126 thoughts on “Pre bubble: Maybe Mature bubble: Unlikely

  1. vand

    You are very wrong about the valuations part of this video. Nearly all valuations methods put the SP500 well into very expensive territory. Even Buffett who is a dyed-in-the-wool stockophile and says you generally shouldn’t try to time the market is a net seller of stock recently.

    1. carlvan

      Buffet has made quite a serie of wrong calls lately…I wouldn’t use him as a benchmark anymore

    2. Gary Post author

      Well at 23 times trailing earnings we’re a bit above average but as I showed in the video a bull market can continue for a long time with valuations above average.

    3. vin

      I would agree the market is not cheap by any standard and it really is extremely expensive in real valuation point of view. PE is not very high but PE ratio is not such great measure of valuation.

      There is one parameter which suggests that the market is not expensive and that is the cash held and available to biggies. Thank FED. And, that could propel the market up. It could benefit the “investors” if they bail out in time but then it could very well be a recipe for disaster causing uncontrollable inflation. On the positive side, those in power may be able to “manage” again and lead the world to even more “wealth”.

      If they can’t then the firework could very well be spectacular, once in a many life-time events.

  2. earthkitten

    Thanks for the sentiment & valuation charts. Good indicator as to
    when to be fearful when others are greedy as Buffett would say.

  3. Goild

    More pain appears to come to the SM, which should not be a surprise.
    Yes, a long SM consolidation.
    Uncertainty should help gold.
    The SKILL is to be patient.

    1. victor

      so, imagine if you would put those 200k to cannabis just a few day ago…, easy 20% or so for now, but it just a beginning.

      1. Jim Dandy

        True, and if he put it in MJ stocks just a week earlier, he still wouldn´t be near break even.

  4. victor

    did anyone bought VFF or CBW as I suggested? If so, congrats …., expect it double till June

  5. 1970confused

    Every morning the same thing happens in gold and silver, they are sold off ….and how long does a market have to consolidate(the miners) before truely moving higher for good! AMAZING??

    1. Gary Post author

      Gold has confirmed a lower low (a failed daily cycle). That means the odds are very high a larger degree intermediate decline has begun.

      I’ve tried to warn traders before that when the fall into an ICL starts it rarely stops until at least producing a second leg down.

      It’s debatable whether we even have the B wave bounce yet, but once we do then be patient and wait for the C wave down before starting to buy.

      Basically expect disappointment for the next 15-20 trading days.

      1. onerobot

        Gary: I’ll never understand it ! I guess it’s a fact human nature never changes. Geesh, man. Are these people just gluttons for punishment ! Or do they have a bedroom full of money? wall to wall, ceiling to floor! Do they crawl through a ” Warm hole ” just to get into bed to call it a night ?
        ” Care to join me ? ” Are you outta your damn mind!
        https://www.youtube.com/watch?v=hflLXh1M-is

  6. jacob2

    Stagflation. Haven’t thought about that in a while. Wonder if that’s where we are ultimately heading. In the mean time welcome to the trading range from hell S&P 2500 – 2750.

  7. Spanky

    One thing to note is that after the crash in 1987, it took the market basically 5 years to really break out significantly above the 1987 peak and never look back.

    1. Gary Post author

      Well not really. The market made new highs in 2 years. But it then had to weather the next 4 YCL, which came as a slightly short cycle because the 87 cycle was stretched.

      Also keep in mind the rally from the breakout was more than twice as large in 87 as it is today. 80% vs. 170%.

      Our next 4 YCL isn’t going to be due until 2020 and considering we haven’t rallied anywhere near as much as we did in the mid 80’s we don’t need to pull the rubber band down anywhere near as hard as in 87.

    1. Christian

      BKX looks very constructive — INTRADAY higher low.

      It could all go to sh*t shortly after lunch, but at least we’re shaking off the Monday morning blues 🙂

  8. onerobot

    Well wadda ya know ! Everything appears to be panning out ! Awesome Gary. Thanks! I’m still wondering about the ball buster ! But so far so good !

