86 thoughts on “March 8 Forum

  1. Gary Post author

    The semi’s may be ready for a sustained breakout above the 2000 high.

    I kind of thought we might have to wait till next week, but maybe not.

    1. Gary Post author

      The breakout is occurring very early in a new intermediate cycle with sentiment still very bearish.

      This is the setup to produce a large sustained move over the next 3-4 months.

    1. Gary Post author

      The stock market is just starting a new intermediate cycle. It’s in the advancing phase of the cycle.

      Gold is in the declining phase of its intermediate cycle.

      What do you expect to happen?

      1. onerobot

        Precisely what you’ve been teaching for all those years ! Gary . If I’m correct there’s 8 weeks minimun to 11 weeks before bottoming out. And of course a possible morning wake up call week 13 14 maybe week 15 bankster under cut ! Jack ass’s !
        Also could end up with a bit of a stretched IC left translated. Declining phase. Blue: I guess bought silver ” owns it ” ! Like good Ole Mr. Walter would say ” Dumbass : I don’t give a damn ! ” LOL !

  2. earthkitten

    Gary. You’re call on the half cycle low a few days was spot on.
    Thanks for the update & for continuing the forum.

  3. MrBurns

    SPY SPX both remain trapped under the 50ma daily, granted this is just an arbitrary line in sand that isn’t all that hard to bust.

    However, NYMO hit +47 at the open and although it has pulled back now, it signals a pause or pullback before anything new transpires. (NYMO at day’s low an hour into the session at +28).

  4. isitpossible

    Used to like the earlier format where Gary would explain his thoughts in a video and then ppl would comment which converts into a discussion….. sadly those days are gone….. 🙁

  5. Goild

    The miners are showing strength.
    And so I am loaded with JNUG shares.
    Hopefully we will make good profits.

    1. Gary Post author

      Miners are in the whipsaw stage of a left translated cycle. In order to make money during this stage you need to switch sides often and try to guess when the banks are going to reverse the market. (Usually it’s right about the time it looks like a trend might be starting).

      So don’t expect much follow through to the downside right now. Also don’t expect any real upside as the cycle is left translated.

      The trending move when it does come will be to the downside.

        1. DaZeD

          Take a look at the dollar//euro. It looks like a half-cycle low so I would agree with Gary that probably there’s not too much follow-through. Trying to take a counter-trend move after confirmation of a longer trend doesn’t seem like it’s worth the time but my 2cents

  6. bigglaze

    I don’t think the rally has fizzled. Looks like we’re flagging down this morning and maybe a breakout this afternoon?

  7. Don

    Gartman has covered his SM short position, losing yet again. If he goes long, well, we know what will happen.

  8. bigglaze

    Some of these analysts… I really don’t know how they have such a following. Everyone that’s bearish is going to get squashed simply because there is no bear market. Company earnings are positive (and perceived this way by investors). When analysts start lowering their forecasts, that’s when we may run into trouble. As of right now, everything is looking very good. I’m a big advocate of VectorVest and they track this and the market ‘climate’. The thing that MAY bring us into a bear market is if the Fed raises interest rates and this starts to cut into company earnings and this snowballs. This isn’t something that’s likely to happen overnight. There will be warning bells. For now, we’re in very much a bull market. I wish people would enjoy the ride and stop trying to short.

    1. Gary Post author

      My observation is that there are a lot of traders that think bull markets should have a time limit, and after it’s passed their arbitrary time limit that means we have to experience a bear market. That’s just absurd logic in my opinion.

      As we’ve seen for decades, secular bull markets can last 20+ years. Yes there will be severe pull backs along the way (think 1987) but for a bear market to begin there has to be a catalyst. The catalyst can be one of two things (and interest rates aren’t one of them).

      Either the market gets away from the powers trying to control it and forms a bubble which then implodes (the last two bears began this way). Or, a huge spike in commodity inflation destroys the economy and causes a recession. The last bear market was exacerbated due to this coinciding with a collapsing bubble.

