Trannies, RUT smalls, MDY mids, Financials, AMZN, GOOGL, rallies all failed in the EW 2 positon, which sets up a run into a third wave, with third waves where crashes happen. This, despite a very significant sell-off for the YEN, with a falling YEN very bullish for US stocks. The bears need to see some red ink mount to confirm the top is indeed in, and it remains a coin toss at this point whether we see the NAZ hit my 6729 target going into early October as a prelude to a crash later this year, early next. FWIW, if the SP has indeed topped, then the FIRST significant bounce should land at 2133, NAZ 5491.
New highs means not a Wave 2 top, thus either a B, or a bull 5, or a bull 3. All of those would put my NAZ 6729 target in focus, which is the 1987 pre crash pattern.
I use indicators to advise me of the risks and opportunity and where I should be putting my money, and how much. My indicators are warning this blow off rally will end very badly, seeing the indexes cut in half, at least, with the potential for much worse. I'm comfortable with that bearish view, though I do find it strange that all the gurus I respect and follow are signaling the same bearish view, as well as the word I'm picking up on the street. Contrast that the run up to 2000 peak, when everyone wanted to be a day trader, and every dip an opportunity to add leverage. Or 2007, when people quit their day jobs to flip houses, which they used as an ATM (since houses never go down in value, thus a sure thing.) Of course, since it was machines feeding off of central bank liquidity injections that gave us the current bull this time around, maybe the opinions of people no longer matter, and the next bear simply a reversal of that as the machines react to central banks inactivity? Bear markets also throw up some previously little known words destined for the history books, such as Long Term Capital Management and the Thai Baht(1998,) World Come and Enron (2000/2), and CDOs and Bear and Lehman (2008.) Thus, perhaps, our fate is in hands of some little known financial entity that simply blows up the financial world in the middle of the night? Or, perhaps, we have to wait for the final bullish guru I track - Martin Armstrong - to see his Dow 40,000 target hit to get everyone on board, just like the old days? Keep following the trend, in my humble advise, and let what will be, be.
Bryan, the FED going one way, while others go opposite, drives currencies far apart, which creates ripples in the force that even Jedi master Yoda couldn't survive. Many financial crises and market panics come due to big currency movement. I'm keeping me eyes peeled on the YEN.
the ecb, snb, boj and others following the same successful plan that our fed laid out. nothing wrong with that. many are in denial that the fed really got it right this time thus we are in the greatest bull market in history and the economy is as strong as it is.
it seems in vogue to call crashes these days as everyone and there brother is doing it. many have been since 2012 . when that stops i'll get concerned, in the meantime i plan on riding the markets higher. i do believe we'll see dow 40,000 before this secular bull market is over.
this years crash like the last 8 will once again (and some are already on board) get pushed till good ol' next year. free beer tomorrow lol
T.Berry, the problem is the economy remains a basket-case despite massive central bank intervention which has left them no room to act when the next recession comes, which it surely will. Sub 2% growth and 1% inflation at a peak is not a good place to be. The problem is, once again, central banks have given a massive speculative bubble built on the backs of overleverage. The problem is that leads to a financial crises larger than the one you were trying to fix. Just as the 2000 one was worse than the 1998 one, the 08 one worse than the 2000 one, the next one will be worse than the 08 one. Since governments balance sheets are twice or three times as worse off as 08, and central banks a zillion times worse off, and the worlds industrialized population a decade further away from peak earnings and savings, and a decade closer to peak withdrawal of savings and peak healthcare needs, what we face is absolute financial and political disaster. I do agree in following the trends, though in BOTH directions, which means up for now, then short the crap out of the markets when poop hits. Once the top is hit - here, or after Dow 40,000, or where ever - the markets won't go near that peak again for many decades.
kevin, according to the latest bea release (august) real gdp increased at annual rate of 3.0% in q2 compared to 2.0% in q1.
in addition, unemployment is at 4.3% multi-year lows (down from 10% in 2010), home values are back above where they back in before the financial crisis, the latest consumer confidence number release in august continue to reflect a positive trend, 401k values are at record highs, corporate profits jumped 15% in first quarter, biggest jump since 2010. i would have to agree, the fed did get it right this time. which more than makes up for their mistakes in the mid-2000's when housing was out of control. the growth we are seeing now is more stable, solid and real. nothing pumping the market out of control as corporate profits continue to support stocks at today's levels.
based on the above leading economic indicators, i don't foresee anything out there that would indicate a bubble leading to a stock market crash. i do think at some point we'll get a standard 10% bull market correction, but nowhere near a crash. i guess i'm going against the grain here as everyone is out predicting a crash.
good luck and hope you do well with your investments. still planning on holding for at least 10 more years.
i remember back in the mid-2000's all the so-called experts kept saying to buy the market but the market and then kaboom. now these so-called experts are saying sell sell sell. does the saying fool me once....fool me twice ring any bells.
