My targets are derived from what occurred under similar circumstances in history. Therefore they are an average and actuals can stray some way from averages, so caution is warranted. Nonetheless, there are compelling reasons for why they may represent the best ‘guide’ going forward.

The equities mania into 2014/5 rivals the biggest manias of all time in terms of valuation, leverage, allocations and sentiment. Not only that but those biggest manias of all time share a similar topping pattern that may be playing out again.



Source: Financial-Spread-Betting

12j5 12j2 12j1

Think of similar waves of crowd psychology playing out each time. Post ‘second chance’, declines were swift and deep:

Dow 1929: 3 weeks 44% declines

Dow 1937: 8 weeks 38% declines

Dow 1968: 8 weeks 18% declines

Dow 1987: 2 weeks 34% declines

Nikkei 1989: 6 weeks 27% declines

Nasdaq 2000: 3 weeks 35% declines

SP500 2011: 2 weeks 18% declines

They average out at 30% declines over 4.5 weeks.

Continuing with history as our guide, we ought then to expect a subsequent slower partial retrace of those falls lasting around 4 months. So hard falls averaging 30% over several weeks followed by a 50%+ retrace of those falls averaging several months, before we tip conclusively into a fully fledged bear market, like this:


There is a seasonality to stock market peaks and troughs in a year, due to the seasonality of geomagnetism.


Based on this, we might look to around March/April 2016 as a bottom for the post second chance waterfall decline – if that is where we are in crowd psychology – followed by a slower retrace wave into mid-year. Remember, this is just a guide based on history and seasonality.

Biotech has been the mania within the mania, or poster boy. History suggests the full mania should be retraced.

Screen Shot 2015-09-21 at 21.06.18

Now the longer term. Cross referencing valuations with solar cycles and demographics we get this prediction:


Underlying source: DShort

Whilst gold should do this:


Making the 2011-2015 gold bear a cyclical bear within a secular gold bull 2000-2025 (or thereabouts).

The Dow-Gold ratio fits in like this:

Dow Gold Ratio

And the Dow, something along these lines:


The waves and price points should not be taken too literally. The key point is that by demographics the developed world is set to follow Japan’s 1990s/2000s model: a long drawn out secular bear market. By solar cycles we should see a speculative mania peak in gold at the next solar maximum (circa 2025) together with a major stocks bottom.

However, this is all assuming the game remains ‘fair’ and central banks do not drastically distort market mechanisms, because it is a sure thing that they will respond with even more unorthodox and desperate tactics should an approximation of these forecasts play out.

Prior to the next solar max comes the next solar minimum, which historically has been the scene of bottoms, panics or crises. So circa 2020 we get a major low in equities before the  deeper one of around 2025. In short, these may represent the ebbing and flowing of cyclical bears and bulls within an overall long term secular bear.

Screen Shot 2016-01-10 at 11.59.09

Underlying Source: Sergey Tarasov


By demographics, the future looks like this:

9j1 9j2

This suggests the global economy and stocks/housing markets will continue to struggle beyond 2025 and all the way out to mid-century. On such a long timescale, developments could feasibly make such predictions redundant.

Hope for a more positive outcome could be seeded in (1) major paradigm shifts from technological evolution (2) a shift to pro-active immigration policies in the major nations to alter demographics or (3) countries with positive demographics such as India and Brazil become much more dominant in the global economy to offset the others.

However, the kind of deflationary depression or long period of negligible growth predicted by demographics that may first come to pass historically gave rise to unrest and war. Additionally the world is forecast to be moving into another grand solar minimum, which also historically resulted in low/negative growth and war. Furthermore, the end game for debt is monetisation, which is where we now are. Recession, deflation and runaway debt is a poisonous mix.


Source: Michael Roscoe

In short, something much more devasting may be seeded in these themes and a long period of difficulty for the world could indeed be unfolding.

Photo source: National Geographic


2,515 thoughts on “Targets

  1. Brilliant even-handed analysis as ever. Thanks John. If the game remains ‘fair’. Wonder what they’re going to be talking about in DAVOS next week.

        1. The reason why I asked is because I suspect that China is now in the “long bear market” phase, given the drop of margin debt from 2.2T to 1.0T. That is not to say that the “long bear market” cannot be violent like in 2008, but the fuel will be corporate defaults rather than margin calls.

          The biggest of your flash crashes (1929, 1990, 2000) were all in-line with demographic peaks, and since it is China’s demographic peak this time around, I suspect that China will set the pace.

  2. Really insightful post, John. Thanks again. I agree with your logic, however given the rapid advance in tech of all kinds most of which have not yet been implemented (self driving this, ultra low energy that, etc) some of which involve novel materials that may replace current uses, could the next 10 years be less of a market down move and more of a sideways market in real terms all the while cost of energy and other input costs (labor, raw materials) staying tame? As far as AU being the lifeboat you may be right, however, tulips were a life boat once, as were goats in some places and times. One new development in mining technology (which is still very pick and shovel) could do to the AU price what modern ag has done to the cost of food.

    1. Hi Valley,

      What do you about the market tommorow and next week?
      I think we will go down one more time and the turn will be next week mo/tuesday after that we will see a good rally..

      Good luck..

      1. Very close to what I am thinking. Maybe bottom middle of next week. However, I will be considering staying long in case we retrace above 2000. So, PALS is negative Fri, Mon, Tues, Wed but price is way low. So for me it is a coin toss. Seasonally 10th, and 11th trading day of month is when 401K plans are buying mid month, so maybe sell off will be after Monday the 11th.

        1. Thanks Valley,

          Mahendra is bullish after the 20th:

          We do strongly recommend taking aggressive positions during the last 63 hours of this cycle, or before the 20th of January, because on the 20th of January Mercury will rise in the east which is a positive astro move for the market.

    2. Valley, check out the book, 4th Turning by Stauss and Howe. We are going to have a revolution over the next 10-15 years, hopefully peaceful. Even peaceful, it will be tough.

  3. Just FYI, I am out of my SPX longs now – took the chance to close both in profit at 1910, so possibly not worth the risk at this point. We may go higher though, will have to wait and see….although I suspect we will go down take a look at 1850ish soon.


    1. Jeger, please may I ask, why are you expecting the market to decline to 1850 after such a strong move upwards today? Thx in advance.

  4. John H, wonderful wonderful analysis. This was the kind of thing I was hoping, nay EXPECTING, from your post. I need more time to go through it all but the different perspectives and their corresponding targets will help me to ‘follow’ the path of this bear.


      1. BTW I don’t know if you did anything regarding the slow upload on the mobile platform, but I can confirm that things have improved significantly. I’ll keep monitoring for a while further and let you know if there is any residual problem. Thx for everything that you do for us.

        1. Purvez – On previous comments section I wrote to ya.

          There is always time to find opportunities to trade the market, but never enough opportunities to spend time with loved ones. You made the correct choice.

          I’m still long from Monday and have been adding. Will stay long for awhile yet.

        2. Geno thx for the thought. I’m glad to have had the opportunity to spend time with my mum.

          At 90 she’s prone to repeating and for muddling things up but even that is quite delightful. Hope I’m half as good as her IF I ever get near that age.

          Also very good to know your trade came off!! However with this schizophrenic market I would be inclined to grab my profits and run.

          GL with your trades. I’ve just wound up as I have 2 days left here before returning home and have a round of H’byes to do still.

  5. I like John’s analysis, but I believe this will prove to be the shake out phase when all is said and done. Perfect touch of the wave [4] triangle lower trend line, now the bounce for (D).

    1. There’s no reason a person can’t sit on the fence and play the daily swings. In fact, it’s prudent to do so. Why put all your eggs in one basket when there’s no need to?

    2. Huh GM? I thought Alphahorn said he was bullish unless a particular level was taken out. Surely that’s just ‘good’ trading?

      1. Fair point purvez, but it will be interesting to see who is right and who is wrong.
        Oddly, I still am on the fence myself re new all time highs for US markets, it’s a possibility after a decline due to capital flows.

  6. I think we can get long Ferrari for 7-10% gain while risking only 3% with a 40.55 SL

    John – Do you want us to keep comments geared toward indices or are individual stock postings okay with you?

    1. Gen

      How do you come to that “buy zone” and the SL? Looks to me like it fell out of that “triangle”, didn’t backtest then did a bit of a bearflag thing and is now in limbo? Or are you guesstimating the end of the bear flag formation (if that is what it was) by the length of the “pole”? Or something else??:D


      1. Hey Jeger – sorry for the delay. The buz zone is calculated using Fib Support areas and time. I set the SL using the ATR.

  7. First layer of shorts re-loaded toward the end of the day here…
    Feel like I’ve f-up about all that I could have so far in 2016, and yet, it’s already been a really nice return so far this month…
    Just reducing some exposure here, as well as looking for higher prices to build a larger short position… Just working my strategery to make a few bucks…..

  8. Outstanding analysis, JH. I was one of those who thought (back in early October) that the Dow would break marginal new highs before turning down. You were right and I was wrong (although the SPX did get to within about 1% of the old high – an unusually steep retracement). You referenced a caveat that the game remain “fair” – no central bank intervention. I’ve suggested that the very reason for a bear market this time around would be a loss of faith in the Fed, as it has been the primary driver of the last four or five years. There is a psychic component to the coming events that needs to be appreciated. When there is extreme fear, traditional measures of technical analysis (momentum and sentiment) begin to fail – that is the only way a decline of the magnitude and speed predicted can happen. The markets may react violently in the short run to any Fed intervention, but in the end, I suspect the Fed will end up being the reason for the crash, not the deus ex machina savior. Any thoughts, JH?

    1. Good comment…
      That’s a reason I’m already starting my scale-up selling…
      Ordinarily, I’d think I’m too early, starting at too low of a level…

      My indicators are telling me we’re going higher shorter-term, but the truth is I’m thinking it’s just “safer” to err to the side of being short this market, and using a great deal of caution in having faith in any buy signal…

      Just not convinced that signals will work out as they “should” in more normal times….
      Another way of saying no cajones for this guy right here, I suppose…. hahaha

      1. ‘The mantra for the mania has been central bank policy trumps all, when they are in fact fairly impotent.’

        Well put. They are in fact impotent. Investors should repeat that 10 times a minute until they grasp it. Even old Bluestar is writing about the Fed being ‘out of bullets’, when it always just a myth (he thinks they had talk powers and policy powers, both BS IMO).
        Just human herding instinct caused yet another bubble.

  9. Just FYI that I went long SPX again, I already have short exposure elsewhere so if anything it is a kind of hedge, which may morph into something else….


  10. New blog top notch, tick tick…
    15th Jan already, options expiring. Russell 2000 confirmed the bear 4 days ago and every day since. The chart fail patterns we have seen bring a need for new chapters in analysis. Is this very bad or less bad? Who knows? Its just bad, that’s all I can surmise so far.
    Unless the Fed has interfered with the mass of the Higgs boson of course.

    1. One thing they are missing here comparing the 1940’s is we now we have massive debt loads in all sectors. That all needs to somehow wash out which could be nasty.

      1. With the erudite and highly informative observations made now and for several years by our host, along with the highly unusual chart fail patterns that have recently come to pass, it is surely not clever to expect good things to happen from here as things stand. The basic premise of the financial system has been first corrupted (ref Clinton) then used for the personal gain (for the few). Then the core was broken (ref Lehman). The repair efforts have created a false wealth effect (we are only now told this was intentionally so) but more-so has enabled even more personal gain (for the few) with a pious belief that it serves the greater good to do so. No attempt to return to the basic premise of the system (e.g. undo Clinton) has been made. Therein lies the folly of it all. Now it loses the confidence of the major participants, which has been eroded by time. But the unworthy few will most certainly retain their status at a constantly elevating level. (All they need to do is read this blog, go short big time and buy gold big time)
        Science fiction morphs into ugly facts in your face. So what you gonna do? Sit on the loo?
        This behaviour has been wrong from the outset. The bastardised system will not fix itself.

        1. Whilst I agree with much of what Peter_ says above, in fact the problem is much bigger.
          This bubble has been expanded since the world went off ‘gold’ at Genoa in 1922 (enabling the Roaring 20s bubble).
          It has enabled the great socialist expansion/experiment for nearly 100 years. The masses love it, so much free stuff!
          But like JH, I have grave fears about what lies ahead as it bursts.
          So hard to see the developed world avoiding wars, civil unrest and revolutionary impulses.
          Hard to see that those impulses will be mis-directed by marxists-in-waiting toward the wealthy and the productive, rather than toward government itself, or the system.
          In summary, FUBAR sums it up succinctly, and gold alone won’t save you: it’s physical location and your own will be crucial. This period could easily last for 40-60 years, before sense is restored.
          I’m currently liking Iceland and Morocco for their values and culture.

  11. The last time the S&P 500 broke support like this was Thursday, September 6th of 2001.

    911 happened the next Tuesday

  12. Did the S&P breakdown cause 9/11 or did someone know it was going to happen? What a coincidence, especially if you look at airline stocks around that time lol….


  13. Small longs on dax and US indices. Fall is overdone but I’m quite sure the top is in. Expecting a rebound of 4-5% before the falls continue into mid year.

  14. jegersmart’s guy looks a litte spastic

    barry’s guy looks mean

    krish’s looks kinda like a pirate

    john li’s looks uncertain

    my guy looks kinda smart with his monocle

    1. Aaah you all need to beware my ‘guy’. Looks downright angry and hungry. That’s me: a pussycat in a tigers uniform. These artificial intelligence avatars are too damn clever!!

  15. I told the little dude, a couple of months ago, that he was about to go on another “vacation”…
    I’m sure he didn’t believe me… Oh well…

    Sad to say, I could have traded this better as well…
    Trying not to dwell on this, but if on Jan 1, I’d have closed my laptop, not looked at one single chart, and not made ~any~ changes to my portfolio, I’d be up over $100k from where I am today….
    Just played golf every day and ignored this crap…. *big sigh*

    1. As much as the market is down and near support, the VIX is really not responding. We are half of where volatility was on 8/2015! This shows the downside potential medium term even if we get a bounce now.

    2. Well, it could be worse – for a couple of months last year if I had left my computers off WITHOUT any open positions I would have been better off……c’est la vie……


    1. ‘Wait’ will work Barry, patience may be required. Obviously as a short-term hedge I commiserate, and gold miners historically tend to get shaken about at these times, before hitting clear waters and a strong tail wind. (Low oil priced a real boon for the sector).

  16. from what i can tell

    the number of new lows are lagging the number from August

    that would signal a likely short term bottom if they don’t expand a lot by the close

    1. The big question is how will it open on Monday morning? Will there be a rescue over the weekend? Would you leave short positions open?

      1. Hi Pulp,

        you actually get an extra day, monday is a holiday

        and the ptb are notorious for using long weekends to support the markets

        publicly and not so much

  17. I took 65% profits on short positions now as we approach the 1860 and 1820 support zones (on SPX), along with 50% of the rest of the puts. I have a scout long on Oil (CRU) after today’s crash – long Potash, Soybeans and Corn, Gold but slightly underwater after I took profit on the main tranches 2 days ago, and I have calls from 2020 to 2140 on SPX mostly Feb and a few March……at the moment these would seem more or less worthless….lol.

