Prologue: This is a bearish article written by someone who covered his short (bearish) positions today (except for the euro) and has only long positions now, in precious metals and stocks, along with a heaping helping of cash. In other words, per yesterday’s snapshot, the market had dropped to levels that could see a bounce, especially since the spark to this week’s reaction was not legitimate as a substantial market input. This article is not concerned with short-term ups and downs; it is concerned with what comes in September or in Q4, after da boyz is back from da Hampins and settled in.
The war of words between the TiC (Tweeter-in-Chief) and the LiC (Lunatic-in-Chief) has little to do with the financial market’s intermediate-term fate. In the very short-term? Sure, man, machine, casino patron and Mom & Pop will fly in and out of stocks as the wind (and sentiment backdrop) blows. But before this standoff of the belligerent, the markets had set a course for changes come September or Q4 2017.
We have our 30 month cycle that often coincides with major tops or bottoms. Here’s the ‘C30’ chart once again, with the noise of the 12 month cycle, which caught the 2009 bottom, removed. The C30 caught the major tops in and around 2000 and 2007, and also caught the market top (that wasn’t) in 2015 and the bear market low in 2002.
Simple math states that C30 is batting 5 or 7 with respect to catching at least moderate turning points (2010 may not look like much on the monthly chart, but players in the midst of it were not feeling that way at the time). It’s an impressive batting average and it is fact, not bias or bearish wishful thinking.
This post was published at GoldSeek on 13 August 2017.