Runaway Market Closer to Being Confirmed

runaway market

While all the technical traders have been busy assuring me I’m wrong and the stock market is about to crash, we see again today that technicals are useless as the market comes out of the 7-year cycle low. A runaway market is close to being confirmed.

Quit wasting your time following these people. The perma bear deflationists will just continue to get it wrong over and over. I warned that there was a possibility a runaway market could begin and if the S&P breaks the intermediate trend line the odds are going to go up significantly that outcome is in progress.

I continue to like the rounded bottom forming on biotech. Once the speculative driver of this bull gets in gear the rest of the market will really start to move higher.

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88 thoughts on “Runaway Market Closer to Being Confirmed

    1. Gary Post author

      No no no. now is not the time to buy metals. Wait for the ICL in May. There is almost always some kind of double top in miners that suckers over anxious bulls back in only to get slaughtered.

      The place to play right now is the stock market, and energy, and especially biotech. Wait 5-6 weeks before wading back into the metals sector.

      I warned this was going to happen. It’s going to be very erratic as the metals move into their ICL. Neither bulls or bears are going to have an easy time making money.

      1. Ryan Walker

        Correction in gold already happened last Thursday at $1211.20. I wouldn’t get cute here.

    2. Captain

      I like your guts and the way you approach trading positions. The key to making profits is holding positions over longer periods and not day trading. Biotech is forming a veritable bottom right now and LABU is one of the the best trades out there in the market right now. Thanks for your web site, guidance and tenacity.

  1. david

    Gary,

    “if the S&P breaks the intermediate trend”

    Is it now more likely then not that it will break or it can stop here and consolidate?

    1. Gary Post author

      It’s going to break it. The question was whether it would do it during this daily cycle or the next. If it does it this late in a daily cycle it raises the odds that a runaway move is in progress.

  2. Gary Post author

    Where are my buddies Dan and Stevie to tell me again what an idiot I am and that market is going to crash? 🙂

    1. RickyBobby

      The markets are gonna TANK Gary – they will force the FED’s hand. You will be right about your runaway market call, BUT only after the S&P500 crashes to 1600 – them they will take rate hikes off the tAble and start asset purchases once again. Like a baby howling for its soother.

      If the runaway move simply started now, then the fed could hike rates all they want – that’s the paradox here.

      You should have stuck to your original call of S&P 1400 THEN the runaway move begins.

      Thanks for all you do.

      1. Jacob

        I think I still agree with this theory Ricky, though my CONfidience is low. It’s not looking so much like the market needs the next round of QE to moon shoot any more. With complete manipulation I guess we can keep grinding higher. God dam it makes me mad, forget the actual economy, stocks high and everything is good.
        Though on the flip side, in the presidential cycle it’s time for a crash.
        Since I’ve been following this site I’ve gone against Gary’s advice a few times, one time it worked (only because in Aus we had a good santaclause rally the rest of the world didn’t have), the rest of the times not so good

    1. Gary Post author

      That’s the kind of analysis I see from 99% of newsletter writers. If the market reaches such and such a level then it’s going up. No s**t. Except you missed the move waiting to see if it happened.

      Notice that I don’t play that game. I tell you before hand which way I think the market is going so you CAN make money off the move.

      1. mm

        Beep beep beep … tooting your own horn. ??? Good call thus far but TA saying the same thing and I’ve been in the market for the last 5 weeks. TA isn’t saying to get in soon, it’s saying heed caution ie next level 2080 and if we stall, take some off the table.

        Not too different than your outlook … u don’t catch every penny but with TA u avoid huge drawdowns.

        1. Anthonyo

          TA don’t mean a hell of beans in the highly manipulated markets. Not an iota of use for TA really now.
          Especially EWA is crock os Sh**t.

        2. Gary Post author

          In my experience with TA you end up with a bunch of small losses which adds up to the same thing in the long run.

          Let’s face it. If all one needed to make money was some charting software and a few indicators then every retail trader would be rich.

          1. J

            You used to have a little humility back in the you started this blog, only following the COT , but now,,not so much.

