Aligns well with my set up for a JNUG bounce……….
Monday did nothing. Sat on hands. Spock is well positioned 80% of capital deployed in short positions.
Today, exited GLD long, and shorted GDX, GDXJ and SLV to take shorts to 90% of capital. Retaining 10% in long treasuries.
The road map I am now using is shown in the attached chart, and the objectives shown are looking more probable.
Comment: In case there is any doubt, this is a bear market. Bear markets are difficult to trade and are volatile. They sort the men out from the boys. Regardless, Spock trades the signals, and ignores everything else, including the endless babble from the financial establishment and media and other moronic financial gurus out there, most who have never traded these markets with their own capital.
The $SPX:$USD ratio chart: “The simplest things are the most extraordinary, and only the wise can see them” quote from The Alchemist.
Looking for a short term bounce trade. Need a bar or two to show support actually exists here and want to see MACD curl to confirm. Long term I still think it’s toast and I’m ready to switch to JDST when that presents a better entry.
Here’s an update on where I think DUST may be.
Rambus has in the past put up some great arguments that the bull market has years to go and much higher prices ahead… I’ve never agreed with this as I have always though the deflationary undertow would eventually catch up with us and end the bull market. I believe that is where we are now and today I declare an end to the cyclical bull market which started in 2009. This bull was simply a counter cyclical bull market within the context of a secular bear market which started in the year 2000. In fact, the market action over the past 15 years has been a FED fueled money printing double top to that original 18 year secular bull market that started in 1982 and ended in 2000. Here is the big picture to get your head around:
So we now start the great bear market which will end in tears and destruction of an entire middle class that has placed its faith in the wall street gurus. Review my synopsis of a phase III decline and project that to the general stock market 4-5 years from now and that is the process we have now begun. It’s all there knights, here we stand at the beginning of the greatest bear market since the 1929-1932 affair. It actually may even exceed that bear market as the ascendancy phase of the previous bull was produced by an edifice of malinvestment the likes the world has never seen.
No one can predict accurately the ins and outs of the advances and declines which we will see, but I suspect over the next 3 months the kick off to this bear is going to knock everyones socks off. I see an incredible amount of complacency still after the past 3 days as hard for that to be possible. Again I certainly don’t know, but I am allowed to guess what lies immediately in front of us. It feels to me that we are now at the mid-point in a market crash. I have mentioned these crash sequences last 5-9 days typically and today was actually day 5 according to my numbering method. After the highest volume scariest day the market typically has a relief day followed by a renewed attack. Typically we have 4-5 hard down days. We have had 3 so far. Everyone is different, but this serves as a guideline.
I suspect our little gold bounce has now ended. Here is the GLD chart that has served so well over the past 6 months and it bounced off the upper bound. Interesting that I have not moved these two lines in the past 4 months
I am going to throw out some price objectives here. Don’t know if we hit them now or in a later crash in the next 1-3 months, but I suspect they will be hit. I will be a buyer if we hit these targets to play a counter trend BMR.
The lower SPY PO could be hit later this fall.
Here is another chart I put together back in January. Hard to believe how it has unfolded. But I based it off of my models from the psychological phases and what I was observing in the minds of the average investor. You can now see that we have in fact reached a POR and that is confirmed by the volume.
You’ve all read the people, like Stockman, who claim that this stock market has been goosed and manipulated by Fed policy so much that they feel obligated to put quotation marks around the word “market” to indicate the completely artificial nature of it. I feel that those claims are warranted and can be supported.
Edwards and Magee wrote: “Volume goes with the trend…Thus, in a Bull Market, volume increases when prices rise and dwindles as prices decline; in Bear Markets, turnover increases when prices drop and dries up as they recover.” In light of this, I would ask you to look at a monthly chart of the DJIA or S&P 500 and examine the volume during the huge so called Bull Market from 2009 through 2015. As you can see, volume has been generally dwindling the entire time.
Therefore, if what Edwards and Magee wrote is true, then the entire post- 2008 financial crisis advance was an enormous Bear Market rally.
The tide has turned …If you want to make some serious money–become familiar with the VIX ETFs…
Chevron, Exxon Mobil all getting hammered. FRAK … etc. This is terrible for US economy. What is Fed going to do…raise rates…give me a break.
ERY and DUG are the short ETFs. I added more ERY this morning near the open.
This is where the short action is going forward
short and hold strategy on FRAK. next support at around 13 then down to 5 area over time. its a process of debt deflation and a whole lot of pain in the industry now. this is what could put the US into recession….unless the Fed announces another QE and goes negative on rates. but then the pension funds blow up. everything is connected here, like dominoes.
Another ugly day but a bounce here wouldn’t surprise me.
NEM is often a leader in the miners and this chart has served me well this year. I was ridiculed in May this year for being full-on short at resistance as 99% of traders were certain an inverse H&S pattern was about to bust out. They forgot we were in a multi-year downtrend. We may find ourselves in the green circles at similar places……….
Also, GDX appears to have hit the downtrend channel today and so far we have a wicked candle forming. Only the close matters so let’s see how this shapes up.
added: My favorite JDST chart….the weekly. At yesterday’s close I was almost ready to scrap the chart but the week doesn’t close until Fri right? 😉 Just needs to close above ~$8.50 to remain in play.
added: possible GDX fractal…..