market internals

The market internals are already signaling that a long term bottom has been completed.

At some point we will get a corrective move. When we do, it will clear the overbought conditions and the market will then be set up to test the all-time highs in May.

The NYA summation index is making higher highs for the first time in 3 years.

The bullish percent index is making higher highs for the first time in 3 years.

And, the advance decline line is making higher highs and on the verge of breaking out to new all-time highs.

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  1. Jackie chan

    Gary, what’s going on with gold? is it natural or something is happening backstage?

    1. Gary Post author

      I think it’s doing exactly what I thought it would do. It’s starting a very erratic correction into its ICL. I predicted that the move would not be like the ICL’s during the bear. It would not be easy to short and would chew up both bulls and bears alike.

      I think it still has further to go. The dollar hasn’t even rallied out of it’s ICL yet. Once it does that should be the trigger to push gold down into it’s ICL in May or early June.

    1. Gary Post author

      I thought it would have already started by now but it keeps stretching. Maybe if we get some follow through to the downside today it will finally turn into the DCL.

  2. Alexandru Popovici

    all this analysis will prove irrelevant as I’ve just detailed in Gary’s prior post; it’s the result of a bullish bias.

    1. Gary Post author

      Nonsense. The charts speak for themselves.

      If anything your bearish bias is preventing you from seeing what is happening.

      I’ll say it again. This has been the 5th most powerful rally in terms of breadth in the last 60 years. Exactly what we should see as the market comes out of a 7 YCL.

      1. Alexandru Popovici

        Gary, also strictly technically, each time NYSE plunged below its 200Wma, the advance into its immediately next IC has been very powerful before resuming the multi-year-cycle decline.
        Thus, what you see in the charts is normal.

        1. Gary Post author

          Again you are making the mistake of trusting nothing more than charts. I’ve shown over and over how that never works at these major cycle turning points.

      2. j

        On one comment you dismiss charts as worthless for prediction and only tell you “what has already happened” , on another its ” the charts speak for themselves”. Its this biased floundering that makes it hard to follow.

        1. Gary Post author

          You know very well what I mean. By using nothing more than chart patterns and some indicators most retail traders believe they can successfully trade the markets. We’ve seen over and over that is not the case. I’ve watched as trader after trader has whipsawed their account trying to pick a top in stocks or a top in the metals. They just keep losing money or they win on one trade out of 5 and it’s just enough to keep them coming back for more.

          It’s the same mentality that causes people to lose money in casinos. They win a little bit so they think they are gifted or smarter than the odds so they keep playing until they lose all their money.

    2. Bill

      Eisenstein a wise man once said

      The method of doing something over and over again hoping for a different result ” that’s the bears on this forum.

  3. JaninWales

    Europe is following Asian down this morning. Perhaps we will get our DCL after all Gary?

    1. Gary Post author

      We’ve had multiple chances. So far none have panned out, but at some point we have to get one. The NYMO is already getting pretty oversold so it won’t take much to push it to levels that will force a bottom and start the next leg up.

  4. Bill

    I’d say the chances of biotech not following the market down is pretty good today, sure it may open down but I feel we bounce back up… Good buying op but be quick about it… The roll iced was valeant noise yesterday about finance… It was a good way to cool the trade for a day…

  5. Walt

    I went short the s&p yesterday at 2070 bid SH . My thoughts are that we go down to 2000-2030. I’ll cover I at 2030. If we start moving back up , I’ll buy IBB and hold it a while . If we break under 1980, though on this move down here , I think we get one big last move down fof our 7 yr low .( I think 1980 s&p holds though . )

  6. Walt

    FYI, I’ve gone short twice over the last year . The day before the big selloff in Oct and the day before the other big selloff in Aug. Both times I covered the following day , thinking that was it for the move down .
    But, both times it kept going lower , much , lower over the following couple of weeks .

  7. Joseph

    1980 Max……2000-….
    Posted a few days ago.
    Down into Aoril 7, Up inro OPEX April 15, Down Into April 22nd…..

    OIL 34-35, if it does not hold, I will Loose…..

    1. Stevie

      He doesn’t day trade. This thing could go to 1900 and he will stand pat on his 7 year cycle low… Until it isn’t.

    2. Gary Post author

      I would buy once we get a swing. If, and that’s still an if, the market does drop into a DCL it’s so late in the cycle and the NYMO is already oversold so that the drop is unlikely to last more then 3-5 days before bottoming. But wait for a swing once it becomes clear that a DCL has begun.

      And if we get another one of those 40-60 point drops that then reverses then we will have confirmation that a runaway move has begun.

