The Tactical investor is the place where mass psychology and Technical analysis converge seamlessly to create the ultimate stock market timing system. Do not confuse market timing with trying to predict the exact top, that is not what we do here; we believe that endeavour is best reserved for fools. Psychology is the driving force behind every human action, so understanding what the masses do and how they think is imperative when it comes to investing.
Instead of trying to predict the market, the emphasis should be on studying the herd. It is the change in the herd mentality that dictates what the market does. The reason most fail in this endeavour is because they do things backward, they try to treat the market as a separate entity and try to find out what it is doing and then determine what the crowd will do. When in fact, what they should be doing is looking at the crowd and then using the information to determine how the market will react. It is the crowd that drives the market. A market soars to new highs or crashes to new lows because of the way the masses are interpreting the situation. How can you predict something if you are not looking at the source? Human beings are the most illogical of all animals. Despite having the power of reason and logic, they are the only creatures on this planet that will go out of their way to make sure they are in harms way. When you understand the mass mindset, trying to time the markets takes on a whole new meaning. This is why at the Tactical Investor, we dedicate an inordinate amount of time to studying the herd; we want to know what they are doing, why they are doing and if the sentiment has reached a boiling point or not. This data can be coupled splendidly with technical analysis to render a clear image of what is going on in the markets
At the Tactical Investor, our focus is not only on Technical analysis, for technical analysis spots the symptoms of the disease, but it does not identify the cause. The trend indicator blends the best elements of Technical Analysis with the powerful field of Mass Psychology. Our investment philosophy is very simple, identify the trend and stick with until it ends. We could list a plethora of reasons as to why you should join our service, but instead of doing that, we will let our past calls speak for themselves
When you think logically and or use old parameters to gauge this market, every single bone in your body probably screams out that this market should crash and burn. That is true, but what is also true is that as nothing is real, logic has no place when it comes to the illusory. How can you use logic (which is based on using real and compelling data) to judge an event that is illusory in nature? Every statistic imaginable has been, is being or will be manipulated to satisfy whatever picture the manipulators want the masses to believe in. It takes two to tango, one to cry and three to have a party, thus the crowd is as complicit in this game as are the manipulators. The most likely outcome is that the markets will trade higher than anyone expects as long as the trend remains up. Market Update May 31, 2015
Nothing much to add here, other than regurgitating nonsensical financial data pushed out by so called elite government agencies; as this data is corrupt it makes no sense to waste time on dealing with fictional events, and we are also not in the mood to work with vomit. Since we made these comments, bonds have rallied nicely, but we feel that they should (key word should) retest their lows before moving higher and testing their old highs. The trend has not turned negative and the reason bonds sold off is because too many fools had over-leveraged themselves in the futures markets and when there was talk from the Feds that rate hikes would be inevitable, markets pulled back and some of these long positions were so leveraged that some players were forced to liquidate their positions; this turned what would have been an orderly pullback into a short-term blood bath. This pullback allowed the Feds to give the impression that they are not manipulating the markets, some stupid fat greedy bulls were slaughtered, the bears were pushed into opening new shorts, so everything has been set up for a rebound. The top players will deal with the new bears in the same kind way, they dealt with the eager bulls. Market Update May 31, 2015
The markets have continued to soar higher and higher, much to the surprise of both the bears and the bulls. As we stated in the last update, nothing makes sense when examined from a logical point of view. However, as far as this market is concerned, logic and reality are two traits that will only hamper you and lead to losses. The individuals behind the scenes are working on the premise that they can recreate reality and so far, it appears to be working like a charm. Interest rates will be held in check until the very end, whenever a reason surfaces to justify a rate increase, some negative news will appear shortly to make it appear that a rate hike is a bad idea. When you control the bad and the good news, you control the outcome of the game. As the NASDAQ just recently broke a 15-year barrier, it appears to us that the NASDAQ should at least soar another 2000 points if not more. Remember a spring that has been held back for so long (and 15 year is a long time), uncoils with twice the force that held it back. Market Update May 17, 2015
