supply and profit taking will ensue even more forcefully.

    2. Richard

      Nice call, I saw you stuck to your guns from many posts ago.
      I was reducing positions yesterday around 1985 and if we can build on the gains this am. will take more off and just holding mining shares.,

  16. Walt

    I’ve been planning on selling at 2040 s&p for the past 4 weeks . I think I’m not the
    only one with those plans , judging from the charts , w resistance at 2050 . I might just sell at 2035 to make sure I’m not front runned .

    1. Richard

      Smart, don’t top tick it. Always leave the last few points on the table for the next guy.

  17. Richard

    Why are so many infatuated with DUST?
    The HUI has strong support at 150 and is currently around the 175-180 area at resistance. Are people actually trying to play the downside from here to 150 in a confirmed uptrend or do they believe 150 offers no support?

  18. Alexandru Popovici

    Walt, if that works for you, then it’s great.
    Personally, I’ve found the hard way that it is not wise [for me] to follow the book, the wise, that it pays to leave room in my trading plan for paradoxes and for the less-likely or even unlikely event (after all a 99% probability is fabulous buuuut….it means that out of 100 events in the same situation there will be ONE EVENT that can be destructive – and I must be prepared for that one or rather for those ones since I deal with probabilities far less generous than 99%).

    A cushion of mistrust is warranted [for me] even if it may come at the cost of losing some pennies of profits. In the long run those lost pennies are insurance fees against “the less likely events”.

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