Reasons Why the Stock Market is Going Higher

Going Higher

I’ll shown you several reasons for why the stock market is going higher. The commercial traders in the latest COT reports are super bullish. The intermediate trend line has to be broken in order to confirm an intermediate cycle low. It’s way too late in the 7-year cycle, and the cycle is far too right translated for this to be the beginning of an extended bear market.

And now I’ll give you another one. Despite a 300 point rally retail traders, aka Dumb Money, are still buying puts hand over fist. Doing the opposite of this group is almost always a winning strategy. They are emotional, they lack inside information, and they are always on the wrong side of the market at turning points.

The fact that they are still buying puts bodes well for stocks going forward. These clueless traders have to be fleeced and start buying calls before this rally will top. At the current rate it may be awhile before that happens.

Apparently these traders are having flashbacks to 2008. Folks, it’s not 2008. The world has changed. We aren’t going to make that mistake again.

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48 thoughts on “Reasons Why the Stock Market is Going Higher

  1. teo813

    Gary, put-call ratio is not exactly bullish unless you have better info which I suppose.

    Anyway, I have to congratulate you for you bottom-picking on gold when everyone was bearish.

    1. Ed

      He also said take profits off the table. It appears that he unloaded 75-80% of GDX in total so far. Yesterday morning his unloading was a beauty. He unloaded in just nick of time yesterday. GDX went up from 20.40 to 20.80 at within 5 minutes of opening and crashed down to 19.70 in next 10 minutes. He lock in his profit at the top. That is probably the best timer I ever seen. I ended up unloading all mine at 20.60.
      Like he said, I am going to wait it out until may be May.
      Only way I will get in before May is when I see Gold going up 1280 in despite of all this Gold Bullion Banks price capping manipulations. They are in desperate mode, but it appears they are still winning like yesterday morning. If I see an evidence of Dumb money (Specs) winning Smart money’s (Commercials) paper gold price capping nake short selling, I will jump in 100% again. GDX is not going anywhere. This is the trade of the century. 100 bagger if you play well and have patience.

  2. Dan

    I made 60% shorting biotech last year, nice try though. Made money in the January plunge too.

    We’ll likely chop around for a bit as the Fed criminals throw everything to keep this fraudulent market afloat. But it’s still a bear market and miners and stocks will get destroyed in the coming deflation.

    Keep chasing trash like XBI and touting the bubble phase with the Qs and NYA well off the highs though. Long nat gas, short miners.

    1. Gary Post author

      The S&P hasn’t even dropped 20% yet. Where do you see a bear market?

      I doubt you made 60% also. This sounds like the nonsense we get from Avi Gilbert. Always a perfect trade but always after the fact.

      In these parts unless you call it in real time the trade never happened.

      Here is a real time call on Feb. 26. You were long DUST. You then proceeded to take a 32% drawdown. We all know you sold that for a huge loss.

      This is what I mean about real time calls.

      So no more of this after the fact nonsense.

      Right now you are long nat gas. That is a real time call we’ll see how it works out for you. Personally NG is too volatile for me. I stay away from it.

  3. pepe le pew

    hmmm, maybe a one day half cycle low in oil? Ist possible when coming off a bottom like this…

    1. Gary Post author

      Stocks and oil should dip down into a HCL but with the FOMC meeting next week the PPT may stop the correction. Betting against the market ahead of an FOMC meeting hasn’t been a winning strategy for like the last 4 years.

      If the Fed wants to raise rates again you would think they would like to get the S&P comfortably back above 2000 before doing so.

      1. Richard

        Gary

        Stocks: 1968 should hold with an upward objective of 2025. Will evaluate at 2025.

        HUI: 150 should provide support with an upward objective of 250. Remaining long mining shares.

        A weaker dollar should confirm economy weakness. A FED non-hike will reinstate concern for the economy. BUND-10YR spread concerning.

  4. Alexandru Popovici

    USX strength into a new DC and gold’s trend underscore the caution of liquidating gold on Friday after a jobs report that cast rays of an overheating US economy.

    ECB’s decision will decide whether USX will form a left- or right-translated DC with cascading effect on gold.

    1. Gary Post author

      I agree on that one. The ECB decision will decide whether the euro starts down into an ICL or makes a right translated intermediate cycle.

  5. Walt

    Agreed . I’ve been long 98% of my money in the s&p for the last 4 weeks. I bought when the sky was falling . I’ll only sell going forward if support at 1965 s&p taken out . Hopefully that number is soon in the far away in the rear view mirror

    1. Ed

      “This time is different….”
      We heard that words a lot before you are about get fleeced.
      Until we see CTFC, FED and SEC people get audited and investigated, nothing will changes. They will find ways to depart you with your money. Be careful with those enticing charts. Unlike any other industry, Gold and Gold miners are against powerful Central Banks. They hate gold and they will do anything to destroy gold bugs.

      1. Bill

        Go pound sand, if I followed you ” Gold is going to 1000″ dopes I would have missed out on my 150% gain… I am scaling back in on every dip.

        1. Ed

          I think you misunderstood. I am out of 100% GDX as of yesterday. I was in HUI 100 so I made of 60-70% profit. Since English is not my native tongue, I do have some problems conveying my message. I said 100 baggers if you play smart, that is in and out as needed for a long time. I never said you gotta be in one position forever to take benefit of a bull market.

      2. Gary Post author

        I would argue the opposite. Central could care less about the price of gold. But it is a useful tool to control inflation expectations.

