Temporary Peak in Stocks and Oil

temporary peak

The stock market appears to have made a temporary peak. In its advancing intermediate cycle price bounces very quickly from oversold conditions. Watch the 5 day RSI. If it hits oversold that is your signal to buy. The caveat is the FOMC meeting next week. The PPT may step in and prevent the half cycle low from forming.

The oil market also appears to have made a temporary peak. Oil tagged the second resistance zone this morning (I took profits on a large USO option position in the aggressive portfolio). This is a prime target for a corrective move down into a half cycle low for both stocks and oil. It will be a buying opportunity.

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29 thoughts on “Temporary Peak in Stocks and Oil

  1. Jameske

    Gary,

    Where do you expect the half cycle low to turn? When the rsi5 on the daily chart hits oversold?

  2. Jameske

    Nevermind Gary, could not read your remarks on the chart on my phone, saw it on the computer. Cheers.

  3. Jay

    This morning’s GDX selloff is just a tiny preview of what will eventually happen to GDX. ๐Ÿ™‚

    1. Bill

      A one day correction and out comes the ” world is coming to an end ” butt hurt callers lol…hilarious.

        1. Gary Post author

          I don’t know about under $10 because all the signs are there that a new bull market has begun, but we’ve already taken massive profits off this move. We have another 25% to sell and then we’ll be back on the sidelines and waiting for the next ICL in May.

        2. Ryan

          I’m already laughing all the way to the bank. Mexus Gold is up 700% from it’s lows. Took some profits, but I’m afraid I may miss further upside with 2 JV’s on the horizon. They will be GORO on steroids during the next bull. A lot of the same investors.

  4. Brent

    At 12:30 EST Andy Bell who is live from the PDAC said gold was approaching $1280, when the BNN ticker was showing $1265?
    He’s as confused about the price as I was, since it was $1276 at 1am Pacific before I went to bed?
    A slip up by the puppet masters I presume?

  5. Walt

    Killing it in DUST since I bought it yesterday . I had to buy it . No regrets here .
    Only used 2% of my assets , but crazy returns today

  6. BailOut-2-BailIn

    If Iโ€™m reading the S&P500 charts right, there were 69 weeks in this latest S&P 500 intermediate cycle. The May top occurred @ week 31 making this Int Cycle left translated. Why would we expect higher highs from here?

  7. MuffinTop

    LABU ๐Ÿ™‚

    For those of you late in the game.. Your next ‘buy’ opportunity is around $6.25, right off short term trend support — 1st Stop Loss under $5.50.

    LABU could very quickly trade all the way up to resistance under $15 if and when…

    1. victor

      Thanks MT, didn’t know about it…, I think it will rise a bit but I’m waiting for one more big move down on SPX , hopefully around 1600 end of the summer or so…, that were I”ll load everything I got…

    2. Vortex

      MT,

      LABU still has a 21 PE even at 52 week lows. I would be a bit cautious at this stage.

      Not sure why your so bullish on it.

  8. Gary Post author

    Just got the latest retail options data. retail traders are still buying puts hand over fist. They have to get fleeced and start buying calls before this rally tops. Based on today’s data the bearish retail traders are in for a world of hurt over the next couple of months. And the longer they hold on to their bearish bias the more sustained the rally will be.

  9. Gary Post author

    Human nature never changes. Dumb money sells at bottoms and buys at tops.

    We got a front row seat to that process in gold over the last couple of months. I expect we will see one more rally in gold to wipe out the shorts now flocking to the gold market and then gold will finally form an intermediate top.

    1. MuffinTop

      I’ve been doing this awhile now and one of my biggest lessons in trading/investing was learning to decipher the many facets of ‘Market Psychology’, including…

      Dumb money [who btw always wants to argue common freakin sense] versus Smart money ๐Ÿ™‚

      1. Gary Post author

        Dumb money = always trying to trade counter trend.

        In an uptrend dumb money is constantly trying to pick a top.

        In a down trend dumb money is always trying to pick a bottom.

        Then when sentiment reaches extremes and it’s actually time for a turn that’s when they decide the trend will continue indefinitely ๐Ÿ™‚

        I would also add dumb money feels the need to trade every day instead of waiting for a low risk trade to set up.

  10. Walt

    I don’t like the look of the s&p today .
    I was looking for a pullback to around 1987-1990.
    The 1979 close today got real close to support at 1965-1975 . If we break 1965 ,
    then back down to test the lows again is back on the table . I’ll sell my position in s&p then if 1965 taken out . That support level is important going forward . If that happens , that could light a fuse under gold again. If 1965 s&p holds, we go up to 2100 in spring and gold corrects at that time . My 2 cents

    1. Gary Post author

      I’ll be willing to bet a burrito that isn’t likely. Maybe a test of the triangle trend line but then one more higher high before gold starts an intermediate decline.

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