For 9 years now we’ve listened to the perma bears try to call one top after another. If one had listened to them you have, and are missing a secular bull market. We had the second worst bear market in history. That leaves a serious mark on many investors. One that many find impossible to forget. So they assume it’s only a matter of time before it repeats. How many crashes have been predicted over the last 9 years? At least a dozen. How many actual crashes have occurred? I would argue maybe one (mini crash) in 2011 when QE2 ended.

For some reason many people are convinced there is no fundamental driver for stocks to be in a bull market…and that is absolutely ridiculous.

Bull markets aren’t driven by monetary policy. They don’t require low interest rates to survive. They don’t need QE, and QT isn’t going to stop a bull market. Trade wars are only a minor distraction and certainly not something that could halt, other than temporarily, a secular bull market. It doesn’t matter who the president is or whether they are Democrat or Republican. For what it’s worth Trump is doing as much as any one man can with the system he has to work with, to benefit the bull market by cutting taxes and regulation . But it really doesn’t matter in the long run because none of these things are what is driving the bull market.

So what is driving the bull market you ask? It’s the same thing that has driven every secular bull market in history. A technological advance by the human race.

In the 20’s it was the automobile and the invention of mass production.

From the 40’s to the mid 60’s it was the invention of electronics and plastics.

From 1980 to 2000 it was the personal computer and the internet.

Today it is a combination of many new and amazing advances in biotech, nanotech, robotics, transportation, clean energy, etc.

Yes we are going to have corrections along the way. There were 5 major multi year cycle lows during the last secular bull market and one of the largest stock market crashes in history in 87. We also had a recession in 91. Did any of these things stop the bull market? No they did not, because none of these things halted the technological advance that was taking place.

We’ve already had two major multi year cycle lows during this bull. One in 2011 and one in 2016. We will have several more along the way and yes we will have at least one recession as well. None of these things are going to stop the human race from taking the next step up. That’s what humanity does. We progress.

I’m already hearing calls for a market crash this fall. The same calls were made last year as well. The perma bears are going to be wrong this year just like they were last year. We are going to have to weather a serious correction but it’s going to occur sometime in mid August to early September just like it did last year. And then we will be off to the races in fall just like we were last year. Anyone who continues to listen to the perma bears will miss the move to 10,000.

The next major 4 year cycle low isn’t going to be due until early 2020. To call for any kind of serious crash before that is destined to fail.

We’re probably going to test the all time highs between now and the next FOMC meeting on August 1st. Then we will have our window for a 5-8% correction. The market will be back at, or making new highs in time for the Fed to raise interest rates again on September 26th.

So if you hear analysts preaching there are no fundamentals supporting this bull market you know they are full of poppycock. The same thing is driving this bull market that drives every bull market. New technology and the inevitable advance of the human race.

Back on June 6th I said one could buy now even if it wasn’t the exact bottom and still make money by the time the weekly oscillators cycled back up to overbought. Well it wasn’t the exact bottom, but guess what? You didn’t have to pick the exact bottom to make money. As of this minute JNUG positions that were bought on June 6th are now profitable by almost 4%. You can sell right now and make a nice gain.

I tend to think we have further to go though, probably a lot further. But at the very least one could put a breakeven stop on the position and not risk a losing trade.

 

Well we got the pullback into the daily cycle low that I was looking for. I suspect most ignored me when I said this would be a buying opportunity and instead listened to the perma bears calling for a market top.

We entered long positions last week and we now have a cushion on our stock trade as well.

Be careful here though. Stocks are going to be due for a deeper drop into a larger degree intermediate cycle low soon. I would say if the SPX tests the all-time high over the next two weeks that would be a good place to get on the sidelines and wait for a larger correction.

Still not one newsletter writer has had the balls to enter the challenge. It’s much easier to claim perfect trades if there’s no real time record.

Not one troll has entered either. It’s much easier to criticize others than actually have to man up yourself.

It’s now official. The dollar has made a lower low for the first time in 4 ½ months. This should confirm an intermediate degree decline is underway. The rally did just enough to turn everyone bullish again but has failed to recover the 200 week moving average.

Since our most recent trade was purchased low at $22.00 we now have a cushion on our trade and can use a break even stop to protect the position. This is why I like to buy low rather than waiting till some line or moving average is crossed. This way my stops are closer with less risk and we can often use break even stops.

These cretins just won’t admit defeat. I’m still getting emails from these clowns. Unbelievable!

As of today the SMT metal portfolio just went over $500,000. $510,000 to be exact. We started with $100,000 at the bear market bottom in January 2016. And this even after we gave back way too much of the baby bull gains.

The Quest portfolio is up 1800% as of today.

I use to feel bad for these people. I could see they were stuck trading their emotions. A guaranteed path to losing money. I’ve tried everything I can think of over the years to steer them onto a better path. One where they can actually make some money. You would think after watching me catch dozens and dozens of these turns over the years they would take notice, but they never do. Their emotions are more powerful than the evidence. So no matter how many times I get it right they just aren’t capable of learning.

But after 11 years of abuse, I now just take pleasure in saying I told you so, and I’ve given up on trying to help any of these emotional wrecks. They get what they deserve. Karma is a bitch…

With all the talk recently of a strong dollar I just don’t see it. Realistically all we’ve had is a counter trend bounce that couldn’t even recover 50% of the initial leg down in what I believe is the start of another cyclical bear market.

We have an ominous death cross on the weekly charts. Granted I don’t put much weight on a death cross on the daily charts. More often than not they signal a bottom rather than the start of a bear market. But the weekly charts are much less erratic. A death cross of the 50 week moving average below the 200 week moving average is not a good sign for any market. Plus as you can see the dollar has failed several times now to recover the 200 WMA.

 

As of today the dollar is a whisker away from making a lower low for the first time in 4 ½ months. Once it does the odds will jump dramatically that an intermediate degree decline is underway.  If the dollar drops below the February 16th low we will have confirmation that a bear market has begun. They tend to last about 8 years. At that point look out below. A bear market in the dollar should drive everything higher. Stocks and commodities.

The one we need to keep tabs on though is oil. If oil rallies 100% or more in a year or less we will have the conditions to start the next recession.

Back on June 6th I said one could buy now and even if that wasn’t the exact bottom it wouldn’t matter you would still make a lot of money by the time the weekly oscillators cycle back up to overbought. Well gold is only on day 1 of a new intermediate cycle. As I’ve shown intermediate cycles rally an average of 8 1/2 weeks and between 10-15%. Anyone who held their position since June 6 in miners is already making money and we should still have at least a couple months to go yet.

So far all I’ve received are two emails again calling me a fraud. I’m not sure how that can possibly be as I’ve just shown positions are already green (and we have weeks yet before the oscillators cycle back to overbought).

These people truly are scumbags. They don’t even have the honor to admit they were flat out wrong. Like I said, dumb money has to consistently lose for the 10% of us who actually make money to have a source of profits. In the 12 years I’ve been here calling these major bottoms these people have never once been able to take a contrarian trade. They trade with their emotions instead of their brains.

While smart money buys low and sells high. 90% of you do the exact opposite even though you know better. Dumb money.