As I noted in my last COTD, there are signs popping up that stocks are about to, or have completed a very mild intermediate cycle low. The vast majority of traders decide to buy (or join the SMT) after most of the move has already happened. Last summer my biggest influx of new subs occurred right at the summer high in metals. No one wanted to join the SMT in January when I was calling the bottom. They waited till the move had rallied 180% before joining. Go figure.
Now I’m telling you again that we are about to start the final bubble phase of this bull market. Most traders are still looking for the next bear market, and have been since 2010. So are you going to make the same mistake again and join the SMT after most of the bubble phase has already passed you by or will you do something different this time and get in before the move happens?
At this point I’m just waiting for the Dow to break out of its bull channel to signal it’s game on.
Like our new Facebook page to stay current on all things Smart Money Tracker
Not yet Gary. Alot of analysts are saying we will get an ABC move, spy to slightly break the 2400 high and then the real correction to 2260 – 2300. After that we will get the bubble phase
I think they will be wrong and will get caught having to chase. I explain why in last nights newsletter.
Gary, I have no doubt that you’ll be right on the money on this one. I will look for yearly highs sometime in June – early July time frame. Thank you for great insights!
Gary: Thanks for the update. I have been curious. Does the intermediate-term sentiment (Optix?) need to drop to the low for an ICL?
I went over one sentiment level in last nights report. I’m going to go over more in the weekend report and show why retail still hasn’t come into this market. In fact they are still way too pessimistic. The longer the public resists the bigger the bubble phase will be.
Pingback: Is The Dow Jones Industrial Average Poised For Another Huge Rally? - Investing Video & Audio Jay Taylor Media
Gary, there is a large detail report put out by JP Morgan’s asset flow team which is quite good. It shows the data that the rally of the past 3 months is driven by the heavy flows from retail investors, so retail is in the market and is driving the market, while large hedge funds are taking some risk off. You can find excerpts from this report on Zerohedge site
I’m going to go over the ROBO ratio in the weekend report. The public still hasn’t come into the market. The drop into the 7 YCL last year scared them out. They will be chasing this rally for a long time yet. It’s why the markets have gone up so aggressively once the Nasdaq broke out above the 2000 high.
A year from now you are going to look back and remember my prediction for what happens when a consolidation that big has a breakout. The rally goes a long long way.
Calm yourself, at least wait for the Healthcare vote….Although Trump usually gets his way….
Gary, don’t get so cocky. Months back you were promising subscribers that gold would see 1500 soon before it collapsed and you were on the verge of shorting gold. No need to start pumping any asset class when you don’t have a crystal ball and have been woefully wrong before.
Don’t forget even though gold didn’t go to $1,500 like I was expecting we still managed to recover all of our losses from the early entry and the metal portfolio is now up 130% in less than two years.
Doesn’t this look like a bear flag on the major indexes?
I would not dare to get into the SM at this point.
The risk is very high in comparison to the potential reward.
There is much less risk say in gold/silver.
The SM has been going up for eight years.
In fact, the SM market has already issued a warning.
The money to be made in the SM has already been made.
For the SM to go up, it needs to break the upper trend line in the chart above.
What force will do that?
The Trump effect made the SM go up and hit the upper trend line, what other effect can be there?
Is not the recipe to buy at oversold and sell at overbought?
Buying now is buying at overbought. Does not make sense to me.
Further, even with the recipe of higher highs result in higher prices, we have already saturation.
Pray if you go long, and get into hopium.
I think you are right Goild.
Here is an article about total market capitalization and GDP.
http://www.gurufocus.com/stock-market-valuations.php
Warren Buffett teaches:
As pointed by Warren Buffett, the percentage of total market cap (TMC) relative to the US GNP is “probably the best single measure of where valuations stand at any given moment.”
Right now we are at Significantly Overvalued
Bubbles are never about valuation, they’re about emotion.
Using valuation as an excuse not to participate in the easy money during a bubble isn’t a valid excuse.
Would you use valuation as an excuse not to participate in golds bubble phase? Or course not.
Gold will also have a bubble but stocks will be first.
Gary, the people pose themselves here on the other side of the trade will never understand your logic and reasoning just like beginning of 2016 for the metals move. In just a few months of time frame, your vision will be seen as spot on for the stock bull. I wouldn’t want to be caught on the wrong side for this one particularly. $ up, stocks and oil up (what’s good for economy good for oil) and gold down is coming up shortly starting from next week.
I think I will wait for the breakout.
And, what if there is no breakout Gary, and the Dow falls back into the channel? I am not saying you are wrong but it’s a long ways down to the bottom of that channel. Also, you could put that chart on a log scale and draw the lines?
That is a log (or semi-log) chart.
It is? Looks to me like each price on the grid is equal in size at 1000 points.. What do you see that indicates it is a log scale?
I tested it using my own long-term chart. In the linear version the 2011 low would be a little below the trend line and the channel is not near parallel. When I switched my chart to semi-log it is well above the lower trend line and the channel is nearly parallel, as shown on Gary’s chart.
Gary,
There is another issue. OK, let us say go long with the SM.
If so what portion of your account would you recommend?
Say Tom, Harry, and Dick have $100K which is their life savings.
If they go long and the SM goes 15%, which is the reasonable limit, then they have $115K.