    I would look at some of the refiners though, they look pretty weak and breaking down and I would have shorted them today but wanting to stay out whilst the market works out where from here. Once Crude gets going, many refiners shares will probably feel it.

    I am more or less done so good weekend all!


  18. Yeah, I’m not worried…. I’m sure that 1998 analogy is gonna kick in anyyyyyyy moment now, and we’re gonna roar off to new highs…..
    Where are those guys anyway…. 😉

    Regardless, would think we’ll see higher prices than where we are right now, at some point going forward, but jeez…. My TZA hedges were a lifesaver today, but I’m long crude, and at this rate, the gas stations will be ~paying us~ to fill our tanks by Spring….

  19. I added some scout positions on QQQ and GDX as well, now I really am done for the week. All the best to you.


  20. Covered about half my shorts, and am now back to net long…

    Emotions aside, looks like a rally “from here” looks easier than a continued move lower…
    To me, anyway… Clearly, not strong conviction here, but still, taking a stand..

    [video src="" /]

  21. Chances of a bounce are elevated, thats not to say we wont go lower over the coming weeks. I am certainly not going short close to strong support….and haven’t as per earlier posts:)


  22. John H, I was surprised that you expect stocks to bottom in 2025 which is likely to be a solar maximum, as I’d assumed stocks tended to rally into the maximums.
    Are you expecting the manic rally to be in gold for the 202-2025 period?
    My view: stocks hit a secular in 2020, but then gold and stocks rise together for many years, driven by the Western collapse (gold) and Eastern/Silk Belt advances.
    I also expect the EZ to scrape through, with most of its sovereign debt gone, via default, or settled post-GOMO using official gold reserves. Small governments should remain, and reasonably open markets (ordo-liberal approach). The risk everywhere is totalitarian outcomes and war/civil war.

    1. I second this view, with the caveat that if Nikkei 1990/2000 is the analog, Shanghai might be hitting bottoms in 2025. Global stocks would surely have recovered from their lows by 2025. Hussman suggests 0% returns, which if true, can be made by -50% and then +100% over the next 10 years, which means we are off our lows even if we go nowhere.

      1. The q ratio chart in the post above shows there have been 3 solar maxima where stocks made bottoms and commodities/gold made a peak. Then by demographics I see us in a Japan style long secular bear, which fits with gold enjoying a long secular bull. Doesn’t mean we won’t get cyclical stocks bulls within that. So thats how I calculate it.

        1. Thanks John.

          It’s surprising that we have 3 maximums where stocks crash, and 5 where stocks are high.
          But…16 and 17 could be compared to 23 and 24 in terms of the bubble bursting for stocks.
          So maybe 18 and 25 will be similar too? As a gold owner, I hope so!

          If it helps anyone, here’s a post I did with some charts on long-term gold miner cycles, and we appear to have a lengthy cycle up dead ahead:

          Also, fascinatingly, I found this chart last year, the writer has re-posted it only this week, and it seems to extrapolate the bottom in bond yields/shares (based on a cycle/mirror) to around-about….wait for it…2025.

          It’s nice when a few different factors and views coincide, certainly gives one confidence one is on the right track. G.

  23. The bounce from any support is quite normal. But normal is not often seen nowadays – correction – make that for some decades already. Now I am not sure that anything has ever been normal. But nonetheless things are appearing to be even less normal nowadays.

    1. A few factors are slightly unfavorable toward any significant bounce here, viz: volumes still increasing, momentums still slowing, TRINs peaked a week ago, last new moon inversion, upcoming full moon bearish, DOW closed below 16000, plus failed ending diagonals not yet at their “normal” baselines for “normal” (i.e. not failing to give new high) behaviour.
      But maybe a dismount into a hand stand will win a gold medal.

      1. And now Caldaro comes to the party with target of 1100 for SPX “in a year or so”. Thats like getting the reels mixed up in the cinema and giving the kids a horror instead of a cartoon.
        From crazy bull to crazy bear – poof!

        1. yes, Caldaro’s approach sometimes misses the major turns. That’s because he goes with the most probable count based on his studies of using objective criteria to determine wave structure. I haven’t taken his course, but my guess is that he uses things like RSI, MACD, Stochs, etc. to objectify waves (based on statistical analysis of how waves have behaved in the past) and then creates the count from there. The problem is the outliers, the exceptions. His charts usually just has one count, sometimes recent price movement is market tentative. This works for smaller degree counting, but for large degree he posts the most probable count. There’s always the chance that one of the lesser probabilities will rear its ugly head, and the problem there is that it may take a while to confirm that lesser probability which is what happened in this case. Therein lies the problem with OEW.

  24. Long WE, all global indices approaching crucial support that needs to hold or all hell could break loose..
    What are the chances that the bean counters launch a covert operation on Monday headed by the number one “baked bean” himself Mario Draghi, that sees follow through to the US Tuesday?

  25. PALS SPX next week:
    Tides: Low on Monday, rising Tuesday to Friday
    Moon phase: Full Moon on 24th, Saturday; bullish Wednesday to Friday
    Declination: Equator crossing 15th to North, bullish Tuesday to Friday
    Distance: Perigee 15th, bearish all week as lunar distance is now increasing
    Seasonals: Bearish all week post opex January
    Planets: post Mercury conjunction 14th, was sell off due to this? Quickly rebounding is typical after deep sell off on or within days of this conjunction.

    Summary: Was long and wrong last week. What will next week bring? Don’t know but hope (not a strategy) that SPX sell off will retrace back to the 50 day MA before falling further.

    1. Hi Valley,

      I was long and wrong also last week, not surprising as we use similar inputs. I was expecting a turn around 11th Jan. No real damage as FTSE was only 100 points below the low of 11th but it was a hairy ride. I am looking for a bounce this week.

      One question:- I take increasing lunar distance to be positive and decreasing as negative. Less lunar effect at apogee, more at perigee. I was wondering why you have it the other way around.



      1. Hi Kerry, my research shows that if you buy 4 calendar days after apogee, and sell at the open of perigee or trading day before if on weekend, you gather much of the gains over the last 18 years. Greater lunar distance is cause of low energy, low tides. Closer lunar distance, higher energy, high tides. This energetic effect seems to have effect on equity market in US.

  26. The Hang Seng looks positively SCARY!… It’s pretty much sliced through ALL remaining significant support and let’s not forget where the 87 crash began.

      1. John, it obviously wasn’t the cause but it is where the big downward momentum began so it set the tone heading into European trading and then the US.

        1. Hey Allan, Martin Armstrong has an offer for you in a recent post:

          ‘I can read a book on how to do brain surgery. Would you like to be my first patient?’

          Lol, poor guy, must be under some serious stress.

  27. Bankster injustice strikes again –
    No mention of the perps or their personal gains from illegal behaviour, instead the taxpayer is the perp yet again. Drug lords and terrorists got nothing on this hellhole of a oligarchic system.

  28. GM – A few quotes from a very old book. Morocco or Iceland may not be far enough away. “Also, there will be signs in the sun and moon and stars, and on the earth anguish of nations not knowing the way out because of the roaring of the sea and its agitation. People will become faint out of fear and expectation of the things coming upon the inhabited earth, for the powers of the heavens will be shaken.” “They will throw their silver into the streets, and their gold will become abhorrent to them. Neither their gold or their silver will be able to save them…..”

    1. Teach a man to fish and he will take all your rods and then all your silver and then all your gold so that you may eat well. Then he will take your house and charge fish for rent and hire out to you your own rods. And the circle of life will continue.

    2. siggy, I’m thinking some farmland might be useful.
      Time to focus on getting the most out of every day, as ‘normal times’ are soon to be consigned to history for a very long while I fear.

  29. Some times Cycles make really really deep troughs….It’s hard to predict the end of the world isn’t it….because it only happens once. 🙂

  30. GM, I’m looking forward to how Martin A is going to talk his way out of his 23k DOW or higher calls?………….AND not to mention his calls for gold to crash under $1k, just like he told everyone to avoid buying Au back in 1999 until it had ceashed under $200………DOH!

    He’s sucked in soooooo many over the years. I too was one many years ago but eventually I saw through it 😉

    1. He’s quite clever (sneaky) as he always hedges his bets, and then veers off onto the time aspect rather than price.
      I’m guessing you won’t volunteer for his brain surgery training programme?

      1. Lol, I don’t think so. As for sneaky, that’s one word. Cunning is another. He’s made a career out of it, not to mention millions of followers
        JH is all over him as far cutting edge market analysis goes. MA just has one very very BIG trumpet thatt he likes to blow incessantly……..ABOUT FRICKEN EVERYTHING!

  31. Valley – I got long last Monday too, and added on Wednesday and Friday. Positions aren’t too far underwater, but definitely didn’t time it very well. Should’ve stuck to my prediction of a bottom coming January 19-22

    The arrows on the chart are my buys/sells since November 2015

    1. My account is about 15% long right now. I like to keep my trades at 7-10%, so I’m a little overweight by getting in too early.

    2. Thanks, Geno. There may be a big sell off Tuesday morning, or Wednesday morning according to my calculations. I am staying in until Friday for sure.

      1. Hi Valley,

        Did you short last week wednesday and do you stay short till friday before full moon?
        I sold my AEX calls today ..

        Good luck.

      2. Very nice calculation Valley I bought calls today on the AEX I hope I m not an early bird in this drop?
        What do tou think of next week a rebound?
        Until now the market repeats itsellf likeJan 2008 so if this is a guide this year will be a big rollercoaster.

        1. PALS is bullish until Friday’s open, somewhat bullish until Friday’s close, and mixed next week. I don’t know if some news will happen this weekend that causes a big rally. Seems like early February may be the low of this sell off.

    1. Not trying to say you’re wrong, in fact you could very well be right and a good bounce could be coming right up. But taking a look at that link you posted previously regarding cycles it seems the 22 weeks from trough-to-trough is just the median estimate.

      Quoting directly from

      “Now in order to understand how a cycle is translated you first have to determine the average duration of the cycle. In our case we are going to focus on the intermediate degree cycle in the stock market. That cycle averages 20 to 25 weeks trough to trough. The median being 22 weeks.”

      So this means the trough could potentially still be coming up anywhere in the next few weeks, according to Savage.

      1. It all depends on where you decide the last daily cycle low (DCL) was. Most believe it was at the mid-November low, in which case we’re right in the timing band for a DCL to have hit on Friday. Savage believes it was the mid-December low which, if he’s correct, would have stocks headed lower for another 2 weeks, maybe longer. There are valid arguments for which date you choose to mark as the last DCL, so… flip a coin?

  32. Rather than trying to predict the future, these guys and certainly anyone trading should look at the risk-reward ratio and go with the flow. If you have a fairly deep correction with oversold levels and positive divergences which stops near long term support – the chances are quite good that there is some sort of bounce. How high the bounce no one knows, but there are targets to shoot for where price has found support, resistance and so on above.

    These guys who try to predict the future through blogs and I assume through subscription services in some cases(?) are really just preying on people’s hopes – that someone will be found that can “see the future”. This will be a fruitless search as has been shown time and time again. Basically, everyone and every system is wrong quite often. To expect anything else is imbecilic imho. And just to be clear, I am not referring to anyone in particular here – I am talking in a general sense.


    1. My problem is coding truisms like this. If it is indeed true, a computer would be able to handle this “going with the flow”. And yet for every example I see where stocks bounce at any oversold indicator, there is a counter example such as 1987 or 1929. The distribution might not be a coinflip — one can be right 4 times but be very wrong on the 5th time.

      Every trade is a prediction of the future. When I see quotes that say not to predict, but to react, they usually really mean to follow some sort of a trend.

      1. John Li, whilst you may be right 4 times and VERY wrong the 5th time, provided you have ‘executed’ your trades with due diligence i.e. sensible stops to get out at and targets to take money off the table then surely your win ratio to lose ratio must improve. No?

        In fact anyone who trades successfully MUST do that.

  33. Well, this is why I never speak with “certainty”. All I said was that that under the conditions specified above the “chances” of a bounce are elevated in my experience. I am wrong (at least in terms of getting stopped out) about 62.x% of the time over the last 12 months, but I never get it “very” wrong because I use stops – which I would recommend every trader does. If you look at historical charts back to 1929 or even 87 when I was a young teenager, I cananot say whether the patterns and/or behaviour was the same as they are since I have been trading (later 90’s). For example, I went long QQQ at 100.22 with a stop of 97.9. This is not because I am bullish, it is just that when price halts with oversold and divergent conditions my experience tells me it is not a time to go short unless support breaks on volume, this does not mean that a bounce is certain or of significant size, but because support was not violated there are market participants that are more likely to be buyers at a time like this. Even if for a short time…..Another time I could decide not to take the trade at all…..

    Why would you want to try to make a computer do this? You have something better to do??:)


  34. I mentioned the other day how this rebound(if you can call it that), looked totally differently on the intraday charts compared to previous rebounds of the last 7 years.
    It keeps resonating within me something that John said over 12 months ago and that is that once the second chamce had come snd gone and the waterfall declines had begun, bounces would be short and shallow and fail to find any traction.

    And that is exacly how this appears to me at present, like I said particularly in the intraday charts.
    The BTFD appears to be well and truly dead and those playing the rebound trade could be in for much more than they bargained at some point.

    1. It does indeed have that character at the moment Allan. Just one thing: in 2008’s waterfall declines there was a neg feedback loop with economic and corporate domino developments. Might need something similar here to seal the waterfall deal (problems coming to light).

  35. Indeed, this is a distinct possibility so please ensure that you are using stops at all times in any case.


  36. Of course, the market is not going to make it easy in terms of stopping at support and bouncing so that everyone who wants to can get in and ride the wave – so again in this scenario there are only really 3 options available to us:

    1. Go long
    2. Go short
    3. Stay out

    In my experience, “waterfall declines” occur when there is catastrophic stress in the market, and/or fear due to that or other serious developments. It doesn’t happen out of thin air where everyone just decides one day to sell. So, from my point of view and experience, price action will dictate and either hold or break through support. If the 1850 and 1820 breaks on good volume I will be stopped out before that and I will normally wait to see whether the break is a fake – and then go from there. As a trader, I am not going to sit around and wait for 4-10 years hoping for waterfall declines to make some money:) – I try to make money whichever way the market seems to be going on a “swing basis”. That is to say I rarely have positions that are open for less than a few days, and quite often for weeks or months.

    There are reasons why markets never go in a straight line, whether you decide to try to profit from this or not is up to the individual….


  37. I was out most of the day, but what a weak bounce, and the subsequent falls must be of concern to bulls.
    I think we’re at that point now where everyone will sell due to a variety of fears. Down to 1700 ES within days maybe?

    My query to the board today please: Any E-wavers (Peter_) like to show a chart of HUI long-term for me/us please? It’s broken a long-term support level today, even as gold holds up. I am sniffing capitulation again, possibly as the broad markets decline imminently. Time to deploy capital…..? How many capitulation can there be in a bear market?