"Short $NFL, $NBA, and it looks like $MLB." Yes! Boycott pro sports!!! I never thought I would see this glorious day, when people finally realized what a giant scam pro sports is.
Maybe a bit of a conspiracy.. but wouldn't a market crash and/or a foreign currency collapse provide really good cover for the Fed to unload a shit ton of its Treasuries at a fairly decent price into the the wild west...??? We act like the Feds are clueless.. but I don't think so. At least not in private..
T.Berry, first off, discussing the economy is not helpful in regards to what happens next, as history shows that everything looks rosy at stock market peaks, and looks terrible at stock market bottoms. To answer your question re the economic basket-case, we have a 2% economy, and we expect a 2% economy going forward (ex gov stimulus by tax cuts and/or infrastructure inflows paid for via more debt; or a recession - with the latter more likely than the former.) 2% economy paid for on the backs of $10 trillion additional gov spending, and $19 trillion expansion of the FED balance sheet - thus artificial and temporary increase in GDP (unless we increase gov spending more than we are expected to do, and/or the FED add more trillions to their balance sheet) - which leaves a mediocre economy with no where to go but down without more propping up. The unemployment rate is artificially low due to low participation rate, as more people choose disability and early retirement than take a low paid job. Outside of select areas, like movies, silicon valley, healthcare, and fracking, the jobs that have been created are low paid, and often part time, which are a symptom of Obamacare tax policy. Incomes have not risen despite the so called economic recovery. GDP is a simple mathematical calculations than can, and has been, adjusted north by gov spending. Gov and central banks intervention does not change the underlying economics, nor the democraphic tradegy we face, and we enter the next recession with govenments and central banks having fired nearly all their bullets. That leaves us in a dire situation when the next recession comes. Whenever blow off phases come, simple recessions lead to financial crises of the overleveraged, and the latter has never been more than we currently see, nor demographics more dire. Japan stocks peaked in 1989 at 40K. 30 years later its still at only 1/2 that, near 20K. That's your future, but AFTER we see recovery from the bottom.
Bryan, I think during normal times, the YEN carry trade drives stock prices all over the world, where a weak YEN equals risk on via mega leverage, while a strong YEN equals a reversal of prior leveraged buying. I think during exceptional times, ANY major currency movements results in significant distress for SOME MAJOR FINANCIAL INSTITUTIONS. All such movements have the power to bring house down around the world, as we are soooooo interconnected and held hostage to massive debt leverage bombs. Just look at the havoc the Thai Baht had in the late 90s, or the Russian Ruble.
On the markets in general, Apple has a nice pattern that continues to lead and offer clues to our future. So far, a three step down move to close the gap. The reaction from here should be a "tell" as to whether we need to put T.Berry on suicide watch or not ;-)
Hugh, depends on what happens next, where a further rally would be all indexes heading to new highs, while a reversal failure of the Trannies would put all indexes in crash mode. Next week should be a biggie. Expecting a 5%+ move for the NAZ next week. Flip a coin on the direction. I continue to hold QLD, hedged with a small portion of TZA and TVIX/UVXY, targeting NAZ 6729, though the top may already be in, with next week's big move answering the question. Note a move to NAZ 6729 would complete the 1987 pre-crash set-up, so a big rally next week adds to crash fears, not remove them.
"a reversal failure of the Trannies would put all indexes in crash mod" What would cause them to reverse? I agree we're at an inflection point. With a few exceptions forward indicators still look bullish. After a couple of weeks of shake out, my bets are we're headed higher.
Martin Armstrong update: expect choppy trading through January. A break below Dow 21,400 = correction underway. Not expecting major breakout till next year, with 23K remaining the key. If gold keeps rallying then expect major confrontation with NK, though good chance Kim will be overthrown and things calm. Expect major civil unrest in 2018.
kevin, i'd lean towards a slight move down next week. the market usually dips briefly before earnings season. then always (at least 90% in the past 3+ years) rallies during earnings. not sure but we could get to 23k after q3 earnings.
as for tza, i got stopped out at 14 for just over a 7.5 % loss, and tvix still holding but expecting to get stopped out for another 7.5% loss (stop loss in place).
think i'll stick with the long side, much easier making money long in a secular bull market. first losing investment in 6 years :(
kevin, any update from your 8/24 that the market is crashing in sept or oct? i assume the market crash will be more that a 10% move down during one of those months.
