Market wrap with Gary – The conventional markets are setting up for a significant drop

May 6, 2014

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    May 06, 2014 06:06 PM

    Pretty interesting interview guys. I agree with quite a bit of what Gary had to say. I object to the use of the word crash though as I don’t see that unfolding. This should not be any more than a corrective decline and one that is needed and overdue. I am onboard with Gary’s call regarding the dollar starting to rise again. Probably mid week or just after the ECB meeting. Naturally I will be chuffed (as the Irish say) if my correction call was indeed good enough that it was just 24 hours late of the peak I was predicting. Do I get a lapel pin or a gold star for that guys?

      May 06, 2014 06:13 PM

      And yes, it is highly probable that gold and silver see new declines if this correction looks to be strong. As I said to Chris last Friday, it will be baby out with the bathwater time. So I would not want to be gambling on the long side of miners or gold until I have seen some of the fallout in the next few days. Nothing is baked in stone here of course. It is merely my opinion that a correction is inevitable at this stage. Early May just seems to make sense.

    May 06, 2014 06:08 PM

    I still beleive a market can’t move consistently without a massive acceleration before closing the current move: either massive liquidation in a bear market before turning into à bull one, either a rush for buying before turning bearish. It has to happen, and it will surprise everyone’s projections when occuring. Without that “ultimate moment”, resistance to further reversal would be too great so that it makes this “parabolic acceleration” phase happen anyway..

      May 06, 2014 06:05 PM

      That’s the thing Fred….we have not had a parabolic move in stocks. It is part of why I feel sure this is simply corrective and not a blowoff top. The big move is yet to come but that looks to be some time off right now. Rick has mentioned a bear-trap on a few occasions. That he felt we would not see declines until after the trap was set and sprung. That also does not need to happen at this stage though because it assumes a crash is the outcome. But a crash is not what I foresee right now.

        May 06, 2014 06:11 PM

        Hi Birdman, I agree with your views. I’m still bullish for mere technical reasons.
        It is a strange situation. It reminds me of Sept11th attacks: the markets collapsed but recovered quickly because in the background they were still bullish, I mean they had not executed this final rush required to engulf all the potential buyers around and thus making the stock supply overabundant on the market. It’s this overabundance of supply that makes the price cascade and kick start a bear market.
        Maybe excellent buying opportunities are on their way.

    May 06, 2014 06:09 PM

    I’m not really in the crash camp either but unless the S&P can make a higher high above 1897 quickly then this intermediate cycle will become left translated. That means it should move below the Feb. low.

      May 06, 2014 06:14 PM

      Good to hear, Gary.

    May 06, 2014 06:21 PM

    It’s ‘beggar thy neighbor’ for the dollar.

      May 06, 2014 06:43 PM

      Not at all Joseph. I could not disagree more.

    May 06, 2014 06:14 PM

    Well Gary looking at the S&P daily chart we’ve got some support levels that need to fall (close below, key word close) first up the 40and50dma are both currently at 1864 next up the trend line support off the Feb 1737 across the April low at 1814 comes in around the 1845 level and with that failing to create support the 200dma would come into play at 1778….there is a lot of support to chew thru to get a hard sell off…

    Cory??…really fed injecting liquidity into the system always brings money into gold????

    That hasn’t been the case since QE# 3 was put in place golds trend has been lower highs and new lows….gold’s most bullish move was Jan 2014 when QE tapering actually kicked in.

    May 06, 2014 06:15 PM

    Interesting cycle data regarding the US$, Gold and the S&P

    May 07, 2014 07:07 AM

    Stock market is going nowhere until September at which point the institutions will exit (as long as the Fed stays the course to raise rates next year). PMs will move slightly higher over the summer (but nothing great). Tough summer for traders.