160 thoughts on “WHAT HAPPENS WHEN THE STOCK MARKET BUBBLE POPS?

  1. trendyfollower

    Brilliant, brilliant! I also see big, big moves in stocks and PMs ahead. I would just wonder about the time frame. 7 year cycle in stocks due “theoretical” in 2022. I don’t think we’ll see a 4+ year bear market in stocks. Rather a continuously accelerating, long-lasting bubble, much longer and higher than even SMT bulls can see 🙂 Also, if the emerging commodity bubble concentrates in PMs only, the FED will not care very much as this alone does not stoke inflation. As long as oil/energy moves up slowly enough, they will not invert the yield curve or at least take down rates fast enough to avoid recession. Looks really good to me until the next 7 year cycle date around 2022. So still a lot of “great” years ahead.

      1. trendyfollower

        Always a possibility. The trend for my waistline and economic cycle seems to expand, though. Including time between recessions.

  2. trendyfollower

    Also biotech- XBI just exceeding the 2015 highs still needs some time for the trending move. Same for semis after 18 consolidation. 3-6 months seems too short for trending move following this long of a consolidation. More years rather than months. Buckle up!

  3. jyoung3759

    Its not starting to go parabolic it has been there for awhile. The following according to Alexander Elder.

    A parabolic rally has three parameters:
    1. Two closes outside a three-standard-deviation channel of a 24-month Average True Range (ATR).
    2. The five-month moving average is within 5% of the three standard deviations of the 24-month ATR (very near 3-ATR channel).
    3. The maximum drawdown from high to close in the past six months is less than 15%.

    When a market moves outside of its monthly 3-ATR channel for two consecutive months, the monthly 5-MA is within 5% of the 3-ATR and it has not experienced a closing drawdown of more than 15% in the past six months, we consider this a parabolic move.

    Based on these criteria, the S&P 500 does meet all requirements for a parabolic condition.

    Timing a parabolic move as to when it will end is near impossible. When these moves end, they tend to do it abruptly and harshly. Every parabolic move in history had a nasty ending. A market that goes parabolic does not have to crash immediately. A parabolic move can persist beyond any logical measure, but the longer it lasts, the more vicious the subsequent crash.

    Let’s review several examples. During the mid-1990’s the S&P500 moved into a parabolic state and remained there for years. The S&P briefly went parabolic again in May 2007, a few months prior to the top in October 2007.

    The market is certainly in a parabolic state. How long it will last is anyone’s guess. Historically, the ends of parabolic moves are marked by the index moving below its 5-month moving average. That level for the S&P 500 is currently at 2,655.”

    1. Gary Post author

      By parabolic I mean bubble.

      Bubbles usually gain 100% or more in a year or less and can rally 40-100% or more above the 200 DMA at the top.

    1. trendyfollower

      Very good point. Most importantly, we can profit from gold and stocks being in good bull markets simultaneously. This reduces portfolio volatility as short-term they often move contrary. It’s really a great time for investors, probably the best in a long time. Tired of winning yet?

  4. jyoung3759

    Attachment

    So where are you standing with your alternate call of a secular bull market and a video in November I believe where you did name technology including biotech that would spawn it.? The chart above is not the one you posted but I’m sure the impetus was found on it or one similar to it? Even if not I would appreciate your thoughts on what is a pretty steady cycle of secular bull/bear cycles throughout history. The moves have been 334%-666% according to this chart which is inflation adjusted. Gary, your thoughts please.

    1. Gary Post author

      A couple of months ago I said I would need to see more to determine whether the market was in a runaway phase that would lead to a multi-year secular bull market or was going to become parabolic and a bubble. At this time I think the odds greatly favor a bubble.

  5. jyoung3759

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    Thank you sir!

    The break out to new highs is what makes this seem unusual. I believe you used this chart. Right now my analysis suggests a top in August for this crazy move so I am in the sme camp you are with my thoughts and I do not really think this is the start of a secular bull which would suggest we are still possibly in the throes of a secular bear and QE has just tainted everything to no end. The payment for this is likely to be very steep, but the can has continually been kicked down the road in one form or another.