            “Let’s face it. If all one needed to make money was some charting software and a few indicators then every retail trader would be rich.”
            Same could be said for cycles, sentiment indicators and a few cot reports.
            You’re doing well gary, but let the market prove you right, you’re better than “I told you so”.

  3. Dan

    Lol. Still 98% cash and waiting for the blowoff phase to finish before loading UVXY calls. Will post when I do.

    Feel free to chase though.

    1. Gary Post author

      I’m afraid not Dan. You bought UVXY back on the 23 and have now lost over 13% in the position.

      You have to quit following Doc. His technicals are useless during these big cycle turns. He shines once we complete the turn and start to trend.

  4. Johny Johny

    I’m afraid you will miss the miners move up waiting 4/5 weeks, it feels a run away move is underway

    1. Gary Post author

      Never chase a move that has already run 90%.

      Focus on stocks (biotech) and energy right now.

      1. Johny Johny

        true, we’ll see, so many waiting for a correction, and that bothers me, but I’m long stock/bio anyway

    2. Ryan

      You never, never, never, stay on the sideline of a baby bull. Never! I said it once, and I’ll say it again. Why chance getting left behind with money parked on the sideline? We are in the 1st inning of this bull market.

      lol! We love you, Gary.

  5. Gary Post author

    Going to be a record up volume day in LABU today. Smart money just continues to accumulate shares ahead of the impending big move.

  6. Walt

    Don’t fight the fed . They’re telling you what to do . Buy stocks , real estate , etc . Don’t hold cash . . If they were more hawkish Gary would be wrong . But the fed wants everything UP. Alot of people thought that the fed would need to finally normalize rates to prevent pension fund insolvency among other things ( elderly savers being killed ) .

    1. Trader Cee

      The Fed does not have a lot of authority over markets right now since their only bullet is to withdraw that one rate hike. I was a little surprised Janet said that an expansion of their balance sheet was still on the table if necessary (read, more QE) but that did not move markets enough yesterday to convince me of anything. A one day post FOMC pop is often followed by a let down a few days later. We will see what happens.

  7. MuffinTop

    Gary — This seems unlikely in my opinion but do you think that GOLD could still very well tag $1300 in order to drag overzealous Bulls back in?

    Ps: I’m also looking at a possible H&S which of course has bearish implications and I think Sentiment is also rather bearish at the moment as well, yes?

    Thx dude 🙂

  8. Alexandru Popovici

    Victor, unless you be already sold or silver, as long as you had already been on that position, I think you should have kept it and tightened or stop.
    What I said referred to getting a new long PM entry to be dangerous but as long as you were already on board…it makes a good idea to keep a position, maybe dump just half of it on strength but not more, and ride the wave of a new DC of gold UNTIL USX BOTTOMS IN 2-3 WEEKS.

    1. RickyBobby

      Alex, you bought gold when it hit $1280 lol. You waited for your “conformation” and bought the top!! Lol

      1. Alexandru Popovici

        yes, Ricky, I did and then closed it on the following day with a -0.2% equity loss

  9. Alexandru Popovici

    USX IS SET TO FALL STEEPLY IN WHAT SEEMS TO BE AN YEARLY CYCLE DECLINE within a shortened YC!

    WATCH THE NEW NEGATIVE CORRELATION BTW STOCKS AND DOLLAR!
    Once USX reaches its YCL in April, stocks and gold will come under strong pressure.

    1. Gary Post author

      Maybe you don’t read my articles. I don’t short. I’m long energy and stocks. I’m heavily long biotech. I already took profits on miners where we made an insane amount of money. I’m waiting for an ICL and some pessimistic sentiment levels before I want to jump back in that pool.

  10. Don

    Gary, you are really getting in to bashing your detractors. If you are wrong about where this market is headed, you will be choking on humble pie.

    1. Vortex

      Not that Gary listens to me, but its been pointed out more than a few times to take the high road and stop bashing Doc and Rick who happen to be really good guys. Who in the hell wants everyone thinking the same way in their analysis? Not me. Differing of opinions makes the market what it is!

