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Gold will go up in a depression. It will even go up in a recession. What hurts gold is high rates of return in bonds, or when the fed is tightening.
But gold could go down into the first panic of the next bear market, so buying and holding is not going to work till we see a panic sell in gold.
Still waiting for buy signal in markets.
I dont see panic selling yet, but the charts support your theory, good luck with your trade. Will post if I ever get a buy signal!
most charts are showing higher highs and lows short term and intermediat, only my gut says we are makig a top, and I trust my gut.
Materials can only go up with the massive financial stimulus.
After last post, this one could be misunderstood, as I do think support will hold and we could rally back to 1400 before the next big drop.
but playing that kind of rally has lost me way too much money in the past to be worth the risk. I applaud anyone who does play it and makes money. Although tempted to buy for short term, staying mostly in cash for now.
Indicators are turning negative. Vix is finally above the 21dma, and it will turn up if stays over 18.
AD numbers coming off overbought, and will need a week of bad numbers before we get oversold.
Now, I know the action today is a climax to bounce off support, and if we close up on day, is super bullish. but if we close near the lows, then super bearish.
My gut says we need another retest of 1270 before is time to buy euro, gold, stocks, etc. That is my plan for now.
I still see another drop to 149 on gld before covering my latest hedge put on last week, after I had covered the july calls.
I also have been wrong about the last drop, and missed too many rallies, but have also missed losing money being invested too soon.
Bottom line: Market is overbought short term, and the pattern suggests another drop to spx 1220-1300 before a final rally for the bull market begins. My gut is we need a 2 day selling climax before it is time to buy.
Last, vix over 35 and could be time to buy, and at 45, buy, buy, buy. Only time you would have lost money doing that was in 1987 and 2008, but those situations were once in a lifetime, though with insanity of financial world, could happen again. Oh, and if you had bought back then and held a year, you would have made money.
My gut says 1400 on spx by friday.
New moon high tomorrow.
Market wants to screw all the put buyers by closing around 1400.
Cant believe we went up after disapointing yhoo and intc numbers.
Thanks, took my hedge off my gold just now for pennies, as put it on a couple months ago when I bought my gold
Think gld could fall to 140 in a major drop, so will hedge it again on any bounce, even if only for a couple hours.
I just dont see how this rally can go on much longer before we retest the lows of june.
Not doing much other than a small hedged gold position, which will get called away if gld stays where it is by friday.
My gut is we run to 1400 or even 1420 by the end of the week, then the big dip starts. But I have lost way too much money in the past playing a rally like this.
choppy up and down pattern not the base for a new leg up, but could support a run to previous highs. I will short if that happens.BTW, buy food, as prices going up soon with the draught. That could help push the economy into a worse recession.
bottom line: Political situation not good for stocks in the next year, but fed would push prices higher short term.
The vix holds the key. If it starts running up, could get to 45 in a couple weeks, with a concurent massive correction.
Earnings will hold the key is my gut feeling, and as always, the reaction to them. If expectations are so low, that any numbers are loved, then up we go.
I hate to trade this set up, as you know the next move is up or down big.
1340, or the rising 21dma, needs to hold or we go down big time.
21dma will start falling, confirming a new downtrend, if we are below 1340 at the end of the week.
Or, this is just a small correction of the recent short term very overbought condition.
Am not buying just yet, my gut says 1260 or lower on spx by oct, and most likely by the end of august. Again, a drop into august, often sets up an up sept.
The market often bottoms in a bull market in early august, like in 2004 and last year. People expect sept to be a bad month, but when the market is down big in the summer, it often goes up in sept.
Fed will pump as much money as they can to keep the financial system from collapsing, and eventually it will go into gold. But till the european situation gets worse in the short run, markets will not do well.
Thanks for the heads up on an early august bottom for gold.
Bullish:
Rsi is making higher highs and lows,same for price
5dma for trin is on buy signal
21dma for price is rising, and 50dma is about to turn up too, unless we fall hard and fast.
Bearish"
Vix is too low for this kind of price action, so too much complacency.
We never got extreme levels of fear, which is normal for as big a correction as we recently had.
A/D numbers at extreme levels, normal to have a pullback here, unless we have started a new bull trend, like some people believe.
