42 thoughts on “Support zones for the daily cycle low

  1. rozelina17

    Gary, what is your latest update on LABU ? It seems that Biotech keeps going down…

    1. newtotrading

      Gary – should we be adding to positions as it goes lower – this way we’ll be averaging better prices right?

      1. Gary Post author

        I think you can start buying, but wait for at least a swing low before committing the rest of your capital.

  2. newtotrading

    btw – i clean apartment buildings and i’m so lucky i found your sight and i’m telling all my friends about you and we think you’re brilliant. i also think you can’t fight that fed!

    1. Gary Post author

      I’m not sure where you are seeing a failed cycle. Stocks are on day 59 of the first daily cycle. Once we put in the bottom and bounce then we could have a failed cycle if price fails to make a higher high and then goes below the DCL.

  3. Don

    Cherry picking Gary? All other US indices, including the transportation index, are not confirming the Dow move. The stock markets of nearly every other major economy are in bear markets. I will be very surprised to see new highs for the S&P any time in the foreseeable future.

    1. Gary Post author

      The Dow led the way down and it’s now leading the way up. As I’ve said before, I don’t wait until it becomes obvious. By then you’ve already missed a huge move.

      The advance decline line is also making new highs. The bear market is dead in the water. Central bank printing presses are too powerful.

  4. Joseph69

    Gary, I went into LABU at 35 as you recommended 3 weeks back. What are your thoughts now at 23. Should I sell and wait for a swing to get back in.

    1. Gary Post author

      We sold LABU at $35. We got back in at $30. Yes we were still a little early. I’m waiting for a bottom signal to add the rest of the position.

      You need to get a subscription so you can get real time buy and sell signals. Anything on the blog is going to be delayed.

  5. Don

    It seems that all analysts and assorted experts are positive that gold and silver are going to pull back from here. We shall see. I have kept all my gold miner penny stocks and bought more. They hold promise for gains of several hundred percent if gold continues to rise.

      1. Gary Post author

        All markets eventual experience an intermediate decline. They have to in order to build fuel for the next leg up. Those that have the patience to wait for it and don’t worry about what happens between now and then will make an insane amount of money.

        On the other hand those that chase this late in an intermediate cycle are destined to give back all their gains unless they can time a perfect exit.

        The second job of a baby bull is to cause longs on the sidelines maximum anxiety and sucker them into the market right before the first counter trend reaction.

        The only way to catch every penny of the gold bull is to ride it old turkey. But that means you will have to survive ICL and YCL’s along the way.

        That next decline will be a YCL BTW. and those tend to be the most intense decline of the year.

        1. Surf City

          Gary, You seem fairly certain on your views. How does anyone know in advance that the next ICL for Gold and the miners is going to be the yearly cycle low???

          I will say that Plunger’s research on both Bear and Bull markets is extensive and the best I have ever seen. Here is another one of his posts comparing the todays HUI move to Phase 1 of the 1982-3 Stock Market Bull.

          Sure I can see ICL’s on the chart but they are very mild. What if this move is similar?


          1. Gary Post author

            If the gold bear is over then the summer ICL has to be the YCL. Otherwise gold would make a lower low and the bear would not be over.

        2. Surf City

          If you look closely at Plunger’s 1982-83 DOW Phase 1chart, what I see is a sideways “consolidation” time based IC Low and no real pullback in the first 10 months of the bull.

          No Yearly Cycle low for almost a year. Again, what if the HUI is on a similar path?

          1. Gary Post author

            There was no sideways consolidation. The first ICL dropped 20%. The second ICL dropped a little over 25%. I can tell you that everyone was absolutely panicking during both of those corrections.

            A similar correction would take the HUI down to 174. Keep in mind that this was during QE1. The correction could easily be more severe this time as there is no QE to keep everything propped up.

          2. Surf City

            I’m not sure what chart you are looking at Gary. Plunger’s post and chart are the start of the 1982-83 Stock Bull (the initial start). There was no QE back then. If you look at the chart closely you can see the initial sideways consolidation near 5 months (similar to the HUI now at 5 months in early April). Then you get another 5 month upside push with no pull back.