      If Gary’s projections turn out to be right then just let your results do your talking. The respect will come and so will the subscribers.

      The constant tit for tat and I told you so is utterly infantile.

      Having said that, I really enjoy Gary’s analysis and market projections. He’s been hitting HR’s lately for sure.

  11. Dan

    Did I say I didn’t have any UVXY calls now? Again you distort. I had 1% of my account in them as of Monday, cutting from 2%. Posted that here.

    Will load up to 3-5% max position. Havent decided yet.

    1. Ralph Wiederzane

      Bona fide fool for buying options, playing he biggest suckers bet in the casino tells me all I have to know about your “trading”. Good luck but please tone it down a little.

  12. Barney

    Gary’s calls spot on again give him credit where credit is due. Must have a friend called Janet. …

    For me just a chance to get more vix x3 etf at good price.

  13. JB

    Doesn’t appear the commercials are making much $ being massively short the metals market so far. Guessing there will be at least 1 more down leg though so they can cover prior to the next significant move higher.

    1. Gary Post author

      JB,
      I warned this could happen. When the metals move into a new bull market the commercials can stay short for a long time and price remains high. I knew it was a mistake to assume that the things that worked during the bear would work during a new bull.

      Traders have to learn to adapt fast to changing conditions. It was clear the Fed was desperate to get inflation as the low oil prices were threatening the financial system. The easiest way to start that process was to stop suppressing gold.

    2. Richard

      “Doesn’t appear the commercials are making much $ being massively short the metals market”
      You do NOT KNOW their setups. They are NOT one directional speculators on the price of the metals. Do not read too much into these reports when you do not know the setups. As Gary noted, the markets have changed and one must adapt. These reports are much different today than decades ago. These reports are ok to analyze, but you cannot make conclusions like the latter.

      Don’t get me wrong, I am just trying to help out with the understanding. Many do not realize this and make foolish decisions based on this type of information.

  14. Anthonyo

    Headline today : ‘Janet Yellen ignites stocks, gold & bonds.”

    Me today: Wait!, I can see something in the horizon approaching steaming a puff of steam in the air … Let me get my bionaculars wait…
    Oh! now I see: It’s The QE TRAIN! and it’s heading this way again.

    10 yr rate may yet plummet again if they come in with QE 4
    damn me Im refinancing now! not closed yet though
    what to do what to do

    or as SNAGGLE PUSS used to say:”Tell me it isn’t True, Tell me it isn’t Truuuuu”
    Here is the QE Train now>>> https://www.youtube.com/watch?v=k4qFxTTi8q0

  15. Anthonyo

    “The Commitee” are not human beings.

    The “Committee” is a bunch of automathons and puppets who do the TBTF mega bank bidding and take orders from them.

    They are like Mafia operatives of TBTF banks differen Godfather families.

    Now we need that scene from Godfather 3 with the helicopter flying across teh glass window of the highrise wher ethe committee meets to mow them all down. A bazooka or two should take care of it.

  16. Dan

    If you Gary followers want to laugh and read real perma bear hair pulling insanity, read mtbigsky on stocktwits. He has been bearish the whole way up since Feb and is pretty much broke.

    1. Bill

      I firmly believe perms bears such as DR Doom Marc Faber are paid to extract money from people … I know I was a former doomer and lost a good amount of money following these noise makers , luckly I caught on quick and changed my thinking , some are still singing the same tune…

      1. Vortex

        Bill, I think some doom is relevant and wise to heed, but we as a world are in uncharted waters and this new insolvency and bankruptcy paradigm requires massive out of the box thinking. Whats coming is effectively quantifiable in its magnitude.

        Some of the stuff Gary talks about daily is outside of box for sure.

        1. Bill

          Again I have followed the DOOM AND GLOOM crowd, I have the tee shirt to prove it, and each and every year since 2004 you’ve been wrong! That is my proof. Sure life isn’t perfect or fair no one said it was suppose to be. That being said if it implodes so what! what are you me or anyone going to do about it? not a dam thing, so instead of hiding in a bunker waiting for the boogie man Ill make as much money on the opposite of what you doomers say or do as I can.