  8. Rickard

    Hi Gary

    Are you expecting a drop in IBB coming weeks?
    Do you in that case see it as an good opportune for a big entry?

  9. Stevie

    200% short on Thursday close and covered for a nice 3% gain.
    300% short as of Friday’s close and covered for 1.9% gains. Went 300% short again after the morning Jam on Tuesday.

    While the smart money was busy selling, Gary got you knuckleheads buying hand over heal. It’s going to be a painful 4-6 weeks ahead.

    1. Ralph Wiederzane

      Congrats, you made almost as much as your broker even though he didn’t take any of your triple risk!

    2. Gary Post author

      Again let me remind you that I’m not a day trader. I trade longer time frames than that.

      And I would also remind you that a DCL rarely lasts more then 5-7 days. And in this instance the NYMO is already oversold so a DCL here would be unlikely to last more than 3-5 days if it happens.

      You will be wrong again in assuming a drop for 4-6 weeks.

      For heavens sake spend the money to get a subscription to sentimentrader so you can quit making these mistakes over and over.

      1. j

        Did you sell LABU at $33 as you called or are you gonna ride it out? If so , what are your opinions of its next moves and how far do you ride it down?

        1. Ralph Wiederzane

          You have the wrong guy, I wouldn’t touch LABU or any 3x etf, in fact I’m still waiting to buy some XBI or add to my miners, whichever gets short term oversold first.

    1. Gary Post author

      One strategy that many are using is to just go Old Turkey. It is the most efficient with regards to taxes. Most of the long term accounts I manage are now Old Turkey for the next 4-5 years.

      1. RickyBobby

        Markets are about to tank hard – S&P and gold might even meet at 1550 by year end.

        Good luck to those poor souls going long for this “runaway move” lol.

        1. Gary Post author

          I’ll bet a burrito that you are wrong.

          I’ve won a lot of them over the last couple of years and I’m willing to add one more to the stash 🙂

      2. Ralph Wiederzane

        Myself included, G-money. You really nailed that bottom in miners, much appreciated. My only decision is when to invest the last 25% of capital, the miners are socked away tight.

    1. Ralph Wiederzane

      You got ’em good last couple times, maybe time to push a bit harder this round?

  10. Gary Post author

    The ROBO ratio is still at 73%. Dumb money retail is still buying puts. This is not where intermediate cycles top. They top when the cannon fodder little guys are buying lots of calls and the big money is selling to them.

      1. Gary Post author

        Yes Steve follows the ROBO ratio pretty closely. He trades exactly in step with the majority of retail traders.

  11. Gary Post author

    Ok folks make your calls in real time. None of this after the fact telling us you covered at the very bottom. If you are covering now then tell us now if you want us to believe you.

    1. j

      Absolutely, let’s hear them before or not at all. Gary put’s his out there every time, if you’re gonna come on here and bash, at least have the balls to do the same. A lot of monday morning quarteback going on.

  12. Joseph

    TSX Canad in FEB had the MOST inflow of $$$$ Ever into ETFs, I’m sure ENERGY…… I’m sure $35 shd Hold…. Probably foriengn money….
    SnP 1980/90-2000, that’s a 7-10% drop,.
    Good entry if you agree to hit new Highs

  13. Joseph

    Realtime trade – April 5, 2016 at 6:53 am. POSTED ON Wrong/Previous thread in real-time, repost on active thread. Here….. Up 4 emini pts……
    Low of day around now till 10am, then high at noon, then back down to end of day into WED, Low of week is April 7…… That’s how I am acting
    Will see

    Reply ↓

  14. Chris

    Gary, u have said your piece. Those stubborn bears still aint getting it. US was very close to sell signal today. But was being protected. Lets see how the days end. And i happen to agree with you. US new highs by April or May, so that Fed could raise rates. I really wish they raise rates. Else they will not have any ammunition for the next crisis.

    1. Stevie

      What if Gary is wrong, most of you will lose most of your account when he decide the 7 year lows “might” not be in. Happened before in 2011-2013.

      1. Gary Post author

        We will take profits once I get the signal that the IC has topped. We aren’t going to hold all the way down into another ICL.

  15. Ralph Wiederzane

    Maybe by the time I get back from the gym some of these vocal bears will have reported exactly when they closed their positions, instead of after the fact cherry picking? All of a sudden they’re silent? Big surprise there.

  16. Gary Post author

    The fact is that all the big biotechs are growing earnings at an astounding rate. The only reason they got hit so hard is that politicians have been using them as a whipping boy to garner senior votes. The market will quickly figure out this is just a bluff that will go away after the elections.

