We’re at a crossroads today. The SPX has been moving down into a DCL. There is the possibility this could even turn into a larger degree ICL. But today’s reversal opens the door that a market intervention was staged to stop the downward momentum. If so and that’s all we’re going to get for the DCL then it’s going to require a 5th, or maybe even 6th daily cycle before stocks deliver the next real intermediate degree correction.
I anticipated that an intervention could occur today and that is why we exited our TVIX trade. Now we just have to determine whether the DCL was aborted prematurely or if will run to completion. If so then here we come 8000 Nasdaq and an all time high in the SPX is in the cards.
So we’re playing this one day at a time as we try to determine which it’s going to be.
I also think the dollar has likely topped (for this intermediate cycle). I’ll do a video on the dollar soon. Nothing has changed in my opinion. I just miscalculated where the 3 year cycle low occurred. I initially thought it came as a slightly short cycle back in 2016. In fact the 3 YCL came early this year as a slightly stretched cycle. That is why we are getting such a strong rally. The bottom in February was not only an intermediate and yearly degree bottom, but also the largest degree 3 year cycle bottom. But I don’t think the dollar will be able to make new highs. I think the three year cycle is going to left translate and confirm that a cyclical bear market began in early 2017.
This has been the hardest contrarian trade I’ve ever tried to enter for sure. We missed on our last metals trade and now we’re back to even in the metal portfolio. That’s a heck of a lot better than most challengers though as many are now down 20-30% or more. As I said the odds of any of last years winners repeating this year are slim. As of right now many are giving back much of their gains from last year.
In the meantime the stock portfolio is doing well. Marked to market today it’s up 20% and we’re waiting on the sidelines for the next correction before we buy back.
UPDATE: We took profits on a TVIX trade today and that has taken the stock portfolio to new all time highs. +178% over the last 2 ½ years.
I’m now watching to see if the Nasdaq can recover and bounce back to test 8000.
Like I said in my last video, there isn’t enough profit potential at this point to make it worth trying to catch the last 1%. It’s very late in the daily cycle and that puts the odds against a sustained breakout above 8000.
When we do get a pullback into the next daily cycle low that will be a much less risky spot to buy. At that point there will be another 35-40 days of potential rally. Right now we might have 2-5 days to rally, and we could also turn south again before the close. So too much risk, not enough potential.
We took profits on our stock market positions yesterday. It’s probably time for a correction. Maybe a larger degree ICL. I went over that scenario in the morning report for premium members.
Corrections are normal. They are buying opportunities. If this turns into an ICL it will be the last great buying opportunity before we start the run to 10,000.
The Nasdaq composite is getting closer and closer to the big 8000.
We’re going to see 10,000 by the middle of next year.
If we get an intermediate degree correction in October it’s going to be the last great buying opportunity to get on board for the run to 10,000.
All year long the fleas have been telling me I’m an idiot to be bullish on stocks. The market was going to crash, etc. etc.
I think they got it wrong, it wasn’t me that was the idiot. We’re in a long term bull market. Based on the last two we should still have 10-15 years yet to run.
Seriously people until you get into the challenge and make real time calls all emails to me just get automatically dumped in the trash folder. You’re just talking to yourself.
Myself along with 51 other people are playing by the rules. We’re making real time trades. About 90% of those traders are suffering drawdowns right now. Most are heavily underwater including all of last years winners. As of today I’m the only person in the top 5 last year that is in the top 5 so far this year. In fact the SMT stock portfolio is leading the challenge by a comfortable margin and the metal portfolio is in third place. Will this last all the way till next July? Probably not as I don’t trade individual stocks, and the way to beat the averages is by catching a big winner. But as I pointed out before the challenge began, it’s going to be tough to repeat. The odds of last years winners making it back to the winners circle are slim.
Markets change and they evolve. Few people are able to adapt quickly to changing markets. Most continue to use the same tactics that worked for them in the past, and often those strategies fail in a different market environment.
Here is an example of what I’m talking about:
When I saw gold being capped and held below the 200 day moving average I knew the banks had set their sights on this sector. I understood at that point that this wasn’t a buy and hold market. That meant strategies that worked last year probably weren’t going to work this year. So we adapted and changed how we traded the metals. It has been the difference between being underwater like 90% of challengers and being in the top 5.
So stop blowing hot air troll boys and girls. Put your ass on the line with the rest of us. At that point then you may earn the right to have your emails read and responded to. Until then you go straight to trash. 🙂