    BTW your analysis is excellent as usual. Thaank you.

    1. trendyfollower

      This is what makes me wonder how long the bull market in stocks may last. The “average stock” per the value line has just broken out of a ~18 year consolidation and bigly cup and handle formation. Such a trend move cannot be over in just a few months IMO.

      1. Gary Post author

        I believe the breakout was generated by years of QE instead of a new technological advance. That’s what should drive a new secular bull market, a new technology.

        So I don’t think this will turn into a long term secular bull market like some are calling for. I just don’t believe the world works like that. Flawed monetary policy shouldn’t be rewarded with no consequences. So I don’t think years of QE will lead to a long term bull market. I think it will lead to severe consequences. Namely a series of currency crises and more bubbles.

  6. Christian

    I posted this on the sub side, thought I would share with the rest of you rascals:

    From Jason at sentimentrader.com

    “With overnight gains, why not trade all day? Most of the gains in stocks come
    overnight, and mom and pop traders have taken note. TD Ameritrade is trying to
    meet that need by rolling out 24-hour trading. That rhymes with the 1999-2000
    period when retail brokerages introduces after-hours and pre-market trading”

    Aaaaaaaaah the Banks.. trying to make it easy for mom and pop to buy some shares. Ain’t that cute 🙂

  7. Americano

    Yeah stocks are a no brainer BUT they were not last couple years as Gary was doing his drum roll to the parabola that is currently manifesting.
    TQQQ ( aka the Dream Machine) is gonna be nuts.
    I don’t think the pop will be all that bad……if hedged with Bitcoin 😉

  8. Gary Post author

    Attachment

    A close above $1340 will confirm that the daily cycle has not topped and gold will then be on it’s way to testing the Sept. top and maybe the baby bull top before this cycle takes a more significant breather.

    1. Jim Dandy

      Despite what it feels like, you have been on fire so I will not be surprised to see this idea play out. When Gary is hot, it pays to listen!

      I will continue to add on pullbacks.

  9. carlvan

    A great video on the Big Picture, thank you Sir! Watching it I understood this: currently the market with the highest relative strength is Stocks, followed by Gold, then general commodity market CRB. And it’s then only logical to state that the parabola in Stocks has started, and Gold will become parabolic later on. So bottom line you were right to say that stocks is where the easiest money is made for now, because the pullbacks are very small if ever existent, so that timing mistakes are easily forgiven. On another hand gold is the next best market to be positioned even before the bubble start. At least that’s how I interpret your last video. Personnally my goal is to be positioned accordingly and, for the stock market part, my mistake will perhaps be to still be waiting for a correction that may never come before the end of the bubble. But at least for gold, timing is now, now and now…

  10. Norm

    Hi Gary, still recommend being on the sidelines as far as stock market leverage and wait for a pullback? Thanks.

  11. Gary Post author

    Z,
    The reason the conversation has declined (as you call it) is because the perpetual trolls have just been flat out wrong, over and over. Instead of admitting they were wrong they have the luxury of just disappearing.

    The stock market perma bears are all but gone now. They almost certainly destroyed their portfolio’s by ignoring my advice not to short a bubble. The gold bears also have been consistently wrong for two year’s. Invariably they become most vocal right before an ICL and then of course they get caught when the advancing phase of the intermediate cycle crushes them.

    Now with the bitcoin bubble imploding most of those people are leaving, or have left as well, other than the one or two die hard believers still in denial. They will do exactly what I said they will do. They will hold all the way to the bottom and lose everything because they bought into a story and ignored the warning signs of a mature bubble.

    So I wouldn’t expect any of these people back anytime soon.

  12. Gary Post author

    We just had a large attack in both the gold and silver market.

    These are one of the more heavily manipulated markets and one has to accept that this kind of stuff happens in the metals. This is why I recommend no one have more than 20% of their portfolio in metals during this stage of the bull market. They are too volatile and too easily controlled by the banks.