    Also, Allan, I have read and seen that at the gold bottom back in 99-2000, it was miners that lead gold upward. With miners falling, do you reckon they will drag gold back down, or is it a false break-down maybe? I feel the next month or two will see the bottom in both gold and its miners anyway, just pondering the moves that may lie ahead. One certainly needs patience in these gold miners, and in gold.

    1. These are the better performing gold miners, with Harmony way out in front and wildly volatile.
      1 Harmony
      2 Sibanye
      3 Goldfields
      4 Anglogold
      5 Agnico

    2. GM as I have mentioned before my best leading indicator for gold, better even than the XAU or HUI is the ASX gold sector which is currentlly in a massive basing pattern with many individual miners already having broken upward months ago.
      If it had only been a few miners that had moved I wouldn’t be so convinced that this was a base pattern and not a continuation pattern, however there are many many miners that have moved significantly off their lows and are in the beginning of bull moves.
      The problem with the ASX gold ndx is that it is heavily weighted with a few majors that are currently holding it down as they have not quite shifted up gear yet, but it will break out of its base pattern.very soon once these begin to move as well.

      1. Thanks Peter_ and Allan.
        I will take my junior miner positions soon….I am expecting gold & its miners to have their final lows within 2 months, as equities have a final (weak) rally. I could be wrong and miss the bottom. We will see.

  38. Mad as this sounds, we are heading towards 15,500ish on the DJIA before this thing reverses. However when it does reverse it will retrace a HUGE amount and MAY even challenge new ATH.

    I’m back in Blightey but too tired to post a chart. Hope to do that sometime in the next day or so.

    1. The chart requires 15370 or less to confirm the bear. SPX has now signed up to join with Europe on this project. We look for Nasdaq and Dow as essential partners to ensure success, but how can they refuse such an invitation? Once everyone has joined up there will be a preparation phase and possibly a delay waiting for promises, but the interest will increase and then we will be on our journey into the bowels of the dragon that must be slayed.

      1. Peter_ according to the IG charting service the intraday low on the 24th August’15 was 15253. However since the drop to ‘whatever’ on 24th August was a 3 waver then all I am expecting is a Flat or Expanded Flat before it reverses. As it currently stands both the rise to the early Nov high and the drop from there are also 3 wavers. So at least on the DJIA the triangle interpretation that Alphahorn was talking about is still alive. However I believe the current down wave is ‘b’ of ‘B’ with another UP (‘c’ of ‘B’) to come AND THEN…. a final 5 waves down ‘C’ which will convince everybody that the Bear has arrived.

        I know this is hard to follow without a picture so I’m hoping to have one soon.

        1. CFD chart I presume. EW best applied to underlying, being the basis. Futures can also generate different highs and lows that can give conflicting counts at critical junctures. Best EW results (and all indicators) arise with instruments that are always enjoying high numbers of competing traders.
          So far the failed ending diagonals (many indexes, many of which are quite imperfect) have played out. But with dramatic failures of these patterns where they constitute the entire 5th primary we are in uncharted territory where small chance exists that nothing will surprise. However I will eat your hat if we see any new ATH in at least the next 3 years.

        2. Sorry but I’m holding on to my HAT for dear life. It’s gone miserably cold in Blightey and I am NOT giving up my hat to ANYONE FOR ANY REASON.

          However I would not at this point rule out an ATH during this year. If it doesn’t happen by then then I suspect you’ll be spared from attempting to eat my hat.

    1. It’s the same as before isn’t it? I think it’s called ‘nested threads’?
      What do you think is different out of interest?

      1. The whole site has been redesigned for starters.

        There seems no link to this comments section that is obvious.

        I only found it as John put a link in a comment somewhere.

        1. It appears that psychoanalgesia is best performed using the hypnoreflexogenous protocol. I think I should try that approach.

    1. Yes John absolutely. As in 2001 it took a little while for gold to warm but once it did….well the rest is history!
      I can’t help but think that if this gets bad, really bad, that US rates go negative. If that be the case then what will those “gold haters” say that over the years have rubbished gold for not paying a “dividend”?
      Let’s see how they feel about gold when having to pay the banks to park their $$$$$$$!!!!!!

      This is gonna be fun 😉

    2. Hi John great site
      With gold it seems to be following the property cycle (Philip J Anderson)
      Gold reached a high at the bottom of the property cycle which was 4 years after stock market crash. 2011.
      If this is so then around 2018 give or take a year gold should rally as the property cycle takes a breather.
      Then it could go back down and as the second part of the property cycle will peak at 2025.
      2025 gold will go up again.
      Just a guess.

  39. Everyone seems to think the miners lead the metals; and I can’t argue with that assertion based on history. FWIW, I wanted to report my observation that on August 26/31 in 1976
    when gold bottomed at circa $101, the miners bottomed at the same time. Correct me if I am
    wrong, but I don’t see that the miners led the metal when a new bull phase began.

  40. I hate to be a party pooper here but the action since early Nov does NOT feel ‘waterfallish’. The 24th August action would be a much better fit.

    All I am suggesting is that everyone keep open the possibility that we are near a ‘bottom’ with quite a BIG surge upwards.

    At least on the DJIA it just looks like either a ‘Flat’ completing OR part of a Flat. The thing with ‘Flats’ is that they retrace ALL the way back to their origins.

    1. Here(DJIA) and elsewhere I see a falling double zigzag after the diagonal so far, with this the last leg of it. Expecting baseline zone bounce, with most of those indices that show diagonals being beyond that point already. But not holding breath due to the abnormal (never been seen before) nature of the fail pattern across so many examples. My gut goes for 50% of the waterfall move from 1st Jan is now in.

      1. Peter_ do you have a target for this bounce? Since I’m calling for a ‘Flat’ I can only say that it will come close to the recent highs although that is just ONE of the possible outcomes. It could of course carry on much further…..hence my call for a possible challenge to the ATH.

        The ONLY thing that worries me about this decline….is that it’s not over. My trend line from the 13 Jan intraday low to the 15th Jan intraday low has not been violated and since this is an Ending Diagonal I’m expecting it to go beyond the trend line (a throw over).

        1. FWIW: SPX 1900 then ranging to 1860 for some degree of indicator resets with upcoming full moon having a say for commence of next downleg. The delayed action of commercial selling will meet with the bounce expectations from the specs. The ATH I look for is with the volume for the upturn bringing the reconnect of mega bankster leverage for a few months to levitate all the dead cats in prep for the global funeral march into 2017. But no expectations of any sustainability above SPX 1900.

        2. Thx Peter_ I could live with the first half of that scenario. I’m not much of a ‘long term’ guy. I tend to ‘look after the pennies’ and have found that the ‘pounds generally follow’.

  41. As bearish as I am on the bigger picture I feel a bounce coming….a BIG bounce. The Davos World Econoimic Forum has a surprise or two up its sleeve I suspect.

  42. An “Intermediate” rally in Energies and Stocks is underway. If it last for longer than five trading days then it might have legs and be a Medium or Long Term rally.

    1. Nic’s back, hello Nic!
      Seems only a week or two ago you were predicting the same stuff, but from $35 oil?
      Guess that weird system you advised JH to read about is to blame eh?
      I think you’ve suffered (yet another) big credibility gap down.

      1. It wasn’t really a call was it, more of an observation of what was already happening, followed by an ‘if this, then that’. He’s not as confident as he was a few weeks back, for obvious reasons.

  43. I would be very careful with the energy sector at this point, a lot of stresses building up there. If they start rallying without crude flying 4% in one day then the case would obviously be stronger, but I am staying away from that sector for now. I think we will see 20usd crude before the summer……either way, I have been trading CRU both ways a bit recently and although profit has been made I am not sure it has been worth the risk…..:)

    I am keeping an eye on 5 refiners though, that could be an interesting short when the time comes…..

    Good luck though as alays.


  44. I think lower prices ahead but we go up and sideways for a week or two……I am looking for something around 2000 on SPX potentially…….

    Just my 2 cent guess…..


        1. All certainly possible. Pre-FOMC rallies are common. However, I like to see more capitulation, rather than the weak activity yesterday.

  45. Just gone short FTSE100 via 3x ETF, 40% position.
    Probably just a day trade.
    I see descending trendlines and lateral resistance on FTSE at this level, and also on ES.

    Moe thinks a triangle before lower:

  46. Hey GM, did you take some @%@%&*% profits at all or what? You could have retired a couple of days ago????:)


    1. I got out of my shorts on 7th January jeger, I did report it here, I was still on holiday, think it was a 21% gain, having missed previous gains I felt happy closing the positions (a tad too early with hindsight).
      The new position is now trapped, as it can only be traded during UK market hours. A sell-off before Monday’s open would be welcome.
      I will retire when gold is subject to ECB GOMO in a few years!

  47. Ok here are some ‘pictures’ to go along with the narrative I’ve been spouting. Bare with me on this one (…or not) because it does get convoluted.

    The first one below shows the action since the August down wave. On that chart, I believe, that the late August low was wave A. The subsequent up to early Nov high is wave a of B. The next wave down from there is wave b of B. I’ve tried to break down this one further into it’s constituent parts.

    The little blue square at the bottom right of the above chart I have then enlarged into the next one. That shows an Ending Diagonal with it’s trend line. However as you’ll notice the last down wave didn’t get near to the trend line which is RARE (and therefore makes it marginally ‘suspect’)

    The action since then and into this morning is clearly a ‘Leading Diagonal’ as shown by the red count.

    The MAIN thing I’m trying to explain here is that wave B is itself made up of 3 huge waves. My REASON for saying that is that both wave a of B and b of B are in 3 waves.

    So….what does that mean in terms of what may come next? I believe that we have a wave c of B to come which will reach the early Nov highs at least. Thereafter we’ll have the ‘waterfall’ wave which will be wave C down. Depending on whether wave c of B just reaches the Nov high OR it goes much higher we will then know whether wave C will just reach the August lows or go much lower. i.e. just a Flat or an Expanded Flat.

    In the VERY NEAR TERM… since the red count is a Leading Diagonal then I’m expecting a drop to near the start of that wave i.e. towards the recent lows BUT NOT going past them.

    If nothing else this exercise has highlighted to me the need for a better charting service!!

    If anyone’s got any questions then please do ask.

  48. Ugh!! The rules on this new site seem to be that if you post more than 1 chart then it goes into ‘awaiting moderation’. The previous one allowed 2.

    So I’m going to split my post up. John H, please may I request that once the 2 posts are shown that you delete the composite post. Thanks and apologies for the extra work.

  49. as anticipated. we have hit 5% retracement from the 1.20.16 bottom. what a counter trend move in oil. managed to back money on $nflx put spreads today despite all the green

    buying some NRG for my 12 month holdings. otherwise in cash going into huge earnings next week for amzn fb baba biib aapl

  50. i think we rise until next bradley turn date of 2/5. w/ fang releasing, hopey changy in the market, counter trend 15% bounce in oil. and spiral targets 1995 on the futures contract in early feb. chinese new year 2/6/2016. year of the monkey

    1. Hey GM

      Most wioll be watching this, I know I am:) I have a half weight long from earlier at 1905 and a new one undeclared from 1858 (just fyi). I do believe we need to take a look at 2000-odd over the next week or so, but will set stops well in profit just in case.

      Good luck all!


      1. The USD is in a mega bear market since topping in 1985. For the last three decades it has been making lower highs and lower lows.
        We have just made another lower hgh and double-top. Get ready for a collapse in the USD. The US is the most indebted nation in history and has massive unfunded liabilities.

        1. Yes, agree re the mega-bear Allan, but let’s see what comes next, a higher high looks more likely for a year maybe.
          What did you think of Snyder’s thoughts?

  51. I see Delta points turning with the full moon and inversions bring a down market to new all time lows with the snow.

    1. “I see Delta points turning with the full moon and inversions bring a down market to new all time lows with the snow.” – John Li

      So lower than 666 on SPX? What time frame?

      1. Obviously not Dow Jones Lows since inception. I am looking at 5 years as “all-time”, which would be true for stocks like FB that IPOed in 2012.

  52. My short has a tight-ish stop, which I may loosen a little depending on Sunday night futures action.
    It now seems to me that literally everyone has called the bottom, and that we’re going to bounce up to various levels.
    Hmm, I’m not so sure.
    Yet to see any panic, bulls still complacent.

    1. Well, clearly it was some sort of bottom which is why shorts cover and go long. A tradeable bounce of 5-10% is very important to making money when trading:D How high we bounce is ofc anyone’s guess.


    1. Full moon: December 25th, market started crashing within 2 trading days.
      New moon: January 10th, brief mall rally.
      Full moon: tonight, rally on Friday, will it continue on Monday, or will inversion take it down, as per Kent’s comment in the link?

    2. Hot for download – Making a Murderer – now threatening to murder Netflix shorts.
      Snow melting, rain due before Fed.

        1. Both counts disregard the probability of the recent failed primary 5th via full ending diagonal. Since that fail mode was echoed loudly across many major bourses I have adopted its message to be heralding systemic seismology with waterfall to A at pugsma C2 moving C2 towards the 9th planet.

  53. I am looking for 2000-2040 and if seen I will probably start to layer out my calls and longs. We have some work to do to get there though!:)


  54. Asia opened up, Fed moved rate announcement to Friday. Blizzard in NYC and Washington is over. Maybe ES will dig its way out of the 1900 level back to 2030 by Friday.

    1. Valley is this your astrological opinion or personal opinion? Just above you were saying new lows by the first week of Feb?

      1. I guess that Friday announcement was incorrect. PALS is on the negative side this week. However, if the Fed meeting was changed, and my anticipation is market would sell off after the Fed meeting, I thought that this week might offer a good long opportunity. So I loaded up long at 1885 on the spx. I will stay in this position into Friday anyways as last few days of January into February first is usually bullish seasonally. Also, there are several high probability up moves in mid February, March, and into April 15. So if I get some up side, will switch back to PALS, yet if market stays below 1900 will stay fully invested on seasonals alone.

        1. I did read some local Fed talk postponed — was it Atlanta? Regardless, that might have been what you saw.

    2. well, looking at 2008 we are still in correlation if so we could go up till friday Jan 29 /feb 1 and after that sell off in 3 days to a higher low..
      let’s see what will happen.

  55. Now the pictures have labels when you scan them. Before, they didn’t. Now I can make sense of it.

    Surely it would be better to have the labels showing all the time whether scanned or not !

      1. John

        I had the same problem without the text shown for about 30 seconds after you launched the new layout. However, if you are looking to attract new users it may be beneficial to put a bit more info on the home page…..


      2. It’s reasonably intuitive on my laptop, but it looks different – and not intuitive – using my tablet…
        My introduction to your new format was via my tablet, and I never figured it out… I eventually just gave up, honestly…
        After trying it again from my laptop, it took a minute, but was much easier to understand and navigate…

  56. I think that one of the best markets to “buy the dips”, for the next two years, will be American Natural Gas as it channel trades higher for 2016 and 2017.

    Latter this year I will be looking to begin “buying the dips” in Crude and Silver. (Yes, that is correct, Allan, I did say Silver).