  9. onerobot

    Bluebell : you didn’t want to do the so-called Monday morning QBacking in the semis, you more en likely chickened out of SPXL @ $42.00 . So what are you going to do now , Buddy boy ? Spread your butt feathers and start prancing around like the pontificating Peacock, know it all, you so delight in being?
    Man you whipped out that volume bar, starting swinging it around like ah light sabre. Dude: I swear, I saw him ( in my active imagination ) slicing through his monitor his PC sparks flying @ his desk light…torn his whole damn room up. Asking ” Any lights going off any Bells ringing? WTF ! Over.

    1. Christian

      Don’t be too hard on him :/ Despite the mild stubbornness which I like to call him on occasionally; BLUE is one of the better contributors on this blog 🙂

      Trust me.. there are other TROLLS lurking in the corner.

      1. onerobot

        Ahhhh Christian you gotta love a good roast ! LOL! He’s not a troll, neither are you somebody’s ” Lap dog ” there are lines that we all can think in / on together, but for a 63 year adolescent behaving man to walk his ass through another man’s door and start sh*t with him ( the Host to which he is a guest) fine Gary can stand up for himself he’s a grown man. But I have an active imagination and the drunk bastard spilled his drink on me, Gary appeared soaked ! He always maintains his cool and is always professional ! Well it’s ( HIS ) blog not Bluebellies ! But @ the same time all i personally could think was why don’t someone bitch slap him ! O fourse I don’t want to get my own ass chewed out by The Host of this Blog so yeah let’s all keep it friendly and civil. Bluebell still crossed that line as a what … A gentleman ! The trolls there seems no way of slicing their throats on a blog or even in Real time !https://www.youtube.com/watch?v=zOgz8kM1VDg

    1. Gary Post author

      Funny as an hour ago you were freaking out because the market wasn’t doing what you wanted fast enough for you.

      Novice day traders. sigh!!!

      1. Lemonjelly Junior

        Naaah that was last night; I go with the trend and doing pretty well, thank you.

        No one was freaking out baby; just looking at real-time reality instead.

  10. earthkitten

    Hey Bluebell. You sold Soxl Friday at 165. It’s well over 170 now.
    Are you now buying back at a higher price? Looks like you
    outsmarted yourself again. Just buy & hold till the bull is over.
    Gary will let you know when it’s risk off.

    1. Bluebellkid

      When dealing with tripled leveraged ETF’s I will probably always outsmart myself and I will play it again. SOXL is still in a “buy zone” but just barely. I have a number of individual semi stocks with good fundamentals that I can play to take advantage of a move in semis without some of the volatility of a triple leveraged ETF. I think we are all getting spoiled to the big moves of the 3 times ETF’s. Ten dollar daily swings are more than common in SOXL. Today’s range was $12. A month ago there was a $43 swing in one day.

  11. Lemonjelly Junior

    Trade wars and multiple rate increases my foot! Just give me 7500 on this Nasdaq thang today or tomorrow.

  12. Don

    Once again, the US market is demonstrating that other world markets are to be ignored with the trading bots pushing the same old sectors higher and higher (tech, bios, semis).

  13. Gary Post author

    At this point it’s a pretty good bet I was correct that we just saw a slightly early half cycle low.

    Usually they occur later than this but the NDX and semi’s weren’t able to get through the all time high resistance on the first try.

  14. primetime

    Are onerobot and Christian related? They seem to be from the same gene pool!

    Hey Bluebellkid,
    It is obvious we are not the chosen favorite ones around here. I have watched you come under attack and think for what? My gosh, what have you done. It has become relentless. In terms of a nice demeanor, you are second to only GOILD.

    Just start throwing up stupid azz charts that are wrong that you steal from someone else and then they will accept you!

    You ever noticed how difficult it is to talk to these kids who only know an electronic form of communication. They become so empowered when they can say and do what they want without looking you in the eye.

    As Sheriff Buford T. Justice would say, “what the hell is the world coming to.”