Bottom line" Price pattern not forming classic bottom yet, but sometimes it does not. Am still long a little gold, but not much else.
We agree on upside for market, just diffent time frames. I know that too many people expect down into Oct, up into end of year, so may not happen, but it also makes sense, in that fear about the election could keep a lid on prices at least till August, and then euphoria about who ever will win plus the fed will move prices higher. EVery year is different, but this could be a repeat of 1980-82, even if the funmymentals are all different.
BTW, after 25 years of doing this, have seen how stock prices move up into the beginging of a recession, but bottom at the bottom of the recession, As in, prices dont fall till the actual recession begins, but they start rising right when the bottom is happening.
I also see the next bear lasting more than a year, as who ever wins the presidency, the tea party fanatics will not allow the kind of spending we need to get the economy going again, but also the govts around the world made it clear they will not allow another financial collaps, which is good,even if the expense for that short term fix, is more misery in the future.
This chart looks a lot like last July, just before the bottom fell out of the market:
http://stockcharts.com/h-sc/ui?c=$bpcompq,uu[w,a]daclyiay[de][pb50!b13][vc60][iub14!ll14
How do it put a chart like this into a post? Click on url?
Full moon madness. The charts are confusing to me, as not sure what to make of it all. Market is fed driven, dangerous as the fed can keep prices going up only for so long.
Not trading much lately, busy writing my next book. Thanks for buying the first one. If it was a photograph, would be one of a very limited edition! Check out my website and look at the blogs, videos (cute kitties, not as cute as my honey though, her pic is on a blog from last year. Amazing to have a GF 25 years younger than me.), and if you like inspirational quotes and cute kitten pics, check out the twitter link.
Again, thanks for the posts and for supporting my artistic vision. Kittens saved my life. Other kinds of kitties make life worth living.
I trust your judgement and am not buying gld yet. Looking for as low as 140, though 148 could be the buy signal. My plan on the next big buy signal for the market, is to put 30% into qqq, 30 into iwm, 20 into tbt, and 20 into gld.
You have been right a lot lately, thanks for the posts. I do well when I take a longer perspective, am pretty crappy at very short trading trends.
Got a short term buy signal today (5dma on trin), expect we run to 1400 before the next pullback. Could be just down to rising 21dma, with another run to new highs to follow, or could be the start of the drop back to retest May low of 1265 or so.
to be honest, not sure which. Eventually we retest that low before the rally into the end of the year, up to what level will depend on news and economic realities. For now, economy limping along, and with the right new it could actually take off, but unlikely.
Am not playing this next bounce, have lost too much money trying to play rallies off this pattern.
This kind of pattern normally resolves with another correction, but the fed may be printing so much money, it has to go somewhere, and it is going into financial instruments like stocks and bonds.
My uncle says the agreement in Europe says no financial collapse anytime soon,which I agree with, but that nothing is being done to actually help the economy, so although no panic in the streets, also no recovery anytime soon, and a recession by next year.
Tough times to invest. But he did say when the govt finally does stimulate the economy with real actions, then the pent up money corporations have will cause an investment boom.
but we think not till 2017. Ouch.
Market will not do well next year, and that is a good bet.
The only problem I have with your data is the vix has not been over 30 once in Sept? Am sure you made a typo error, as your other data seems right.
Will post again about other stuff, but the pattern is ambiguous, but I still dont believe this rally. ON the other hand, some very smart guys predicted a rally, and i did not believe it, so am feeling pretty dumb right now.
Thanks for the data.
Wow, i do not see any signs this is a significant low, but as always could be very wrong.
My gut says we need to at least retest 1300 to make a head and shoulder bottome, but what do I know? Probably am missing the buy signal of the century.
Thanks for the post. I had all those numbers, but was too lazy to post precise data, which I use to do all the time. But a needy GF keeps me busy now.
ONe can see from your post, the vix can jump for a low number to over 45 in just a couple weeks., so another reading over 45 by next week is possible, though nothing is certian.
Watch the VIX. When it gets up to 45,buy, buy,buy.
2 years ago, it jumped from current levels to 45 in just 6 trading days.
We need more fear short term, and then greed can stage a comeback. The insane low reading earlier last week was a clear sell signal.