    1. I suspect that not only are there long term fundamental changes in the –American– NG market but, also, there are fundamental near term changes too. I suspect that Americans are becoming “shut in-s” for many different reasons and that they are keeping their homes warmer than usual with some of the savings from low Gasoline prices which helps to explain the record NG “burn” rates in 2016 so far:

  57. Everyone expecting the bounce to continue: therefore it fails. No more buyers, sellers now in control again, expecting bottom to be re-tested shortly.

  58. FWIW – I added some long exposure to SPX at 1862, with a stop somewhat below the LOD – tighter than I usually like but lets see…..


  59. I have covered all my stock shorts and I am looking to go long. Delta’s S+P 500 eighteen point Long Term points have been unusually accurate over the past year and its L-7 as a low is now due. It is possible that its six point Long Term rotation L-3 is also a low instead of a high and could be coming in with L-7.

    At this time I think that long “American” Natural Gas is the best trade.

    1. Same here. I am covering my shorts right now. Even though SPY is up, IBB is down quite a bit. My model doesn’t like FOMC meetings.

  60. Thanks John for the link to this Mahendra fellow. I would just remember that no one can predict the future, no one. Whether what he is selling is useful or not, I don’t know – possibly, but I don’t think I am going to find out for the reason I stated….:) If he wasn’t so sure, and did use words like “should or could happen” I would actually be more inclined to take a look…..

    Isaacson, just taking a look at the price action for NG – I don’t see a compelling reason to go long or short at this point. Reading your posts above I am not quite clear why going long is a good idea? Keeping homes warm….meh……but increasing exports to Mexico could be interesting to monitor, allowing for flat price change and of course also demand and what the supply/demand picture is in Mexico. I don’t normally trade too much NG, so if you have any further data that can be shared I would take a look.


    1. In addition, one would need to consider the USD before taking a position in a commodity such as NG. My view on the USD is well known, up up and away for a year or so I reckon. Down with commodities therefore.

  61. I closed my shorts this morning, my lie-in cost me dear, but still a handy 2% profit banked, so can’t grumble.
    Currently unsure what will happen next, but nice to see gold doing OK.
    Suspect a rise to FOMC, and a good shorting opportunity at that point.

  62. Big swing from negative to positive today. Could be the start of a more sustained rise. Shorts all closed for me although I missed the majority of the drop.

  63. You should be able to feel the effect of that consumer confidence tablet surging through your algorithm, unless it is another fake from the far east side.

  64. The rally in the Canadian Dollar could be a signal from Mr. Market that the lows in the Energies is in. A rally in the Energies would increase the odds of a broad market rally in stocks.

    1. The Industrial Metals, Copper and Silver, have broken out to the upside today. This is more evidence that the Bear Market in Commodities is over.

      1. As of today I am going to consider that the Bear Market in Commodities is over and, therefor, to start “buying the dips” in Commodities.

        This is also causing me to consider changing my opinion of Delta’s stocks six point L-3 as a low instead of a high. Both L-7 and L-3 are due in January and if they are both coming in together as lows then it increases the odds that Super Long Term point 7 is coming in early and stocks are on their way to new ATHs and beyond. This is a major change of opinion about the markets for me.

        1. More correctly Richard, you made the exact same declaration a few weeks ago.
          Back then oil was at c. $34, and subsequently plunged to $27/8.
          So, let’s see if you have more luck this time?
          I suspect you’ll be proven totally wrong once again, as I think industrial commodities have much lower to go.
          Good luck.

  65. This ‘bottom’ in ES looks very different to the previous two plunges, both of which had very swift recoveries, with plenty of ‘uumph’ behind them.
    This time, no uumph, chopping around, unable to gain much headway to the upside.
    A sign that the bulls are exhausted, and there are now more bears at these levels?
    Hard to see ES 2000 being reached, maybe 1950 though.

    1. I am still a bear. I jest but still believe new swing lows. Got out of IBB at the 10am lows this AM, and will short in the next day or two again.

      1. Oh I realize it could be confusing because I said “Same here” above.

        I read “I have covered all my stock shorts…” and I tuned out the rest of the message when I said “Same here”.

  66. This week PALS is mostly negative, and this continues into next week. Fed meeting acts as price magnet most times, which is why I went long Monday at lows. After Fed announcement, I will be lightening up my spy long position. Shorting so far below the 50 day moving average rarely pays off especially from late January until April 15.

  67. April 15, tax day, in US acts as one of the most stable price magnets there is for the spy, regardless of selling in January or February, market tends to retrace into that day. That is another reason I want to buy dips, cause if market continues lower, I hope to be able to exit higher by that day.

    1. Was surprised to read this valley. I thought you were day trading?
      Surely you would sell the rips on down days (like in 2008 and 2000), and only start to buy the dips nearer April 15th? Hard to trade Feb and March based on something weeks and weeks away.
      Good luck.

      1. I focus on day trading the e mini. Yet in another account I swing trade the spy. Helps to have both short term and medium term perspective. If short term bet goes awry, exit. If medium term swing trade goes awry, remain in if seasonals are compelling in direction of trade.

  68. From my perspective we have recently carved out some sort of bottom, obviously it is not clear whether it is a pause in the selling or an intermediate or long-term bottom, but personally my view is that one either trades these set ups on the long side or one stays out – going short near a support level is not good trade in my eyes. I dont know if the PALS system takes into account recent price action is the reason for mentioning this, if the system says “buy” then thats what you do? I thought this system was a short-term swing system – positions over a matter of a few to several days – not day trading?

    In any case, all the very best of luck to all. FWIW, I am considering closing part of my SPX longs over the next hour or 3 if we cannot regain at least 1900 in that sort of timeframe – but it is going to be difficult to trade this week well I suspect….


    1. I agree jeger, but if the game has changed (to bear) the risk/reward of shorting here with a tigh-ish stop could be attractive. Hence I think one needs to either have a view on that, or sit it out.
      If I could trade US times (as opposed to only UK times) I would be shorting now. But maybe tomorrow will allow an entry. Likewise, gold has the potential to pop up to $1200, if it can creep over $1120ish. Much to be decided today/tomorrow.

  69. The geriatric force shall awaken to tea and waffle, meanwhile the rest of planet x will partake of a free vote where the early pollster results suggest a broken trampoline is imminent.

  70. The time has come to “buy the dips” in:

    1st: American Natural Gas
    2nd: American Heating Oil
    3rd: West Texas Intermediate Crude.

    And maybe, just maybe, the American S+P 500/DOW stock indexes.

    1. Over the past several days, intra-day, has Copper been leading WTI Crude and, thus, the S+P 500/DOW stock indexes higher? Could it be that WTI Crude is not leading American stocks higher but that Dr. Copper is?

        1. I agree that 1950 is possible — I think FOMC is quite dovish. More sunspots recently too.

        1. Thanks that is what I need I kept my AEX calls the Oil rally caught me by surprise..

          The bradley,spiral and Alphee are still up into next week (middle or end)

        2. PALS suffers from far south lunar declination, and post perigee next week, seasonals are ok, and new moon lead up week is good usually. I am fairly certain we rally into Friday. I am doubtful about next week.

        3. Hi Valley sold my longs this morning I hope you will see your SP 1930.
          I think B.O.J saved the day.
          What are you plans for next week we have Sean spiral date Feb 5 Bradley Feb 3-5 and Mercury Feb 6

    1. Thanks! I was up a ton, wanted to let it ride, lost a ton, didn’t want to be down on the day, and then up four tons *if* I had not gotten out.

  71. John Li

    I look for the bradley dates on Time Price the Helio and Geo version
    The last Helio version was Jan 19 .. bottom …well the 20th was a big bottom next top Feb 3 or 5
    Or a bottom don’t now?

  72. Can anyone spell “v-o-l-a-t-i-l-i-t-y”? I added a bit more SPX long exposure at 1877, again with stops fairly tight. I got stopped out of my QQQ long last night for a 0.2% profit……and closed my gold longs yesterday as shared here. Still long soy, corn, gdx and POT. and short UPS which looks like it will be stopped out at break even very soon…:)


  73. i just closed my GDX longs, the price has been capped by a descending trrendline for some time and as there may be a reaction I will take the profit now. If it breaks out I will re-enter.


  74. Market thoughts:
    My Trading System went to a “Buy” last night, and while I have not enough cajones to actually go long, I have reduced shorts to a very modest 30% net short…
    That feels like almost no position at all, but that’s what leverage teaches you… hahaha

    It looks like there is enough to get a pretty good bounce here (charts / oscillators / sentiment), but I simply don’t trust this market one bit….
    Been a good month, so going “small-ball”,and I’m looking to add to shorts as we get higher, but in no hurry as long as things look bullish…
    Call me “Baby Nicolas”…. 🙂

  75. So the global bear has been verified, so what. Go long until March, April or May. Say what?
    So the 7 year bull cycle is ended with never been seen before chart patterns everywhere. So what? The sentiment is still bull crazy for absolutely no fundamental reason, so what? Prices are so way over extended (accepted as the cause of the freak failure patterns), so what? Go bull crazy or you miss the obvious. And the obvious is – CB omnipotency. Believe in the mystic power, and know that the moon is really made of cheese.

  76. I agree the bull is broken – probably. If you only trade one direction, just wait for the right time….?


  77. Near record temps this weekend could set the Energies back to new lows (led by NG and HO). This would also pressure stocks to set back too. (By my calculations HO’s Delta I-3 is due today and is clearly a high so that its I-4 will be a low and possible a new low.)

    1. Clearly schizophrenic. Or just having a laugh at those who take him seriously?
      Just 2 days ago…….

      ‘The time has come to “buy the dips” in:

      1st: American Natural Gas’

      Mad as a hatter.

      purvez, where are you, hope you’re well?

  78. Bruno says:

    I’m a longtime follower of, John Hampson, and I appreciate alot. This time, in addition, there’s ths marvelous picture to open “targets”. You know, the mountains? They are the Langjoch and Plattjoch (italian: Sassolungo e Sassopiatto) viewed from the Seiseralm (italian: Alpe di Siusi) in the Dolomites, South Tyrol. Behind them lies the fabulous Gadetal (Val Gardena) one of the most beautiful valleys of the Alps. Gratulatins and many thanks

  79. Good job, Jegers….
    I just added a layer of shorts at my 1920 SPX level…
    Looks like we’re pretty much on the same page here, but your way actually MAKES money…. LOL 😉

      1. I’m actually at 87% net short right now…. I was up over 400% net short over a month ago, so clearly much more to go….
        2000 possible? Of course…
        I think that’s a stretch though, and my scales will be done before then….

        I would expect we’ll top out somewhere between here and 1980, but as mentioned earlier, I don’t trust this market one bit, and it could literally do anything…

        I know that’s not really a helpful statement for positioning oneself, but that’s why I’m not too levered up at this moment…. Just a LOT of cross-currents going on, and rumors/news/CB actions aren’t helping….

  80. I had a target of around 1930-35 so have changed my mind and offloaded now. Let’s see what next week brings.

    All the best


  81. Bearish momentum has been stopped so time to let the Bulls do their thing before going short again. Expecting 3-4% further upside at the most.

    1. Today was unexpected, and yet it feels familiar.

      I recall that we were shorting/scaling in 10/2014, and then at the end of 10/2014, Japan announced pension fund stock buying. The market rallied the entire 11/2014.

      Now, they announce negative rates. Is this the first shot, or the last shot?

    2. It was an initial target only, I still think its possible that we head up towards the top of the large triangle (2040ish) over the coming weeks but there are other factors that I think may come into play – and I have a bunch of SPX calls both Feb and March in any case so wanted to book profit bearing in mind recent volatility. Next week if we see a retrace down to 1890-1900 again I may get back in on the long side especially if crude doesn’t slip back too much – I will need to take a look at the charts on Sunday night in more detail. I think it quite likely that we will see around 1550-1600 on the SPX this year, so in the larger view this is something that I will bear in mind – but nothing goes in a straight line so if can bag a decent percentage of the (possibly) 1000 points on the SPX on the way there I would be more than happy.

      Just going back to the crude scenario, I wish I had gone short a few refiners already when I brought this up a couple of weeks ago but I am not sure we have found the longer term bottom in crude – although we certainly seem to have found a bottom of some sort. You will remember that I was long CRU from 3006, it spiked to 3084 where I moved my stops to break even, and then over the next several sessions it sliced through down to 27xx so the stops kicked in but CRU is trading at 3422 now….but at least I was safe…:)

      It is easy to get carried away, I note that my performance since September 1st last year stands at just over 167% net gain, with around a quarter of that in the last 6 weeks. I can fairly frequently go through periods of 20% draw down, especially during periods of whipsaw action which makes it difficult to swing trade – and bear in mind that if all my Feb and March calls expire at zero (they were OTM when I purchased) that will be a 11% loss on my pot. But, the 2030 and 2040 calls are very much in profit, my 2120 and 2180’s not so much…..:) I have allowed for a 6% overall loss on those.

      Apart from the SPX calls, I am long Soybeans and Corn and POT – but am 89% in cash now as I was quite heavy long SPX /QQQ and so on until last night. Time to really consider how to re-apply the released funds.

      p.s. and just fyi, when I quote gains it is always against my nominal trading pot only. That is to say, I have a pot which for example sake is “100”, whenever I go above 130/140 I will withdraw funds and use them elsewhere. Each year (normally) I set the size of the pot according to my overall financial situation, and the easy thing is that since 1 Jan 2015 it has not changed size if you see what I mean? Just to put things in perspective…..

      Good luck to all.


        1. Well, if you pick a period to suit – it can look better or worse of course. In August last year I was down 22% in that month alone – but that can and does happen. The longer term average (for which I have current records – so about 6.5 years) is around 53% per annum – before tax. In the last 19 years, of which I have been trading around 14 of those (sometimes hobby, often fulltime) I suspect it would be nearer 40% than 50%. I didn’t keep such good records in early days, plus I lost a load of records at some time around 2007. In 2008 for example I was down 22% for the year.

          The pot allocation also varies quite a lot. If my pot size is currently “100” – then it has also been 25 at times and in a few years about 2000. I only allocate what I could afford to lose completely without duress, and of course that varies from period to period.

          The point was really to put things in perspective and to clarify what I quoted – sometimes 53% can be enough to buy a car, other times when the pot is bigger it can be enough to buy a house. And in the years when I am negative, the losses can be quite small or enough to have purchased an apartment if I hadn’t lost it… best ever year was 246% gain, and my worst was around 65% loss – but thats pretty extreme – after all I cannot be 246% down, these are all relative to the *initial* pot……

          The main thing is, we all learn over time. Thanks to many here and others I know in the game or elsewhere the trend of profitability is up constantly from when I started. At some point it will be all I do (again), however as trading can be quite boring most of the time I suspect that I will need to allocate a large pot once again and make maybe 30-50 trades a year only on a long-term swing basis so I can get back out on some expeditions around the world and develop the physical oil broking business that I started a couple of years ago. It is very small at the moment with only a couple of smaller term deals, but there are big fish to fry now into China so perhaps it will be possible to get close a couple of big deals that I am working currently (I give it 10% chance of success) – which would open up more possibilities in time. Luckily I am employed now to do pretty much what we do here within oil, with an office set up at home so have flexibility to explore a variety of options. In truth, at the age of 44 it is a bit strange to be back working for someone else but in these circumstances it doesn’t *feel* like I do….which is what I get allergic to most of the time over the past 2 decades,,,,,but, I have done my share of commuting in London….and I don’t miss it one bit…..

