Monthly Archives: April 2016


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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Just as I have been predicting: everything going up together. The longer one listens to the perma bears the more potential profit you are going to miss out on. 2016 is going to be a very good year for bulls in every sector, except maybe the dollar.

everything going up together

As of this morning the stock futures have broken the 7 year cycle downtrend and the Dow has rallied above the November highs. Just like I predicted, everything is going up together.

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Biotech is on the verge of starting the aggressive trending stage of its rally, and the Dow is about to drive the final nail into the bear market story.

I’m opening the 25% off offer for today only. Get on board and start making some money instead of missing one opportunity after another listening to the perma bears. Buy a yearly subscription and I will refund $50 back to you.

The offer is now closed

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Gold is definitely in a new bull market.

From time to time I have to respond to something I hear or read over at the Kereport. Since Al has blocked me from posting I have to respond here on the blog.

Today I want to address the nonsense by Birdman that the technicals are indicating that gold is still in a bear market. Nothing could be further from the truth.

First let me dispel the idea that somehow the mining stocks haven’t broken out of their bear market down trend. Not only has the HUI broken the long term down trend…

new bull market

But the miners have also rallied above two previous intermediate cycle tops and tested last years yearly cycle high.

new bull market miners

So for the first time in 4 years the miners are making higher highs. This is the very definition of a new bull market.

That’s the technical picture. Now let me go into the other signals confirming that the bear market is over.

7 weeks ago the COT for gold (and silver) reached levels that would be considered bearish, and during a bear market would have immediately turned price back down. Every analyst I know of started calling for an imminent collapse in the metals back below $1000 (Birdman included). At the time I pointed out that during bull markets the COT can reach bearish levels but price will remain elevated for many weeks and even continue higher. As we now know I was correct and gold just continued to rally and has held onto most of its gains for 7 weeks despite bearish COT levels, just like I suggested was going to happen.

During a bear market sentiment rarely goes much above 50% bulls before price rolls over and starts the next leg down. During the last 3 1/2 months sentiment in gold rallied above 65% and more importantly has held above 50% for a month and a half. That is bull market behavior.

This is the problem with being closed minded. You can’t recognize what is happening, you are driven by your bias. There is one reason and one reason only why gold generated a massive bear market. The Fed needed to do QE3 and keep the stock market inflated. They didn’t however want that liquidity to flow into the commodity markets, spike inflation, and destroy the global economy like it did in 2008. The easiest way to prevent that was to set aside the laws governing the futures market and attack gold with paper shorts creating a bear market. If gold was collapsing the rest of the commodity market would at least remain in check. It worked.

But by the fall of last year the energy industry was in trouble and on the verge of triggering another financial crisis as many overleveraged energy companies were on the verge of going under. The Fed desperately needed some commodity inflation. The simple solution was to stop the price suppression in the metals and allow the natural bull forces to regain control. That would tend to put a bid under the rest of the commodity markets.

Again it worked perfectly. Gold resumed its natural bull market trend, and oil bottomed not long after and has rallied 60%.

These people say that price manipulation is an excuse. Folks, once I recognized the manipulation and why it was happening my trading results improved dramatically. Recognizing that manipulation was occurring allowed me to alter my trading strategies and profit, not use it as an excuse to fail.

Now this same inability to recognize that the manipulation has ended is causing many of the bears to miss the new bull market.

How long will it be I wonder before Birdman blames manipulation as the reason he missed the bull market in gold 🙂

Yes gold is due for a multi-week correction, but it is not going back below $1045, and I even have my doubts that gold will drop back below the 200 DMA.

new bull market gold

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Gold is chewing up bulls and bears alike.

chewing up bulls

It looks like gold is already 5 weeks into its intermediate cycle decline. So far, it’s doing exactly what I expected – churning back and forth to chew up both bulls and bears alike. I expect this slow downward drift to continue into May, or even early June, before gold is ready for the next leg up. This may end up as more of a sideways move than a deep correction.

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