Thursday, July 13, 2017

Want to see a strong Friday to finish up

Closing at the highs tomorrow, 2466 on the S&P 500, would be a perfect setup for the weeks ahead.

Bouncing between support and resistance trendlines would draw a beautiful head and shoulders to mark the top up here, finding strong support in mid-January.

S&P 500 3Y

Everyone + mother has been comparing crypto-currencies to tulip bulbs lately, which is obvious enough.  I think the South Sea Bubble makes for a better comparison, as it was a whole collection of scams and ripoffs from Exchange Alley in London, of which the South Sea Company was only the first.  At the end of the day, all the cryptos will be blackened craters, worthless.

31 comments:

Christian Gustafson said...

Then something breaks over the weekend -- China?

Kevin Wilde said...

My targets would be 2096 (confirms next Great Bear underway,) 2306 sucker bounce, 1499 crash, 1754 reflex bounce post crash, 1315 low to end first major down wave (likely,) or end the bear phase completely (doubtful.) Of course that needs 2466 to be the peak, and so far not seeing much sign of that. Indeed, further highs and everything breaks out of significant bases, thus could - should - see another 10% up if that happens. XLF only bear set-up pattern I see, and that will remain a fear till we see a breakout of that, though that can happen easy too. So I'm a bull for now, then playing the crash waves once top is in.

Bicycle said...

DJIA 22k. We are only +1.9% away.

We have a partial lunar eclipse on the other side of the globe on Aug. 7.

But my new favorite hocus pocus supercycle turn date is Aug 21. The Total Solar Eclipse Across North America.

i.e., The Day The Light Goes Out

it is the first total solar eclipse since 1979 (very near the last Really Big Turn). And the last until 2024, when we will bottom out.

The Great Collapse of 2017-2024

collapsing all the way to infinity (crushing deflation then hyperinflation)

T.Berry said...

kevin how will you know the top is in? i mean not being funny but have you seen how many tops and final highs have been called since 2012? they always seem to eventually happen next year too lol

Kevin Wilde said...

2017-2024 fits with demographic trends.

Kevin Wilde said...

T.Berry, there are 4 parts to the bull/bear cycle, based on risk. Low risk, new bull (green arrow.) Moderate risk, sideway churn/minor bear (yellow arrow,) high risk, blow off bull orange arrow,) extreme risk (maroon arrows.) Each require a different way of trading, as in, one wouldn't want to be shorting new bulls, nor buying new bears (except for short term trading.) High risk - which we are currently in - require following the trend both up and down, meaning one should hold long on the uptrends, and shorts on the downtrends. Now to answer your question: the top is in when the stock market drops 12.5%+ AFTER a trend change to negative. Then expect stocks to get cut in half from the peak, though such collapse phases can come in multiples, like 1930s and early 2000s. The guy as to when the great bear ends is the bull/bear cycle indicator landing into the lower extreme zone and starts to turn up to deliver the next green arrow. In 1987 and 2008 that landed in 1 year. In 1929, 1973, 2000 it took 3 years to deliver the green arrow. Copy and paste link into address box to view indicator top of chart:
http://alphaking.com/performance/

T.Berry said...

thank you for explaining kevin. rather than for me to try and time the market i'll likely hold through the 1 year bear as my time horizon to scale out is probably a little over 10 years. which by then the stock market should be at least double where it is today. hope to further average in/up on any bear market. thats what nice about being a bull is they can last 20+ years whereas bears only 1-2 years.

T.Berry said...

great seeing the markets run the tables today. nas, dow , s&P all brand new all time record highs. : )

historic secular bull!

Kevin Wilde said...

T.Berry, it is more likely be of the three year variety, and those go down 80 to 90%. Also, once the highs are in, they will likely not be exceeded for a decade or more. Fundamentally, we have just experienced a generational bull market the likes of which have never been seen before, and it will take a very long time for the next one to be in position. A complete retrace is the norm in such things. Once we are near the bottom of course making money is a given, even if we fail to see new highs for many decades. Being positioned for that is job one IMHO, as well as staying away from the collapse phase. Bullish for now, though, and long may it last! (though the higher we go the harder we fall.)