    1. mk

      You also said that PMs are early in the intermediate cycle and now is the time to press on gas.
      And stocks are late in the intermediate cycle and it is not time to have a leveraged position.

    2. Jim Dandy

      This will turn out to be a buy/add opportunity if the weakness can maintain through the day, I am ready.

    3. carlvan

      I am ready to ren-enter leveraged miners ETF as soon as GC <= 1315 but not sure we will get that much of a correction

  13. Goild

    Good morning,

    The gold manipulation extends to all levels.
    Over night gold was higher to make Asia and EU pay higher prices.
    This morning suddenly is down.
    Likely the manipulators are pocketing a lot of money.

    1. RTTPD

      No one should be surprised at this point, how corrupt/crooked the system and the people running it are.

      Anyone been watching the FBI lately? They’re probably just as corrupt as MS-13, just not as primitive in the way they act out violence. They’re definitely not the ” good guys” as protrayed in Hollywood.

      Karma will catch up with all of them at some point in time — linear or non-linear.

  14. Gary Post author

    The problem is we don’t know what the manipulation is trying to accomplish. Are they short and they’re trying to trigger a sell off so they can profit from their short position, or are they trying to create a selling panic so they can scoop up more shares before the next rally begins?

    I’m going to guess it’s the latter because the dollar is on the verge of breaking down and the euro on the verge of breaking out.

  15. Gary Post author

    With the dollar breaking down and the euro and yen rallying the odds are high this is an attempt to create a selling panic so the banks can scoop up more shares. That should mean the next rally is going to be a doozie.

  16. LeilaniFarms

    I’ll be honest, these kinds of days annoy the shit out of me. Watching the dollar move down and Silver get smashed down even more…lol doesn’t make sense except for the fact that I’ve seen correspondence between traders for major banks working hand in hand with some major silver shorts during the bear market from 2011-2015.

    It is clear to see that this is what we witness from time to time in the silver market, today is just one of those days…argghhh!

    Pure manipulation and stop hunting from the Big Boys.

  17. Alexandru Popovici

    Gary, you know based on my position in the championship that this comes as no surprise to me.
    I’ll shift my position after gold touches 1299 next week.

    PS: yet, I will fail to accomplish +100% return by the end of this month after re-entering the championship at the end of November (in 2 months).

    1. Gary Post author

      Bitcoin has topped, but the metals won’t form a final intermediate top until the euro tags it’s bear market trend line around 1.27.

      If I had to guess I’d say the miners still have 20-40% to go yet.

    2. Jim Dandy

      Gary should also give out an award for the single worst performer in his contest, the one who blew out the fastest, Teddy.

    3. LeilaniFarms

      Ted, you are truly a Clown. In all seriousness, you don’t really think you add any value to this forum right?

      Considering all of your outlandish calls backed by no charts, what is your goal here?

  18. ras

    Opinions aside, jnug/nugt are in DT intra day: lower highs and lower lows. dust/jdst vice versa. Rest is just noise.

  19. Gary Post author

    The currencies are on the verge of a breakout (euro, yen) and breakdown (dollar).

    I don’t think there is any question this mornings attack was a setup to allow the banks to accumulate more shares ahead of the currency moves.

  20. ras

    ag looks awful. It needs to recover from its swoon before seeing any upside. Leading pm stocks look like a scattered army running in different directions. They need to develop the oomph to get going in the same direction. Until then, it is just watch and wait.

    1. Gary Post author

      Watching and waiting is what caused most traders to miss the initial rally out of the ICL.

      Most will also miss the second daily cycle rally as well because the first DCL will look like a top instead of a buying opportunity.

      1. Gary Post author

        Watching and waiting also caused most to miss the majority of the vertical phase in the stock market.