          All the best


        2. With returns like 53% per annum consistently, you are beating Warren Buffet and should really consider starting your own fund!

  82. PALS Next Week SPY:
    Phase: positive all week (unless new moon inverts again)
    Distance: weak Mon Tues post apogee, positive Wed to Fri
    Declination: weak all week, far South
    Seasonals: no clear advantage, unusual volatility
    Planets: bullish no bearish factors, several bullish

    Summary: Exited long position at close Friday. Looking for shorting opportunities at noon on Monday until next Friday.

    1. Thanks Valley very good call Sp500 at 1940,

      Maybe next monday still up that will be the start of a more volatile week ahead

      For the Mahendra lovers this is an interesting link from his newsletter Jan 25-29 and the days ahead… He is not bullish on oil longterm I remember his newsletter may 2014 he called the last top that was spot on.

      Also the analogie 2008 and 2015 (Jan and Feb) is still inline if it will stay on track after Monday we will dive agian not to new lows but close..

      Click to access 25-29_january_2016_weekly_financial_letter.pdf

      To all
      Have a nice weekend.

  83. Hi folks, hope everyone is keeping well.

    I have a quick question which I am hoping John H
    or one of you other guys may be able to answer-

    Has there ever been an example of both the DJT and
    RUT trading in to a bear market (on the 20% from high definition)
    without the SPX and DJI then following?.

    Much appreciated if someone can answer.

  84. Martin Armstrong at it yet again………

    “The REAL BULL MARKET will see the metals rise with equities”

    This statement contadicts history TOTALLY! It is now obvious that MA has allowed his disdain toward the gold community to cloud his perception of fact.

    1. I guess we should start with being open to anything being a possibility whilst leaving emotions at the door? I don’t and have never read his stuff, in my experience most of these people are at least as wrong as I am on a continual basis…..


      1. J, always open to any possibility however when somebody pounds table and says ignore history, listen to me, then I am very wary of what they have to offer.
        I will always lean on the side of history first.

        1. I read Armstrong every day, often for amusement more than anything else. Some excellent typos guaranteed.
          I am intrigued to see whether he could be right about equities and gold rising together as the sovereign bond bubble bursts after c.33 years (arguably after c. 94 years).
          In the 70s that didn’t happen, money fled sovereign debt, rates therefore rose, gold had a 22x increase, whilst the broad markets were sideways for c.17-18 years.
          However, I am also mindful of cycles, and the current secular bear is due to finish within a year or so, then could be off to the races again.
          So, I’m open-minded, undecided, watchful.

  85. SPX still far from -20% on my spyphone, is it new normal corrupted? No wonder so much bear bluff bull stuff. Meanwhile the fail pattern may as well be a leading diagonal (except its wave 2 went awol). Should we suppose anything can happen, the more berserk the more the new normal?
    Why not? Been happening for years already. Another month ending dressage, bombs away.

  86. I am aware the SPX is nowhere near -20% and
    that was the basis of the question – has there been any
    example of both the DJT and RUT trading in a technical
    bear market (-20%) where the SPX and DJI have not followed.

    The DJT in particular was a lead indicator for US markets
    in 2015.

    1. For some there is only after the fact, incredible doubt in the face of incredible reason.
      Why bring it here, this site is virtually closed due to the demands and encampment from day-trading (and other) schizophrenics, doubting Thom’s and Tell Me More types who have no apparent interest in the postings of the erstwhile host.

  87. Am tracking a 10 month cycle. According to this cycle next two months are down, possibly a lot. Worst two months of the 10 month cycle. Typically spx rises into April 15, tax day. However, based upon 10 months cycle, interest rates nut that must be cracked, commodity sell off, etc., I am looking for a deep sell off in the next two months to about 1695 on spx..

      1. My Pleasure … That was on my mind too, the fed needs an excuse to make up for there bad call in December…
        We will see if the rally has more legs tommorow
        I think the next bradley dates 3 or 5 Feb will be very important this week they have to be tops
        and bottom in early March

        1. Tides obviously are useful. I use them also. I don’t see any real strength until after Fed meeting. I bought low yesterday and sold half today near close. Will sell other half if we reach 1950.

      2. Thanks Valley I should have sold my puts yesterday and buy them back today but I hope we will see new lows before the fed meeting.
        Darkpools also bought the lows yesterday but sold the highs at te end of the day..

        1. Valley,John

          Do you plan to go short before ADP today. or wait for it. How is the PALS next week.

        2. PALS next week on spy:
          Phase: positive (unless bear market inversion)
          Distance: positive
          Declination: negative until next Friday
          Seasonals: positive
          Planets: neutral

          Summary: assuming we are in mini bear market. expecting new moon to invert causing weakness next week. will try to make money by day trading.

  88. Here’s my SPX daily Renko chart. It has been great and calling tops and bottoms. It just marked a significant bottom, see ADX indicator level. It provides a pretty nice wave count as well. Like I’ve been saying, and of course I could easily be proven wrong, but I believe we just finished the shake out phase the John notes, and now we are embarking on the final push up before we roll over. We’ll see if the SPX clears 1956, then 1965 then 2000.

    1. Your recent depart brought forth the budding of the fruit of your work for our benefit. Accordingly I have become bolder by this second impulsive – increasing my exposure to the short side of CB props and the long side of gold (the trinity). You have heralded the great waterfall.
      All non-believers should now kindly take their snake oils elsewhere, or be consumed.

  89. Actually any unheard of or unusual destination recommendations for travel are always welcome. If its any good let meknow??:D


  90. Haha – I had enough of volcanoes actually – I was in Iceland hiking when that one went off. Amazing sight but felt somewhat vulnerable until I got back into civilisation….:)


  91. FWIW, as of this morning, I have decided to cover all shorts, and have actually gone long..
    I am at a 23% net long position ATM, with no real desire to add to it at this point, but we’ll just see where we go…
    That is a reversal to my earlier strategy, but it comes down to one specific thing:

    Either you follow your system, or you don’t.. One is the right thing to do, and the other is not…

    My trading system says be 50% long, the charts generally look bullish, HY is starting to go back up again, so as much as this pains me, I am now long…

    Process matters….not the result… *gotta keep reminding myself of that*

    1. Just curious Barry, what signals in the trading system changed so suddenly? Is it the VIX under 20, or an oversold condition?

      1. My system flipped to a buy several days ago…
        It didn’t change, ~I~ did….

        I just asked myself, if I didn’t have any positions on right now, based upon everything in front of you, do charts and indicators say higher or lower? And my system being long was part of those indicators, but lots of charts said “higher” to me as well..

        Again, are you a trader that follows his systems or not.. Today, I answered that “yes”…

  92. I have taken long positions in SPX and XBI – the latter seems to be in a falling wedge which I like to trade.



  93. Biowreck index is now down over 37% from nicholas’ top recommendaton price.

    i was pretty sure he should have given out some stop ideas with such touts

    1. Central Banker’s are N’s stops… He’s “convinced” of it… hahaha

      He must be on such a great vacation he’s completely forgotten to come back…
      On the other hand, his money looks ~much~ better in my account than it did in his, and I’ve been taking good care of it for him…. hahaha

      Jeger’s been doing a great job of taking care of some of his money too, I’d imagine… 🙂

  94. Well if I have it will be my turn for someone else to “take care” of mine another time…:)

    The point I made about Nicolas many times was not that it was a problem he was bullish, but more that he was a troll – i.e. no plan, no clue and on top of all that smug as f**k. It’s just not a safe attitude to have.



  95. John Li asked me earlier today about my current trade re-orientation, and I thought the following might add some perspective to my earlier answer.
    It’s something I’ve started reading (re-reading?) every couple of days, and I think it’s one of the things that helps me be better about keeping an open mind….

    From Richard Wyckoff and worth a read each morning prior to taking a trade

    “The information you can derive from the tape and from your charts is far more valuable than any that you can get from any other source. There is an old saying: The tape never lies.

    Your judgment should be based on sound premises. You have all the facts before you; assemble these and make your diagnosis.
    Decide what the situation calls for; then use courage in acting upon your decision.
    Be courageous, and somewhat bold, but with a certain measure of prudence – alertness and watchfulness combined with caution.

    Allow for the unforeseen and the incalculable.

    Learn to think and act promptly. Your decision becomes a command to trade.
    Having placed your order, never fear to revise your opinion.
    You must have flexibility; the mere holding of a certain position is no REASON for your holding it; never be bullish or bearish just because you are in a trade.

    The market always tells you what to do.
    It tells you: Get in. Get out. Move your stop. Close out. Stay neutral. Wait for a better chance.
    All these things the market is continually impressing upon you, and you must get into the frame of mind where you are in reality taking your orders from the market itself – from the tape.

    Your judgment will become poorer from the very time when you decide that you know more about the market than the market is telling you.

    From that moment your results will be unsatisfactory, for in this trading business the tape is the boss. You must learn to obey its orders, doing exactly what it tells you.

    When you can accomplish this, you are on the high road to success in your stock trading.”

    1. Hypnosis also under consideration by CB’s – e.g. you must do as the market tells you and we are the market so go long no matter what. Best cure is a bucket of cold water.

    2. Its a good thing to remember – however in my experience occasionally the market does something that I can only identify as “lying” – i.e. it shouts “go left” and for a short while it does and then makes a u-turn and lights the afterburners, leaving you bruised and in a foetal position with your clothes/bodyhair still smouldering from the heat…..



  96. I took a few pct profit on XBI and flat on SPX, the rallies are quite heavily sold into so I want to be more neutral right now.


    1. I just came here to relay my thoughts here, and I see you’ve pretty much beat me to it… 🙂

      I’m long, and holding at about 38% net long, but the market does indeed look heavy here, and it wouldn’t take much for both my system to reverse back to short, nor for me to get rid of these longs and get short again…

      Regardless, still holding long, but very unimpressed today….

  97. US$ finally finally breaks from extended e wave, kickstarts $gold break out. Good as gold for preserving the buying power of rapidly shrinking dollar value.
    China not open all next week – but its in the bounce or continue zone – needs watching for a trigger effect. The bull cycle fail mode portends significantly more drama than all this fiddle faddling, but focus appears to be in the currency markets for now.

  98. My guess is that tomorrow (Friday) will open up slightly, and then sell off significantly; further selling into next Thursday. Won’t short at these levels, but will buy with leverage if we reach 1700 to 1750 on spx. Election years usually chop into summer and finish very strong. So 1700 excellent entry for a long term buy and hold. 2004 is nice analog, with chop into summer, and rally into December.

    1. Well,I’m going to disagree with Valley…
      Obviously, the market can do ANYTHING short-term, but after looking through charts tonight – like every night – they’re telling me “higher” right now…

      I don’t have a time, nor a price expectation in mind, but just holding long and believe that’s the side to be on, right now…

      As well, and to John Li’s point, you must not believe too strongly in your own forecast, because to me, if I was sure the SPX was going to 1700, you can bet I’d be shorting the piss out of it…

      And the problem is, it just seems like ~everybody~ wants to be short right now… And my charts just aren’t telling me that…

      1. And looks like I got a new avatar… I like it!!

        Critical eye, and all… Or am I just the one-eyed man, who just see’s half of what every one else see’s? Uh-ohhhh…

      2. My charts also suggest a move higher short term but the market can change direction very quickly so I’m being a little cautious just relying fully on charts.

      3. Barry, re:”And the problem is, it just seems like ~everybody~ wants to be short right now… ”
        Where did you get that sense? I think everybody is afraid to short right now.

    2. Hi Valley if that is the scenario then we will see a bumpy ride ahead.
      The currency markets USD-Yen and USD-EURO do not look very promising
      The bradley siderograph can also fit in this scenario interesting also the big run up after the summer.

      Bumpy chart 2004…

      1. Nice chart. 2004 was also Year of Monkey, which every 12 years. 1992, 1980, 1968. If you look at each of these years they were not bullish. Monkey is smartest animal, and if market takes on that trait, could be difficult to trade effectively this year. Lot’s of snap back rallies that are fake outs, and deep sell offs that test the bulls.

        1. Thanks, I lived with a Monkey for a a long time not my favourite animal but they are smart and calculated when you think you have figured them out the season is already changing..

          The Monkey business song LOL…

          So if mister market is like that sell high buy low haha..

          Mahendra is getting a little bit nervous but is still bullish his advice is to buy this monday again.

          Click to access 5_february_2016_daily_flashnews_with_day_trading_range_&_strategy.pdf

          Good weekend to all..

  99. USD chart looks really ominous. Been saying it for nearly 18 months. Aussie gold stocks began outperforming in November 2014 signalling that gold and silver were pretty muchin a bottoming/ basing pattern.
    Since then many ASX listed junior/mid tier gold stocks have been 5-10 baggers or more in a few cases.

    The USD dollar was and still is the most crowded and lopsided trade I can ever remember and it is going DOWN with a HUGE thud

      1. US is the most indebted nation on the planet. They are going to struggle just to meet their social security bill not to mention their massive military budget.
        Certainly the Yen,Euro and Pound have tneir own issues but the USD is sittimg on a perch that is incrementally far higher.
        US share markets have attracted masiveinflows of foreign capital in recent years similar to the period following the Asian currency crisis and the lead up to the dot com bubble.
        Just as the bursting of that bubble saw massive outflows of capital from the US post dot com era, that overwhelmed any US Bond buying and led to a USD collapse and gold surge, so to are about to see a similar scenario unfold.

        This time around however, it will be far more pronounced as USD speculator positions are at extremes and whilst most are anticipating a post GFC dollar surge, this time is NOT to be compared.

        1. GM I will just add to the above by saying why are people expecting the USD to make substantially higher highs anyway?
          A look at the very long term chart of the dollar shows it to be in a MAJOR bear market that began in 1985 after topping at just over 164.
          It seems totally bizarre to me that anyone would expect higher highs in what is clearly a long term chart that is making lower lows.
          Couple this with my points above and the dollar is set to shock and awe!

        2. We agree on the long-term dollar demise Allan, but I think for a couple of years it will surprise you to the upside, due to eurodollar tightness (after a little fakeout plunge shortly maybe), and being perceived as the strongest horse in the glue factory. The US has a load of debt, but others will reach a crunch before the US, in my opinion.

  100. Support for SPX now on the historical side. Green news feeds the arm (ageddon) of the bear. When the Fed is seen to be on the very right side with caution the self-feeding complex unwind gets very big momentum. But then some think I’m just over-bearing.

  101. So Bradley has come and gone. Is it a top or bottom? Sunspots have come back too. Interesting.

    I am bearish through next week, but I have little positions overnight.

  102. I sold some actual physical gold today, the funds will be redeployed into gold miners following subscription to Brent Cook’s service, hopefully after a gold price decline to marginal new lows.

    1. Bob Hoye is buying gold miners on dips, and believes the real price of gold will rise and gold miners from here will have advantage vs. all other asset classes.