Bicycle said...

the current bull market is 35 years old

2017-1982 = 35

this bull market followed the prior bull market which was 34 years old

1966-1932 = 34

the period 1966 - 1982 was a giant bear market in equities on an inflation-adjusted basis

1982 - 1966 = 16

we are in for a bear market at least that long, 16 years, and likely worse as we are currently in a wave 5 of a supercycle

2017 + 16 = 2033

https://en.wikipedia.org/wiki/October_2033_lunar_eclipse

"A total lunar eclipse will take place on October 8, 2033.[1] This will also be a supermoon, the first supermoon lunar eclipse since September 27, 2015."

as for how long bear markets can last... ask the japanese and their nikkei 225. it never recovered

Bryan Franco said...

BOJ. Buying ETFs. All one needs to hear to understand what risk-minded people are battling.

Bryan Franco said...

I have written our Fed a new question. I will forward on a reply should I receive one:

Thank you for your prompt reply to my question regarding recent statements by Fed officials. I'm not so sure I understand the reply, but I will leave that aside for now. A new question if I may. I have become concerned by the pickup in U.S. stock purchases by the Swiss National Bank, itself a public company. I wonder if any research has been done to gauge the likelihood that this causes financial instability in the U.S. On a related note, I know the U.S. Fed has conducted research on wealth inequality. Moreover, I wonder if any research has been done on the impact of equity purchases by central banks on wealth inequality. It is known that most people do not have large equity allocations as a percentage of their total assets. It is also known that the Bank of Japan is purchasing equities indirectly, but only of Japanese companies. You probably can't speak for the SNB or BOJ, but we know that central banking policies have become more coordinated over the years. Several Fed officials have pointed to the importance of this. Certainly, some vetting by the U.S. Fed should have taken place before giving the SNB authority to buy shares of Apple, Facebook, and Amazon, no? Some research has shown that central banking itself can cause wealth inequality, as certain groups are able to borrow more cheaply than others. Now I begin to wonder if central banks' purchases of equities should affect wealth inequality. Best regards, and again, thank you for your service. Bryan Franco, CFA

Christian Gustafson said...

Bryan, you're so on a list now.

Bryan Franco said...

They should thank me. I am trying to prevent much bigger problems for them.

Kevin Wilde said...

I'm not a fan of central banks meddling in the markets in any shape or form - beyond normal interest rates adjustments, and maybe margin requirements to nip bubbles - and recent central banks manipulations have clearly benefited the rich - and banks - at the expense of savers, and pension funds. However, money doing its thing - whether that be banks buying Amazon and Facebook, or real estate, or bonds, or commodities - must be allowed to occur naturally, rather than governments trying to control money flows in the name of things like income equality, or for any other reason. You don't help close the income gap by making the rich poorer, or by limiting their investment choices. There's only one way to get everyone equal, and that's the communist way of making everyone poor. Normalizing interest rates around the world will go a long way to giving more investment choice, though even then big money is going to leave sinking ships like Japan and Europe, for places with better prospects like the US amazons and facebooks.

T.Berry said...

s&p 2500 could get hit with earnings about to begin. expecting another solid q with earnings coming in better than expected again. only 1.6% to go

Kevin Wilde said...

SP 2500, yep, though let's not forget we are playing Russian Roulette, and we know how this movie ends.

Kevin Wilde said...

http://hussman.com/wmc/wmc170717.htm

T.Berry said...

kevin, in 10 years i believe 2500 will look cheap. probably over 6 or 7 k by then. its funny, i remember hearing your nuts to stay in when 1500 was hit too that was 5 years ago. :) good luck!

Bryan Franco said...

Every little dip gets bought, it's magic
Every little dip, the turn is on
Even though the NAZ before looked tragic
Now I know the dip must not go on

T.Berry said...

lots of cash on the sidelines bryan! plus it's earnings season and if netflix is any indication of the reports, we are likely moving a lot higher.

kevin, the naz is looking awesome, i don't doubt your call for possibly another 10% upside yet this year. it may hit 7,000 before next year : )

congrats on both s&p and naz hitting yet another new all time record high. the july crash might get pushed to august lol

Kevin Wilde said...