      Without a catalyst we simply aren’t going to fall into a bear market and as long as that continues to be the case traders shouldn’t expect major and sustained declines until the next major multi year cycle low comes due, which in our current situation isn’t until sometime in 2020.

      1. bigglaze

        …so for the second ‘option’, commodity inflation, wouldn’t this be exacerbated by the dollar collapse (and I apologize as i am sure you’ve covered this already)? Commodities are priced in US dollars.

        1. Gary Post author

          Yes it should. The government was able to prevent the last one by attacking the gold market and keeping commodities in check. Granted we have a long long way to go before commodities are likely to spike enough to collapse the global economy. Certainly not enough time in this 3 YC for it to happen. Maybe during the next 3 YC from 2020 -2023.

      2. jacob2

        “The best of the bull is behind can’t find anything I really want to own and moved 70% into CD’s which is where I plan to stay.” This from my friend who started trading at 13 with 1K and is now 68 with a 65 Million portfolio.

        My guess we’ve entered a long (multi year) topping process that’s just going to wear everybody out (my comment).

        1. Gary Post author

          If you think this is going to top with a long sideways grind after 9 years of global QE I’ve got some ocean front property I’d like to sell you here in Vegas.

          1. Gary Post author

            Missing a bull market isn’t stupid, it’s just a missed opportunity.

            BTW he got rich by riding two of the greatest bull markets in history. At 65 he has more than enough money, he doesn’t need to take risk anymore.

            That’s not really a good excuse for other younger investors to miss this bull market. Let’s face it, most have already missed the first 9 years. The memory of 2009 is still too fresh in most peoples minds (as I’ve shown with the current ROBO ratio).

            I tired to tell people what was going to happoen when the Nasdaq broke out above the 2000 highs. Almost no one listened. Now I’m trying to tell people what’s going to happen when the semi’s breakout above the 2000 highs. Again 90% are not listening now just like before.

          1. roadrunner

            absolutely pete. the dude is a winner. if i had that amount of cash i wouldn’t have more than 10% in the SM.

        1. Gary Post author

          That’s a bit questionable since the last two rate hiking cycles the dollar was in a bear market.

          Clearly interest rates have little or no bearing on whether the dollar is rising or falling against other currencies.

          I will grant you that ultra low interest rates for too long does tend to result in bubbles though.

          1. Mac

            That’s the problem with just memorizing correlations! Interest rates absolutely impact currencies and that is the whole concept behind carry trades. Remember though, currencies are relative so other factors like fund flows, current account surpluses/deficits, other CB monetary policies, etc. are also at play.

            BTW, interest rate increases are not synonymous with dollar appreciation. The dollar can rise or fall during a rate tightening cycle much the same as the dollar can rise or fall during easing. Similarly, longer term rates can also move separately from short term rates and rise or fall during a tightening cycle which is the whole concept behind curve flattening or steepening. I mention all this to dissuade people from just memorizing correlations and expecting them to never change.

    1. AT

      tariff announcement may spell trade war, … the result perhaps stocks down/Gold up ? … miners are on break even or positive side today even with Gold down $6

  9. Spanky

    Silver’s 200 dma definitively crossed below its 600 dma on February 1.

    That has never ever been a good sign in the past. It did this back in 2000, and it didn’t bottom out until a year later.

    It did this in Nov. 2012 and well, that was the first sign something was dreadfully wrong. Silver was about $30 at the time.

    But maybe this time is different?

    1. Spanky

      The only remotely bullish thing on the charts is $hui is currently putting in an inverted hammer on the weekly chart, which is a potential bottoming signal. However, we have to see how tomorrow ends up before we start hootin n hollerin. Also, an inverted hammer isn’t a 100% guarantee of a bottom. Given where we are in the daily and intermediate cycle, I don’t see how anyone can be optimistic here.

