• 107 days Will The ECB Continue To Hike Rates?
  • 108 days Forbes: Aramco Remains Largest Company In The Middle East
  • 109 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 509 days Could Crypto Overtake Traditional Investment?
  • 514 days Americans Still Quitting Jobs At Record Pace
  • 516 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 519 days Is The Dollar Too Strong?
  • 519 days Big Tech Disappoints Investors on Earnings Calls
  • 520 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 522 days China Is Quietly Trying To Distance Itself From Russia
  • 522 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 526 days Crypto Investors Won Big In 2021
  • 526 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 527 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 529 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 530 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 533 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 534 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 534 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 536 days Are NFTs About To Take Over Gaming?
Stock Barometer

Stock Barometer

Stock Barometer

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend. Our goal is to…

Contact Author

  1. Home
  2. Markets
  3. Other

Significant Low?

9/30/2014 6:16:14 AM

Good morning Traders,

Every day the stock market doesn't break down, means the potential for an advance increases significantly. Thinking back to some of the best bull market rallies from 10/1 through year end - you have to prepare that the potential exists.

Talking about potential, let's look at potential returns from here:

Expected One Month Future Return Chart

The above just takes the forward 1 month return based on the level of the barometer. So we're in the 10% range. This is one reason we didn't position for downside in our Stock Options Speculator service. Now we may position for upside and some calls on the next Buy Signal from the barometer.

But if stocks rally - who needs gold? I would expect gold to crash - significantly:

Gold Volatility Chart

That being said, I'm not alone in that assertion:

Gold Put/Call Ratio Chart

As you know, I am not a big fan of being part of the crowd. So the potential for a rapid advance in gold also exists. We're in gold puts, but if gold can hold these lows, I'd have no problem pocketing our profits (>100%) and trading the upside until the put buying resolves.

As for the barometer, we remain in Sell Mode, but the Qs have remained strong, holding on to the 50day.

Daily Stock Barometer

Longer term though, we could see a flip in the nature of the market:

Cumulative New Highs and New Lows Chart

We'll look at our longer term indicators over the coming weeks and months for a similar turn down in cumulative money flows and breadth - as this will be a sign that the underlying bullishness of the market has changed.

Regards,

 

Back to homepage

Leave a comment

Leave a comment