    1. Christian

      Nonsense — BLUEBELLKID is one of my favs and you are most certainly not :/

      Please stop taking things out of context and making sh*t up just to stir the pot!

      Thanks bud 🙂

  15. Spanky

    Yen rolling over here should see the US stock market rocket to new highs shortly and gold and silver to get pummeled.

  16. Alexandru Popovici

    Got stopped out of long treasuries position w/ minor profit. Let’s see what Ts have in store for us.

  17. minerguy

    https://www.google.com/amp/s/amp.theguardian.com/business/2017/aug/20/robots-are-not-destroying-jobs-but-they-are-hollow-out-the-middle-class

    If trickle-down is real, we’re fine. Nobody has yet convinced me, however, that the bourgeoisie have any desire to quickly (or even slowly) invest windfalls into either capital or labor. They appear to hoard it. I know I would. Or put it to work in the financial and derivative sector. So what happens to interest rates then? Maybe someone smarter can weigh in?

    1. vin

      They don’t need to invest invest in labor anymore. Last 700 years or so, they had no choice, they needed cheap labor and they manipulated to get it. Now very little physical labor is needed to produce And, there is abundance of it.

      “trickle-down”? LOL! You know what trickles down? And, that is what we are going to get.

      1. minerguy

        Vin, that’s exactly what worries me… For all of us. Unless we make it into the 1% we may need a bunker. Or maybe “Idiocracy” is what we’re headed for, or the 1% decide to use a UBI to keep the peace and assuage their consciences to some degree. I don’t want to think about the authoritarian “solutions” to allowing an unemployed labor class to organize and create social unrest. Maybe we will need the bunker or UBI sooner rather than later? 😬

  18. vin

    qqq options strike price 200, Sep 21 are selling significantly cheaper than Sep28 ? Any explanation?

    Very curious!

    1. MrBurns

      Calls? They are similarly priced, taking into consideration a 7-day difference in lifespan.

      1. vin

        Not really, MrBurns. The gap is much larger than warranted by a week of strike price in Sep. while we are in the first week of march.

        Yes you are right it is calls I talk about.

        1. MrBurns

          I disagree Vin, price is adequate, even if you consider the FOMC date on September 26th which in theory should make the quarterlies a bit higher (they are too far OTM).

          The gap you speak of is a few pennies.

      1. MrBurns

        Yes they are, so what? They are a week apart and price justifies the time difference, no significant difference here.

  19. Lemonjelly Junior

    Broad.

    All 11 primary S&P 500 sectors are trading higher as stock rally gains steam

  20. Christian

    Attachment

    I love trading DIVERGENCES, especially near a Cycle Top or Bottom, depending on the prevalent trend of course. They’re usually quite reliable.

    I posted this Chart of the JPY/USD this morning on the sub side. Let’s see if we get any follow through..

    1. Spanky

      Looks absolutely reasonable to me. This should coincide with gold, silver and miners hitting their ICLs.

    2. DaZeD

      Why not take the USDCHF trade instead of the USDJPY instead? The USDCHF completed the pattern first and the yen was the last of the majors to “top” against the dollar.

      Also, you guys forgot about the convincing bounce that Gary was talking about…

      1. Christian

        Absolutely! This confirms Gary’s bounce UP in Gold in my books. GOLD bulls should def take extra care on this one.

        I know a few that are trying to jump the gun :/ this is where patience comes in.

        1. DaZeD

          This is some cryptic message. Don’t you mean that gold BEARS should take extra care on this one as this a counter-trend bounce? Honestly I would say both bears and bulls should take extra care, I don’t want to touch the damn thing as it’s just whipsawing around and not worth the effort when the SM is well behaved although…. I’ve been taking currency bets on a strong dollar and am long 10YR bonds as well.

  21. Spanky

    So a lot is being said about large specs being net short silver. Some are saying this is a bullish sign. However, if large specs were net long during the bull market, doesn’t it stand to reason that during a sustained bear market they would be net short silver, and the commercials would go net long? So that at ICLs, the commercials would be massively net long and would reduce their net long positioning into IC tops–basically the opposite of what we have had for the last 20 years?