  21. davidch14

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    Gary,

    Also note that your time line of ~6 months for the top nearly coincides exactly to a report that Tom McClellan did correlating stock market’s to crude oil on a ten year delay early last year. It’s actually amazingly accurate on a historic basis. That would suggest that the markets will top in approximate June 2018 time frame 10 years after oil topped in June 2008. The entire article is here: https://www.mcoscillator.com/learning_center/weekly_chart/crude_oil_foretold_the_trump_rally_10_years_ago/

    David

    1. Gary Post author

      I would suggest Tom’s observation is purely coincidence. There are too few occurrences to establish a link, and 10 years is way too long to have any significance.

      I think Tom just data mined a non related correlation.

  22. Gary Post author

    It’s official, the dollar has broken to new lows. The next support zone is all the way down around 88…or 1.27 in the euro. This intermediate cycle collapse isn’t going to stop until the euro reaches the bear market trend line around 1.27.

    1. Autobahn

      Amazing

      Was watching CNBC from Davos.
      Ray Dalio said we probably gonna have a blow off and if you in cash you will feel really stupid.

      They know what’s coming. They do know.

  23. vin

    Gary, is this a change in thinking that during the “soon” coming inflation phase EVERYTHING will rise together in tandem?

    1. Gary Post author

      I don’t know what you mean. Everything has been going up together since the bottom in 2016.

  24. Don

    Netflix is up over 10% in a single day and 31% already this month. Nvidia is up ‘only’ 23% this year and AMZN is dragging it’s ass being up a mere 15%. How come no one was seeing the value in these stocks when they were supposedly outrageously over priced six months ago?

    1. Gary Post author

      I’ve been warning anyone that would listen for a long time that this was coming.

      The biggest and quickest gains come at the very beginning of a bull market and at the very end.

  25. Goild

    Attachment

    Be a trading ANT and sleep well.
    Make a lot of small profits at minimum risk.
    A consistent trading ANT beats the MARKET!

  26. Don

    It took only nine trading sessions for the S&P to go from 2700 to 2800 and at the rate it’s going up right now, it will breach 2900 in half that time.

    1. Gary Post author

      That’s a sign of unsophisticated investors hitting the ask. That’s what happens during a bubble.

      10,000 is going to be a piece of cake. 20,000 isn’t out of the question when we get to the really nutty phase of the bubble.

      We got a taste of what nutty is like in Dec. during the final bitcoin melt up. The same thing can and probably will happen to the stock market.

  27. Don

    It is interesting how well the bond market is holding up as if higher interest rates are nothing to be concerned about.

    1. AT

      Gold seems to be moving now above 1340 … I guess today’s action was just another trap to trigger stops, and smart money loading

  28. Gary Post author

    The ECB will continue to fight to keep the euro suppressed.

    I’m positive they are going to fail. They need to wait until price meets a resistance zone so they can get some help from the market. Right now they are just throwing money away needlessly.

    1. BeachandBiscuits

      Very weird though that miners (JNUG) just don’t seem to be reacting like they should to the obvious weakness in the dollar the last couple of days.

  29. Bv

    Gary, from what you are saying, your Quest portfolio must be in a MEGA BUBBLE. When are you saying enough is enough and getting out? Great work btw.

  30. ras

    Dust is awfully close to breaking down. jdst is still dithering. Good movers among juniors: auy, kgc, btg, etc. On a transition cusp?

  31. JJHarmen

    GDX is up a penny! What’s not to like about this roaring bull market? I just bought a 1000 LABD @3.11 just for fun. The bios seem a little over done but I concede that they could get a lot more over cooked. We shall see.

    1. vin

      jj I have LABU and have done well with it. A bit concerned the way it shot up. A pull back at this point to about 100 would be healthy. Tough I will hold on to LABU.

    1. Gary Post author

      The miners have already rallied 16%. An intermediate rally of 36%-56% is a pretty big rally.

  32. roadrunner

    GDX was on a short term buy signal al day…and we are off and running. ted, I hoped you dumped your dust for some profit?

  33. ras

    There was no need for anxiety about missing. Anyone could have bought nugt/ jnug around 1 pm today when their inverses began to breakdown. Just day one.