      1. Yes, in the 30s miners did 10x, in the 70s it was 22x, from these levels over 10-15 years, 30-40x is likely. I’m speculating at the junior explorer end of the spectrum, as reward potential is huge, assuming gold turns up shortly and oil stays down.

  103. Monday may be up day, will peal off my long calls on strength and re buy on weakness. I believe next week will finish way up, with bottom on Thursday. So buying short term calls lotto tickets on Thursday may be a good recipe.

    1. Good call on Friday/today. Are you still calling for selling till Thursday? But now, Thursday and Friday are up big, so that despite the selloff, we end up way up.

      Pre-holiday rallies are frequent, but that is one wild swing from possibly 1700-1750 as per your earlier post.

      1. Thanks, John. Sell offs are elevator, rallies are stairs. While PALS is mostly positive next week, I am guessing Fed speech Wednesday will be for more rate hikes, and market will bottom Thursday at 1750.

  104. To Reply to John Li:
    I replied yesterday, but for some reason it never posted.. ???? (maybe the two links included screwed it up?)

    Anyway, I stand by what I said earlier, that the strong majority of the many charts I go through every night have three similar things going on…

    1 – Price declining – It’s driving more people to pessimism on the market going forward… There are a number of sentiment gauges that are low.. Not really something that’s definitive, but certainly one piece of the puzzle for me..

    Also, I use pretty much the same template to look at all my charts, so I can see trends developing as a whole, to get a general “feel” for the market… And on this template there are two indicators…

    2 – Money-Flow: Pretty much to a chart, MF has been trending higher for a couple of weeks now…
    As prices have been fluctuating and moving lower, MF is going up, in some cases strongly…

    3 – SA-RSI: I also follow a self-adjusting RSI indicator… The parameters adjust based upon volatility. Again, almost to a chart, the indicator is on the bottom of the range (another way of quantifying and confirming for me the pessimism in the market)

    And when you put those all together, and you’re seeing the same thing over and over, it just confirms to me that being long is the way to be right now… Certainly, that didn’t work Friday, but again, looking at the charts, MF was STILL going up, even Friday…

    So that’s the way I’m playing it… I am up to 45% net long going into Monday…

    The market changes all the time, so that may (will?) change a week or a month from now, but I’ve learned (still learning?) to trade what I ~do~ see, not what I ~want~ to see….

    Hope that helps clarify my position…

    1. Thanks I get it now. I don’t mean any disrespect BTW. There is enough pain in P&L to worry about.

      Your sentiment measures #2 and #3 are based on technical price/volume. My statement was just based on the investors I track, and they have been waiting for S&P to hit 2000 (even though now less sure than before). Indeed, I can see myself agreeing with them too — if 8/2007 looks like 8/2015, and 1/2008 looks like 1/2016, we WOULD hit 2000 on S&P by 5/2016.

      I have no positions in US stocks overnight. I am short China.

  105. I had to leave early on Friday so put in a limit long SPX at 1865 which did not hit. Depending on how it looks over night I may cancel that order and see if we can reclaim 1900 odd before making a further move on SPX. I am considering a longer term short on Nasdaq 100 though, I think that has the biggest downside potential. Let’s see what tomorrow brings….

    good luck all.

  106. SPX futures are up Sunday night after Super Bowl. Given PALS being positive on all four aspects from Mon to Wed, and Fed speech on Wed; I am going to keep a small long position into Fed speech, in case we get a 3% rally into Wed.

    1. Hi Valley,

      I have been keeping a record of my lunar short term cycle which uses elements of PALS (distance, dec, phase) and it is working nicely over the period (at the moment) although it doesn’t nail tops/bottoms. Today is the start of a roughly 2 week bullish period to 19th Feb, although I have 11th as a possible low this week. I am long from 5730.

      Dates and past performance since Sept 2015 to 22 Jan are here, it has trounced the FTSE and Dow

      Dow: +2216 points during bullish periods vs actual +779
      FTSE: +1085 points during bullish periods vs actual +6



      1. Declination seems like the most useful of the three. I track it closely and while it doesn’t work every month, and bear markets are tricky, over time it allows a real advantage. Distance is good also, with apogees tending to be weak month after month. Phase seems to invert during bear markets. Such as todays new moon selling off so much. Glad you are statistically measuring the results, very useful.

    2. Hi Valley,

      So what now?
      At opening Europe, SP fut sold off sharply do you still think we will recover from here into the Fed?
      Thursday is also a Mercury day could be the low anyway I sold my shorts..
      Dark pools covered there shorts last friday.

      Good luck..

        1. I am expecting a rally sometime between now and next Friday back above 1900, so am fully long until we reach that price. If this goes deep sell off mode, will add to long position in SPY on the way down, hoping for seasonal rallies into April.

      1. Mahe.. expects this cycle to be volatile with bounces up and down til begin March after that it’s up..He was spot on calling a shortterm bottom Januari 20..
        So I think top about SPX 1950 bottom arround the levels or somewhat lower

        Monkey Business…

  107. I think gold has topped short-term, so just opened a small short position via a 3x ETF, will add in days ahead. Trade only, I’m still a long-term bull.

  108. GM it is a dangerous game you play attempting to short Au and Ag at this stage of play. Certainly we may pull back for a bit, but there are times in the past when the PM sector has just exploded out of bottoms. We may be at one such ocassion.

    If this is another…….BUCKLE UP FOR THE RIDE!

    1. I have a clear line in the sand. We bottom/top within days, or my short will be closed. It’s a small position. I feel markets are nearing a bottom, or will crash another 10%.

      If gold corrects again I expect sub- $1,000, but only c. $950.

  109. Back in the day an ending diagonal pattern (HUI) in commodities was usually a sign there would be little or no pullback, giving those left behind little chance to get aboard. Feels like that now; an overbought status–price getting ahead itself–needing a pullback, etc. Recall that in 1999 gold went from 252.40 on July 20 to 326.25 on Oct 5th. Then back down to 255.95 on April 2, 2001.
    Meanwhile, that same 29% increase would equate to today’s target of 1354 which certainly looks
    rather ambitious even from these levels. Of course I have no idea; but this is what history shows.
    Who knows how price will unfold going forward.

  110. The fear is breeding fear. It is not a transitory thing. The fail mode across major bourses is unprecedented. The consequences will certainly not be milder than typical, do not expect anything typical from here on. The unprecedented fail mode will bring unprecedented consequences.
    My take is our combined weighted average of worst nightmare will pale in comparison. My expectation is that the hitherto systemic risk will become systemic reality and the pace will freeze the brain.. Once initiated there is no stopping. If anyone has plans to save themselves, now would be a good time to get moving with them.

    1. I’m with you re the planning Peter_, but suspect this washout will not be the crash.
      Too much fear at the moment, seems bulls have lost their nerve, hence we will probably bounce hard (into wave 5 of the big bull?).

      1. The ending diagonals are the writing on the wall. As soon as the second leg down passed below the 1st one that was it. There is no 5th leg of the bull coming, the bear is confirmed – both at the same tick. Its a transparent, rule-based system similar to the way the Fed operates..hahahaha hohohoho hehehehe

  111. Valley, I am 300% long after buying the dip this morning — a little too early as usual, but looking good now.

      1. I bought the dip also. So opened down 2%, jiggled portfolio, ended day down .75%; fully long into Fed meeting as it would be nice for speech to begin with market at mid value so that it can respond to Fed’s nuanced comments. I am looking for 1875 or better as speech begins. After speech, will have to react, but believe we will see 1950 before too long, even if 1750 is touched.

        1. Do you mean Yellen’s appearance before the house, before market open on 2/10? Or one of the later appearances, eg. 10am Senate.

        2. What I mean is that I won’t be holding my 300% long to see what happens pre-market Wednesday. I will be trimming or exiting tomorrow.

    1. I’m not ~anywhere near~ that long, but I sincerely hope that works out for you…

      I am convinced we are in an on-going bear market, which to me means “small when long, big when short”. And as mentioned previously, I clearly am looking for higher prices at this moment…

      But that said, clearly, you have bigger cajones than me… 😉

  112. Gold price rejected somewhat at $1200.
    I notice 4 weekly gaps up in a row, expect they will all be filled in due course, over the next few weeks would be ideal for me.
    Remember, strong dollar is currently correlated with stock markets up, so watch the mighty dollar for clues. I suspect bears are going to struggle to take markets much lower.
    Are we heading for the slingshot move to ES 2400?
    I hope so, short of a lifetime!

  113. Aussie gold mines are going up hard as the general market tanks. We need to hold these levels or we will see the SPI let go big time. Yank futures are down pretty well at the moment. The next couple of days need to hold these levels if long.
    Long gold miners at the moment. Thinking about shorting cattle. That chart looks ugly.

  114. Think I’m going to ride for a bit with the positions I have:
    62% net long US stocks
    Short modest T-bonds – TBT
    FLAT Silver/Gold – I have physical metals, but hedged flat with DUST (bearish ETF)
    Long Oil from about $29.50, via UWTI…
    And sitting on lots of cash…

    Think we’re close to a bottom, if we haven’t seen it already…
    But always mindful of it being a rally in a Bear market…

  115. Hello

    Due to a set of convoluted circumstances I ended up being in a very remote (rural) part of this planet at short notice from 24th Jan till day before yesterday. On Friday 22nd Jan the DJIA finished around 16100 when I last saw it before leaving and as I’m writing it’s swilling around 15929… not much appears to have happened eh? However looking at the charts quite a bit DID happen and some very interesting trading opportunities too.

    In the last 2 weeks I was pretty much cut off from the rest of the world…..and I LOVED IT!! I would highly recommend it to anyone. Jeggersmart, here’s the ‘adventure’ of a lifetime that you were asking about.

    GM thanks very much for enquiring after me.

    Good to see that John H is taking a family break.

    The commentary here continues at it’s elevated intellectual cum humorous pace.

    As far as the markets go I was expecting a leading diagonal from the 20th Jan low and everything seemed to be going as planned until yesterday’s and today’s action…at least in the DJIA. However I can’t figure out where yesterday’s and today’s action fits in with the bigger picture or rather how the bigger picture has changed due these actions.

    But….the market must love me because since the start of today’s trading, on the 5 minute chart I am seeing a (wait for it) ‘TRIANGLE’ forming so there should be a new thrusting low before it all reverses upwards. My track record on triangles may well be broken today as I am currently counting a final wave ‘e’ as the DJIA heads up towards 15966. My track record will stay intact if this goes higher than 16060. IF this triangle does come to pass then it should drop around 300 DJIA points from wherever wave ‘e’ ends. I love triangles…..despite getting them wrong MOST of the time.

    Good to be back here.

    1. “Due to a set of convoluted circumstances I ended up being in a very remote (rural) part of this planet at short notice from 24th Jan till day before yesterday.”

      Okay…I am interested…
      (i) Looking for the fabled Nicolas?
      (ii) Checking the artic to see if global cooling or global warming?
      (iii) Buying guns and a bunker for when WWIII breaks out?

      1. Hehe John Li, far far more convoluted than that.

        About 18 years ago I helped some impoverished farm labourers (8) (in Pakistan) to buy the land that they tilled for their landlord and form a loose cooperative. Since I don’t believe in ‘handouts’ I gave them some very strict conditions to meet or I would become their ‘nightmare’ landlord.

        One of the things was that they had to allow was for their children (including girls) to be educated (a HUGE step at the time). They agreed and although the ‘their village’ was approximately 30 miles from the nearest town (and therefore school) a friend of mine found a 16 year old student who would be their ‘teacher’ 3 times a week. The agreement was that all the children should be allowed to learn how to ‘read and write’. Urdu was the MAIN language but they also HAD to learn English.

        The eldest child at the time was 8 years old amongst the kids at the cooperative. 18 years went by with some pleasing progress in their community. However it also brought some lads into adulthood (read testosterone) and there were continuous squabbling for ‘position’ which spilt over into family feuds.

        One of the ‘elders’ fearing a break up of their hitherto peaceful community wrote to me asking me to come and speak to all concerned. (Wish this had happened a week earlier whilst I was still in Pakstan…but ce la vie)

        Well…I’ve brokered a peace of sorts but ‘education’ also has it’s drawbacks. The kids know a lot more about the ‘world’ we live in (largely through 3 day old newspapers that the ‘teacher’ brings them) and want more of what we have…sadly.

        I don’t know how long any of this will last but it was good whilst I was there. Sleeping under the stars in a ‘charpai’ (low level bed hung with strings and a ‘relatively’ clean set of cotton wool duvets for cover). Water from a well and sanitation….well I best not go there.

        Getting to the town was via a rickety old tractor (more than 18 years old since it was bought second hand). Also they’d ‘bought’ an electricity generator which ONLY responded to one of the elders who would either coax it with soothing language or on occasion give it a stern warning before it spluttered into life. It barely managed to light 3 bulbs…one of which had ‘fused’!!

        Aaaah the ‘luxury’ of peaceful living!!

        1. Wow, never expected that. Good job in helping those less fortunate, even though it does come with headaches sometimes.

        2. The truly interesting bit for me was the ‘teacher’. My friend (who also doesn’t believe in handouts) had agreed to buy the guy a motor scooter provided in return he taught the kids at the village 3 days a week for a period of 10 years.

          Well…I met the ‘teacher’ (they call him ‘masterjee’, including the elders) a number of times and who told me that this was one of the BEST parts of his life and although his ‘commitment’ expired a while ago he would continue to teach as many generations as they would allow him!!

          I went back to my ‘charpai’ and crept under the duvets and cried both with joy and a smidgeon of shame.

  116. Hehe, did I say the market loved me? It was just toying with my emotions. Bang goes the triangle. On the flip side my track record is intact!!

      1. Thx GM.

        Wish I could have an EW count for the DJIA right now that I could hang my ‘hat’ on. It’s all over the place since the last 2 days.

        1. I’ve seen Trader Moe on and off. The trouble I have with him is that he covers all bases so he’s hard to follow.

  117. Every day, I see SCTY -25% after hours. LNKD -44%. Oil is near zero.

    And yet SPX is not even in a bear market. FB is near/making new highs. Is this the biggest divergence the world has ever known, or are we going to crash everywhere but SPX?

    Why not? 1980 solar max or 1960 solar max, did not see much of a bear market in SPX.

    1. Nice read. Issue I see is they talk inflation when really we have deflation. Inflation won’t take hold until a lot of this debt is wiped out and that will only occur after a melt down. I see gold (physical) as a hedge for when all hell breaks loose including banks going broke. Europe will be the first. They have no hope of surviving these next few years.

      1. Yes, first the deflation, then the inflation. Gold likely to do very well in the next 10-15 years.
        As the planet goes to hell, and hopefully returns intact.

  118. Danger zone begins tomorrow at 10AM with Fed speech. Tomorrow is peak of PALS positivity, and Thursday on several PALS items flip negative. Good chance of deep sell off after Fed speech that may extend into middle of next weeks OPEX.

      1. Exited long position during Fed speech at 1870. Waiting for lower prices next Tuesday to buy again. Distance, Declination, and Phase are all negative beginning tomorrow for a few trading days.

        1. markets usually rally into OPEX. are you thinking of going long again on Tuesday and holding till next Friday?

