• 3 hours America’s Workforce Elderly Workforce To Double By 2028
  • 9 hours Toyota Tests Solar-Powered Prius
  • 1 day Why The Gold Rally Flatlined
  • 1 day The Uranium Sector Can’t Catch A Break
  • 2 days Upcoming Fed Meeting Has Investors On Edge
  • 2 days Global Gold Sector Outlines Responsible Mining Principles
  • 3 days China’s Giant Vampire Fund Loses $120B
  • 3 days McDonalds To Roll Out Robot Drive-Thru Clerks
  • 3 days Savvy Investors Are Betting Big On This Little Data Company
  • 4 days How The Government Is Wasting Tax Money This Year
  • 4 days Supply Concerns Halt Expansion On Tianqi Lithium Plant
  • 4 days The World’s Biggest IPO Is Almost Here
  • 5 days The Relatively Of Money And Happiness
  • 5 days Wall Street Unfazed By Recession Fears
  • 5 days SoftBank Urges WeWork To Pause IPO Plans
  • 6 days Anti-Aging Market To Hit $55 Billion
  • 6 days JPM, Morgan Stanley Take Advisory Roles In Aramco IPO
  • 6 days Are Bonds In A Bubble?
  • 7 days The Unknown Media Giant Taking The World By Storm
  • 7 days From Millennial To Millionaire With One Simple Trick
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

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

Potential Sell

Good morning Traders,

As the market vehicles tend to move in sync, we see a potential set up here as we go through our normal timing charts.

(Click to enlarge)

(Click to enlarge)

Stocks approaching a sell and bonds looking to break out.

(Click to enlarge)

The Dollar has been weakening, which has added to the buying in the Qs.

(Click to enlarge)

Gold would be near a top in normal markets, but if we get a sell off, they’re breaking out.

(Click to enlarge)

Oil has been trending lower, which is contrary to what you would expect with inventories shrinking and the dollar selling off. Even oil option writers are betting on upside. Momentum is setting up a bullish divergence.

And moving on too some sentiment indicators:

(Click to enlarge)

This peaking suggests sideways action.

(Click to enlarge)

And the VIX - a bet on volatility - is also setting up a potential top. No one can predict the future, but it’s easy to see storm clouds and that does increase the odds of rain.

(Click to enlarge)

The barometer is not reflecting the bullish action in the market, which suggests a bearish divergence and market vulnerable to a sell off.

So as much as we have the potential for a sell off, if bonds reverse course and head lower, that will create more liquidity - similar to 1999 and that liquidity is seeking returns, so stocks will benefit.

It certainly is an interesting time to see the market narrow in leadership so much and a few stocks responsible for a significant amount of gains. I was actually reviewing some Low Periodic Power Law material to see if we’re setting up for a historic crash. I’m no quite there yet. But there are similarities with the pattern in the Qs.

If we do get a crash, I hate to say it, but I’m betting on more of a 1987 style crash, which will be faster than anything we’ve experienced in some time. A move lower like that sets the stage of breaking some markets. So the period after - the recovery - could also set up the next larger move lower. This is reminiscent to the March 2000 move lower in the Nasdaq, where in 3 weeks, the Nasdaq went from 5000 to 3200. Sure it recovered, but the recovery set the next stage for a move lower from 9/1/2000 to October 2002. The 87 crash was 3 weeks as well, taking the markets from 328 to 216. The difference between now and then is that then we didn’t have the Nasdaq. This time around, we have the crowd gathering into the same ETFs driving the same stocks higher. Ready to lose close to half that value in 3 weeks?

The key to responding will be speed. So after a price point is broken, we will move to a bearish stance. Until then, we’re long and patiently watching.

Regards,

www.stockbarometer.com

Back to homepage

Leave a comment

Leave a comment