It’s that time again when I break out the long term charts for the “Quarterly Report” I do for Catherine Austin Fits who is the founder of the Solari Report. Doing these quarterly reports every three months forces me to look at the long term picture for the stock markets and other areas of the markets which is the most important aspect of trading the intermediate to long term trends. If we understand what direction the big picture charts are suggesting it reduces our chances by 50% of being wrong.

What that means is that in a bull market the odds are heavily in your favor if you trade the long side because if your entry point isn’t the best the bull market will eventually make it right. On the other hand, if you go short in a bull market you are constantly fighting against the uptrend that can have serious consequences if you don’t have the discipline to get out of a trade when you recognize when you are wrong. Holding on to a losing trade and hoping the market will save you when you are on the wrong side of a bull market is the surest way to fail as an investor.

What most of these long term charts I use for the Quarterly Report have in common is that there is a massive consolidation pattern that began to buildout at the tech bubble high in 2000 to the breakout some 13 years later in 2013 which completed these massive consolidation patterns. I know most are tired of hearing me say, “big patterns lead to big moves,” but when you see what has and is transpiring in regards to the big picture look it’s undeniable IMHO.

A well constructed chart should tell a story of what investors have been doing with their hard earned capital by what the Chartology is suggesting. Keep in mind when you look at a chart it shows what the sum total of every investor, either a bull or bear thinks of a company or stock market by either buying or selling their shares in real time. This is why certain patterns form on a chart as the bulls and the bears fight it out which leaves some type of recognizable chart pattern when the battle ends. In a bull market those battles show up as consolidation patterns which will resolve themselves in the direction of the bull market. It’s only when a bull market comes to an end will what looks like the next consolidation pattern in the ongoing bull market, end up being a reversal pattern that will end the bull market . This will be the beginning of a new bear market. The bottom line is that the “trend is your friend” until you see a confirmed reversal pattern.

In part one of this Quarterly Report we’ll look at the US stock markets that we’ve been following for many years now regarding the big picture that has shown the 2009 bull market in all its glory. I realise that many will be very sceptical of these charts and the bull market they have painted since the 2009 low, and that’s fine. The job of a healthy bull market is to keep most investors on the sidelines until the parabolic blowoff phase takes hold when it will give everyone who has been on the sidelines every chance to get in. Once the euphoria ends so will the bull market and a new bear market will begin, rinse and repeat.

Lets start with the most important stock index on the planet the SPX

For Members

https://rambus1.com/2019/07/07/quarterly-report-part-1-us-stock-markets/