  34. Troy

    Both GDX and GDXJ closed the gaps they left on Jan 12th. Well almost, they both came within one penny. I like it.

  35. Nada

    I guess Christian is not saying anything about my gold position, since I am not saying anything about his oil position. I am at a 20 dollar loss at the moment with my short, but I decided against closing them. I want to see how gold reacts to a potential double top. Max loss on position is 375, so no real worries.

      1. Nada

        I bought on Dec 12th and sold at 80+% profit in GLD calls. I have been idle since. I only have a tiny position at the moment (short). I am more of less flirting with the cycle duration. I gave up on the gap fill, but I guess gold is going to take another crack at it.

    1. Christian

      I’ve already said what needed to be said my little enchilada and to be honest, I’m too busy enjoying life to linger on the blog ALL DAY and EVERY SINGLE DAY 🙂

      Some of the best advice I was given and have given in return was to find a hobby..! There are too many people on here bored with nothing else better to do than over-analyze every single wiggle and I’ve been doing this long enough to tell you that it’s not worth it.

      Speaking of which! Off to Hawaii this week for some scuba diving and much needed Sunshine. Vancouver rain will suck the life out of you if you’re not careful, Lol!

      Back in a month. Hasta luego…

  36. Jimsee

    jan28 temp high gold – or last turn before a barn burner to mid feb imo.

    my guess is a 1-2 day wobble at nominal highs (1357?) then a burst to 1400+, leaving no room for fence sitters to accumulate.

      1. Jimsee

        since we made a low on the 10th, a high for the 14th made sense , then a turn in the Jan 25-28 (probably 28 centered) – if we bottomed early for the turn in price today then a 1-2 stutter step is likely until either a spike high on jan28(short term top) or a retest low (in this case then shazaam to the upside for mid feb.)

        Remember in DEC we discussed a late Jan turn as a possible retest of the ICL low?

        this has been playing fairly well 2 script.

        Closing above 1327 was the key price for me – done deal for 1400+ imo.

      1. vin

        It is not always that nice. So, when it happens it is a joy. Even though LABU has exceeded my expectations and I am sure a pullback is in cards, it is a hold for me.

        But, INDL! WOW! I plan to hold on to this gem. If I had the courage I would buy more right now.

        For jnug, credit goes to Gary. His recent predictions have been awesome. Let us see what happens.

  37. Bob

    Those that aren’t subscribers should really try it out for a month. You get full access to the cycle counts and many other resources as well as the Weekend, end-of-day reports, sometime morning reports when things are likely to go strange as well as the buy and sell calls all communicated instantly to your cell or twitter. If you can’t make $50 more than otherwise in a month I’d be very surprised.

    1. RTTPD

      The only stopping me from being a subscriber is I dont like ets.

      It’s likely a ton of extra work, but if Gary ever decides to start picking a few stocks, i will subscribe right away.

      1. Bob

        You’re not required to buy the ETF, although the benefit is the diversity of individual stocks, not leaving you vulnerable to a single event (strike, mine accident, etc. as an example for goldminers). You can apply the guidance for gold to any gold mining stock, but subject to the individual actions of the management. Only you can pull your trigger.

  38. Gary Post author

    Attachment

    Poor ole Ted made the same mistake twice. I’m willing to bet he will do it again. Why? Because he’s trading his bias instead of what the market is giving him.

    I’ve shown everyone that intermediate rallies almost never top in only 4 weeks. Even in a bear market they don’t top that fast.

    I revealed that sentiment was still neutral, and the COT’s are not bearish.

    I’ve warned traders over and over to take everything with a grain of salt in this sector. It’s one of the most heavily manipulated sectors. The banksters very often paint the charts to trick retail traders and hedge funds into making the wrong trades.

    Last week was all about options expiration and trying to force as many strikes to expire worthless as possible.

    This mornings attack was about causing emotional retail traders and hedge funds to cough up their shares to the banks before a big move begins. The fact that the banks were willing to run a risky manipulation like this with the currencies flagging suggests they know there is going to be a big move ahead. The reward will be worth the risk.