The pattern suggests we bounce along and then fall one more time to a new low, setting up the buy, or we drop into early July, and then rally. So another rally to 1360 should be shorted.
Either way, we are on sell the rallies mode for now.
As to the end of the world, my gut says those in power will in the end not let it all fall apart as long as they can. Hyper inflation, with food prices so high most people are starving, will eventually bring down the house of cards. Or a serious environmental disaster, that either comes quickly like a nuclear incident, or slowly like climate change (which is likely a major reason for the crop failures leading to current high food prices) will end up breaking the bank.
Bottom line: The banks have been in trouble for over 20 years, and could be for another 20 before they can no longer keep up this silly game. For now, the problem is not a lack of abundance, but a serious distribution inequality. Fear and greed, lets hope greed wins out in the short run.
Vix is signalling big danger sign. I have found the past couple years, that the vix is better at prediting the fear of the market than the put call ratio.
It has fallen back to a level of fear we had when everything was going well, at 17.2. Sure the 21dma is now falling, etc, but my gut says too much lack of worry, when the crises is still happening.
Would short if I had more courage, glad am out of tbt, will get back in soon enough, if am right and we drop hard and fast soon.
Btw, full moon new moon said top early in week, bottom again in 2 weeks. Not worth trading, but interesting.
Market is like my current GF, beautiful and confused. Well, maybe neither of them are that beautiful, but isnt it in the eye of the beholder?
I would not make a bet on this market, too unpredictable. If the g20 dont come up with a really good plan, and who expects that one,then europe is going to have a crisis soon.
Bonds cant make up their mind too, but if we retest recent lows in yeilds, or the crises finally happens, short bonds, buy gold.
remember, when that crises does finally happen, buy, buy, buy!
Insanity is doing the same thing and expecting different results.
The rally looks like it has legs, but my gut says we need to retest the recent low again, and so the market will once again turn on a dime, and what is now ok will not be again.
Bottom line: I bailed too fast on tbt, so what else is new? I think central banks will have to come to the aid of the few greedy people who put us all in economic hell, and the market will rally again. Waiting for next buy signal to start accumulating long postions, but patience is a virtue.
Took a loss on tbt today. Futures sunday on bonds said i would be in the black today, but by this morning, bonds were rallying again.
I dont trade this kind of market normally, and in a few months, tbt will be shining, but short term, this is a set up for one more nasty drop before we rally, if we rally.
bottom line: Most short term indicators have turned up, but i dont believe it. Bonds rallying makes no sense, other than flight to quality. We are bumping up a falling 50dma on the spx, so another leg down, at least to the rising 21dma makes the most sense short term, but when is the market logical?
The options action, with a 1.28 yesterday, and almost 1 on the equity options today, is very bullish.
My gut is we rally big time tomorrow, and to mess with everyone, we keep rallying next week.
But am not willing to risk my money on an oversold bounce, when the reality is we are heading down big time at some point.
Bottom Line: Those who sold their tech stocks in the summer of 1999, missed watching them double, but they were back to that level again in 2001, and then much lower. so keep playing the mo mo stocks, but dont be left holding the bag when the fat lady sings, but she is still warming up.
Also, my experience says the financial system comes close, but does not collapse next year, but a serious recession, depression does happen. A collapse will not be good for anybody.
30 year yields like in Japan, below 1%?
been buying TBT, as no matter how bad the market may do (and my gut says buy, not sell for the next weeks action), bond yields cant stay this low for long.
Bottom line: We need one more downside event to complete the complex bottom, but it could be weeks or even months down the line. Early july and also early August sometimes are major bottoms, same for mid oct.
I just know for sure stocks will be a lot lower next year than now, and bonds will also, so buying tbt makes the most sense. Still have 10% in gld, hedged with covered july 155 calls (bought at 149. I also think the final bottom for stocks this year, before the year end rally to who knows how high, is not in yet.
Persistence and consistency.
Just the facts Mamm.
21 dma got Vix is rising and the current reading is above that number. Bearish
We got an extreme high reading on the 21dma for the trin for several weeks, and yesterdays almost 3 was a buy signal. Bullish
We are getting an inside day, after pulling back on an outside day yesterday, on a major key reversal. The pattern is bearish.