When you control the bad and the good news, you control the outcome of the game. How high will this market soar? Well to issue very long-term targets would be a waste of time as the situation is very fluid; meaning that this market will go as high as the masses allow it to go. Market Update May 17, 2015
The Feds will not raise rates until there are literally facing a double barrel shotgun and even then they will wait for the last minute to act. This effectively means that this artificially low rate environment could be maintained for some time. As long as this is the case, they will find a way to push money into the markets. Remember extremely low rates combined with inflation (money becoming more worthless each day) will eventually push even the most conservative player into the market. Market Update May 6, 2015
What we need to focus on is that the underlying theme is “inflate or die”; this means that the currency race to the bottom is on maximum overdrive. In such an environment, it would be foolhardy to take a different approach that would entail pain. Individuals in the West are not like their Russian counterparts; they are not ready, and they do not have the experience of dealing with hardships. In such an environment where the only weapon central bankers have is to flood even more money into an already overextended financial system (this phenomenon is not a localised phenomenon but a global one for the most part), every strong pullback has to be viewed as buying opportunity and every extremely strong pullback has to be viewed as a screaming buy. Market Update March 31, 2015
We have infinite reasons and then some as to why this market should crash and burn. Ebola, slowing economic growth, the Ukraine/Russian crisis, the possibility of a default by Greece, a supposedly slowing housing market, the possibility of a Euro recession, a slowing down of the Chinese economy, the fact that the Yellen in her infinite wisdom might raise interest rates, and let’s not forget ISIS. So the bears and naysayers have plenty of ammunition to spin a plethora of horror stories for the gullible masses. On the same token, the bulls also have a boatload of rigged information to support their deranged theories. However, the only thing that matters today is not what is going to happen, what has happened or what might happen. The man who controls the money supply (in this case woman) is the one that control the direction of the market. All the other stuff well it just makes for good chatter. When you have absolutely nothing better to do and are bored out of your mind then you can subject your mind to this fetid gobbledygook. If you are a smart person, then you should read the views from the potato heads/penguins/brain surgeons (or otherwise known as experts) when you are looking for a good laugh. Overall, these tools are affirming the trend; therefore, all pullbacks must be viewed as buying opportunities. Market Update Feb 28, 2015
The penguins were all over the place. We advised conservative players to adopt a neutral position and aggressive players to use strong pullbacks to open new positions and this worked out relatively well for the respective groups. . However the weekly trend is up again, so the outlook is bullish once more. All strong pullbacks should be viewed as buying opportunities. The monthly trend is issuing a conflicting signal, but our focus is not the monthly trend but the weekly trend. If the monthly trend does not change, it simply means that the weekly trend is going to turn bearish over the next few months, but until it turns bearish we will remain bullish. Market update Feb 18, 2015
The trend is mixed, some penguins are screaming the market will crash, others are saying it will fly. We are stating that the trend is not clear, but as it has not turned negative, the outlook favours a move higher and the old highs could be possibly tested. This will hold true until the weekly trend turns negative; the moment it turns negative we will send out an Interim update. Market Update Jan 31, 2015
The dollar easily traded past 93.50 and surged to our upper-level targets, when it surged to 95.85 (just a few points shy of 96.00). As the trend was up (and that overrules everything) we specifically stated that there was nothing stating that the dollar had to pull back and that is why we stated all pullbacks should be treated as buying opportunities. The weekly trend is still strong so the overall outlook still calls for higher prices. The daily trend is down and so we can expect a possible test of the high 93 ranges to low 94 ranges; this is not guaranteed, but it’s quite possible. What we do know is that all pullbacks should be viewed as buying opportunities until the weekly trend turns negative. This means that the euro still has more downside. Individuals are softly humming the hymn “kumbaya my love” and with the passage of each day the volume will rise until everyone is screaming this silly hymn from the top of their lungs. At that point, the dollar will put in a multi-decade top. Market Update Jan 31, 2015