    Gold isn’t going to top until the euro does, and that isn’t going to happen until the euro tags the bear market trend line.

  39. Gary Post author

    At the very least I think the miners will match the rally out of the YCL last year. That was a 36% rally implying at least $28-$29 on GDX before the intermediate top.

    And I don’t think the baby bull top at $31 is out of the question.

    1. jacob2

      A little dysphoria with the market would do wonders for gold. Speaking of which when was the last time anyone mentioned a bear ETF? TZA, QID etc. must be years, which makes me think they are due.

    1. Nada

      Yeah, it wanted the gap fill after all. A retracement is in order if you follow the harmonics, but only if you can stomach pain, lol.

  40. didier

    Gold is 10 dollars from its babybull high but gdx 7 dollars. Strange divergence, hopefully the gap closes soon. Huge difference!

      1. didier

        Gold’s babybull high 1361; today 1350
        Gdx’s babybull high 31,05; today 24,1
        Anyhow, big divergence.

      2. RTTPD

        Fantastic work Gary! You’ve been hella accurate.

        I knew you were good when you nailed stair-step of the 50’s to 60-62 and beyond in oil – but this is a step up even better——especially with all shifty-ass little dishonest games they play to screw the little guy.

  41. Jimsee

    if we are not ready to run in gold just yet…1353 from this AM should hold it until post Jan28 imo.

    A retest of the magic number 1327 likely *if* we are not launching yet.

    long dgld against core longs…

    1. Nada

      Good luck Jimsee. I have small position in March contract, looking to add this morning.. but will observe price action.

      Nice job Gary, you are definitely providing some great analysis.

    2. Jim Dandy

      Even if gold dosen´t want to run, I will be fine with 2 days up and one day down for the next couple years. 🙂

      This move is looking a lot like how the 2016 run started, though I am expecting it to be a more steady rise this time around, less fireworks but still cover similar ground percentage-wise in the miners. I say that only because it would be rare to see an exact repeat of one of the biggest bull runs the group has ever seen, but who knows, maybe its doing it again.

  42. GBull33

    The Gold train isn’t stopping till 1398 to 1400 based on charts. I feel bad for Ted’s pompous a**. At least bitcoin is looking like it’s going to run to 13500 if it breaks 11350

  43. jake

    Not like the good old days when Silver was up 2% miners would be up 10%~15%. It’s going to be awhile before gold breaks out of this accumulation phase.

  44. Gary Post author

    The next major support zone is around 88.50 in the dollar. That would be a reasonable spot to expect a DCL, probably on next weeks FOMC statement when the Fed fails to raise rates and even attempt to rein in the bubble in the stock market.

  45. Gary Post author

    So many suckers got fleeced out of their shares and ounces yesterday when the banks sent through the attack yesterday in the premarket.

    I’ll say it again: You have to take everything in this sector with a grain of salt. Charts are more or less meaningless as the banks can paint them at will to get retain traders and hedge funds to make mistakes.

  46. vin

    INTL approaching 120!!!! Incredible IT IS

    To-day jnug is on fire. Thank you Gary.

    Though LABU is down. But, then that was expected after the run up it had.

    Good luck to everyone.

  47. Jim Dandy

    It seems that over the last few years that bonds competed with gold as a safe haven, apparently we won´t have to worry about that going forward as the wheels come off in the debt markets.

    1. trendyfollower

      I thought the same this morning. We must be true geniuses. It’s proven! 🙂
      Also, lumber futures usually offer a few months forward look towards interest rates and they have been on a tear.

  48. Goild

    Despite SPY is going up, UVXY is also going up.
    I read this that big money is expecting a correction pretty soon.
    I still have 500 UVXY shares and I may double that money.

  49. trendyfollower

    Gary, does this look like a failed yearly cycle in Treasuries / TLT, and early in the three-year cycle? – Your prediction of the end of the bond bull seems prescient.

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