T.Berry, 10% up and then we crash. Or we fail to deliver that 10% up and we crash right here. The best fit patterns are 1987 and 1998, where we are about to hit a summer peak ahead of similar crashes to back then. If its the 50% big one, then next two year should resemble what happened in 1988, 1989, and 1990 (with a second bear swoon in 1990 landing to complete an A-B-C massive correction.) If its the 30% 1998 one then we do a 1999 repeat next year that double many indexes to make you happy. Then we suffer the 1929 big one after. The danger to my 1987 versus 1998 analysis is we suffer the 90% down 1929 one once the top is in this summer. The indicators will show which one it is, though now all the charts say is blow-off got a little more to go, then we crash, and then we see where we go next.

T.Berry said...

kevin, not to dispute you about the possibility of a crash (either 20% or 90%) but we've been hearing how the market is going to crash worse than 08'/09' every year since 2012 (when s&p 1500 was the TOP lol)and we've done nothing but going higher. i'm of the belief that a 2008 style crash is a once in a lifetime event much like 1929. now a 20% crash is probably good for the market to get it reset to head even higher over the next 10 years. as for 90% crash i highly doubt that would happen given the strength of the fed along with the market circuit breaker system in plance. one thing for certain is i have no plans on selling (like those who got spooked out in 2008 only to miss the greatest bull market in history that we're in now) if we drop 20%+ because like every single other time in history, the stock market has always come back. 100% of the time.
good luck to you in your investing! if you can time this crash you're expecting you surely hit the jackpot!

Kevin Wilde said...

T.Berry, each to his own, and there's more than one way to skin a cat, and not up to me to tell anyone else how to invest. But, from for strategy discussion purposes, are you saying - planning to stay - 100% long the markets no matter what? In that, you plan - strategy - is 100% allocation all the time, with no adjustments made for any reason? I use a +200% thru -200% allocation model based on risks and trends, for aggressive funds/investors. And +100% thru 0% (cash/money market) for more conservative funds/investors. If an investor planned to raise some cash as risk rises (say up to 20% cash) - and then put that cash to work on dips - that would be +100 thru +80% allocation model. Is your plan something like the latter, or 100% all the way? How would you describe your approach?

Hugh Jazole said...

I'm going to be keeping my shut for the time being. Don't want to be "that guy." As 2017 winds down I'll be firmly back in the bear camp.

Hugh Jazole said...

*mouth shut*

T.Berry said...

yes kevin, planning on holding long as my time horizon is over 10+ years. i'm not good enough to time the market so i don't even bother. had i listened to the numerous crash calls since 2012 i would have missed the strongest bull market in history :) . i know some who sold out in 2008 and did miss out. my strategy is simple, buy and hold for the long term while price averaging in (works 100% of the time as long as you have a longer timeframe). the market would have to get more than half or a little more for me to reach breakeven. somehow i think in 10 years the stock market will be considerably higher than were is currently is. i do have a small amount of cash i've been building waiting for a decent (5-10% or ) pullback however in the meantime i continue to add to 401k on a monthly basis. i do have a portion in divy stocks that are paying over 4%. much better than getting .0075% in a saving account :)

Bicycle said...

THIS IS THE END MY ONLY FRIEND THE END

OF EVERYTHING THAT STANDS THE END

Bicycle said...

are you gonna be Cusack or are you gonna be Woody???

Hugh Jazole said...

"OF EVERYTHING THAT STANDS THE END" This I'll agree with. We are LONG overdue for a massive natural disaster.

T.Berry said...

kevin, good call holding on to half your nasdaq position. not sure when that will pullback but it's looking like 7k is now within reach this year. less than 10% to go and the 2nd half should be solid ---the nasdaq was up over 14% in the first half so 10% isn't that much of a stretch. i believe earnings for the 2nd half will continue to drive all markets to multiple record all time new highs. look for this secular bull market to hit the 5th inning later in 2017. strong and only getting stronger