    1. Don

      Spanky: When was the last time the commercials were net long, never mind “massively” net long?

      1. Gary Post author

        The commercials have never been net long in silver. They are always hedged to some degree.

  22. Don

    Netflix up an incredible 64%, YTD, Amazon 31%, Nvidia 22%, Boeing 19%. We have big dollar stocks performing as if they were pump and dump penny stocks. Sure seems to me that we are in the mania phase of a bull market.

  23. Goild

    Attachment

    The market does not wait for anyone.
    The miners maybe taking off.
    We shall see.

  24. Bluebellkid

    With tripled leveraged ETF’s being in favor here (me included) I thought I would share some info on LABU since it was in favor at one time. LABU recently completed a cup with handle base but didn’t really have a breakout type move. In other words it took out the pivot point but volume was anemic and didn’t confirm the move. It then sold off $8 (shakeout) on very heavy volume. It then stabilized and vaulted ahead from the low 80’s to 116 in less than two weeks. The ETF succumbed to the overall market selloff and cratered all the way to 67 before bottoming and doing a reversal. What is interesting is that fund ownership was 2 funds a year ago and only 3 in the last quarter but it now shows that 11 funds own it so evidently some fund managers are getting on board – what do they know that we don’t? SOXL shows only 3 funds own it and TQQQ shows 10. The Relative Strength rating on LABU is 97 meaning it is outperforming 97% of all stocks and the Relative Strength line is close to being in new high territory and the line compares it’s performance against the S & P 500. It closed above the 10 day and 5 day Friday and made a nice move today on slightly above average volume.

        1. Blake M

          Thanks for sharing the fund ownership information, Bluebellkid. Where do you get that information?

  25. Bob

    Gary, Although I’m not looking forward to the results as I’m sure I’m out of the top five, it would be interesting to see the monthly roundup in the Real Time Trading Contest.

  26. victor

    I follow up LABU too, as Gary pointed out some years ago there’s a future in biotech. If it would be not a marijuana legalization – I would put lots of money in bio. For now cannabis is a thing to go.
    Here I will show you guys your future retirement . This stock I mentioned before and would like to share some info why it can be so beneficial in the future….
    CBW.V is a royalty company, this one for a long run, their value are going to increase as soon as the companies they have contract with starts producing and give their agreed share to Weaton. https://finance.yahoo.com/quote/CBW.V/?p=CBW.V
    Here’s a list of streaming partners and KG p/year expected for CBW
    ABcann – 8,000kg
    Curative Cannabis – 15,000kg
    Artiva Inc. – 17,800kg
    Broken Coast Cannabis ltd. – 15,000kg
    Cannabco Pharmaceutical corp – 5,300kg
    Cannahort Agriculture ltd – 10,400kg
    CannTX Life Sicence Inc. – 1,980kg
    Evergreen Medicinal Supply inc – 6,600kg
    Great White North Growers Inc – 8,300kg
    Green Relief Inc – 115,000kg
    Harvest One Cannabis inc – 18,000kg
    Lotus Ventures Inc – 6,000kg
    PlanC BioPharm inc – 7,000kg
    Sundial Growers inc – 5,500kg
    FV Pharma – 200,000kg or 49.9% of total production
    SGSC – 5,500kg
    Beleave – 1,275kg
    RockGarden Medicinals – ???
    **Convenience Store Group – 350stores
    **InnerSpirit Holdings – 95 stores
    Total KG: 453,655
    Total Grams: 453,655,000
    Realistically, profits r going to be higher than the frequently mentioned $3/g… CBW doesn’t have the growing expenses…which seem to be between $1 and $2 /gram.
    Expenses:
    Figuring tax of $1.5/g
    Operating expenses of $0.5/g
    ($0.5 x 453,655,000g = $226,827,500/yr)
    Without adding any more streaming partners… CBW likely lands somewhere between:
    $8 x 453,655,000g = $3,629,240,000
    $3 x 453,655,000g = $1,360,965,000
    Current Market Cap: $597mln

    1. RTTPD

      Victor ——

      What is wrong with Village Farms – I thought it would at least be 10-12 Canadian by now?
      Emerald is lagging too, considering they’re the actual license holder?

