Stocks may move down into an intermediate cycle low over the next 15 trading days. If they do we will again hear the perma bears calling a new bear market. They will be wrong again as they continue to be wrong over and over. 

The S&P has tested the 2100 level 9 times. There is no such thing as nonuple top. Heck there’s really no such thing as a triple top. When a resistance zone gets tested this many times it’s a consolidation before a breakout, not a top.

stock market not topping
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  1. Gary Post author

    I’m confident the breakout would have occurred today if the Brexit vote had gone the other way. It’s been delayed a few weeks to a month but it hasn’t been stopped.

    And when a consolidation this big and this long breaks out it’s going to go a long ways.

  2. gent25

    Not long ago pounding the table that SPX was going to make new highs and the $USD would break to new lows and now this sounds like in denial as the world economy is unraveling… Brexit creates more uncertainty in an already uncertain political & economic landscape.

    1. Gary Post author

      I guarantee I’m going to be right. New highs have been delayed a bit by the Brexit vote but not stopped.

      Realistically this doesn’t change anything. Just because Britain decided they don’t want to be a part of the EU doesn’t mean the global economy is suddenly going to unravel. We just got an event panic today. The world didn’t all of a sudden come to an end.

      It will take months, if not years to forge new trade agreements. In the mean time governments will just print even more money and interest rates will remain at historically low levels.

      1. Robert

        Then wouldn’t that also just mean that holds rise was just panic? The dollar is breaking out to the upside also, so gold rise may be short lived. I predict gold retest near 1360 but we won’t see 1400 till after summer. More downside for S&P to maybe 1950 which is where I’ll buy some SPY call options. Gold should prbly get back to 1280-1300

        1. Gary Post author

          The dollar can’t even close back above the 200 DMA on a panic like Friday. The dollar is toast.

  3. mmwilson

    Already friends of mine want to go back to live in England and holiday there because of the vote result and the weak pound. This is a fantastic result for the markets and just represents another great buying opportunity supporting all of Gary’s long term views on gold, oil and the S&P500 over the next 3 years.

  4. ndmaster

    The market topped in May of last year. It is already making lower highs and lower lows. The SPX isn’t the only equity index out there, Gary (but it is probably the most manipulated). The RUT, NYA and COMPQ are all well under their all time highs.

    1. Gary Post author

      No it’s not making lower lows and lower highs anymore. Both the Dow and the S&P are back to making higher highs.

      I can’t stress this enough. Look again at the advance decline line. It’s only a matter of time before the market follows it to new highs. And a consolidation this big is going to produce a huge move higher once the breakout occurs.

  5. chrisG

    Gary, whats your thoougts on USD. It couldnt close above 200 ema. But looks likely going forward. With Brexit ,and others exiting, USD seems destine to go up.

    Gold COT is up 20k. Now at 330k !!!.

    1. Gary Post author

      Nope, the dollar is just finishing what will be a left translated intermediate cycle. If it didn’t top Friday it will soon. The intermediate cycle in the euro is already way too long for the dollar to continue to rally much longer.

      This is why everyone keeps getting these things wrong time after time, because they don’t understand cycle theory so they always end up on the wrong side of the trend right as it’s ready to reverse.

    1. Gary Post author

      What has happened in the past is that the commercials start covering their shorts into DCL’s and eventually get positioned for a bull market instead of a bear.

  6. humbled

    lower highs and lower lows are normal as part of correction. If higher highs and lows never called correction. This wave 4 consolidation lasts many quarters to gartner energy for the 5th wave to take us easily 2,400-2,500 or beyond on S&P.

    Picture this : as yen depreciated.what it has done to boost Nikkei; when usd goes bear how much translation gains when profits are accounted back to usd? Big margin step up.

    This not even taking into flows from.fixed income securities to equities and commodities as participants.continue to chase asset returns. Liquidity remains ample. Markets climb a wall of worries. Central banks remains accommodative to market developments.

    Just my 2 cents

  7. tulip

    The brexit is a referendum; parliament needs to approve it… much can happen.
    There is NOTHING binding in it.

    From Jesses Cafe..june 24
    The map below shows the support for ‘Remain’ was centered primarily in the southeast which is London and in the north in Scotland. The huge majority for ‘Remain’ in Scotland raises the prospect of another referendum there for independence in order to remain in the EU.

    I wonder if the professional establishments of the West will continue to misjudge the depth of the dissatisfaction of the public, counting on their complacency to maintain the status quo.

    The November elections in the US may be another interesting situation to watch closely. The smug sense of complacent entitlement of the Democratic National Committee and their anointed one is striking.

      1. Anthonyo

        Guys; I prefer him too. But I hate to disappoint you, but it don’t look so good in the polls for Donald unfortunately.
        Plus Republican party top brass are against him to the point that they rather see Hillarious win than the Donald. Yep, it’s that bad.

        Unless something big happens — like Assange or Snowden who have promised to release really damaging emails of hers(and only if this has legs)–she will more likely than not be the next Prez. and then watch it unravel as the middle east and EU rip themselves apart in teh next 3-5 years.

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