My what a difference a couple of months makes. Several months ago everyone was convinced that stocks were starting a protracted bear market. Many expected it to be even worse than the last one in 2008/09.

A couple of months ago everyone was calling for 110-120 on the dollar index.

A couple of months ago everyone knew that oil was going to the low 20’s or even into the teens.

And several months ago everyone was convinced that gold would trade below $1000 some even calling for targets below $800.

what a difference a couple of months makes

I disagreed with every one of these assumptions. Why? Because all markets were due for multi-year cycle lows. (Except the dollar which was due for a multi-year cycle top).

As we now know all of these assumptions were 180 degrees wrong.

Folks when everyone is thinking the same thing, then no one is thinking.

Now we have many people swinging for the fences in the opposite direction. That’s what a persistent trend will do to trader bias.

Here’s my contrary predictions for the next several months.

Almost everyone is still assuming that stocks are in a bear market and that we are just forming a double top. Stocks are not forming a double top. This is a new 7 year cycle. There is simply no way a new 7 year cycle can top in less than 2 1/2 years. Stocks are going to go so far above the all time highs in the next several years that it will make your head spin.

The current theory is the dollar is now ready to crash. Again the crowd is on the wrong side of the boat. The dollar is not going to crash. In fact it’s due for a multi-week rally. But once the rally has run its course the dollar will continue down and the 7 year bull market is over.

Everyone continues to get sidetracked by the supposed fundamentals in oil. This is not a bear market rally in oil. The fundamentals have already changed even though no one can see it yet. We are never going to see $26 oil again. 

And the strength of the rally in gold has convinced many that this time is different. Too many analysts are now expecting only a sideways correction in gold or a very mild intermediate degree correction. This is absurd. The dollar hasn’t even rallied yet. How in the world can one predict that gold will just trade sideways before the dollar even delivers its rally? Gold is going to correct and the move down into the intermediate cycle low will be much more severe than anyone is currently expecting. Miners will retrace at least 50% of the baby bull rally and in the process completely cleanse the bullish sentiment that has built up in the sector. 

Once the correction has knocked everyone off the bull and convinced most everyone that the bear has returned, then and only then will gold be ready for the next leg up in its new bull market. 

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    1. Vortex

      Gary, those are some very bold predictions. You’re recent record does provide a solid backdrop to believe you may be right.

      I for one, hope like hell the miners/metals 50% retrenchment comes true. Honestly I’m having a hard time believing they will drop that much, but I hope it plays out as you predict.

      In the right move and time component the money to be made in the PM/miners is simply staggering if a view of history is used as a proxy.

      In the right environment I think the PM’s will offer gains far in excess of the DIA, S&P 500 or even Biotech.

  1. plo888

    Humble pie best served cold Savage! Spy 186! Bull won’t be easy to take down but it’ll go down again.

    1. Gary Post author

      This is exactly why one can’t close their minds and ignore market manipulation.

      It’s also why I keep stressing over and over that it’s just not safe to short the stock market. The PPT has demonstrated that they can stop market sell offs almost at will.

    2. Ray_B

      I don’t see your point Irwin … it did go down close to 1700 as Gary predicted just a few months later.

      1. Irwin

        @ Ray
        If you call 1810 “close”, then I guess so.

        Also, Gary didn’t predict 1700 in “just a few months”.
        He wrote, “there should still be one more crash leg down into mid October …”
        He also expected 1700 to be the minimum drop, with a maximum of 1550.

        My point is, when Gary points his finger at all the wrong-way-willies, there are three fingers pointing back at himself. If he’s your hero, fine.

        1. bill

          Hey Dope, its not Garys fault you missed the train, stop whining and learn from your mistakes no one owes you anything.

  2. eddy1974

    I trade from Italy and all the analist dont see any of your signal .
    I follow you……i have the gain

    1. Anthonyo

      Itrade from Italy…that says it all right there.
      When was the last time Italians got “anything” right? lol Salute just keep drinking that wine.

  3. Jacob

    Hey Gary, I subscribed recently, and most of the time I try to get into the subscription site I get a temporarily locked out screen? Please help Cheers, Jacob
    By the way, I agree with all your predictions, I’m in Aus, and thinking short Aud is the trade. I can’t go long this shit show of a sharemarket, still hopeful we’re wrong and something comes along to knock it down, but after the last two months I can’t see what

      1. BeachandBiscuits

        This happens to me sometimes as well. Especially if I’m logging in from my iPhone

  4. Gary Post author

    Today is another classic example of why you never short a baby bull. Yes there will eventually be a correction but you will destroy your account trying to anticipate it.