T.Berry, NAZ 6729 is my target for the top. The danger to that is we rollover prior to seeing NAZ 6729 hit. NAZ 6729 completes the 1987 pattern. Rolling over here completes the 1998 pattern, which are other past high blow off bull phases similar to the current set-up.
Hugh, Armstrong expects gold to correct over the next 3 months. However, if gold breaks above 1362 then that warns the smart money expects a major conflict with NK, thus gold is the war canary in the coalmine in this set-up.
T.Berry, the link below shows what I was telling my subscribers on 8/24, which you should be able to view even if you're not a subscriber, as there's only a one month delay in what is shown in the AK archives.
thanks kevin, i was reading your 8/24 post on this site,i must have misunderstood. we'll get to 6729 and by then the dow i believe will be north of 23000 ---on the way to 40000 :)
has tom demark given any updates since he said the mkts were going to crash on either 9/15, 9/18 or 9/19? and nenner who said get out of market by september?
after new ath's hit once again today, looking forward to the new final highs and market tops. lol
T.Berry, Tom DeMark never said anything about a crash. He said to expect a peak and pullback after Dow hits 22,280. The Dow went 100 points beyond that, and we await whether DeMark will be proven right or now. If you're going to be so quick to judge, then please take the time to get the facts right.
sorry kevin, i stand corrected, he did call those days as tops not crashes. i guess with everyone under the sun calling for a stock market crash i jumped the gun. sorry about that. went back and re-read the post.
the good thing about tops though, is that they are 100% temporary. :)
i do expect a standard bull market 5-10% correction at some point . a correction would be extremely healthy for this bull and set up to take down 23000 towards the move to 40000 :)
its a secular bryan. been saying that for the last 3-4 years. we might be in the top of the 5th at best. still plenty of upside over the next 7-10 years
Apple remains the key, and currently struggling after falling in 3 waves. If, as expected, Apple drops below 150, we will have a complete EW 1 new bear start. Of course, we can expect a bounce at that point, so the torture of waiting to get into the go somewhere position would continue. We need to assess where we are after the next cyclical bear to gauge how the bigger picture looks, IMHO.
hugh, if you have 7-10 years you'll be ok on the long side. we will likely never see a stronger bull market in our lifetime so you gotta make hay while its shining. :)
the s&P is up 12% ytd, a bit better than i expected ytd. i'm good with 10%/year. this bull market has proven that's not a problem. its very possible the s&p hits 6500-7000 by the time i start exiting.
bears don't last long hugh at most 18 months which gives you plenty of time to add to positions. rather than take a chance and sell now only to have to pay 10% more as this secular is showing no signs of weakening, adding at lower prices is an easier play imo.
bears are only temporary, don't forget the stock market comes back 100% of the time. :)
T.Berry, Japan peaked in 1989 at 40k, and 28 years later it is near 20K, which is way better than the worse of it, though still pure misery for the bulls. 1929 bear didn't see new highs till 1954, and only then for the surviving companies, and most stocks - even Dow stocks - get BK before then. Demographics and finances and central banks and governments suggests what we face is among those disasters, so I'd be careful with one will be fine 7 years from now. Indeed, I can near guarantee you most bulls today will have given up investing entirely sometime between now and seven years from now.
Bryan, the bears have been waiting for the stock indexes to get on the same page, by all topping. Interesting that while the Trannies and RUT have hit new highs this week, the NAZ, Dow, and SP are struggling to make such a leap. Since the trannies and RUT have come a very long way in a short time, one could make the case that all indexes are topping together. Having said that, other than hedges, giving the bull the benefit of doubt till we see evidence of the rollover is way to go. Interesting that NAIIM (active money management positioning) hit an extreme bullish in sentiment and positioning this week, which means they are all in once again. My work shows we are in a topping process, with the lone debate just how the final top will land, and when, where the higher we go, the higher risks go, and the deeper the depth of destruction coming out the other side will be. Preparing for financial winter is called for by all investors, IMHO.
A big picture look at the RUT shows a clear 5 wave up move, while in the 5th wave position, which is super bearish once complete, which should be very soon. The big move 400-800(ew1.) Corrected (ew2,) then rallied to 1300 (ew3.) Corrected, (ew4,) before rallying to current near 1500 (ew5.) Closing in on that 1000-1500 move we have 1000 to 1200 (ewi,) then mini correction (ew ii) we rallied to 1400 (ewiii,) and we recently paused and corrected near 1400 (ew iv,) which current breakout ew v of ew 5 to complete the bull. Target, somewhere between 1500 and 1600, with closer to 1500 more likely than 1600. Perfect wave count of a bull about to collapse in a bear to confuse those who haven't studied history, or ignore it.
