Monthly Archives: August 2016

CHART OF THE DAY – DOLLAR NEARING BEAR MARKET RECOGNITION MOMENT

Dollar Nearing Bear Market Recognition Moment

The dollar is getting closer and closer to that recognition moment when the market realizes that a bear market has begun. It’s now making lower highs and lower lows. The next step will be to break the intermediate uptrend line. After that will come a break of support at 92. That should usher in some kind of waterfall event as all the trapped longs finally understand that the fundamentals are not bullish for the US Dollar. After printing literally trillions of them over the last 6 years I have no idea how anyone could – with a straight face – say the fundamentals are bullish. There has to be consequences to the Fed’s insane QE programs.

recognition moment
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CHART OF THE DAY – OIL HAS CONFIRMED AN INTERMEDIATE BOTTOM

Oil has Confirmed an Intermediate Bottom

Oil sliced right through the intermediate down trend line today on its first try, confirming that the intermediate cycle low is complete. I don’t expect the next intermediate degree top for at least another 12-16 weeks. The previous intermediate cycle rallied 17 weeks before topping.

oil has confirmed
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Trade setup – Money Back Guarantee

Money Back Guarantee

Every once in a while the market gives me a trade setup that has excellent odds of producing a big gain. We have one of those right now. I will post the trade in the morning for SMT subscribers. We will use a $1000 stake, and if you don’t double your $1000 by the end of the year (I actually think it will take less than a month) I will refund your yearly subscription fee. You should be able to cover your subscription fee and walk away with an extra $800 or more in your pocket by the time the trade closes. 

This offer has expired. You can still get in but the trade guarantee will be based on my entry price today. If you join and take the trade tomorrow or Friday, you could get a better or worse entry price.

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CHART OF THE DAY – POTENTIAL FOR A RUNAWAY MOVE

Potential Runaway Move

Over the last 7 years I’ve repeatedly warned that we no longer have free markets. Governments figured out in 2011 that if they could artificially inflate the stock market they could delay the normal business cycle. This ushered in a new age of market manipulation. Anyone who doesn’t factor this into their analysis is going to sorely under perform or lose money.

Now the Nasdaq is at a crossroads. In a natural market there is no way the index breaks through the all-time highs on its first try. It’s simply way too late in the daily cycle and sentiment is way too optimistic. In a natural market we would experience a profit taking event at this juncture.

But if the powers that be want to prevent that natural correction,m the easiest way to do it would be to manufacture a breakout right here and abort the natural profit taking even that should occur. This would have the potential to create a runaway move into the elections. We should know in another day or two if this is happening.
potential runaway move
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THE BIG PICTURE FOR BIOTECH, ENERGY, MINERS AND STOCKS

THE BIG PICTURE FOR BIOTECH, ENERGY, MINERS AND STOCKS

The problem most retail traders have is that they never bother to look at the big picture. In the charts below I’ve marked where we entered the biotech, energy, miner and stock markets. I like to enter low and sell high. The exact opposite of what most people do. I’ll say it again: the correct time to buy is when you are most scared.

Biotech (IBB): Many ridiculed me, most ignored me. They missed the opportunity.

Energy (XLE): My most poorly timed trade should turn out to be exceptionally profitable as we got in at a 30% discount to the all-time high.

Miners (HUI): My best timed trade and our metals portfolio is up 144% so far.

Stocks (SPX): The SMT stock portfolio is up almost 70% over the past year while stocks have mostly gone sideways. We did this by avoiding major corrections and correctly understanding that stocks were not entering a bear market.

biotech, energy, miners
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CHART OF THE DAY – GOLD IS NOT TOPPING

GOLD NOT TOPPING

I’m starting to see a lot of analysts now calling for gold to drop down into a bottom in October. It’s amazing how these guys can consistently get this wrong over and over again. Gold isn’t topping. Gold has been bouncing around in a range for the last 5 weeks giving the 200 day moving average time to catch up to price. Gold won’t top until the dollar cycle bottoms, and that intermediate cycle isn’t due to bottom until late September or early October.

Gold will be making a top in October, not a bottom. But it may have to churn in this range for the rest of August before the next leg up can begin.
gold not topping
The dollar isn’t due to form it’s intermediate and yearly cycle low until October. When it breaks support at 92 we will probably see some kind of waterfall event that could take the dollar back down to 88-89 before the next bounce.
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CHART OF THE DAY – OIL HAS PROBABLY BOTTOMED

OIL HAS PROBABLY BOTTOMED

Oil tested the 10 DMA and has bounced violently today. I’m about 99% convinced the intermediate cycle low is complete. Oil should reach $70-$80 during the second half of this year.

When the energy stocks break out of their 3 1/2 month consolidation box this will be where the next big trending move will occur. Miners have already delivered a monster move. Now it’s time to look at another sector for a bit.
oil has probably bottomed
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CHART OF THE DAY – ENERGY: NEXT BIG MOVER

Energy: Next Big Mover

I think the big moves in the next month or two will be in the energy sector as oil starts a new intermediate degree rally. The metals may be stuck in a consolidation for awhile as gold works up enough energy to break through the resistance around 1380-1400.

Look for oil to regain $60, $70 and maybe $80 during the second half of the year.
energy: next big mover
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