As predicted, the market is breaking out to new highs. I’m going to collecting on a ton of burrito bets today. This is not the time to try to time a perfect entry. It’s still very early in a brand new intermediate cycle. While most breakouts tend to get sold, I would not count on that happening here because it is so early in the intermediate.

This breakout could run just like the silver breakout. 9 days into a new intermediate cycle isn’t the time to worry about timing perfect entries. Just get in and wait for the top which won’t be due till September.

Remember, the larger the consolidation, the bigger the rally once the breakout occurs, and this consolidation lasted more than a year. The rally into September could go a long ways.
new highs
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40 thoughts on “CHART OF THE DAY – NEW HIGHS

  1. Gary Post author

    The SMT stock portfolio is currently up 70% over the last year and a half.

    Not bad considering the S&P is up only 4% during that period.

  2. Diller55

    Hi Gary,
    Your performance has been stellar recently. And most of what you say makes a lot of sense to me. However one thing that does not is your view on USD, why in the world are you so sure we are heading down? What are your arguments supporting this view? If it is QE that hardly makes sense as the entire western world is currently engaged in this, and currently other areas than the US seem mostly involved. Also technically the USD looks really good in a consolidation after a good run and a b/o of the long-term downtrend. And Europe is a basket-case… How can you be bearish on USD?

    1. Gary Post author

      Let me ask you this. Over the last 7 years the US has done about 12 trillion in QE. In what reality does that equal a strong dollar?

      1. Diller55

        Well…, if that is what you’ve got I wouldn’t be too comfortable in that call. There could be many arguments raised including the relative size of US qe compared to others and timing of those. Another would be previous us qe has hardly been clearly dollar negative.
        Most importantly, how can one be so sure about the timing? Doesn’t price action trump everything else? Maybe we have one more bull leg remaining before the big reversal down? Seems more logical to me at least. How comfortable are you in that call and when would you say you were wrong? Thanks!

        1. Gary Post author

          If you are going to look at price action then there is no question. The dollar has now made two lower intermediate lows. The three year cycle has topped.

  3. Alexandru Popovici

    Yes, Gary, you’re right!

    I’m also short T-bonds in a FULL position via TMV — THIS IS A CRITICAL MOMENT: Friday was the end of the bull in treasuries.

    I am 81% invested long stocks and short bonds. I’ll add on follow-ups and break-outs from consolidations.

    1. Don

      Gary, you were right about gold and now about the stock market. Good job. Now we need the dollar to decline, oil to head up to the $55-$60 range and the biotechs go parabolic and then you will be batting 100% so far this year.

      1. Gary Post author

        It will take way more than a year before biotech goes parabolic. I’m going to guess 3-5 years before we get the bubble phase.

    1. Gary Post author

      I like to enter at cycle bottoms (the point where everyone else is telling me I’m wrong).
      In the middle of a cycle it’s anyone’s guess when a good time to enter is.

  4. Don

    Bad news for the bulls: Dennis Gartman is bailing out of his stock market short positions. As a contrary indicator, this guy should not be ignored as he wrong far more often than right.

    1. Anthonyo

      FARTman at CNBS >>>> when Dow was at 16,245…Fartman:”GET OUT OF STOCKS.”

      Also, this gem:

    2. Gary Post author

      It is very very early in a brand new intermediate cycle. Don;t look for a top until Sept.

      Short term corrections yes, but no intermediate degree top till the fall.

  5. vespij

    Gartman is bailing out at a loss so we are still ok. Lol. Yes Gary was right. Whats amazing is that Gary was about the only one that said both stocks and metals were going higher. And he stuck to his guns every day. Impressive.

  6. Steffmeister

    I feel very uncomfortable about this breakout, it feels 100% artificial …

    This is going to end bad 🙁

    1. Gary Post author

      Yes but not until we get the parabolic bubble phase.

      Just look at the last 18 years of history. The Fed prints too much and keeps interest rates too low = bubbles.

      Now we are just waiting for the next series.

  7. rborna

    Hi Gary,
    Looking at your weekend post of dollar and gold, I see a shallow pullback on the chart from 1390/1400 to looks like about 1340. That is only 15 points from today’s 1354 price, less than 1%. Am I reading it correctly?
    So Gold will make only a minor pullback, but Silver will pull back 5 to 7 % from here?
    Do I understand this correctly?
    i.e., we can buy UGLD now, but wait for USLV for further pullback?

    1. Gary Post author

      First off I almost never draw targets on charts unless I specifically say it’s a target. I’m just showing trajectory. Gold could dip to 1308.
      But then again it might not. It might just break right through 1390.

      Never, never, never, never short a bull market, especially not one this early and coming of a massive manipulation that created the bear market.

      Jorgy destroyed his account trying to do that kind of nonsense.

      There is absolutely no reason to short anything for the next 3-5 years. Long positions only. If one asset goes into a correction then rotate money into other assets that are still rising.

  8. maybesomeone

    Don’t eat too many burritos before your next rock climb or you’re going to need a thicker rope! Although on the plus side, at least you can afford it after your more recent calls…

  9. tulip

    AL Korelin banned me from his site months ago.. but I wanted to give credit to doc postma’s take on Brexit this evening…

  10. Alexandru Popovici

    T-bonds stand ready to deliver a bearish island reversal today — we are on day 2 of a massive bear market for bonds

  11. Alexandru Popovici

    it might be the end of the long bonds’ bull , there is a significant probability.
    It depends on how Japan’s government will deleverage and their demographics tackled: acute financial repression by a trusted government or lost trust in government with ensuing disorderly restructuring.

    I was hoping that elections on Sunday would be the catalyst in markets’ trust in PM Abe, but it was not the case.
    The next thing I will look at is Japanese government opening their doors to foreign labor. Such an act would increase the probability that bonds’ bull is behind us.

    1. Alexandru Popovici

      ….besides…..mass media is filled with news about the unwavering, unending trend of falling yields — a great context of mass psychology to host the very top in treasuries 🙂

      1. Jacob

        Yeah, there is almost total agreement bonds are going lower from here, and stocks higher. Something blindsides the situation soon (I hope). I can’t believe we went straight back to all time highs after a really bad situation just got even worse. It’s so broken now I don’t know what to think, but do think something jumps out in the next bit, and fucks shit up. Fed raises, or BOJ talks down the helicopter for a little, or a European bank breaks, but something snaps (surely). But with you, interest rates are about to rise, even idiots are doing the math now and wondering if 2+2 really does =5.

  12. Gary Post author

    Looks like we are going to get some follow through on yesterday’s breakout to new highs. This could really get some momentum as all the vast majority of traders suddenly realize this is not a bear market like they thought and are forced to cover their shorts.

  13. Alexandru Popovici

    And here we have it nice and beautiful: a bearish island reversal in T-bonds!

  14. Gary Post author

    The Dow has now followed the S&P to new highs. All indexes will eventually follow.

  15. Gary Post author

    The energy stocks are suggesting we are getting an intervention today to halt the rest of the ICL in oil.

    This is why traders absolutely must accept manipulation as a way of life in modern markets. If you wait for normal corrections to play out often times you will get left in the dust when the government steps in to stop a correction prematurely.

    I’ll say it again. If you are following someone who continues to deny market manipulation and government interventions then run far and fast in the other direction. They are going to be bad for your portfolio.

  16. humbled

    yes are gold and silver halted by stock market rally money flowing into non-miner stocks?

  17. Gary Post author

    Everything is going up together. There will however be corrections along the way.

Comments are closed.