"Trannies and RUT have hit new highs this week, the NAZ, Dow, and SP are struggling to make such a leap." Retail is lagging as well. Still confusing in the short term.
hugh, the s&p's struggles are over, a new all time record high today. dow is only 39 points away, clearly a no brainer. possible quick dip next week before earnings, then off to the races for more new all time record highs. :)
kevin, now stopped out of tvix at 11.50 for a 7.5% loss. lost 7.5% on tza too---all in about a week. quickest money i've ever lost :( not worried as it'll be made up long soon enough
that's it for me on the bear side, sticking to a sure thing by staying long. this market is only getting better.
T.Berry, did the profit on your long positions swamp the losses on your TZA and TVIX positions? If so, that's how hedges are supposed to work. If not, your hedges are too large in regards to the size of your long position. I've ran hedges all year, per my strategy, and I'm up near 50% on the year (near 100% since last November,) despite my hedges losing money. The only part of your sure thing long approach is you are guaranteed to lose eventually. But each to his own, and I wish you well.
Need the smalls to smash back into their longer term internal trendlines. Unless that happens.. Bull. It is a pretty clear inflection point for all to see.
yes kevin my long positions continue to make money however the high amount that tza & tvix lose in such a quick time nullify's the gains. unless you can time the pullbacks in a secular bull market (especially one as strong as we're in ) you will lose money hedging. I'm sticking with a sure thing and that is remaining long because it works 100% of the time. had i listened since 2012 to the "guru's" and their charts and graphs my portfolio would be less than half of what it is today. long term buy hold and price average in works 100% of the time. it seems everyone and their brother has been calling for a crash for the last 6-7 years. i can't imagine trying to make money with that strategy. stock market crashes (50% or more) are once in a lifetime event. so unless you plan to live say for another 60-=70 years you likely will not see one. good luck trying to time a crash but i hope you keep some long positions just in case. : )
Actually 50% drops are normal stock market action once certain conditions have been met, which is why I'm expecting one going forward, and I hope that is the depth of the losses, for the alternative is for stocks to drop 80 to 90%. I do not suggest anyone try to time crashes or bear markets. I suggest everyone follows the trend, which takes care of whatever happens, whenever it happens.
Remember the axis of evil speech? Only two left standing - NK and Iran - and war with both seems perilously close. For the conspiracy theorist in you: http://www.thrivemovement.com/the_movie
circuit breakers, the fed & the don, stocks will not go down 50%.
glad to have cut my hedging losses at 7.5%. since i sold tvix it's down another 27% and tza is down 7%. hedging in a secular bull market as strong as this one to me is throwing good money at bad. unless you time it perfectly, money allocated to hedging ends up in money heaven. lol
wars in the past have been good for the stock market. not that i want to see a war but stocks really don't need any help. they're doing fine on their own.
23k proved not much resistance, perhaps 24k? or maybe 25k?
74 comments:
Kim broke us through support on the /ES last night and now it's time to die.
Aren't you going to need transports lower to get this done?
$DJT just failed to make a new high with the $DJI. Dow Theory divergence.
It DOES look a bit like a bull trap here.
Trannies, RUT smalls, MDY mids, Financials, AMZN, GOOGL, rallies all failed in the EW 2 positon, which sets up a run into a third wave, with third waves where crashes happen. This, despite a very significant sell-off for the YEN, with a falling YEN very bullish for US stocks. The bears need to see some red ink mount to confirm the top is indeed in, and it remains a coin toss at this point whether we see the NAZ hit my 6729 target going into early October as a prelude to a crash later this year, early next. FWIW, if the SP has indeed topped, then the FIRST significant bounce should land at 2133, NAZ 5491.
What happens if DJT reaches a new ATH?
New highs means not a Wave 2 top, thus either a B, or a bull 5, or a bull 3. All of those would put my NAZ 6729 target in focus, which is the 1987 pre crash pattern.
new highs begat new highs. nothing holding this secular bull market back now. the crash will get pushed back another year lol
It's been some time since I read a good Bill Bonner piece. He's as feisty as ever.