      1. Jim Dandy

        HUI is only up .04% on the week, so the inverted hammer is wishful thinking, in my opinion. Then there are leading miners like FNV getting hammered and breaking into new lows from the recent decline. Look out below on miners, they aren´t anywhere near starting a move higher, they are not even oversold on the daily chart stochastics, and take a peek at those moving averages. It´s going to be a long time before miners get going. I am not shorting them, but have awhile to wait before they are a buy.

        http://schrts.co/rpNX9h

        I´m expecting a strong move lower, at worst, and at best a drift lower for many months.

  10. Goild

    Interesting this little rally was led by the miners.
    Perhaps because they were overdone by yesterday drop.
    Though definitely the miners started the rally.

  11. victor

    Gary, “a huge spike in commodity inflation destroys the economy and causes a recession. ”
    Exactly, declining dollar = declining confidence in money = inflation. Recent years interest rate growth driven by rising inflation expectations and that trend will persist as we see. That in turns push commodities upward (gold) and that (commodities inflation) turns into recession. 2019 is the mark.

    1. Spanky

      I don’t think the miners will break the 2016 high until well into that second 3 year cycle in commodities. I think they will be stuck making higher lows and lower highs between now and 2020. Just my guess. Anyone calling for a huge breakout this year or in 2019 is smoking some primo stuff IMO.

        1. Spanky

          The dollar recorded is biggest 1 year decline ever last year iirc, and the miners were flat to down, with silver miners down hard. So, IMO, watching the USD is pretty much worthless.

  12. Spanky

    $silver’s MACD on the daily chart is flatlining. 99.9% of the time this presages a big, big drop. It did the exact same thing just before the bloodbath phase of the last IC.

  13. Spanky

    Attachment

    Very uncharacteristic and frankly unnatural MACD in SLV. Likely setting up a huge drop.

    1. Jim Dandy

      I agree, especially considering how many newsletter guys are so bullish because the COT reports. Even people not bullish on gold are bullish on silver, and you know what that means.

      1. Spanky

        The bullish CoT for silver is pretty meaningless. The same bullish picture was present when silver dropped from $19 to $16 in 2014, and the commercials actually increased their short positions on the way to that low.

        1. Jim Dandy

          Yes, I agree. I think stocks like FNV breaking down the way they are is a avery bad sign for the sector. This stock didn´t was one fo the best performers throughout the entire bear market, but look at it now.

          I was too bullish on miners at the December low, but am glad I sold awhile back now. I can´t tell you how good it feels to not be loaded up with these turds.

          1. Spanky

            FNV should easily hit $63-64 now based on H&S target. After that, who knows. That roughly also corresponds to the 144 WMA.

            Ugly stuff for sure.

          2. Spanky

            Looking at the long term FNW weekly chart, I didn’t realize it performed so well during the bear, basically basing out the entire time.

            That is a hell of a huge base, which suggests that the break out around $56 should hold (and which was already tested successfully once in December 2016).

            If I had to buy FNV, irrespective of cycle timing, I would be very tempted to take a stab when it hits the 144 WMA.

          3. Vortex

            Jim,

            FNV breaking down is a very bad omen for the metals. Franco-Nevada is a best in class miner. When they go down you better pay attention.

  14. Spanky

    The MACD (see the histogram) on GDX is also flatlining on the daily chart. It’s bizarre and is a sign of extreme weakness when the MACD histogram is barely positive but flatlines like this over days. Don’t know if the coup de grace starts soon or in the next couple of weeks, but we are setting up for something ugly IMO.

  15. Lemonjelly Junior

    Yeah sure, that “friend” of yours who started investing with 1 K at 10 years old lol,,..
    And I have a “friend” who started investing in his diapers with 10 cents, he is now saying he wants to impose tariffs , etc.
    Where do some kids get these juvenile fantasy stuff? And he gets a reply too! lol

  16. Lemonjelly Junior

    Back to Reality>>>
    THIS JUST IN:
    J.P. Morgan president warns of 40% stock pullback

    That’s the warning from J.P. Morgan JPM, -0.46% Co-President Daniel Pinto, who in an interview with Bloomberg Television on Thursday said “we know there will be a correction at some point.” A correction is usually defined by a more than 10% drop from a recent market peak.