  17. Gary Post author

    IBB is green, Now if AAPL can turn green and drag the banks up with it we will have the setup for another reversal into the close.

  18. Joseph

    Day trade short worked for me, CHK post,……
    SnP as I said wd renou d at 10am……will rude upbtill noon, then back down to end of day….
    Made 4 pts, will try for another 2 pts Going short again at 12/1230 Or so….. Let’s see…..
    This is just a day trade, I am long OIL. Not in BioTech yet……
    Not used to posting and it actually messes with my trading that I even posted on the wrong thread…..

  19. Stevie

    Covered all SSO at 63.21 for 4.5% total.
    Looking to reshort after beige book tomorrow.

    1. Ralph Wiederzane

      Terrible cover, especially if you think the market is going to collapse bc it’s really a bear. It’s like you don’t have any conviction!

      1. Ralph Wiederzane

        But at least you’re making a semi-effort to hold yourself accountable to the readers here that have to tolerate your posing. Kudos for that, let’s see how you do as you report immediately after taking your trades instead of telling us tomorrow what you did yesterday, should be interesting.

        1. Stevie

          I have reported my traded in real time. You just haven’t been reading. And depending on what indicators you are watching, commercials based on OEX put to call are heavily short.

    2. Bill

      So minus broker costs your not even covering your cost Steve, like I said I would love to be your broker.

      1. Stevie

        Anyone listening and trading based on a newsletter writer on the internet that charges 30 dollars a month needs to get their heads examined.

        I knew someone that did exactly this 3-4 years ago and got his account blown up.

  20. Herman

    keep a close eye at EUR/USD. I expect it will break through 1,14 soon, and then rally fast to ?1.17? Last kiss goodbye to EUR at around 1.20-1.22, then USD bull will start roaring.

  21. Stefan

    I am ALL IN in pennie stox, my “golden prison”. So far so very good +330% since August 2015.
    The good thing about p-stox is that they are immune to a declining gold price.

    Bullish Spx:
    Gary Savage

    Bearish Spx:
    Bo Polny
    Greg Mannarino
    and an interesting piece from Mike Maloney

    We need QE4 to stay afloat in common stox !

  22. Chris

    Stevie… what if Gary is wrong. The thing is, market is only selling off so little despite Dax and Nikk huge drop. If SPX takes out certain low, then sell. It have not taken out certain low yet, so just sit on the hands and ride the uptrend

    1. Stevie

      Are you out of your mind. He’s riding 3x leverage ETF. If 1800 breaks, you will lose 50-75% value on those ETF.

      1. Ralph Wiederzane

        And apparently you’ll be on the sidelines watching since you’re already out. What’s the point of chirping all day about the huge move you expect only to get out .8% later? You stink at trading because the market is going lower today, already has from where you exited. Have some conviction instead of just yapping like you do!

        1. Stevie

          Forget acct size, I nailed 8% over the past few days.
          C’mon give credit where credit was due.

      2. Bill

        That depends on where is strike price is and his length of time ,,, if he’s deep in the money he’s lost nothing but time …the market can reverse on a dime. None the less Steve with all due respect I feel your out of your league here and I’m being sincere your percentage gains here and there is something a novice would brag about.

      3. Chris

        U are amateur Stevie, did i say the level is 1800 as a stop loss. You obviously dont know how to trail an uptrend. And I woudlnt reveal the important level on the market.

  23. MuffinTop

    LABU update..

    I mentioned in yesterday’s post that we could see a bit more weakness tomorrow and possibly Wednesday and that a drop to $29 was very likely but not set in stone. LABU dropped all the way down to $29.50 this morning and I expect one of two things to happen here:

    LABU will either consolidate at current levels [above $30] before the next leg up, or.. if it fails to register a new high before end of trading day, then it could very well drop back down to $29 and possibly breach that level. Intraday Charts are extremely bearish at the moment but remember, momentum is on our side so don’t get cute!

    After that I expect the rally to continue all the way up to $36/$38

    Ps: Please don’t ask me when you should get into this trade! I’ve already made several suggestions throughout several posts and at the end of the day, that’s for you to decide using your own volition 🙂

  24. Joseph

    Seems High didn’t come at 1230…… Can’t get my 2 more emini pts….. Looks like 230/3pm will be low and reverse/rebound and go back up…..
    Looking to go long at 230/3pm if Lows tested and close long end of day…..
    Will see…

  25. Joseph

    Real-Estate in Toronto GTA UP 16.5%…..
    Hence why buy a small house, RENT Out
    Mortgage rates 1yr 2%, 5 Yr fixed 2.35%, 10 Yr fixed 2.80%….. BuY & HOLD……

    1. Alexandru Popovici

      hi, Victor!
      yes, you are right, I sold too early 🙁

      now on the other hand it is too late to buy –> crude oil may have already put its DCL today at 35.24, a swing low may be produced tomorrow quite easily while bonds are late in their daily cycle.