https://dailyreckoning.com/america-going-broke-nobody-cares/
I use indicators to advise me of the risks and opportunity and where I should be putting my money, and how much. My indicators are warning this blow off rally will end very badly, seeing the indexes cut in half, at least, with the potential for much worse. I'm comfortable with that bearish view, though I do find it strange that all the gurus I respect and follow are signaling the same bearish view, as well as the word I'm picking up on the street. Contrast that the run up to 2000 peak, when everyone wanted to be a day trader, and every dip an opportunity to add leverage. Or 2007, when people quit their day jobs to flip houses, which they used as an ATM (since houses never go down in value, thus a sure thing.) Of course, since it was machines feeding off of central bank liquidity injections that gave us the current bull this time around, maybe the opinions of people no longer matter, and the next bear simply a reversal of that as the machines react to central banks inactivity? Bear markets also throw up some previously little known words destined for the history books, such as Long Term Capital Management and the Thai Baht(1998,) World Come and Enron (2000/2), and CDOs and Bear and Lehman (2008.) Thus, perhaps, our fate is in hands of some little known financial entity that simply blows up the financial world in the middle of the night? Or, perhaps, we have to wait for the final bullish guru I track - Martin Armstrong - to see his Dow 40,000 target hit to get everyone on board, just like the old days? Keep following the trend, in my humble advise, and let what will be, be.
Kevin. The SNB, ECB, and BOJ have been picking up where the Fed has been winding down.
Short $NFL, $NBA, and it looks like $MLB.
With leverage!
Long $AfD
Bryan, the FED going one way, while others go opposite, drives currencies far apart, which creates ripples in the force that even Jedi master Yoda couldn't survive. Many financial crises and market panics come due to big currency movement. I'm keeping me eyes peeled on the YEN.
the ecb, snb, boj and others following the same successful plan that our fed laid out. nothing wrong with that. many are in denial that the fed really got it right this time thus we are in the greatest bull market in history and the economy is as strong as it is.
it seems in vogue to call crashes these days as everyone and there brother is doing it. many have been since 2012 . when that stops i'll get concerned, in the meantime i plan on riding the markets higher. i do believe we'll see dow 40,000 before this secular bull market is over.
this years crash like the last 8 will once again (and some are already on board) get pushed till good ol' next year. free beer tomorrow lol
T.Berry, the problem is the economy remains a basket-case despite massive central bank intervention which has left them no room to act when the next recession comes, which it surely will. Sub 2% growth and 1% inflation at a peak is not a good place to be. The problem is, once again, central banks have given a massive speculative bubble built on the backs of overleverage. The problem is that leads to a financial crises larger than the one you were trying to fix. Just as the 2000 one was worse than the 1998 one, the 08 one worse than the 2000 one, the next one will be worse than the 08 one. Since governments balance sheets are twice or three times as worse off as 08, and central banks a zillion times worse off, and the worlds industrialized population a decade further away from peak earnings and savings, and a decade closer to peak withdrawal of savings and peak healthcare needs, what we face is absolute financial and political disaster. I do agree in following the trends, though in BOTH directions, which means up for now, then short the crap out of the markets when poop hits. Once the top is hit - here, or after Dow 40,000, or where ever - the markets won't go near that peak again for many decades.
interesting read on the FED and what comes next
https://realinvestmentadvice.com/whatever-the-fed-does-its-bullish-09-22-17/
kevin,
according to the latest bea release (august) real gdp increased at annual rate of 3.0% in q2 compared to 2.0% in q1.
in addition, unemployment is at 4.3% multi-year lows (down from 10% in 2010), home values are back above where they back in before the financial crisis, the latest consumer confidence number release in august continue to reflect a positive trend, 401k values are at record highs, corporate profits jumped 15% in first quarter, biggest jump since 2010. i would have to agree, the fed did get it right this time. which more than makes up for their mistakes in the mid-2000's when housing was out of control. the growth we are seeing now is more stable, solid and real. nothing pumping the market out of control as corporate profits continue to support stocks at today's levels.
based on the above leading economic indicators, i don't foresee anything out there that would indicate a bubble leading to a stock market crash. i do think at some point we'll get a standard 10% bull market correction, but nowhere near a crash. i guess i'm going against the grain here as everyone is out predicting a crash.
good luck and hope you do well with your investments. still planning on holding for at least 10 more years.
i remember back in the mid-2000's all the so-called experts kept saying to buy the market but the market and then kaboom. now these so-called experts are saying sell sell sell. does the saying fool me once....fool me twice ring any bells.
keep selling mortimer lol
kevin,
economy remains a basket case? how so?
"Short $NFL, $NBA, and it looks like $MLB." Yes! Boycott pro sports!!! I never thought I would see this glorious day, when people finally realized what a giant scam pro sports is.
Maybe a bit of a conspiracy.. but wouldn't a market crash and/or a foreign currency collapse provide really good cover for the Fed to unload a shit ton of its Treasuries at a fairly decent price into the the wild west...??? We act like the Feds are clueless.. but I don't think so. At least not in private..
