Miner have had a terrific lift since September 30, a 12% ascent in just four sessions. I would respectfully point you to the DUST graph, however (the triple-bearish-on-miners ETF) which is looking like it might be ready for a bounce. Adjunct to this, GLD is looking like it’s losing steam.
The recent correction of the S&P500 had many shorters and Bears wringing their hands, hoping to see a Bear Market that will make them a lot of money.
However, looking at our proprietary, quantitative S&P500 Futures LONG model, it does not seem there is all that room to go much lower than the bottom the market has printed some weeks ago.
The ESZ15 WEEKLY chart below shows what could happen if there was a new dive to lower levels.
Trading colleagues online are a surprisingly disloyal bunch. After Friday’s mega-reversal, the cat-calls and chortling began anew. Even BDI was declaring that the “President’s working committee” would “teach me a lesson.” So I guess I’m on my own again. The last bear standing.
I wanted to make a point beyond my own lonely role, however. I offer this chart, with some commentary beneath:
Even I can hardly believe what a dog BOX has become. I first wrote this snarky post about the freshly-launched IPO. Well, the price at that time (marked below with a red arrow) was terrific compared to where it is now. At this point, even in the context of a completely fake bull market and Friday’s laughable comic market reversal, the stock is down 53% from its IPO high. The path to zero is firmly in place.
After I did my Whole Foods Bear Market post late last month, I started hunting around for other interesting parallels: that is, stocks which had topped out around 2006-2007 and then went into a complete, utter, and stunning free-fall. The additional requirement, of course, was that they be exhibiting a topping pattern as of right now. My thesis is that these are sample “canaries in the coal mine” which illustrate far better than the insanely-manipulated /ES market how unhealthy equities are.
First is Pier One, that purveyor of throw pillows, scented candles, and coconut monkey dolls:
(Note from Tim: just about the only person I’m in contact with throughout any given trading day is Northman Trader, who was kind enough to share the post below. Click on any of the images for a big version. I’d like to add that Northman tends to be much more evenly-balanced than I am, and he isn’t running around beating the bear drum constantly like me, so take that into account when reading this:)
We’ve been bullish from a trading perspective this week and it has worked out great, but we are chartists and what we are seeing is concerning. We’ve talked about structural macro charts for a while and they have teased us along the way with magic saves month after month. But since they are monthly and quarterly charts one has to recognize that the math is straightforward and its clinical results are showing one startling conclusion for bulls: Utter Doom.
We have been using the Tinder Box theme in NFTRH lately. As in, stock market sentiment is so bleak, so depressed as to be a Tinder Box with the elements to ignite a flame that bounces the market, to clear the over bearishness at least.
We have successfully followed a plan every step of the way… 1. down from the August breakdown, 2. up on the bounce to SPX 1975 or 2040 (hit 2020) and now 3. down to a test of the October 2014 / August 2015 lows, which is a decision point between a bounce or an entry into a bear market (by making a lower low to October 2014).