            I have also shown you the same pattern in the USD during its surge in 2014 (no pullbacks, just sideways consolidation). Also reverence the TLT Bull run that started in Dec 2013 through Oct 2014. Ten months with little to no pullback.

            The point is that at the start of Bull runs, assets can and do have sideways time based consolidations. You can see it in the charts.

            If Gold and the miners make new highs over the next few weeks will you still insist that we are still in the first Bull IC and making new highs after month 6?

          3. Gary Post author

            Gold is a much smaller and more volatile market than the Dow or the dollar. I think it is very unlikely that the intermediate gold cycle could stretch that long without an intermediate correction. The BPGDM is just getting too overbought.

  6. rozelina17

    Don, you believe gold will keep rising while rest of sectors going down ? Biotech is fading away it seems…Energy pretty stable until now

    1. Don

      Gold and oil ..trend is up. Biotech isn’t making new lows but that could change.

  7. Don

    What is the general consensus for the bond market, specifically, the etf, TLT? Up from here or down? Gary says he doesn’t deal with the bond market. Feel free to speak up Ralph, this is one of those times I care what you have to say.

  8. itsinthedna

    Gary: I’m not seeing higher highs and higher lows on your chart. Maybe I’m missing something.

  9. Donvito1

    Gary: What about Gold and Miners? I see USD is strengthening somewhat but due to bad nhp numbers
    Gold and Miners are stronger. I know you mentioned bloodbath phase and maybe this is the peak?
    Would be great to hear your opinion because I have difficulty to imagine if this is the end of the bloodbath or if there is more to come. More or less even the last person is soon convinced that Gold and miners go up from here. Psychologically this is where the drop comes……?

  10. babolat

    Take a look at a weekly chart of $SPX, you’ll see the same thing that Gary pointed out on DOW. Gary was right on the $USD call too. I’m not trying to kiss up but seems most of what he’s calling is on target. The $GOLD cycle top is too early to tell – could be just a temporary bounce after coming back through the Bollinger band.

  11. Donvito1

    Tnx Babolat and agree about USD and SPX calls so far but PM/miners call and its current status is my question towards Gary. We are on the edge here and if USD turns down next week then PM/Miners will run further up which of course will not negate Garys call but will prolong the peaking process.

  12. Donvito1

    Looks like Gary offline today because he is usually more active than today? Looking forward to his evaluation of the the market situation.

  13. Gary Post author

    Now you see why I said it was potentially risky to be short.

    When the market can’t go down on bad news it often signals that the trend is ready to reverse.

  14. vand

    The Dow doesn’t lead anything. It’s main street stocks. It’s Nasdaq that indicates risk appetite and should lead the way. As others have said, DJIA pretty much the strongest market you can pick. Every other major index is putting in lower highs. Stocks looks hugely vulnerable this summer.

    1. Gary Post author

      Actually the Dow led the market down and was the weakest during the initial drop in August. Now the Dow is leading the way out of the 7 YCL and has already followed the advance decline line to higher high.

  15. Steffmeister

    We are in a bear since late April last year, for Europeans indexes like DAX/OMX, US since May/June 2015. No higher high for a year !

    I see a breakdown in US indexes going forward, like I told you here in April 🙂

    1. Gary Post author

      What I see is that we were in a very sharp correction into a 7 YCL, but it ended in February. Now all indexes have broken their 7 year cycle trend lines. The advance decline line is back to making new highs, and the Dow is leading the way and is back to making higher highs and higher lows.

      All the signs are confirming that the 7 YCL is finished.

      You can wait till everything starts making new all time highs, but then you will miss a big chunk of the rally.

  16. rozelina17

    Gary do you think 3x ETFs are good for long term hold now that everything will go up according to you? For example JNUG and NUGT … thanks 🙂

  17. rozelina17

    One more thing, what is your opinion guys on Natural Gas ? UNG and GASL ? Does anyone think that there is much to gain in that sector ?

  18. Joseph69

    Now I’m really confused.

    So you raved about biotech and how it would go up for weeks only to sell at 35? You then re-entered at 30 only to ride it down to 23 (-23%) in 4 trading days.

    So is this a long term play or just a day trading spec play? Your action, words and analysis speaks long term but at the first sign of trouble you jump ship.

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