The weekly trend is still positive, but showing signs of being extremely overbought and thus the current pullback is healthy; the same outlook applies to the monthly trend. As long as the weekly trend does not change, then all pullbacks (including the current one) have to be viewed as buying opportunities, even though we might personally feel otherwise. The trend on the daily chart is still up, but all secondary indicators are overbought and indicating that the current pullback is healthy. We have support in the 2000-2015 ranges and if that is taken out, the SPX will most likely revisit the lows of Dec 2014. The last update for Dec 2014, sent out Jan 3, 2015
One should expect Chinese markets to continue rallying higher, albeit the normal corrective moves (corrections mild and severe) along the way up. We expect when things calm down that Russian markets will also experience similar moves, perhaps even stronger because they are being pushed lower via artificial means. So if we take a look at the current chart, it appears that the markets followed the path we laid out for them as early as August of 2013. The Russian markets could end up doing the same thing. They have already off to a pretty good start. Last update for Dec 2014, sent out Jan 3, 2015
Note we stated that the Chinese markets were also extremely oversold not too long ago and continued to do this for awhile; we were a bit early, but as the saying to the early bird comes the worm to the late bird the bullet. The Chinese markets started to rally nicely since October of this year and topped out with our markets and should continue to resume their upward trend. One day we see FXI trading past 200 and RSX north of 70. Market Update Dec 21. 2014
As the weekly trend is still up, and the daily neutral, the markets will/should experience another quick correction and as long as the weekly trend does not change the markets will probably reverse and move higher again. We will not short the markets until the trend turns negative on the long-term time frames (weekly charts). The trend indicator overrules everything else; thus regardless of the pattern if the trend says something else, we will follow the trend. Market Update Sept 13, 2014
The trend is still strong and the dollar will continue to rally higher until the trend turns negative; in fact the pullback to the 81.80-82.00 ranges might or might not occur given the strength of the current move. We would not focus on the level of the pullback now; the only thing to keep in mind is that every strong pullback is a buying opportunity till the trend turns negative. The opposite holds true for all major currencies. Market Update Sept 13, 2014
If you look at FXI, it has had a nice run since Oct 2013 (the first time we recommended this play to individuals who were willing to invest for the long haul). It traded as high as 42 before pulling back. The 40-42 range is a zone of pretty strong resistance so this pullback is to be expected. The next leg up should propel it past this point and once former resistance becomes support, one can expect the Chinese markets to really take off. When FXI closes above 42 on a monthly basis, it should easily be in a position to test the 50-54 ranges before running into any resistance. We fully expect FXI to eventually trade to new all-time highs and once the current all time is taken out, the path for a move to the 140 plus ranges will be in place. There are many blue-chip stocks selling at a discount so long term players can continue opening up positions in these companies. Another very good long term play is the Russian market. Believe it or not many will look back in shock at their inability to recognize this lovely long term opportunity. Market Update Sept 13, 2014
No one is really expecting the dollar to rally strongly, and it is usually under such circumstances that the opposite of what the experts expect comes to pass; in this instance that would mean the dollar rallying strongly while many of the major currencies pullback. This goes against all logic because the USA is printing new money like a turbocharged crack addict, but logic never made anyone much money in the markets; the markets are illogical and even more so now, given the massive level of manipulation (fraud) that is taking place. Market Update July 28, 2014
Long term the Chinese markets remain a very good investment. The Shanghai Index pulled back in almost perfect correlation with the BDI Index (Baltic dry index) and as the BDI has stabilized now and is ticking upwards, the time for long term entry points is at hand. Those who are patient should look into opening positions in top Chinese companies that have taken a beating, especially those traded on the NYSE or NASDAQ exchange. Market Update July 28, 2014