  27. victor

    Why such a down move in stock?
    As you know cannabis companies can’t lend money from the banks for now. So, the way is – private loans and share dilution, …. and very little income for now. But, watch how things will change in a few more month.

  28. Lemonjelly Junior

    Switching from options to x3 ETFs for the rest of the bull manifestations…NOW…to ride the trolley to
    NASDAQ 7500 and beyond.

    Will wait for gold buying oppty bottom soon(1250?)… and then for it to take off to 1450-1550 by June? as advertised here as I read previous posts history and in other places;………Fed meeting may be what triggers it(buy the event.)

    Those waiting for oil to dip to $58 again before taking off waited for a sailed ship.

  29. Lemonjelly Junior

    Gilburt thinks we are going lower still???????? …Blistering barnacles…Foooeiy!

    “With the action we have seen this past week, the market is still suggesting that we can be heading down toward the 2,440-2,530 support region in the S&P SPX, +1.10% one more time to complete wave (4).”

    “It would seem the next two weeks are quite pivotal as to whether we see a lower low for wave (4), below that struck in February. For now, I am still looking lower until the market proves otherwise in the blue-wave count.”

  30. dj

    Gary,

    I would agree that we are not in a “stock market bubble” per se, we are in a bond market bubble. Look at the price/sales ratios, they are at historic highs. These valuations are being buoyed by the low (and negative) interest rates. A percentage or two rise in the 10 yr could easily cause the market to fall by 50%. The stock market was not in a bubble in 2007, but it still fell by 50%. Thoughts?

    1. Gary Post author

      I think you’re kidding yourself if you think a couple of percentage points are going to do any serious damage to the stock market. Interest rates are supposed to go up as the economy improves. The tax cuts will more than offset a percentage point or two in interest rates.

      The bubble in 2007 was in real estate. When the bubble popped the Fed made a huge monetary mistake by flooding the market with liquidity thinking they could reflate the bubble. Instead the liquidity found its way into the commodity markets causing a massive inflationary spike that destroyed the global economy and sent the world into recession.

      They don’t appear to be making the same mistake this time. However if they allow the stock market to become a bubble and then try to reflate it with money printing they could potentially get the same result as before.

      1. 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.

  31. Goild

    Attachment

    There are about 57M JNUG standing shares.
    Fund institutional ownership has increased by a factor of 10 to 2.3% in the current quarter.

  32. Goild

    Interestingly, there are about 19M TQQQ outstanding shares of which about 5.03% are owned by institutions. For LABU there are about 4M shares of which 9.5% are owned by institutions.

  33. Goild

    Institutional ownership of:

    XBI is 83%
    QQQ is 40%
    GDX is 41%
    GDXJ is 47%

    XBI is hot.

    There are about 2M JDST shares of which 25% are owned by institutions.
    In the current quarter the institutions have dumped about 50% of their previous holdings.

  34. Goild

    What is the ‘SEC Form 13F’
    The SEC Form 13F is a filing with the Securities and Exchange Commission (SEC) also known as the Information Required of Institutional Investment Managers Form. It is a quarterly filing required of institutional investment managers with over $100 million in qualifying assets. Companies required to file SEC Form 13F may include insurance companies, banks, pension funds, investment advisers and broker-dealers.

    BREAKING DOWN ‘SEC Form 13F’
    SEC Form 13F, which must be filed within 45 days of the end of each quarter, contains information about the investment manager and potentially a list of their recent investment holdings. The form was made famous by investment con artist Bernie Madoff. It provides investors with an inside look at the holdings of Wall Street’s largest investment managers. While this form can provide valuable insight into the management style of some of Wall Street’s best portfolio chiefs , history has proven that these forms are only truly useful to investors when the investment manager reports accurately and honestly.