Though, Tom, Harry, and Dick know very little about their emotions. If the SM goes south they can lose $15K much more rapidly, and they will not sell but stay in hopium, and before they know it they will lose $25K.
We are risking almost nothing. That’s where the stop comes into play.
Weekly Sell Signals on The CCI for UPRO, FAS, UDOW, TNA and TQQQ almost has a weekly Sell Signal… You have Talked in the Past about not Buying Break Outs and now You Ask People to Do That when these Leveraged ETF’s are giving Strong Weekly Sell Signals on the CCI indicator… I will take my chances with the CCI… Note- the Market is Under Pressure… GDX weekly CCI is above -0- and rising… Gold and GDX looked have Retraced about 50% Move from Jan 2016 to August 2016… after the 50% Retracement… Gold, GDX, JNUG haved completed a Double Bottom and should move higher… Also with the Daily VIX rising above the 50 MA… that means ETF’s like, UPRO, TNA, FAS, UDOW, TQQQ are in trouble near term… so I would be buying these… Good luck everyone…
correction to my post above- I would not be buying these ETF’s UPRO, TNA, TQQQ, FAS, UDOW, TQQQ
Mr Merlin told me that stockmarkets is moving up until mid summer/summer solstice and he is also expecting a low for gold miners at that point in time.
Here is a goldchart that I made yesterday, I hope I am wrong:
http://i629.photobucket.com/albums/uu19/solssonabb/Mw_zpsjnkpmnsi.png
Gary,
This trade you are pursuing in the SM, if right, would highlight you as quite an insightful trader.
Hope you are right.
What is the exit price?
I would try to exit as close to the top of the bubble as possible.
Gary I think your gonna get stopped out. They market is looking ugly here and if anything happens over the weekend could gap down and selloff big by Monday. I still have calls and regretting not selling them yesterday on the quick spike
Getting stopped out with a very small loss isn’t the end of the world. We’ll just try again next week.
No mercy to SM, now is time to begin paying the “irrational exuberance.”
Day trading today was reasonable +$1.3K.
I will have some nice meals over the weekend.
Good trading to all.
well, the beginning of the end. It’s not just health care vote, its everything else on the table plus what’s coming with Trump at the helm. This bill could pass as republicans are a ship without a rudder and running scared of Trump, their voters, the media, you name it.
Any selloff here on a failure of vote should be bought, because the his wall streeters will be quick with promises of tax cuts, regulation cuts etc to talk up the market again. Which will be another hook for retail investors as these policies will do nothing but confuse and anger voters.
Trump is such an intellectual fool, with zero principles on anything of national interest. Only interest is to be a popluar celebrity with the bottom third who have nothing to cheer about.
Opinions are fine. SM rice still wants to go down. No rush to get into SM until price stabilises. We need to take it one day at a time.
Its looking like that stop run was a possible bear trap. Gary hope you didnt get stopped out we might now be set for the rally!
It happens sometimes.
They postponed it again. I was surprised that they wanted to vote today. It meant they had enough votes. They will not vote unless they have enough votes.
What at last minute manipulation to save the SM.
I almost lost half of the $1.3 but managed to increase it to $1675.
Have a nice weekend.
Ras nice to know you are around.
It was annoying to see every reply moderated (censored?) by the blog monitor. Watching major etfs of SM for a nascent uptrend, if any. If the so-called SM bubble phase were to start, there will be plenty of time to get in. Absolutely no rush. Next week will tell.
I like to pick the bottom because my stops are very close. I can lose several times and still make good money.
Though, in stress, things come up.
There is an inverse relationship component between SM and Gold.
Longs in PMs may be behind us for a while. Price action looks terrible.
I think it’s too late in the intermediate cycle to keep pressing the metals trade.
Possible choices: dust longs or sm longs. Former needs nimble trading skills. Latter, buy and hold for several months.
Not sure about the USA, but here in the UK, people with a bit of spare cash seem more interested in the buy to let market than stocks and shares. Where are the retail investors going to come from to drive the bubble phase?
If you want to play the short side… check this out…
https://preciousmetalsforecast.com/
Dow to crash to 19100 per my chart… any body have that target? 2hr indicators are still bearish…
The McClellan oscillator is suggesting we’re abut to put in an intermediate cycle low any day.
my weekly indicators are pointing down and looks like a quick blood bath phase….fyi i am waiting for a crash so I can get in…hoping for a good entry
There have been a few times in history where an intermediate cycle correction has been compressed into a tight range like we are seeing now. None of those resulted in any big move down. As a matter of fact the most extensive loss was a little over -1.5% while the intermediate gain was almost three times as big.
MegaMind like Alexandru you will need to keep waiting for your “crash” in the SM
MegaMind, how do you come up with such nonsense? Would love to see those indicators of your pointing to: ” looks like a quick blood bath phase….fyi i am waiting for a crash so I can get in…”
Sounds like you missed the big run higher, like Alexandru, and are now just hoping that the market tanks to let you in. Good luck…
short GBPUSD makes a great swing trade for the next fortnight:
– GBP touched its 150dma on Thursday – a historical resistance for the pair
– reverted yesterday confirming its resistance
– produced a bearish harami.
With DCH on day 7, it is assured of a left-translated DC –> THE BLOODBATH PHASE OF THE STERLING!
I’m going to cover sentiment in the weekend report.
We have a long long way to go before the final top forms.