Once again, we have many negative factors that could derail this bull market, but once again, we have to be prudent and understand that the trend is what counts. Roughly 2 years ago, we had a system issue a signal that never failed for almost a 125 years, but guess what it failed for the first time since its inception. It was not because the signal was flawed or the system had failed; it failed only because the playing field had changed. The playing field right now is as unbalanced as they come; the room for free market forces to run is so small they might as well not exist. For all intents and purposes, the markets are completely controlled now. In such an environment a new system has to be used, one that takes the current factors into consideration and one that effectively focus on price action (plus a few key psychological factors. The trend indicator/system does this and this is why we are going to wait for it to turn bearish before we exit all our long positions and look for a few short positions. Market Update June 30th, 2014
Once again we are in the same position, the outlook has deteriorated even more, but the trend has still not turned negative and despite the fact that from a logical point of view it would make sense to short the market, we must resist this call for now, as the outlook still calls for another move past 1900. Market Update May 22, 2014
The dollar is giving pretty strong signals on the longer term charts that a bottom is close at hand while only the Euro appears to have put in a top, the other currencies should be topping out over the next few weeks. Market Update May 22, 2014
The trend is still strong and as of yet shows no signs of weakening, though many technical indicators are starting to flash warning signals. As the trend has not turned negative yet (do not confuse this trend with the one you obtain via plotting trend lines; the trend we speak of is completely different from the one you obtain by drawing simple trend lines), bonds appear poised to test the 137.50 ranges and potentially trade as high as 140.00. Market Update May 22, 2014
Since the development and full implementation of our trend indicator, despite many so-called signals that the market was weakening or was ripe for a correction, we have continued to view every single pullback as a buying opportunity. The overall projection for the SPX to trade to and beyond 1920 is still valid, with a possible overshoot to 1950. Even then it does not mean we will short the markets just because these targets have been hit. On the contrary, we will only short once our trend indicator confirms a trend change. Market Update April 28, 2014
The Dow is still on course to blast upwards to a series of new highs. The strategy now used by the central bankers and top market manipulators is becoming more psychological in nature. The focus is on altering the perception. Once the perception is altered it does not matter what the reality is for a new alternate reality has been created. This alternate reality will replace reality and remain valid until the masses manage to break free from its hold. For months now the Fed has been giving hints that it was going to taper off its $85 billion a month program, but when the markets reacted badly, it always backed off. However, this time the markets are holding up fairly well; it appears that they have priced in the fact that the Fed is going to start looking for a way to cut back on this program. In this sense, the markets are holding up rather well and one would have to say that they are now actually climbing up a wall of worry. Market Update Jan 22, 2014
The new reality is that the mom and pop investor has just jumped into the market, and they have been sitting on the sidelines for a very long time. They have also been finally brainwashed into accepting the alternate reality that all is well. On that basis, we can expect the markets to rally much higher before they finally run into a brick wall. Market Update Jan 22, 2014
Based on the trend and our psychological analysis of the situation, we think that the Dow could soar to unimaginable heights before the markets crack and even when they crack they will not break the long term uptrend. The Feds pulled a Houdini with their unrelenting quantitative easing program, and almost no one seems to have noticed this, or if they have almost no one is talking of it. The Dow and SPX put new highs and based on momentum and old technical analysis theory which most seem to have forgotten; a true bull market begins only when the old highs have been taken out. The long-term trend remains strong so for now there is very little evidence of long-term weakness. A correction of up to 20% is possible. We will probably have two corrections one in the 10% ranges and one in the 20% ranges both should be viewed as buying opportunities. Market Update Jan 22, 2014
The perception is changing; the masses are now becoming optimistic thus unless the trend changes we can expect the markets to rally even higher. One other thing to understand is that even though the rally in the markets has been artificially induced, the markets have actually recently issued “a true bullish signal." What is this signal you ask? Well, both the Dow and SPX are trading at new highs. A true bull market is not in session until the old highs have been taken out. 9 out of 10 times when this occurs the market rallies significantly from the breakout point; the breakout point, in this case, is roughly 14200 (the old 2008 high). Market Update Dec 12, 2013
Using trend analysis and a few other tools the targets we come up with will sound outrageous right now.
1st target is for a test of the 19,500-20,000 ranges.
