Note from Tim: I didn’t write this. And I probably have as contrary a view to the thoughts below as can be imagined. But I want to provide other points of view. I simply wanted to stress……these are NOT my opinions. No no no no no. OK, thank you.
Over a week ago, in my analysis to my members, I noted that, ideally, I was looking for the market to pullback and test the 2800SPX region. And, the market certainly dropped down to the 2800 region, but also broke the 2796SPX support upon which I was focused. That had me begin to focus on the 2700SPX region of support. And, today, we dropped and broke my next level of support at 2700SPX. But, this is the pullback I have been looking for over the last several months which had not materialized. Now, it has come in with a bang.
While this pullback took many by surprise, the common reason attributed to the decline last week was the rise in interest rates. I need help understanding this “reason.” Allow me to explain.
Back on June 27th, 2016, we published analysis to our members entitled “Beware of Bonds Blowing Up.” That was the first long term top call we made on bonds in the 5 years we had been open to that point. And, as we now know, the bond market topped a little less than two weeks later.
With the Nasdaq continuing higher this past week, it has now reached our minimum target we were looking for before a pullback may be seen. But, I think the XLF may be providing us with certain clues about how 2018 may turn out. And, it may not be as rosy as many believe. Well, at least the first half of the year.
Anecdotal and other sentiment indications
Interest rates are rising. Tax obligations will likely be dropping. And, many believe this could be a wonderful environment for our banks to thrive. In fact, I am seeing many Wall Street analysts picking the banking sector as one of their favorites for 2018. Well, I certainly cannot concur, based upon what I am seeing in my charts, which provide insight into market sentiment.
As markets move higher and higher, for some reason, people turn more and more bullish. I mean, the drive that most consumers have to find the best price for the goods and services they desire is conspicuously absent from the greater investor community. (more…)
The “sentiment” in the metals complex now ranges from indifferent to very bearish. In fact, I am seeing many just posting how they are just fed up with the metals complex, and just want to move on. And, that is often the time when fireworks are seen. So, I think it is prudent that we remain on our toes right now, just as many seem to giving up.
With silver’s direct drop lower this week, along with the potential that the GDX may hold its 21 region support, we may be able to maintain a more immediate bullish perspective. However, I still want to note that it will still take several months until the next break out set up is ready to go. But, what I am about to present is the best-case scenario we can view on the charts at this time. And, they need some serious confirmation in the coming weeks.
First, I will go through the more immediate bullish potentials, as presented in silver, GDX and GLD. Then I will discuss the more bearish potential, and what can trigger that. (more…)
When I sat down to review how I can update the analysis I provided to our members in my mid-week update, I realized that there is not much more technical analysis I am able to add to what I wrote to our membership in my mid-week analysis, so I am going to repeat it here, with some additional general thoughts below:
While I strive to provide deep insight into the markets I track for you, I am somewhat at a loss in this region with the metals, especially with the various charts presenting quite differently.
For those that have followed me for years, you know when I am bullish and you know when I am bearish. And, for the great majority of the time, my bullishness and bearishness have been appropriate to prepare for impending price action. However, we are now in a region of uncertainty, and I don’t think I can classify it any better than that at this point in time. (more…)
Hindenburg omens. Market valuations. Record low volatility. And, I am only scratching the surface of all the reasons paraded before investors as to why this market is, in their opinion, “too high.”
So, is this time different? Have we finally conquered the business cycle and the stock market will rally on forever?
But, when article writers suggest that their old methods of market evaluation have failed them, and then conclude that we need to prepare for a market crash, it makes me question the logical if/then perspective of their analysis. (more…)
This past week, we experienced yet another horrendous terrorist attack in New York City. And, amazingly, just like what occurred after several other terrorist attacks that have been experienced over the last year, the market rallied right after the attack.
It has almost gotten to the point that people now expect the stock market to rally after a terrorist attack. Have we really become this warped in our thinking? Must we hold fast to ridiculous notions that news is what drives the stock market to the point that we have to resign ourselves to believing that the market will rally “because” of a terrorist attack? Do you not see how ridiculous these perspectives really are?
Yet, if the market dropped after a terrorist attack, there is no question in my mind that every analyst and their mother would be absolutely certain that the market dropped specifically due to the terrorist attack. Every article the next day would have been pointing to the attack being the definitive “cause” of the market drop. And, if I then challenged this false exogenous causation theory, the response I would receive is “don’t you believe your eyes?” Yet, not a single analyst dares to suggest that the markets are rallying because of news of terrorist attacks despite seeing many instances of this occurring over the last two years. Do, they not believe their eyes? (more…)