  35. cazabrujas

    The strong reaction this morning to NK news might be the catalyst we need to start the bubble. Fingers crossed.

      1. cazabrujas

        The Nasdaq futures are up .65%. Granted, it’s not huge or anything and it could turn out to be a knee-jerk reaction, but it could also turn out to be a much stronger move by EoD, given that we just came out of the HCL and the semis are probably breaking out today.

        1. carlvan

          Ok. the markets have a tendency to be cynical so my take is, when everybody is expecting market to go up after friendly talks between NK/SK I would bet they will do the opposite right after the opening and go down. For a few hours or perhaps the entire session. Then up.

  36. Gary Post author

    Attachment

    Gold is now in the bounce I warned about.

    Don’t make the mistake of thinking it’s safe to buy this bounce and that gold will breakout soon. This should top soon after RSI reaches overbought conditions and then give us the second leg down into the final ICL.

    1. Vortex

      Gary, don’t worry.

      You’re excellent analysis is not lost on everyone. Although most will not listen, rest assured, you will reengage on the topic within a couple of days and say, as usual, I told you so.

      Extraordinary Popular Delusions and the Madness of Crowds has never been more relevant as a social construct than it is currently in today’s modern human.

      Humans are unequivocal controlled sheep with little functional depth. They are that limited today and they will likely remain that way for something quite possibly close to eternity.

  37. Goild

    Despite yesterday’s large BOW on GLD, this morning premarket GLD rise has no volume.
    Looks/smells fishy.

  38. Gary Post author

    The middle part of a failed daily cycle is when the banks start whipsawing the market and fleece both bulls and bears alike.

    It’s difficult to make money during this time as the banksters don’t allow any sustained trend to materialize. Just when things start to look good on the long side they turn it back down. Then when the bears start to feel it’s safe to short they turn it back up. Back and forth picking the pockets of both sides.

    1. Vortex

      Gary, why do you continuously and consistently reengage with people that do not listen to you’re advise and that will not listen to reason. These are not one-off events, but openly long-term regurgitated thought processes.

      I find that extremely mystifying and illogical, but yet entertaining.

  39. JJHarmen

    This one is easy: Big SM opening upside gap is guaranteed as US investors join the rest of the world in celebration of the news that NK is going to de-nuke (with a few conditions, of course). Great stuff! Buy, buy buy!

  40. JJHarmen

    Generally speaking, over night gains made by gold are smashed down when the US markets open.

  41. Gary Post author

    I won’t be doing anymore videos on the blog, or only on a very limited basis from now on.

    Videos will be reserved for the premium side only.

    1. Vortex

      Gary there you go. The people that actually want the information and will execute the information will be the ones to get the information.

    2. Christian

      I’d like to think that those who really want to change and/or take their trading methodology to the next level will buy a subscription, or at least try it for 6 months 🙂

  42. minerguy

    Stock Bulls in Trump Country Are Freaking Out Their Brokers – Bloomberg

    Sorry, trouble with the link… Basic gist is Trump followers are dumping everything they have in the market to take advantage of the “Trump Put.”

  43. victor

    RTTPD
    VFF, I don’t see anything wrong eather, expected $12 as soon as licensed. This is the most established Co for growing as of now. Start producing in April. I think it’s the next to go to Nasdaq, institutions will lift it up quickly. Eagerly waiting for announcement of first # of thousands of harvest….
    Its a second after Canopy Corp.

  44. Lemonjelly Junior

    Wince when Ron Paul has become a financial guru??

    ‘There’s no stopping it,’ warns Ron Paul: A ‘calamity’ could cut this market in half

  45. Jim Dandy

    The wheels are coming off Bitcon again, looking like the next stage of busted parabola kicking in now. A quick couple days drop, then months and months of drifting lower before the bottom falls out and everybody agrees it was never going to last, while those involved won´t admit they owned a token out of fear of embarrassment.

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