2nd a target is a possible test of the 21,000 ranges. Market Update Dec 12, 2013
As stated above, the housing market will heat up, despite the debate that higher rates will affect. Bottom line the banks will find some way to reduce their lending standards, and once they do; a lot of money will pour into real estate as well as commodities. After all real estate is a commodity. If real estate prices surge, 30-40 percent in 3-4 years that is a substantial gain given that your position is leveraged. At most, you put down 20%, many banks are now allowing individuals with very good credit to put as little as 5% down. Based on the money you put down, the gains one stands to make is in excess of over 100%. However, do not rush into this sector blindly. The sector should experience a pullback, but for the most part, it might no longer be easy to be able to land what we call a “screaming buy." Now individuals will have to settle for a good deal. The best options are to look for a fixer-upper and put in some elbow grease. With a fixer upper, you are bound to lock in a good deal. If you cannot spot anything in your area, then do not be afraid to venture to other zones. Market Update Dec 12, 2013
The small mom and pop investors have finally turned bullish, but contrary to the stance most contrarians and bears will adopt, it is not the time to short the markets aggressively. . In fact, from this level the markets could run up significantly as all this money that was sitting on the sidelines makes its way into this market. We need to wait for the feeding frenzy stage (Euphoric) and at that point it will make sense to aggressively open up shorts. At this point, the mom and pop investor are simply optimistic and there is a wide chasm that separates optimism from euphoria. Market Update Nov 30, 2013
From a very long-term perspective, it makes sense to start nibbling at FXI and other key Chinese companies such as YZC, BIDU, HNP, ACH, CHL, SNP, GSH, TSL, etc. However, from a midterm perspective, we would like to see some more strength before opening up positions in FXI and some of the above-listed companies. Market Update September 10, 2013
Dollar drops to new 3-month lows and Gold responds in kind, suggesting that a new short-term relationship might be in the works. So far, when the dollar dropped, Gold rallied and when it dropped strongly as was the case last week, gold usually rallies very strongly. In this instance, the opposite took place. Gold is now oversold as is the dollar, and it could now put in an intermediate bottom.
It has found initial support in the 1630 ranges. The support at this level is strong, and it should hold. Failure to hold could result in a test of 1600 ranges. Looking a bit further the current development strongly suggests that Gold will be heading much lower in 2013 and the low targets fall in the high 1200 to low 1300 ranges. Market Update Dec 12, 2013.
Gold did drop to the suggested ranges in 2013.
The contrarian thing to do was to purchase a lot more Gold once the Feds started printing more money like crack heads; those who took this route were rudely shocked when Gold bullion plunged. Today one cannot take a contrarian position against the crowd immediately; the situation has to move to the extreme zone and only then can you consider taking an opposing position. . Instead of buying more Gold, we decided to sell all our palladium bullion positions, and 75% of our Silver and Gold positions almost at the top in August of 2011. Nov 30, 2013
To reiterate, until the weekly trends change, the longer-term outlook still calls for the SPX to trade higher and thus as mentioned in the last update, it is still possible for it to trade to and past 1700 again. Sept 10, 2013
Overall, even though we are expecting the markets to go through a tough phase in the 4th quarter, the SPX could still potentially trade above 1700 one more time before experiencing a larger correction. Market Update Aug 17, 2013
In the last update, we compared the Shanghai Index with our markets, and the differences were striking. A weakening economy (USA) had the stronger market and vice versa. As stated in the last update from a long-term perspective the Shanghai index is in a bottoming phase. What this means is that a bottom could take hold soon or the lows (roughly 1800) could be tested again.
There is a relatively strong amount of support at 2,000, and unless it closes below 2000 on a weekly basis, this level of support should hold. In the event, 2000 is breached; the next level of support falls in the 1750-1800 ranges. There is a very small chance that it could spike down to the 1000 ranges and test an extremely strong zone of support, and in the small chance that this occurs, it would represent a screaming once in a lifetime buying opportunity. Instead of panicking if this ever comes to pass, become greedy and load up. The support in the 1750-1800 ranges is very strong, so we would need a shock-type event for these levels to be breached.
On the positive side, FXI is already showing some signs of strength, and if this index can close above 2,400 on a weekly basis, it should easily manage to test the 3000-3200 ranges before running into resistance.