        2. Yellen is still speaking tomorrow…why is it that you expect fireworks today and not tomorrow too?

        3. I also think we can make an important low Tuesday or Wednesday,Helio bradley is on the 17th has a fairly good trackrecord lately.
          After that full long into Opex.

          Good trading everybody..

        4. Tomorrow is Perigee and Equatorial Crossing S to N. A volatile combo separately with negative bias. Kept small long position into tomorrows open that I bought late in the day. Crossing fingers for morning rally. I won’t be fully invested long until next Tuesday/Wednesday or Monday if we get below 1770.

  119. Well, still holding everything mentioned yesterday, and certainly happy to see a bit of a rally today…
    But still, pretty lame attempt to go higher today… My charts say higher, and my system went back to a “Sell” signal last night, so I’m on the fence here…
    The term “mixed signals” can’t be overstated…

    Maybe NorthmanTrader’s article is true… “Ignorance (on my part) at work”…. Good post..

    1. Hello Barry.

      Northman is wrong on ‘A’ here:

      ‘My main premise then: A. $DB is too big to fail and they won’t allow it if they get ahead of it if there is a blow-up risk. or B. There is no blow-up risk and this entire dump is overdone, in which case we may see a massive rally at any sign of relief.’

      The ECB is rubbing its hands, it can’t wait to kneecap the banks, then the sovereigns.
      All the QEs from the ECB to date have just been buying time to get banking resolution/supervision procedures in place, and it’s now ready to go.

      1. GM I know we’ve been through this ‘hoop’ before but I really do need to understand where you are coming from.

        Certainly the ECB, as you say, is currently in a ‘legal’ position to kneecap banks and sovereigns. The bit that I can’t get my head around is ….. for who’s benefit?…and will the bigger sovereigns (Germany, France et al) allow it?

        Its like a detective movie. I ‘get the plot’ but I can’t understand the ‘motive’…and there ALWAYS has to be a motive. Any help you can give me in that direction please. Thx.

        1. For whose benefit is THE question purvez.

          The answer (apparent after reading scores of speeches, historical documents and leaked information) is:


          (you’ve read the Nexus, which describes the problems of the current system).

          The Euro architects are ordo-liberals mostly, many from Leven University.
          They recognise that socialism (big govt/marxism) is destroying economies and civilisation itself.
          They set up the currency to ensure socialism is contained by two things: the market, and what taxpayers are prepared to pay for social support, so no more huge debts, and no more inflating away those debts, and of course more market, more liberalisation, and more freedom to trade, start businesses, and work anywhere in the zone. Safer banks (less risky loans), skin in the game, and a stable currency, not as hard as a gold standard, not a soft fiat. but a PTC (perfect tensile currency). This will favour neither borrowers nor savers, neither one generation nor the next, everyone gets the same.

          Politicians were clueless to the aims above when they signed up, effectively signing up to their own executions, typical politicians. But they had noble reasons mostly: avoiding war, and ending nationalism.

          It needs to work, but it could yet fail, due to the whole EZ project collapsing, via revolutionary impulses.

          But the ECB have the ‘red button’ to press before it gets that bad, and that will be a series of massive QEs into physical gold, enabling EZ countries to settle some debts using CB controlled gold reserves. A one-time bail-out of the world.

          Few years to wait, but banks failures in 2016 I reckon. (France & Germany are powerless to stop it, it’s law now).

        2. Hmmm, much as I’d like to believe your scenario, collective ‘goodness for the people’ of the type that you describe hasn’t happened in history as far as my limited knowledge goes. Where there has been ‘goodness’ it has been due to a strong but benign dictator or a compassionate leader (like Gandi).

          If this does come to pass then we will be living in an unprecedented period in history.

        3. The ECB will be the strong & benevolent dictator managing the money.
          That will be enough to keep humanity on the right line I reckon.

        4. Even if this does come to pass, we are only talking about ‘western/financially developed(depraved?)’ humanity. The poor guy in the middle region of the dark continent or for that matter the community I just arrived back from neither know about, nor understand or are affected by the ECBs great ‘humanitarian’ effort.

          The thing is ‘they’ represent by far the majority of ‘all humanity’ on this planet.

          A very sad reflection indeed.

  120. I see some suggesting a collapse in the US dollar. I don’t.

    The pattern in the chart below has been seen before and it presages a collapse. In this case USD against the Euro.

    Yes, normally it bounces to resistance or 1.20 in this case.

    Then it should collapse to a least 0.50.

  121. So we have a global bear market with severe and unprecedented EW failures, all in the charts.
    Ending diagonals are playing out true to their nature, with waterfall continuations are likely commencing. US$index and US$Gold have both completed their ending diagonals and each promises complementary action. All major equity markets that have been overbought to extremes are still flagged for heavy correction by the bear.
    So what to do. Start with what not to do. Make sure there are some very solid reasons for taking opposing positions to that which has been ordained by sound reasons, and understand “transitory” to mean having a short time frame. And forget about any continuation of the bull. The bull is dead and buried. The bear is here and will still be here in 2017.

    1. Wow Peter_ that is just waaaay to lucid for you. You clearly are passionate about this subject. No mixed metaphors and obtuse sentences just plain straight forward advice.

      Thanks very much.

      1. Hi purv, you know I was once convinced that the 5th wave of the bull would still be here to later this year. It was by following JH here that it I became open to the idea that the 5th wave could fail in the face of such compelling reasoning. What has transpired has seemingly shook me to the core and made me straighten up and fly right (for now).

        1. That’s one hell of a shake up then. 🙂 😉 Welcome to the ‘straight’ side, although I’ll miss the intellectual exercise of deciphering what you meant.

  122. Alphahorn – are you still holding on to your pattern or has it changed. Things look very ugly now. Europe is letting go big time.

  123. Playing out exactly as I expected and contrary to how most expected.

    US markets down……..USD DOWN. Expect that trend to continue with a few lack lustre bounces along the way.
    REMEMBER what JH said. When the waterfall starts there will be very little respite. And yet I still see many are unconvinced ;). That ensures the trend continues.

  124. OK, my first share of a hunch for what lies immediately ahead.
    (Prompted in part by Bluestar’s latest ‘aces’ post at Ibankcoin).

    I think the Fed will make an unscheduled rate increase announcement, possibly this weekend, or early next week.

    Up will go the dollar, down will go gold (for a little while), and the market crash will be aborted as capital flows into the US from overseas.

    The yield curve is flattening, so it will fail ultimately of course, but will buy a month or two more, and a blow-off top for the markets.

    You heard it here first!

    1. Ok you guys are starting to scare my 2 brain cells. First Barry goes bullish and now GM talks about ‘blow-off’ tops. I’m going and sitting in my dark corner and contemplating on my navel….or as usual I’ll fall asleep there.

      1. Hi Purvez;
        To be clear, not “bullish”, just long, based upon a number of technicals I follow…
        Obviously, not working out for me as of this moment… :-/

  125. Gold at 1345? No need to get excited about an extended move higher over a longer period of time? 1345 just mirrors the technical move up in 1999: before returning back down to major support.

    1. electic, sorry you are wrong.

      I have been POUNDING the table about the following for over 12 months!

      The greatest leading indicator of all, Australian gold stocks, have been signalling a new bull leg in gold.
      Again this is the greatest indicator I know of. Sit back and prepare to be amazed as gold breaks all resistance with relative ease as the USD collapses.

      1. Far too much panic buying into gold recently, I will be adding to my short-term gold shorts tomorrow, another 25% position.
        I think we’ll see $1100 again in a hurry after this parabolic move.
        Also, I don’t see NIRP arriving in the US ever, that would be the death of the dollar.
        But I do see them raising again, possibly this weekend.

  126. GM gold will correct of course at some point, however it could be from much higher. This would not be the first time that gold has blasted out of a bottom and not looked back.

    There is NO WAY known to man that the Fed will raise. NIRP dead ahead!

    1. Can somebody please explain this NIRP thing to me. So….if I borrow to the hilt I’ll have a healthy income stream? If so where do I sign please?

  127. Valley,

    Why didn’t you short at 1870 , I had some put spread and might pay good. I want to understand your logic, shorting at 1870 was not like shorting in the hole. If we go to close to 1800 and rebound with no new lows there will be good divergence, will you buy today or next week if we reach 1790/1810 , i am thinking credit spreads 3/6 weeks out. How Is PALS next week.

    1. Good advice, Bill. Thanks. PALS is mixed next week, with positive declination, neutral distance, negative phase (except for Friday). February OPEX weeks are usually down, so seasonally not good. Planets not good as earth is swinging into opposition with Jupiter, a month either side of this event “jittery” markets. And 10 month cycle could indicate a down month, and next month as well.

      Carrying a small call position into next week. Won’t check it until next Wednesday, where I will add more if market has sold off, as a lotto ticket.

  128. Allan, I do fully agree on Yr. analysis of gold/dollar markets. Would you comment on Mr.M.Armstrong’s end of january post with the firm forecast of gold under 1.000$. I’m a seasoned trader (since the 70s) and had often profitably used “negative indicators”. Shall we suggest MA fo this role? Regards Brunobear

  129. And as of now, up to 90% net long the US stock market…

    Again, that is about a fifth of what I was short coming into the year, but at this point the market indicators I am watching look VERY bullish. Obviously, it’s a counter-trend trade, so ~not~ getting too heavy on the long side here, but as I said before, gotta trade what you see, not what you want to see…

    GLTA……including me!! :-O

      1. Hi GM;
        The irony is (and I was taking a pretty good loss earlier today) other than the DUST hedge I was using against the physicals I have, at the moment I’m about flat on the day…
        Who knew??? All I did was hedge myself from making money.. hahaha

  130. As individual entities the CBs are dead and have lost all credibility. The next action – as the markets continue to waterfall and economies dive into deflation and recession? The CBs will join together in a synchronized shock and awe effort to save the banking systems. How that will look, who knows, but it will be Impressive or frightening, depending upon your bent. This is the end game folks, buckle up.

    1. If CB set negative -10% rates, stocks cannot fall, but inflation will eat away returns. As long as bears lose I guess…

      1. They can’t set rates that low John, big entities will simply vault cash or buy gold (or oil, anything really).
        NIRP is experimental, and is unlikely to have a very long shelf life.

  131. FWIW, and to give some comfort to Barry I am somewhat long SPX (underwater by 1% or so, although felt quite squeezed yesterday tbh), long IBEX, long USO and long Corn. Not huge positions obviously. My Soybeans stops were moved up and I got stopped a few days ago but happy with that.

    I might have a look at a Nikkei long at some point as well.

    Just fyi – good luck all and especially to Barry and I lol


    1. “I’m So Bullish iT Hurts!”

      Following Mah.. We just have to wait for Tuesday’s conformation if we are still up I will be fully invested…
      The next Cycle from the end of the first week of March will be verry bullish it can last for 3 months..nobody believes it but SPX can see new highs..

      uppppperpubbbb ..

      Nice Weekend..

    1. I am too tired to predict further. Usually this means a good trend will come. Flat for the week but lots of frustration.

  132. Same here JL, I entered a few new positions today after some price action finally confirmed (in my view) and looks far better than even this morning. Keep safe and be patient is my own advice to myself…..


  133. Just liquidated all energy related ETFs… Out of ERX and UWTI…
    Grateful for the rally today, and grateful to be out of the cluster-f known as oil, at break-even on this trade….

    Charts look like further rally ahead, but it’s more a risk reduction move than anything else..
    Just don’t really trust a 10+% move in oil today, before a 3-day weekend…
    It’s a good day, though…. 🙂

    1. Good one Barry – I am feeling a little like a raisin having been squeezed quite hard this week – but looking a lot better now (my positions, not me) and have made some adjustments to reduce exposure in some areas. I am staying long as per above tough, although I have gone short GDX about half an hour ago.

      all the best


  134. I think it is prudent to short GDX, but probably not SPX and so on. It depends what you are referring to. I am planning to start offloading longs around 1900SPX if seen – but won’t be looking to go immediately short unless there is a very good reason to do so.

    In any case, good luck all and great weekend. I am just glad IP Week is over…..


  135. FWIW, I have taken 30% profit on SPX and IBEX longs – stops trailing now. Whilst I think we will go higher I just want to make sure to book decent profit in stages.



  136. My USO longs are locked in today due to US holiday, however as things are now I will probably close at least 50% tomorrow as I am fairly bearish on Crude overall.


  137. This will likely only be of interest to Brits, an example of regulatory over-kill that really pisses me off, to the extent that I will go to court if need be.

    My SIPP (self-invested pension plan) was all in physical vaulted gold. I just sold around 15% and want to invest the proceeds in gold explorers and junior producers (listed in the US & Canada). My SIPP provider does not provide me with investment advice, just acts on my instructions. (subject to ‘the rules’).

    Here’s an email I received today:

    ‘Our Technical Team have had reviewed the investment proposition you have sent us and although we are aware that these stocks are all listed on HMRC recognised US securities, the majority of these companies are involved in actual mining for high grade Gold in various locations within the US and Canada. Our concern would also be the mining element of these companies as the investment is not into actual Gold Bullion, rather the shares of a company who will use the funds to potentially explore development and exploration into various mining projects. Overseas developments also introduce complications and uncertainty over our ability to perform our checks whereby these would include validating projects, forecasting and the ability to provide a return to investors when mining for precious metals.
    We therefore do not believe that this is a suitable investment that we would allow to be held in a SIPP. ‘

    Absolutely ridiculous. I am awaiting a phone call from someone senior, but if they do not allow me to invest as I choose, and I am forced into mid-tier or larger miners, I will sue them for the difference in returns (assuming it’s in my favour of course).

    The provider is terrified of the regulator, and so I suffer from freedom of choice being curtailed. One more reason why the UK and I will part company for good before too long. Marxism rules here. FUBAR.

    1. GM, I’m confused. Are you saying that your broker is stopping you from making SIPP Investments or is it your SIPP provider? My personal experience is that SIPP providers ‘apparently’ can stipulate what you can or can’t invest in (above and beyond the Gov’t rules). However your broker has no say in the matter.

      I looked at Hargreaves Lansdowne who provide quite cheap SIPP management but only allow investment in funds that they recommend.

      I eventually went with a firm ‘European Pensions Management Ltd’, somewhere in the ‘south west’ of the country. They are very sanguine about where you ‘lose’ your money. LOL.

  138. Hmmmmm….I hear you GM – I haven’t bothered to set up my SIPP’s for anything “spicy” yet – so I can’t even short the SPX with mine…..:)

    I love that bit where they complain about “overseas” making it more complicated…hahaha. Why not go back and ask them to find and recommend some gold miners and explorers based in the UK??:D

    I am pretty sure that what you suggest is possible in the UK- but you may have to do some digging around?


    1. The irony is that the FCA SIPP rules do not preclude any investments at all in HMRC recognised equities, none.
      No, the SIPP provider is merely afraid of FOS decisions on potential future complaints, and the FOS is a law unto itself.
      When we speak I will offer to sign a disclaimer waiving any right to complain to the FOS for compensation for the advice that they haven’t given me.
      Otherwise I will eventually sue them for losses.