      2. Trader Cee

        Funny you say that Bill because I also noticed that Faber makes some of the worst calls I read anywhere. I was also thinking the same as you that he is helping with some kind of an agenda to keep people confused and using his credibility as a famous investor to keep everyone who listens off balance. Reviewing his past material it is remarkable that someone who is supposed to be so smart can make so many stupid calls. Either he is a media shill to confuse the gold community or he is a really bad investor. I would not listen to one more word out of that guys mouth.

  17. Joseph

    The Banking Index closed at 64.65.
    Go to July 2015….the highs and the lows are in a down trend wirh the Banking index.
    We are going to test 2000 at least or 1980.
    As a short term trader, im on sidelines as I don’t trust this rally,……. Will see but in 1-2 weeks were coming down and there usually is one bad ass day that shakes the croind…. ..

    That’s when I guess the crowd should get into your LABU etc….. Seen this game…..as a short term trader, I step to the sides after I get 3-4 emini pts a day….

  18. mike trike

    I bought $2000 worth of LABU. Would never have considered buying into Biotech if not for Gary.
    Hope his winning streak doesn’t end with this one tanking. If it is a winner I will be buying a years subscripton for sure.

  19. Ty64

    Tend to agree that the stock market will rise somewhat higher for a nice little profit.

    However, there is risk of Deflation coming down hard on financial assets in the near future. Bankers do NOT want to experience the financial season of Winter. Perhaps they think it is possible to skip Winter and go directly from Fall to Spring.

    I don’t think such a thing is possible…historically speaking. Unless perhaps, the entire system goes to digital money, permanent negative interest rates, and Bans cash. If that were to happen, we would soon probably all have to receive a mark to in order to participate in the Bankers newly-updated trading system…really doubt it is the season for that to happen. 

    Maybe, I need to take the time to re-listen to Mike Maloney’s interview with Harry Dent and emphasize detailed reasons on why the system has to Experience Financial Winter—Deflation—before the system enters Spring.

    IMO…The USA is a nation of Debtors who are overly proud of their debt status…something has to give here. Personally, I don’t think Debtors are going to get their way here in the next few years heading into 2020—having their debt simply wiped clean by being inflated away to perhaps just pennies on the dollar.

    No, I think the surprise will come when Debtors find their-selves unexpectedly in the middle of a short-term hard, Financial Winter. Overly-inflated financial assets should then take a temporally drop in value. It shouldn’t be surprising to then see many, many Debtor sheep get sheared by the Bankers during this time. If I am wrong…then I’d say…look out for the full-blown Beast system is coming our way soon.

    1. Gary Post author

      Deflation is only possible in a fixed monetary system. The reason we had deflation in the 30’s is because the currency was backed by gold so the government couldn’t expand the money supply at will. Now that all currencies are fiat deflation is a thing of the past (or at the very least only temporary).

      The Kondratieff theory of winter was formulated during a period when all currencies were backed by gold. That theory no longer applies. Like I keep saying markets evolve. We can’t live in the past, we have to adapt to modern markets.

      1. Ty64

        IMO…there is nothing new under the sun.

        I believe we are in an artificial Financial-Debt bubble.

        Bankers can print money out of “thin air.”. But, can’t this debt money disappear faster than it was created? When an artificial debt Bubble Burst, a lot of debts can go bad and will be written off or perhaps restructured.

        I wonder what kind of money is in the financial assets that have been over-inflated in quantitative easing…Governments can’t keep an artificial bubble going for ever…or can they?

        When this artificial Financial-Debt bubble implodes…stocks could go down hard—like 80%. It shouldn’t be surprising to see this Debt bubble burst faster than it was created…possibly 2-3 times faster.

        1. Gary Post author

          What is the catalyst for it to implode?

          We know what the catalyst was last time. A real estate bubble.