The 21dma and 50dma for the spx are falling, and price is stuck between the 2 today - Bearish
The 200dma is rising, and the longer term pattern is still higher highs, and higher lows - VEry bullish
The RSI is for sure making solid higher highs and higher lows - very bullish.
Working on the ad numbers, but looks like at first glance that they are bearish for the short term, and are forming some kind of complex bottom
Bottom line: We are forming a complex bottom like last summer, and should bottom by the fall, or even the end of the summer. The powers that be, as usual, will kick the problem down the street, making the final resolution even more horrible, but ensuring them being able to keep their jobs a bit longer. that will help the markets stabilize and rally into the end of the year, but it could be a bit longer till this correction finishs.
He is a terrible investor, way too emotional. But he does see the market losing a lot of its value next year, and sees severe deflation, not inflation, next year too. He has been wrong before, thought we would have a recession in 1997, but the market did fall pretty hard that late fall. He has been right on since then with the economic predictions, and his indicators are not anywhere near as negative as they were all of 2008, but they are pretty grim.
Your charts have lots to think about. My Uncle says depression already started in 2008, and will continue till 2014 or even 2016. The weekly leading indicators turned down 2 months ago, same as they turned down right at the high last year. The market can rally short term even in the worst bear market.
For me, if we can break 1340, then 1400 is likely. Otherwise, we need to go down one more time before we get a solid bottom.
My Uncle, who as a famous economist served on the commision to recomend ways of not repeating the crash of 1987, just emailed me to say monetary policy will never help the ecomony, only fiscal stimulus is the answer. And with the current belief in fiscal austerity, we are down a famous creek without a paddle.
Full moon madness?
Venus transit of the sun probably has zero effect on the stock market. Anything that can pull the earths oceans up and down, must have an effect on all of us in subtle and unknown ways.
So, we had a full moon tuesday morning. anyone notice the market acting pretty strange this week? Of course, the only way to really know if another rally has begun or if this was just an oversold bounce is to wait to see the news next week.
Understanding How the Great Depression Happened!
Financial Times columnist Martin Wolf:
“Before now I had never really understood how the 1930’s could happen. [Watching the euro crisis] now I do. All one needs are fragile economies, a rigid monetary regime, intense debate over what must be done, widespread belief that suffering is good, myopic politicians, an inability to co-operate, and failure to stay ahead of events.”
Been busy with family. Tried to buy some more gold this morning, but was too greedy and did not get filled. I do have some gold, hedged with covered calls after the 2 day rally, and will buy a lot more if we see gld 140 or so, though could fall to 120 in a total financial crises.
Owning mulitnational companies that dominate in their field and pay a good dividend, may lose you money in the short run, but bought on major dips, will be safe bets.
Bottom line: Yes, the euro mess will get worse before it gets a lot better, but the fed will prevent a complete meltdown, so this is a very tricky market.
We are on sell the rallies, not buy the dips mode, as in more money to be made on short side till we see vix 45.
Sell the farm and buy stocks at vix 45. It worked every time except Oct 2008, and the economy is not nearly as bad as that time.
I do see spx 1340 later this week, but not playing that dangerous trade.
1440 was the high back in may 2008, after the pretty serious correction into march of 08, before the market fell apart.
I will sell my house and short the market if we reach 1440 this month. My gut says we will not get that high before the next selling wave.
Aapl will move the market big time monday. My gut says we are seeing enough negativity to run us back to previous highs pretty quick, but that the next rally is THE time get short.
So, have a small long position put on wednesday, and will cover it when i see spx 1400. But, bad news and we could fall 5% very fast,so not going too heavily long just yet.
bottom line: Banks are living on false numbers, so the end is coming, when is the question, not if. Have been saying be careful being long since January, too early, but noticed when the spx hit 1400 it was 12% over the 200dma, which is overextended to the point where it had to break.
btw, we are oversold and a bounce makes sense, but again, the financial system is so bad, be careful being long. I would say either trade the spy, qqq, or a high quality dividend stocks so if you ar wrong, you at least have the dividend to live off.
However, pattern very similar to last november, which produced a big decline off this 2 day rally. My gut says higher next week, but would not bet the farm just yet.