    ‘It could be a deep correction. It could be between 20% to 40%, depending on the valuation.’
    J.P. Morgan Co-President Daniel Pinto

    A 40% plunge would erase the recent gains for U.S. stocks. The S&P 500 SPX, +0.00% has rallied 38% over the past two years, while the Dow Jones Industrial DJIA, -0.20% has soared 45% in that period.

    Pinto’s prediction comes as traders already are nervous over the potential fallout from President Donald Trump’s planned tariffs on steel and aluminum imports.

    1. bigglaze

      I saw that this morning. It’s rhetorical nonsense. If anything, it will drive US steel stocks UP because it will discourage companies from buying foreign steel and go domestic.

      1. Lemonjelly Junior

        If Wall Street and mega huge banks cabal are all against tariffs; I am all for tariffs.
        He is trying to scare the populace into demanding that WH won’t do it, it seems.
        These insects come out of their dark nests every time there is going to be real change for America and against their interests.

    2. MrBurns

      If JPMorgan is so concerned, then maybe they should stop taking bullish trades from clients on margin.

  17. Spanky

    The thing is, if TPTB want to put a lid on commodities for at least the next year, they can give silver a gentle nudge off of a cliff right here and now, and that should create a very strong headwind for the metals for quite some time.

    1. Vortex

      Spanky, the metals don’t need a nudge off of the cliff. They’ve already fallen off the cliff. The insanity of watching investors in the gold and silver mining sector is breathtaking.

  18. victor

    Spanky, rising interest rate is a process that is in early stages. In 2019 we start talking and justify most of what happen in a stock market because of rising interest rates. Mark it.

  19. Goild

    The different sectors are taking positions for the spike at 3:30 PM.

    We shall see which sector is setting a big trap.

  20. mexican

    US Buck at 90.14 up good and gold not responding?? Should have dropped by now? Something in the wind perhaps! 3;30 est will tell!

    1. roadrunner

      markets closed nears the highs of the day. lets see what Jobs report says tomorrow.

  21. dj

    The PE ratios are being held artificially low by the record company stock buy backs (a result of all the cheap money). Once all that debt gets more expensive, it will drastically affect earnings. That’s why I think price/sales is a more reliable metric at this time. Thoughts??

  22. roadrunner

    markets closed near the highs today. jobs report tomorrow. maybe market see’s good things.

  23. Spanky

    $TNX is gathering energy. Bollinger bands on the daily are very very tight. Should be good for some large whipsaws.

  24. x33e

    Attachment

    The Nasdaq Composite closed above the Jan/Feb downtrend line while SOX made another ATH.

  25. zkotpen

    Gary,

    Is there any significant advantage to choosing Premium over Basic subscription to SentimenTrader?

    I am finally gonna take your advice and give it a try — I’ve been thinking about it for a while since you’ve been recommending it. Trying to Keep It Simple, yet effective…

    Thanks in advance!

    1. Gary Post author

      You don’t really need the premium for most market conditions. Sometimes if we are getting late in an intermediate cycle I’ll add one month of the premium so I can check the Hindenburg omen count and a few other premium indicators, but they aren’t really necessary.

      1. zkotpen

        Thanks Gary!

        I know you like Smart Money/Dumb Money confidence, ROBO and maybe LOBO…

        I looked at their Sign Up page about a month ago… “Access to over 300 sentiment indicators and graphs” — that stopped me immediately. I certainly do not want 300 more indicators and graphs in my life!

        I would venture to guess the 80/20 rule applies. If you’ve read Richard Koch’s 80/20 Principle series, you know that the Pareto Principle doesn’t stop at 80/20. When you’ve boiled it down to the 20% that’s most effective, you can further distill again and again… 95/5… 99/1… etc.

        My gut tells me fewer than 5 of those 300+ indicators have much more predictive value than all the rest…

  26. jyoung3759

    Get ready for another failed peak Friday or Monday and move lower again. Magnitude cannot be guaranteed but this is definitely going to be a double bottom of some sort.

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