          Where is the bubble waiting to implode?

          Now the bubble is in government debt and like I keep saying as long as governments can counterfeit at will there is no limit to the debt they can service.

          Actually there is a limit. At some point they will break the currency.

          That’s what I’ve been saying for almost a decade now. The end game will be in the currency markets when we have a cascade of currencies collapse.

      2. Trader Cee

        There are plenty of instances of fiat based systems that were not on a gold standard, Gary. All of them failed eventually and the outcome was more or less the same meaning that assets end up deflating back to their intrinsic value. So when you assert that “Deflation is only possible in a fixed monetary system” that is not quite true. Anyway, gold itself is a fiat currency because its value can be dictated by the ruling monetary elite. Arbitrarily changing its value has never succeeded in solving the underlying problems of credit excess and unrepayable debt. The system always crashes and burns. The debasement of precious metals coinage in Rome is an example proving a bi-metalic currency that was in theory a fixed system could still lead to tragic outcomes. The root problem was governments inability to reign in spending thus forcing taxation to extremes that destroyed the empire. As Armstrong has pointed out, the value of land in Rome plummeted as the city was abandoned and no amount of financial tinkering with coin debasement was able to resolve the underlying problem of debt. So why would QE save us today when at its heart it is attempting to do the same thing by expanding the money base against a wall of debt that is magnitudes of size greater than all the interventions created worldwide?

        1. Gary Post author

          You are making my case. The end game in Rome was the same as the end game here will be. A currency crisis. That is not deflationary, it’s inflationary.

          1. Trader Cee

            My point was that despite currency debasement the Roman empire fell into a deep and protracted deflation. The inflation in the Third Century was an outcome of that deflationary period and it was resolved by widespread debasement of the coin because tax revenues had collapsed. You could well be right that we will see inflation however I don’t think we are there yet. This deflationary period has hardly ended and the defaults that will mark its passing have not yet happened nor have we arrived at the period when dramatic actions would be taken to offset a shortage of tax revenues. My feeling is that you are ahead of the curve. Early but not entirely wrong. The trade is still on the downside for now though.

  20. Frank

    Yes, the market will tip its hand very soon, but do you want to be like Groucho Marx, a devout bear all his life – until the summer of 1929?!

  21. Mogonzo64

    Thanks, Gary! Looking to add more LABU sometime tomorrow before the “big runaway”! Really appreciating your commitment and truthfulness “as you see it develop” and tenacity in providing truly meaningful real-time updates. Incredible service you provide here! Hoping you never lose your desire to keep doing this….

  22. Gary Post author

    Any kind of rally tomorrow and the Dow will join the mid caps and transports in confirming the 7 year cycle low has been completed by breaking the 7 YC trend line.

  23. felix

    Scuse me Gary, but what about Japan!!…. it’s 25 years in Deflation now! and they don’t have any gold standard…. ; ); ) (the opposite, they printed a Universe of yen…)

    Felix.

    1. Gary Post author

      That is a misnomer. Japan never had deflation and they never printed massive amounts of yen until just recently. Look what it did for their stock market.

    2. Vortex

      Felix, news flash: stop regurgitating what everyone spouts on the MSM.

      As recent as a few years ago I lived in Japan for 7+ years. Its hands down one of the most expensive countries in the world. You ain’t doing shit there unless you have mucho cash coming in.

      No one is going to move and live in japan unless they make huge money as an imported worker or have a spouse that lives there and receives Govt bennies.

      Nothing about Japan echo’s deflation! That is a high priced consumer inflationary monster canvasing an old consumer/population base that does not spend.

    1. Trader Cee

      That’s what makes a market Rob. Thankfully there is almost always someone on the other side of the trade. So widespread disagreement over the direction of any given security is usually a good thing.

  24. Vortex

    At some point in time you are just not going to be able to be out of gold/silver stocks.

    Just pick a spot and get a position.

  25. Greig

    Gary, when you say energy and biotech are you talking about ETFs ? Is it good time getting into OIL by the way ? Thank you!

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