The point is not to focus on the actual bottom, but to understand that this represents a great long-term opportunity. With that in mind, traders can use FXI as a proxy for this market. Use pullbacks to open positions in FXI. Later on, when the weekly trend turns positive, we will look towards purchasing calls with the longest available time premium: currently, the time limit is roughly 2 years. Market Update August 17, 2013
As long as the weekly trend remains up, no matter how strongly the market pulls back it will recover and rally again, possibly to new highs. At this point, we continue to look for decent to moderate correction but should the outlook change we will have time to take advantage of this development. Market Update June 16. 2103
The most important development this week is that we have a new daily sell on the SPX. Now it’s time to see whether the SPX will follow the path taken by the Yen and bonds, both of which had two daily signals neutralized before the third signal produced a very strong effect. In the case of bonds, two buy signals were neutralized and with the Yen, two sell signals were neutralized. Even though we are expecting a strong correction based on the fact that the SPX neutralized two daily sell signals, the longer-term outlook will remain bullish unless the weekly signal changes. At this moment, the weekly is firmly in the buy territory. Until the weekly, buy is neutralized the outlook is for the SPX to test the 1650-1700 ranges this year. April 17, 2013
At present, we still do not have a clear signal in the daily charts, but the bias is clearly shifting to the upside. A third indicator is very close to moving into the buy zone. This leads us to believe that the markets will experience a quick downward move and then reverse course and surge to new highs. In terms of the SPX after a quick pullback, it should be ready to challenge 1600. However, there are already indications that the market is going through a topping phase. We explore this below under “interesting developments”. Market Update Feb 11, 2013
V readings experienced yet another 75 point drop from the last reading. In total V, readings have dropped by 225 points this year. Clearly something is in the works. This informs us that until the trend changes the moves to the upside will generally be stronger and longer lasting in nature as opposed to those that occur on the downside. Once the trend changes we can expect the intensity to pick up on the downside and at that point the markets will be ready to experience a significant correction. . As the main trend is still up, it means that until a new sell is triggered every strong pullback will prove to be a buying opportunity. Market Update Feb 11, 2013
The heat is on; it is just a matter of time before all the players join the game and then the theme will become devalue or die. This will lead to another bubble or several bubbles as investors will be forced to look for a place to park their money. One of the bubbles will eventually be in the precious metals sector. In the end, the entire commodities sector will go through a bubble phase. The end result will be the same. These markets will implode and collapse. As this is going to be an all out of war (something we spoke off years ago), it is going to have an impact on the financial markets. It will alter their normal trajectories and push them higher as investors pile into the markets. This confirms that the Markets have more room to move higher but in the short term they are ripe for a correction. Market Update Feb 11, 2013
The strength of the SPX clearly suggests that for now all strong pullbacks should be viewed as buying opportunities until a new sell signal is triggered. Market Update Feb 11, 2013
It (Yen) did not manage to trade above 128.81 and so continues the trend of putting in lower highs. As long as it does not trade below 124.25, it still has the chance to test the 128.81 ranges. It is now locked in a trading range. The first sign of a stronger correction will be for it to close below 124.25 ranges on a weekly basis or to trade below, it for 3 days in a row. Aug 14, 2012
Longer term; it (Yen) needs a weekly close below 118.50 to signal that a stronger and more destructive phase is going to take over. Once this occurs, traders can use strong rallies to open up additional long term shorts until the Yen is trading down to 100 or lower. Market Update August 25, 2012
The BBC Global 30 combines Europe, Asia and North America - the three power centres of the global economy - in a single index so it provides one with a nice broad view of what is taking place in the global markets. This index is most likely going to run into strong resistance relatively soon when it tries to break past the 5800-5900 ranges. The intermediate-term trend is still strong so after a pull back this index should rally further, which is in line with our views for the general market; a sharp pull back, then a strong counter rally and potentially a larger top in March. If this pattern plays out, the top in March should produce a much stronger correction which could/should take out the Oct 2011 lows. Market Update Jan 23, 2012