T.Berry, first off, discussing the economy is not helpful in regards to what happens next, as history shows that everything looks rosy at stock market peaks, and looks terrible at stock market bottoms. To answer your question re the economic basket-case, we have a 2% economy, and we expect a 2% economy going forward (ex gov stimulus by tax cuts and/or infrastructure inflows paid for via more debt; or a recession - with the latter more likely than the former.) 2% economy paid for on the backs of $10 trillion additional gov spending, and $19 trillion expansion of the FED balance sheet - thus artificial and temporary increase in GDP (unless we increase gov spending more than we are expected to do, and/or the FED add more trillions to their balance sheet) - which leaves a mediocre economy with no where to go but down without more propping up. The unemployment rate is artificially low due to low participation rate, as more people choose disability and early retirement than take a low paid job. Outside of select areas, like movies, silicon valley, healthcare, and fracking, the jobs that have been created are low paid, and often part time, which are a symptom of Obamacare tax policy. Incomes have not risen despite the so called economic recovery. GDP is a simple mathematical calculations than can, and has been, adjusted north by gov spending. Gov and central banks intervention does not change the underlying economics, nor the democraphic tradegy we face, and we enter the next recession with govenments and central banks having fired nearly all their bullets. That leaves us in a dire situation when the next recession comes. Whenever blow off phases come, simple recessions lead to financial crises of the overleveraged, and the latter has never been more than we currently see, nor demographics more dire. Japan stocks peaked in 1989 at 40K. 30 years later its still at only 1/2 that, near 20K. That's your future, but AFTER we see recovery from the bottom.
Kevin. Could a meltdown in the Yen potentially be as worrisome as a meltup?
Yep. It was a bull trap.
Bryan, I think during normal times, the YEN carry trade drives stock prices all over the world, where a weak YEN equals risk on via mega leverage, while a strong YEN equals a reversal of prior leveraged buying. I think during exceptional times, ANY major currency movements results in significant distress for SOME MAJOR FINANCIAL INSTITUTIONS. All such movements have the power to bring house down around the world, as we are soooooo interconnected and held hostage to massive debt leverage bombs. Just look at the havoc the Thai Baht had in the late 90s, or the Russian Ruble.
On the markets in general, Apple has a nice pattern that continues to lead and offer clues to our future. So far, a three step down move to close the gap. The reaction from here should be a "tell" as to whether we need to put T.Berry on suicide watch or not ;-)
"Blogger Kevin Wilde said...
should be a "tell" as to whether we need to put T.Berry on suicide watch or not ;-)"
no worries kevin, didn't you hear, the 2012 got pushed back another year. lol
i'm fine, it's those who've been calling for a crash over the last 5-6 year you should worry about : )
Another bull trap or the real thing this time? Transports and XLF looking like new ATH's soon.
oh no, not another bull trap. didn't we just have one on sept 25th? the top must be in. :)
Have you the scary bearish position the FANGS have found themselves in?
About that Dow Theory divergence. The transports just hit a new ATH, what does the theory tell about the future direction of the DOW?
Hugh, depends on what happens next, where a further rally would be all indexes heading to new highs, while a reversal failure of the Trannies would put all indexes in crash mode. Next week should be a biggie. Expecting a 5%+ move for the NAZ next week. Flip a coin on the direction. I continue to hold QLD, hedged with a small portion of TZA and TVIX/UVXY, targeting NAZ 6729, though the top may already be in, with next week's big move answering the question. Note a move to NAZ 6729 would complete the 1987 pre-crash set-up, so a big rally next week adds to crash fears, not remove them.
"a reversal failure of the Trannies would put all indexes in crash mod" What would cause them to reverse? I agree we're at an inflection point. With a few exceptions forward indicators still look bullish. After a couple of weeks of shake out, my bets are we're headed higher.
Martin Armstrong update: expect choppy trading through January. A break below Dow 21,400 = correction underway. Not expecting major breakout till next year, with 23K remaining the key. If gold keeps rallying then expect major confrontation with NK, though good chance Kim will be overthrown and things calm. Expect major civil unrest in 2018.
kevin, i'd lean towards a slight move down next week. the market usually dips briefly before earnings season. then always (at least 90% in the past 3+ years) rallies during earnings. not sure but we could get to 23k after q3 earnings.
as for tza, i got stopped out at 14 for just over a 7.5 % loss, and tvix still holding but expecting to get stopped out for another 7.5% loss (stop loss in place).
think i'll stick with the long side, much easier making money long in a secular bull market. first losing investment in 6 years :(
dow 40k is calling. :)
2508 is the new 1440 lol
kevin,
any update from your 8/24 that the market is crashing in sept or oct? i assume the market crash will be more that a 10% move down during one of those months.