        Like I’ve been saying; in 2013 the Fed needed to release more QE, but they wanted it to flow into stocks, not into commodities. If it went into the commodity markets it could spike inflation and cause a recession like it did in 2008.

        The answer was to attack the gold market and keep QE from flooding into the CRB, and stay mostly in the stock market. It worked perfectly.

        Now however we have a potential crisis brewing in the energy sector, so now the Fed needs inflation in commodities. The easiest way to get that is to stop suppressing gold and allow liquidity to find it’s way back into the CRB.

        So I think we are done seeing active suppression of the gold market. Now we should get normal cycles. 3 steps up, one step back.

        1. Richard

          Agree with you on that Gary.
          Now, the question:
          If the USD drops significantly, will that force a breakout above $40 on oil? Or will it indicate economic weakness thus dragging oil lower?

          1. Gary Post author

            I’m of the opinion that the CRB has completed its 3 YCL. So I think oil is going above $40 and probably back to $60.

        2. Ed

          I agree they need to jack up the price of oil and commodities space in general to inflate stock markets. That tells me that Gold Smart money for once may be subject to short squeeze.? But I seriously doubt that they are going to lose control that easily in suppressing gold price. I think Central Banks still want to see gold and silver price suppressed to disguise their competitive fiat money printing operations. All other non-monetary metals and commodities, I agree with you 100%.

  6. Stevie

    Take a look at the COT report and compare it to the SH numbers. Dumb money was shorting in the 1800s and over the past 2 weeks they have record short covering.

  7. Walt

    Yes, I see that bull flag too on s & p .
    We’re at the bottom tip of the flag .
    We’ll see , fingers crossed

  8. Jorgy

    There goes DUSTy… Guess who’s getting their teeth kicked in now? Dumb money bought the failed breakout attempt of the consolidation triangle that everyone and their brother was hoping would rip to $1,400. Now we get to hear Gary bitch about “manipulation” until May while I bank coin! ?

    1. Jorgy

      [email protected]@k at all the Johnny Come Lately’s run like hell to the exits rushing to lock in gains (best case) and/or limit losses (worst case) from getting sucked into a “This Time It’s Different” trade. Sorry folks, you’re not getting rich quick and it’s never different! ???

    2. Gary Post author

      First off we all know you sold for a loss after taking a 30% drawdown on your DUST position.

      Second I’ve already sold all but the last 25% of our miners and the metal portfolio is up 51% so far over the last 14 months so no reason to complain for me.

      Like I just said I don’t see the reason for the Fed to continue to attack gold. They need commodity inflation now. So gold should begin to move naturally. 3 steps up then a corrective move back down.

      Gold is 14 weeks into an intermediate cycle, it’s going to be time for a corrective move soon. I expect it. It doesn’t take manipulation for it to occur. Just natural market forces will result in a normal profit taking event.

      1. Jorgy

        It’s all good bro… bulls make $, bears make money and the pigs get slaughtered. Just playing the IC Top and drop… I’ll be back on your team (side) in a few weeks! ?

        1. Ed

          I just found a quote you may be interested. “The first thing I heard when I got in the business, not from my mentor, was bulls make money, bears make money, and pigs get slaughtered. I’m here to tell you I was a pig. And I strongly believe the only way to make long-term returns in our business that are superior is by being a pig. I think diversification and all the stuff they’re teaching at business school today is probably the most misguided concept everywhere. And if you look at all the great investors that are as different as Warren Buffett, Carl Icahn, Ken Langone, they tend to be very, very concentrated bets. They see something, they bet it, and they bet the ranch on it. And that’s kind of the way my philosophy evolved, which was if you see only maybe one or two times a year do you see something that really, really excites you. The mistake I’d say 98% of money managers and individuals make is they feel like they got to be playing in a bunch of stuff. And if you really see it, put all your eggs in one basket and then watch the basket very carefully.” -Stan Druckenmiller

          I agree with him 100%.
          I don’t do asset allocations. Also I don’t play any leveraged stock like 2X, 3X. In a long run you will lose your bets. That’s a casino. In casino, house always win.

  9. tulip

    Market Meltdown Already Underway-Gregory Mannarino
    By Greg Hunter On March 9, 2016 In Market Analysis 8 Comments

  10. John Galt III

    Fed will raise rates next week – market does not expect that

    GDX – huge gap at $15.00 – we will get there – just another buying opportunity for those who missed.

    “Since 1994 – all golden crosses that started from one-year lows and continued on to higher highs experienced initial peaks within (3) weeks of the cross and dropped a minimum of 5% and as much as 22% within 4 weeks. ”

    We will get to $15 on the GDX very quickly

    http://www.321gold.com/editorials/hoye/hoye030816.pdf

  11. Huckleberry Finn

    1,180 GOLD coming to a gold bug station near you.
    But I think Gary is right longer term that it will be a buying opportunity.

  12. Gary Post author

    Gold tagged the triangle trend line this morning. As long as that holds I’ll continue to hang on to the last 25% as I think we still have one more higher high before the intermediate cycle tops. If gold breaks the trend line then I’ll take profits on that last 25% position and get on the sidelines till May when the next ICL will be due. Either way we still have a huge profit in the remaining position so I can be patient and see what plays out.

    1. Gary Post author

      I’m afraid he’s going to get killed again on his DUST position that he took yesterday. He already got killed on the last one trying to short the baby bull.

    1. Gary Post author

      I’m just holding that last 25% position for now unless the triangle trend line breaks.

  13. Sahel

    I sall be using this upcoming pullback in gold to get bearish gold and silver, and to make money on the short side.

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