      John Li, thanks for the kind invitation, but I’ve written so much that’s been critical of that country, I fear immediate arrest on entry. ;(

      1. They cannot value gold on their systems, thereby they cannot value anything related to it, thereby it all has no value at all to them all. I smack my laptop about every day just to let it know who’s the boss. And show it the graveyard of predecessors to keep the intimidation mutual.

    1. haha, I am not sure those blue circles are relevant in the current scenario – but makes for a more dramatic chart of course. Even though I don’t look at historical patterns in this way, I would say the price action leading up to the 07-80 peak is very different to the price action leading up to the 15 peak. Does that matter? I guess we will find out. By the way, if you are going to trade based on what you say will happen with your chart, how will you do it? Look forward to further updates, whether overly dramatic or not..;)

      p.s. we are in a downtrend in my view, the global collapse of the credit markets was the cause of waterfall action like in 08-09 as per your chart, what is going to cause it now ? Unless we make new highs we will grind lower in my view until April when a lot of frackers are going to run into problems with credit ratings and possibly debt rollover. I can see some fireworks then, and a lot of volatility in the meantime. Should be good for traders.



  139. Two scenarios, two different immediate term outcomes. Most favor scenario 1, but scenario 2 is still very much and in light of this overwhelmingly bearish sentiment across the globe, could the SPX be the beneficiary of capital flight for the next six months +/-?

    Scenario 1, Cycle Wave 1 has topped, Cycle Wave 2 underway:

    Scenario 2: Cycle Wave 1 beginning its 5th and final leg, then rolls over:

  140. PALS has several positives this week. Rising tides, optimal declination, pre full moon days, Opex week entering from weakness so probable run back to 1970 to take premium for shorts. So, I am keeping a few calls that expire Friday and will peal them off as we approach 1970. Next week should be optimal shorting week.

    1. Hey Valley I think tommorow will see some profit taking later on the day just a dip before going higher..The highs should be in early next week monday or Wednesday after that new lows arround March 5 or 12..

    2. Hi Valley do you still think 1970 can be reached I have got a feeling that we will top arround 1930 and we will see a pullback next week?

  141. My USO long hit limit target today so am out for 12.8%. I heard the Saudis have said they will “freeze” production, whatever that means……


    1. Hi John,

      Take good care of yourself (as you’re certainly doing). At the risk of sounding trite, health is probably the most important thing we can have. With good health, you have all possibilities ahead. So here’s wishing you a full recovery to robust health! And thank you for sharing your work, it’s quite amazing.

  142. Get well soon John! On a positive it looks like central banks have yet again struck high levels of confidence back into investors. I like it when CB’s provide us all great shorting opportunities.

  143. It’s been over a week since I started staring closely at the DJIA chart again and I ‘STILL’ can’t decide on a wave count from the 20th Jan low. Right now allowing for another 100 (or so) point rise it would look like a flat for a 4th wave since the early Nov highs. The thing is that since the early Nov highs to the early Dec highs (wave 2) ALSO looks like a flat. Now Mr RN Elliott said that he expected to see an ‘alternation’ between waves 2 & 4 and hence what is currently happening ‘shouldn’t’ be a flat….but if it’s not a flat then ‘what the hell is it?’

    Answers in a few ‘syllables’ here please. Thx in advance.

    1. Failed 5th ending 2nd Dec 2015. (Fails can just fail sometimes). That was an ending diagonal of the tortured and disfigured variety. Being such an abused instrument it continues in agonising anguish. Now it gaps up as if it is jumping out of its skin. Yes -what skin? thats exactly what I say.
      Elliott never saw anything like any of these chart patterns – new chapters being drafted by all self appointed pundits.

  144. I am now down to about 15% net long the US stock market – using a handful of particular individual stocks… NO leveraged positions at all, other than still holding DUST…

    Charts look a little less bullish than they have, so just reducing some risk…

  145. Small minds think a like – I just closed the rest of my IBEX longs for 652 points profit each, and the rest of the SPX longs 72.x points each. I shorted GDX for a short term trade just now, and still have the majority of the SPX calls left, most of which will expire at zero at this stage. I have a couple of longs in individual US stocks, and still long Corn although that one is like watching paint dry so may close for less than 10 points profit unless I just stick some pieces of tape over the screens so I can’t see it’s there.



  146. Well played those who were long during this rally.
    I’m still short gold via a 3x etf, 20% position, underwater by 10%. Meh, gold is holding up despite this stock market rally, tells me it will shoot higher perhaps.
    But I am liking the look of the FTSE for some more aggressive shorting at the moment, all sorts of resistance, and it tends to run out of steam and drops like a stone after these brief spurts back up.
    I still have a target down at 5,200, so will be entering shorts tomorrow morning, having missed the chance today due to meetings.

  147. John Hampson, get well soon.
    Whilst not aware of your ailment, can I recommend the paleo diet and lifestyle to you and to all here.
    Best site to read up on this is ‘Mark’s Daily Apple’, and I get his weekly news email.
    Loads of healthy tips, from diet, to exercise, to sleep, to lifestyle,stress management, fun, everything really. I’m nearly 49, but cutting out gluten and sugary foods and eating loads of meat/veg/fish/nuts has dramatically improved my health, banishing the IBS I used to suffer from to history. Also now doing weights at the gym, feeling stronger and fitter than ever (literally), which is helping with my badminton and golf game. Also, toning up will help when I’m on the beach. 😉
    Health and attitude very important in my opinion, especially with turmoil ahead.

  148. Hi Jegers! LOL – Small minds.. 🙂

    I ~also~ bought one S&P option that is no doubt going to be worthless as well..
    I buy one option every few years, which serves as a reminder to me as to why I do ~not~ trade options… And it did it’s job!!
    Next time I get the urge, I think instead I’ll just blow a grand on strippers….
    The wallet result is the same – empty – but with strippers, at least they get happy for a couple of hours, and I do too!! 🙂

    Regardless, back to business…
    I have two thoughts here…. My charts still look bullish, so have no real reason to be short just yet, but that said, planning that trade…
    Plan A – we rally into Friday – options expiration, and depending on my charts, short the hell out of it, wherever we are…..
    Plan B – Start scale-up sells, starting from about 1930 and up to ????

    Your thoughts??

  149. Ugh the consensus….(Barry + Jegersmart) is that we still have some ‘up’ to go.

    However since you guys have longer time scales than mine, I suspect I’ll still get my 100 point drop on the DJIA before you get your ‘pudding’.

    The BIG FLY in the ointment is the FOMC minutes due out in under half an hour. I’ll probably go ‘flat’ just before. These guys can cause unnecessary havoc for a short while.

  150. hehe

    I tend to trade options as hedges, if 85% of the current calls I have expire at zero then it will be about 18% of the profit on the last trade. Price of doing business, but of course as it will probably turn out, I didn’t need them….but then I haven’t used my car insurance either for 10 years or more…:D

    At the moment I am not in a major hurry, going to reassess tomorrow morning but keeping Opex in mind – but ideally need to see weekly closes before I commit more heavily. The last lot of positions were quite heavy for this type of market, so whilst I went a few % underwater it was a calculated risk near support… least thats what i tell myself lol..



  151. Purvez, I am bearish as we are in a downtrend in SM – but am happy to take a whole bunch of bull points any time. I think we will see more downside soon and we take out the recent low – but from where is the question? So I will wait and watch and see if my GDX/GLD shorts pay off in the meantime. Of course if all else fails, I can watch my Corn position move a couple of points each day if I need some sleep……


  152. Today has been one heck of a day to trade. I’m 10 points positive in the whole day and ALL of those were made fighting the UP trend. Sometimes this market just doesn’t know WHEN to give up.

    Anyway I’ve lived to fight another day….although ‘lived’ is a euphemism today.

    1. I just hope the down draft doesn’t start overnight though. There is probably as much as 300 points on the DJIA to harvest there. I, personally, would love another small ‘UP’ draft tomorrow that I can trade.

      1. Now that I got my ‘wish’ I’ve taken my ‘short position’ but so far it’s looking corrective so I guess today may yet turn out to be ‘yesterday’. 2 days in a row of sub 50 points gain is quite torturous.

        Now where are those ‘joss sticks’ and my prayer mat?

  153. Oil helping to drive stocks higher this week. I feel this rally will carry on for the rest of this month and wrong foot many bears before the markets turn back down. Momentum has returned to the bulls. S&P 2000+ quite possible…great shorting opportunity that would be!

  154. A query re RSI divergences please folks.
    This is gold weekly.
    I grasp that an RSI making higher lows in a falling market is a bullish divergence.
    But the recent RSI spike, at a time of a lower high, is that also a bullish divergence?
    I’m thinking probably yes, but also that maybe it is signalling way overbought.
    Just trying to avoid buying my junior miners/explorers at a short-term peak, as I am now subscribed to Exploration Insights.

    1. In the matter of subscription it is the remorse of every de-subscriber that they ever subscribed in the first place,

      1. That’s a matter of opinion Peter_.
        Brent Cook is simply a top rate geologist identifying companies in a risky field.
        But, we pays our money, we takes our chances.
        Each to their own.

        1. Nay just ask them – they know what things are worth – that’s why they be de-subscriptionists nay? Anyone he/she who has purity of heart is either free of charge or dead already, The latter more likely, except for very very rare cases now, like Sir John Hampson ( no royalty affliction required).

        2. Well, I consider myself honest, and at considerable cost to myself, I shared my views on the world (and assets) with clients a few years back. Cost me tens of thousands in lost business (many investors hate to hear bad times are a’coming).
          But I retained most clients, and I sleep with a clear conscience. But I charge of course, I’m in business. All of my clients will de-client when I retire, hopefuuly with their living standards enhanced by my views. They pays their money….

  155. GM, I presume you mean a lower high than last Feb for example? If so, I wouldn’t view the recent spike as a bullish divergence – it doesn’t work like that in my book at least. The rise has been parabolic, so a fairly deep retrace will occur in my opinion. Have a look at some of the fibs, the RSI is also uncommonly high rightnow. It smells of panic buying to me – so many people watching gold and getting sucked in. I wouldn’t start buying until the RSI at least tests the levels that have seen a reaction before. I am short GLD atm, but just being objective as can be. I am not saying we can see higher prices short term but the parabolic rises have a habit of crashing back down in my experience….

    Good luck though, 72% of my pensions in gold miners and theyhave enjoyed some heavy gains recently….:)


    1. Thanks. I am short gold also, and underwater but holding, I expect the parabola to crash back down, hope so, so I can get my little miners sorted. Been a good year so far for HUI/GDX, but much more to come in the next 20 years, I’ll be holding tight, selling only to meet retirement expenses (I hope).

  156. GM; Andrew Cardwell has a unique perspective on the RSI. I don’t think one needs his course or anything so excuse the sales pitch.

  157. “That was was Jeggerspart cos I have no brujah for wishywashy as far as my golden holden be involved see. Yah”

    Can anybody translate?


  158. FWIW, I opened an initial long position on QQQ with a tight stop. Possible bull flag in play and OPEX may provide some updraft. I am expecting a pull back in GDX over the coming days and these have had an inverse correlation for a while – so let’s see what happens……


      1. GM, my take on your chart is as follows:

        a 3 waver (a) down to the late August lows
        a 3 waver (b) up to the early Nov highs
        and a 5 waver (c) down to the early Feb lows

        That’s the signature for a FLAT in EW terms. Now if that is ALL the correction we can expect from the May highs then the resistance will prove futile. However unlike impulse waves corrective waves can be more complex. i.e. they may have more than ONE sub wave in them, separated by ‘X’ waves. Soooo….the answer is that if this holds then we may be in for a multi wave correction. In any case we are at a critical juncture as you’ve high lighted and so we’ll know soon enough.

        1. I suspect resistance will not hold purvez, and seasonals into end of March/early April will take markets higher, and hence gold lower. That would not be a bad result for me. Tick tock.

        2. The main thing with trading, GM, is to have a plan of action for either event. GL with your trades.

  159. I have a question for swing traders (the vast majority here from what I can gather). Once you’ve placed your trades (along with your ‘stops’)……What the HELL do you do to pass the time, for days / weeks on end?

    I’m just curious because I ‘intraday’ trade just one instrument and hence am continuously looking to enter/exit trades, I can’t imaging what you all do to pass the time.

    Anyone care to respond, I’d be very appreciative because I could do with an alternative life style in my dotage. Thanks.

    1. Hehe, reading through what I wrote….makes me sound like a ‘computer’ NERD who needs to be told to ‘GET A LIFE’!!

      Anyway I’m old enough to be past caring and so the question still stands!! Looking forward to some advice.

      Thx in advance.

    2. Read the Economist and other financial news.
      Or read a variety of good books that are related to the field — eg psychology.
      Spend time with family.
      Just my two cents.

  160. Swing trading is something that I morphed into over a longer period. I started learning on one instrument (SPX), but I couldn’t imagine doing that now. It is rare that I have more than 35 positions running, average since December would be around 10-20. I spend quite a lot of time looking for other trade setups – and indeed this is why I went back to a day job – because trading can at times get mostly boring. Sort of 90% boredom (looking for trades, waiting/watching) and then 10% of the time elation/excitement/fear/doubt etc. Perhaps thats just me though. In terms of money-making activities, I do tend to get quite bored – whether it is working at one location/company for some time or purely trading and so on, so around 4 years ago I decided to invest my own time into changing this. Now, I trade, I am developing a business slowly on the side and doing a day job that compliments my trading very well and mostly working from my home office. It also gives me time to be a trustee of some private charities, look after my other half who hasn’t been too well over the past year or so and to spend time with family. Almost everything I do can be done from anywhere with internet and a phone signal. I still live in London though as I need good access to the city and also Geneva/Zurich etc.

    So I am busier than ever, but more interested and engaged. If you are happy to sit and watch one instrument all day, there is nothing wrong with that at all – but just keep your eyes open – the world is out there!


    1. Thx very much for responding John Li and Jegersmart. Both of you obviously have a big ‘family’ element and I guess that’s one of the things that this lifestyle does allow us all. Self development through reading / alternative concurrent career paths is also very rewarding.

      I guess age and personal likes/dislikes also play a part in making choices.

      My main reason for asking is that I am beginning to find my ‘style’ of trading quite tiring by the end of the day. Even on exceptionally ‘productive’ days I find myself exhausted by the sheer amount of concentration that I put in. I have been considering moving to a swing style of trading where I don’t necessarily need to spend every hour of the day staring at the screen. I think before I move in that direction I need to be clear what I would spend my ‘spare’ time on. At my age (60+) I’m certainly not starting another career but I have a huge amount of interest in all sorts of ‘odd ball’ things in the world. I guess what I don’t want to do is find that the time I do create by ‘swing’ trading is not just frittered away.

      Of course once I stop trading completely then I’ve got a bucket list of travel destinations….but that will have to wait for 3-4 more years I guess.

  161. PALS and SPX price next week:
    Phase: down until Thursday
    Distance: neutral all week
    Declination: down until Thursday
    Seasonals: down until Wednesday
    Planets: negative bias until April due to Jupiter opposition
    10 month cycle: negative bias until April

    Summary: this week and next mostly negative for PALS. If we have low prices on Wednesday may do a swing trade into next week as PALS looks better then.