"If gold keeps rallying" Am I missing something?
T.Berry, NAZ 6729 is my target for the top. The danger to that is we rollover prior to seeing NAZ 6729 hit. NAZ 6729 completes the 1987 pattern. Rolling over here completes the 1998 pattern, which are other past high blow off bull phases similar to the current set-up.
Hugh, Armstrong expects gold to correct over the next 3 months. However, if gold breaks above 1362 then that warns the smart money expects a major conflict with NK, thus gold is the war canary in the coalmine in this set-up.
T.Berry, the link below shows what I was telling my subscribers on 8/24, which you should be able to view even if you're not a subscriber, as there's only a one month delay in what is shown in the AK archives.
http://alphaking.com/portfolios/archive/?id=2985
OK, got it! More like if gold STARTS rallying. The dollar strengthening could also be a warning, because otherwise it's in a bear market as well.
thanks kevin, i was reading your 8/24 post on this site,i must have misunderstood. we'll get to 6729 and by then the dow i believe will be north of 23000 ---on the way to 40000 :)
has tom demark given any updates since he said the mkts were going to crash on either 9/15, 9/18 or 9/19? and nenner who said get out of market by september?
after new ath's hit once again today, looking forward to the new final highs and market tops. lol
3 sessions in a row with McClellan oscillator unchanged.
Pressure cooker.
And no one seems too concerned that we were 3 pts away from (1370 - 666) + 1810 today. Maybe that is/always was our final destination for all of this?
T.Berry, Tom DeMark never said anything about a crash. He said to expect a peak and pullback after Dow hits 22,280. The Dow went 100 points beyond that, and we await whether DeMark will be proven right or now. If you're going to be so quick to judge, then please take the time to get the facts right.
Bullish sentiment took a hit last week, but it all went to the Neutral range. Still pretty bullish, bearish sentiment still well below average.
sorry kevin, i stand corrected, he did call those days as tops not crashes. i guess with everyone under the sun calling for a stock market crash i jumped the gun. sorry about that. went back and re-read the post.
the good thing about tops though, is that they are 100% temporary. :)
i do expect a standard bull market 5-10% correction at some point . a correction would be extremely healthy for this bull and set up to take down 23000 towards the move to 40000 :)
Rut wedge breakout needs to come back under in a hurry. Otherwise, New paradigm confirmed. Bull.
Broadening pattern. Whatever you want to call it.
s&p 18 months from 3000. dow just less than 2.7% from 23000 heading to 25000 next
its a secular bryan. been saying that for the last 3-4 years. we might be in the top of the 5th at best. still plenty of upside over the next 7-10 years
Apple remains the key, and currently struggling after falling in 3 waves. If, as expected, Apple drops below 150, we will have a complete EW 1 new bear start. Of course, we can expect a bounce at that point, so the torture of waiting to get into the go somewhere position would continue. We need to assess where we are after the next cyclical bear to gauge how the bigger picture looks, IMHO.
Kevin. Your thoughts on that RUT breakout?
Unemployment numbers also look like we're nearing a top. All previous readings of 4.5% or less were followed by a bear within the next year.
T. Berry, I agree it looks like a secular bull. However, I don't want to be exposed to too much risk when that cyclical bear comes knocking!
hugh, if you have 7-10 years you'll be ok on the long side. we will likely never see a stronger bull market in our lifetime so you gotta make hay while its shining. :)
the s&P is up 12% ytd, a bit better than i expected ytd. i'm good with 10%/year. this bull market has proven that's not a problem. its very possible the s&p hits 6500-7000 by the time i start exiting.
bears don't last long hugh at most 18 months which gives you plenty of time to add to positions. rather than take a chance and sell now only to have to pay 10% more as this secular is showing no signs of weakening, adding at lower prices is an easier play imo.
bears are only temporary, don't forget the stock market comes back 100% of the time. :)
s&p just hit 39th ath this year. we are witnessing history ,
hope you all are making some hay :) never been a better time to be in the stock market !
T.Berry, Japan peaked in 1989 at 40k, and 28 years later it is near 20K, which is way better than the worse of it, though still pure misery for the bulls. 1929 bear didn't see new highs till 1954, and only then for the surviving companies, and most stocks - even Dow stocks - get BK before then. Demographics and finances and central banks and governments suggests what we face is among those disasters, so I'd be careful with one will be fine 7 years from now. Indeed, I can near guarantee you most bulls today will have given up investing entirely sometime between now and seven years from now.