The markets rallied and topped out as expected in March of 2012
Gold has still not issued a strong sell signal on the daily or weekly charts, but it’s getting dangerously close to doing so. In terms of our indicators, Gold is now trading in the extremely overbought ranges. We have never in our trading lives come across a market no matter how strong it appears to be that did not experience several strong corrections during its bullish run-up. Gold is not going to be the exception to this rule; at the very least it is going to experience a medium to strong correction and or an extended period of consolidation. The Gold bull is not over, but there are strong signs that it’s getting ready to take a break. Potentially Gold could surge to the 2000 ranges before putting in a top. We suspect that a surge to the 1950-2000 ranges will generate a series of massive negative divergence signals and potentially a very strong sell signal in the process. Market Update Sept 3, 2011
A few days later Gold traded past 1940 before topping out (the week of September 9, 2011)
Bottom line; now is not a good time to buy any precious metal. We suspect that Silver could trade down to the $25-$30 ranges before a bottom takes hold. At those prices Silver will make for a good buy; if by some chance it should dip to 20 or below it will become a screaming buy. Aug 26, 2011
The strong reaction from the commodities sector in general clearly suggests that some sort of top is in place. A rebound should be expected over the next 1-2 weeks and investors should use this to close out half their positions in Gold bullion, Palladium bullion and Silver bullion. Continue trying to get rid of your silver in the $40-45 ranges. Market Update May 24, 2011
In the precious metal's sector, we are already witnessing signs of a blow-up top. Absolutely, nobody is buying silver at above 40 dollars because they are afraid of inflation. Forget it, the only reason they are jumping in is because they want to speculate. They are mad they missed the ride so far, and they are determined that they are going to get a piece of the action.
Another sign of a blow off top is a market mounting a mediocre pull back and then rallying very strongly from there. This is precisely what took place in the silver and gold markets; they experienced a very tiny pull back and then raced upwards. Market update May 4, 2011
One thing every single person needs to remember is that every single bull market has experienced several strong corrections and at least one incredibly painful correction; there has never been an exception to this rule and there will never be. Commodities are slowly falling down one by one, it is just a matter of time before oil and precious metals are hit. Despite the dollar trading to new lows, there are still many signals that continue to validate that the dollar is going to mount a multi-month rally. The time frames have moved, but the pattern has not turned bearish. Lastly, everyone is harping about the dollar trading to new lows; in reality its July 2008 low is still holding, but many commodities have traded to new all-time highs. This development alone is one of the largest possible positive divergence signals any market can or could ever generate. Market update May 4, 2011
The Japanese Yen from a very long-term perspective is in a bubble territory. It’s not a question of if but when this bubble will pop. Thus, our advice is to continue accumulating positions in YCS and do not look at them on a weekly basis. Just put it in a draw and look at it maybe once every month. When this market collapses, it is going to fall very strongly. Market Update Sept 3, 2011
And boy oh boy did it completely fall apart
The higher readings below refer to our V-indicator (V readings).
- It is also our opinion that higher readings indicate that the level of market manipulation is increasing. Higher readings correspond to higher levels of market manipulation. Once again, this would explain the Dow's incredible feat of putting in 11 new highs on pathetic volume, Gold shooting well past 1200, The Japanese Yen index trading almost to 118 and bonds soaring to 141 before pulling back and so forth.
This phenomenon was 1st revealed last year. In Oct 2008, the Dow bottomed, and then it went to put in the classic head fake where it put in a lower Low in Nov 2008. In between Oct and Nov 2008, the markets experienced several selling climaxes, VIX soared into record territory, put-call ratios spiked, the number of individuals bearish on the market set new records, we had multiple positive divergence signals, several daily buy signals, etc. In essence, everything was in place for a turnaround. The only anomaly was that volatility readings stayed above the 900 mark. The Dow rallied briefly and then took out its Novembers lows. It moved from the oversold, to the very oversold, to the extremely oversold and then finally into the extreme of extremes and just to add a bit more pain it dipped a tad bit more before putting in a bottom at 6469. It dropped almost 1000 points below its Nov 2008 lows. Market Update Dec 8, 2009
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