    Long, or on the sidelines. Those are the only two viable strategies.

  5. Gary Post author

    Bullish percent levels (a measure of how many stocks in an index are above their point and figure chart uptrend line) are approaching dangerously overbought. This is not the time to let ones emotions cause you to chase a severely overbought market.

    1. joel

      Does this morning’s huge gain in gold and silver indicate the blow off phase in the PM equities during this cycle?

      1. Gary Post author

        Well not a blow off as that would imply a parabola. Those occur at market tops. Not at bottoms. But yes we are into the final phase of the baby bull were he tries to get as many traders as possible to chase before catching them and dragging them down into the first correction.

    2. ras

      That is right. They can stay elevated for a few more weeks. No sell signal yet. One day and one week at a time. Will not be surprised, if gold spikes to $1350-1400 range, before mid May. More important than ever not to get caught up in euphoria.

  6. goldbug

    There seems to be a big contradiction in your forecast: the early year market selloff was blamed on the strong dollar and the new stock market rally has occurred during a dollar slump, but you see a stock market big upside move and, at the same time, a dollar over 100. Also you claimed that there cannot be recession with interest rates at zero or close to it, I am sure the Japanese and the Europeans agree with you…

    1. Gary Post author

      You aren’t understanding what I was saying. The drop was never caused by the dollar. What I said was that ICL’s in the stock market almost always occur along with either an ICL in the dollar or an ICL in the euro. One of those two currencies is usually under stress when stocks bottom. We did get a major bottom in the dollar on the same day that the stock market bottomed. Maybe it was an ICL although it never confirmed by breaking the intermediate trend line so that is debatable.

      Show me where I ever claimed that there couldn’t be a recession with interest rates at 0.

      Again what I said was that we are not going to get deflation and a bear market with global QE and negative interest rates. We are going to get another series of bubbles.

  7. bill

    Central Bankers around the world are acting in unison to artificially raise inflation so that they can hopefully get out of the F’ing mess they got themselves into with this low/negative rate BS.

  8. Gary Post author

    Nothing is really shortable right now. Certainly not gold or oil as both are in baby bulls. I’m going to suggest forgetting about shorting either for the next 3-4 years.

    And certainly not the stock market that appears to have begun a runaway/creeper move higher out of the 7 YCL.

  9. Joseph

    For a day Trade went short into FRI

    OIL must take out 43.75…. Many were saying 42 but from info I get from a strong seasoned Oil trader 43.75 to brk with Volume for 2 days….

  10. JJHarmen

    Good Day Gary. I have been following your blog for a while although I am not ready to subscribe, yet. I have noticed that commentators that are critical of you seem to disappear from this blog. I like to read all view points and not just those that are telling you how great you are. To get to the point, do you block trouble makers?

    1. Gary Post author

      I haven’t blocked anyone. I suspect once I required people to register to comment the people who’s only purpose was to be a troll moved on to easier pickins.

    2. Ray_B

      I don’t think having a different point of view is considered a ‘trouble maker’ … nothing wrong with having another view .. its just those that come to this site to criticize Gary and cry about past calls that didn’t go perfect for them .. those I consider ‘trouble makers’. Nobody is perfect .. I come to get Gary’s opinion … and then make up my own mind .. I would never blame Gary about a trade I made that didn’t go my way .. I’m a big boy and don’t put blame on someone else with trades that don’t go the way I hoped.

  11. Joseph

    Sold short, 2x emini 5pts profit
    Not bad……
    May go in again latter and for sure FRI….

  12. Gary Post author

    Here is my exact comment in my nightly report to subs on February 11th.

    “I can assure you there isn’t going to be any institutional buying tomorrow. The risk is massive right now, especially for a gap down tomorrow morning. No professional trader is going to risk that. However I fully expect the PPT will try very hard to close the market green tomorrow. So it just boils down to who wins. Either the natural forces keep pulling stocks down, or the government throws enough money at the market to again temporarily halt the cycle. ”

    This is why I make money and others continue to lose. Because others are foolishly assuming that we still have free markets. I assume the exact opposite and I’m always looking for market interventions. This is why I keep hammering at traders not to short the stock market. You are trying to win at a rigged game with an opponent that has a printing press and unlimited funds.

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