      1. david

        35 looks like a floor right now.. but the day is not over yet.. I guess, tomorrow’s weekly oil inventory report will be the catalyst, up or down.

  26. Stevie

    So Gary is down 20% on his ERX trade.
    Not a lot of talk about energy here.
    Whatever happened to cycle analysis where things should bounce strongly out of oversold conditions. Oil has dropped from a high of 43 to 35 over the past 2 weeks.

    1. Enoch

      I expect oil to rebound after today regardless which way the trend goes since it has nearly corrected 50% off the low to high and both high and lower level charts are extremely oversold. Even bears need a break. this counter trend rally could very well give the stock market one last push as Gary mentions and biotech sector towards the breakout target for another 5-10% higher

  27. Chris

    Only an amateur cant see Oil dropping of its first attempt at 200dma. It is expected to drop into the 34-35 zone, which it has. So, around this region, and over the next few days is where the tough part lies. Resumption of uptrend, or really back to bear mode? I just bought back crude. I am in the bull camp. If clears 42, we see 50. But of course, i have my stops in place.

  28. Chris

    Stevie, SPX have rallied 250 points off the lows. If you did not capture a big chunk of it, dont pound your chest for making 20 meager points off the highs.

    1. Ralph Wiederzane

      He didn’t catch any of it, just a good pounding from behind as he shorted all the way up. I understand his chest pounding on such measly gains, after what he’s been through any green at all must be a breath of fresh air.

      Then there is the miners trade where he stood aside and watched many of us here double and triple our accounts in a few short months. It can’t be easy being short-bus Stevie.

    2. Stevie

      I did, I bought at 1820 spx while Gary was pounding on the table that it was going to 1,500. I rode it for 180 points.

  29. Enoch

    finally oil is making a higher high today, come on make a swing low to bring the bulls back

  30. El Lobo

    Still short USO, DJP, GREK. Betting that intermediate tops are in and long term downtrends will continue.

  31. Bill

    I for one am impressed the way LABU is holding up here with all the PFIZER ALLERGAN DEAL noise. Bottom line bull markets like to rocket with as few riders as possible these noise makers IE Goldman are well positioned I’m im sure, if they are screaming fire in the theater relax and buy with both hands .

    1. MBP3

      I closed out my LABU today for a small gain. I might be chasing it soon, though. It just looks like we may get another 3-5% dip in XBI near term.

      1. jacob 2

        Lots of stocks in many different sectors that are putting in long bottoms that should make you money.

  32. Ralph Wiederzane

    XBI holding up pretty well considering the S&P is sliding into to new lows at the close.

  33. Bill

    LABU neutral call just as we expected… Tommorows minutes will be direction but it should be a roller coaster sort of day I’m sure.

  34. Joseph

    For Trend, I look at DAX, DOW, SnP, NasDaq, DOW Transport, RUS, and…..Banking Index
    Bank Index—- Look @ Last July 2015, lower highs and lower Lows…….   Don’t get to Brave here……
    CLOSE positions daily or weekly or at least a portion
    YOUR Call……
    Got my 4 emini pts only today
    Good enough for me….

  35. Walt

    I’m still short s&p . Volitile day . I thought I might have to cover late mid day . I still think its just a pullback to 2000-2030.
    If it looks different as we move thru the week ( uglier ), I might let my short ride.

  36. tulip

    well, I ll be –I have to give kudos to Ker this afternoon on their market wrap…
    they FINALLY accept ‘conspiracy’ abounds………and that the panama papers is a ‘job’.
    congratulations Chris & Doc…good work.

  37. Ras

    Corrective move first, higher highs later. Why guess about the amplitude/duration of the corrective move? Take one day at a time and ride the corrective move. Monitor vix, svxy, uvxy etc. for guidance. Then, when the trend begins to reverse , go the other way. No need to surmise or agonize. Future price action is not entirely predictable.

  38. Stevie

    If it’s only that easy, what if this thing plunge 500-800 plunges over the next few days? Are you going to hold? I bet 99% of you will exit including Gary.

    1. Bill

      To soon not while Obama is still in office load up short mid October or just before the election then ride it short till 2017 or if playing puts February 2017 that’s my plan

  39. El Lobo

    ERX/XLE head and shoulders breakout today. I would expect more weakness in the short term at least.

Comments are closed.