Bryan, the bears have been waiting for the stock indexes to get on the same page, by all topping. Interesting that while the Trannies and RUT have hit new highs this week, the NAZ, Dow, and SP are struggling to make such a leap. Since the trannies and RUT have come a very long way in a short time, one could make the case that all indexes are topping together. Having said that, other than hedges, giving the bull the benefit of doubt till we see evidence of the rollover is way to go. Interesting that NAIIM (active money management positioning) hit an extreme bullish in sentiment and positioning this week, which means they are all in once again. My work shows we are in a topping process, with the lone debate just how the final top will land, and when, where the higher we go, the higher risks go, and the deeper the depth of destruction coming out the other side will be. Preparing for financial winter is called for by all investors, IMHO.
A big picture look at the RUT shows a clear 5 wave up move, while in the 5th wave position, which is super bearish once complete, which should be very soon. The big move 400-800(ew1.) Corrected (ew2,) then rallied to 1300 (ew3.) Corrected, (ew4,) before rallying to current near 1500 (ew5.) Closing in on that 1000-1500 move we have 1000 to 1200 (ewi,) then mini correction (ew ii) we rallied to 1400 (ewiii,) and we recently paused and corrected near 1400 (ew iv,) which current breakout ew v of ew 5 to complete the bull. Target, somewhere between 1500 and 1600, with closer to 1500 more likely than 1600. Perfect wave count of a bull about to collapse in a bear to confuse those who haven't studied history, or ignore it.
"Trannies and RUT have hit new highs this week, the NAZ, Dow, and SP are struggling to make such a leap." Retail is lagging as well. Still confusing in the short term.
Thanks Kevin. Thanks HJ
hugh, the s&p's struggles are over, a new all time record high today. dow is only 39 points away, clearly a no brainer. possible quick dip next week before earnings, then off to the races for more new all time record highs. :)
kevin,
now stopped out of tvix at 11.50 for a 7.5% loss. lost 7.5% on tza too---all in about a week.
quickest money i've ever lost :( not worried as it'll be made up long soon enough
that's it for me on the bear side, sticking to a sure thing by staying long. this market is only getting better.
T.Berry, did the profit on your long positions swamp the losses on your TZA and TVIX positions? If so, that's how hedges are supposed to work. If not, your hedges are too large in regards to the size of your long position. I've ran hedges all year, per my strategy, and I'm up near 50% on the year (near 100% since last November,) despite my hedges losing money. The only part of your sure thing long approach is you are guaranteed to lose eventually. But each to his own, and I wish you well.
Need the smalls to smash back into their longer term internal trendlines. Unless that happens.. Bull. It is a pretty clear inflection point for all to see.
yes kevin my long positions continue to make money however the high amount that tza & tvix lose in such a quick time nullify's the gains. unless you can time the pullbacks in a secular bull market (especially one as strong as we're in ) you will lose money hedging. I'm sticking with a sure thing and that is remaining long because it works 100% of the time. had i listened since 2012 to the "guru's" and their charts and graphs my portfolio would be less than half of what it is today. long term buy hold and price average in works 100% of the time. it seems everyone and their brother has been calling for a crash for the last 6-7 years. i can't imagine trying to make money with that strategy. stock market crashes (50% or more) are once in a lifetime event. so unless you plan to live say for another 60-=70 years you likely will not see one. good luck trying to time a crash but i hope you keep some long positions just in case. : )
crashes always happen next year lol. see 2012
Actually 50% drops are normal stock market action once certain conditions have been met, which is why I'm expecting one going forward, and I hope that is the depth of the losses, for the alternative is for stocks to drop 80 to 90%. I do not suggest anyone try to time crashes or bear markets. I suggest everyone follows the trend, which takes care of whatever happens, whenever it happens.
These three fellows want a war with Iran. Will they get their wish?
http://lobelog.com/are-billionaire-donors-driving-trumps-iran-policy/
Remember the axis of evil speech? Only two left standing - NK and Iran - and war with both seems perilously close. For the conspiracy theorist in you: http://www.thrivemovement.com/the_movie
I agree Kevin. These two aren't going to go down as easily as Iraq.
circuit breakers, the fed & the don, stocks will not go down 50%.
glad to have cut my hedging losses at 7.5%. since i sold tvix it's down another 27% and tza is down 7%. hedging in a secular bull market as strong as this one to me is throwing good money at bad. unless you time it perfectly, money allocated to hedging ends up in money heaven. lol
wars in the past have been good for the stock market. not that i want to see a war but stocks really don't need any help. they're doing fine on their own.
23k proved not much resistance, perhaps 24k? or maybe 25k?
next big round number on deck, s&P 2600 just a mere 1% away
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