Market Update
Trader Scott’s Market Blog
September 9, 2016
I sent this to my e-mail subscribers during today’s trading hours. And below it is an update for after the close. I will cover other markets later this weekend.
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I have written several times about the complacency in all markets, but especially in the global stock markets. And I have been cautioning about waiting to short stocks until the next bigger selloff – if it’s accompanied by a large increase in volume, then I will be shorting into the ensuing rally. The volume is picking up a lot today. I need to see where the close is, and the potential follow thru next week, but I am extremely concerned about all markets over the next 80 days, including gold, just to a lesser extent. I’ve been expecting volatility to begin ramping up mid-Septemberish. We’ve had our little fun summer complacent period. This whole fun time in markets post-Brexit is setting up a very scary next 5 years. (Complacent DISTRIBUTION areas.) Stocks and bonds are beginning to move together. It’s what I’ve been waiting to see. The biggest bubble on this planet is not actually sovereign bonds, (although the price action will correspond), it’s the bubble in confidence in central banking. The cracks have been appearing for about 3 years. They’re only going to increase. I have received the question many times that central banks can play this game as long as they wish. I have consistently disagreed. But markets are all about timing. Entering and exiting at the “ideal” time. The belief in the eventual omnipresence of negative interest rates (and what a completely ridiculous term/”idea” – only Economics PHD clowns could dream it up) is wrong. Even the erudite morons at the central banks are figuring it out. Yes, helicopter money is next, (possibly next summer but the path to it is going to be ugly). And I do believe that the “manipulators” are going to try and push gold, silver, and the shares below the solid SUPPORT areas that have been set up, and breached briefly last week in gold and the shares. Silver was a few weeks prior. Those situations are buying opportunities. Even if “they” aren’t able to accomplish “their” task in full, please only buy into selling waves. DO NOT buy into STRENGTH. Remember when you’re too scared to buy it’s usually (but DEFINITELY not always) a great time to enter the market. Visa versa, when you’re too greedy to sell it’s usually (but DEFINITELY not always) a good time to exit a position.
Update after the close:
So the stock market closed around the lows today with a very large pick up in volume. Tremendous QUALITY SUPPLY thrown on the market today. And this is with no “news”/excuses (aka horse manure) to pin it on. It’s the big selling waves and buying waves with no “news” that have much more meaning to me. I have included 3 charts. They are annotated. The point is to watch the SUPPORT and RESISTANCE areas. It’s how we can anticipate turns in markets and plan ahead. Maybe you can even put buy limit orders below the market, if you’re busy with a real job. (I am unfamiliar with that situation).
Chart #1 is the IWM (Russell) index.
Chart #2 is the SPY.
Chart #3 is the 30 year bond yield.
The point is to look at where the HIGH QUALITY DEMAND and HIGH QUALITY SUPPLY is showing up.
The bond market is in a massive DISTRIBUTION/topping area – alternatively bottom in yields. The massive bond bull market started on Oct. 26, 1981 when yields hit 15,21% on the 30 year. The bear market in bonds, which is close, but not here yet, will be equally impressive. And it will destroy our lifestyles as we know them. Get prepared now. Virtually no one on this planet is giving any thought to how different our lives are going to be without the easy access to credit – and all of the “benefits” that has brought us since the decision by the global elitists to convince us all to be debt junkies.
'Trader Scott – Market Update – September 9, 2016' have 4 comments
September 11, 2016 @ 3:51 am Matthew - London
‘ Remember when you’re too scared to buy it’s usually (but DEFINITELY not always) a great time’
Good point Scott. I recall last year when gold was at the bottom of about 1050.00 USD or 700.00 GBP that i just couldn’t buy there as it seemed it may keep falling.
September 11, 2016 @ 11:21 am traderscott
Matthew, Everything in markets is about RISK and PROBABILITIES, it’s not about “figuring things out”. It took me a long time to understand that.
This is what I wrote in my December 2015 post: “I’ve been urging listeners to avoid buying gold since Sep. 2011, except for a trade. However, that situation is slowly changing. In the last update, I said that I still expect more new lows in gold, which has occurred. So now what? Gold is definitely under accumulation by big capital, despite the obsession with gold manipulation, they’re using weakness to buy. While I still expect sub $1000 gold, so does just about everyone else now, even some of the most bullish gold bugaroos. So begin to SLOWLY accumulate gold, but do NOT buy into the price rallies. Call THE master of numismatics Mr. Gauss and work out a buying plan.
While gold itself is not nearly as bullish as it was into the 19 1/2 year bear market low of $248 on July, 20, 1999 – the gold miners are that bullish. Something to ponder.”
It’s vital to approach the markets in a different manner than we’re “taught”.
September 11, 2016 @ 4:39 am Michael Harvey
Dear Scott
I love this quote of yours-it about sums up the world we are living in today.
Virtually no one on this planet is giving any thought to how different our lives are going to be without the easy access to credit – and all of the “benefits†that has brought us since the decision by the global elitists to convince us all to be debt junkies.
PS. All this talk from the Fed’ officials about rate hikes is irritating. They are doing this to supress the price of GOLD, but oh! will they be sorry when it all collapses around them.
It is beyond stupid the way they are using this so called forward guidance- this cannot and will not create stimulus, they are like casino players on a losing streak trying to recoup their losses.
Why is Wall Strreet sucking in this false talk, as an ex trader maybe you can shed some light on the subject?
Regards
Mike
September 11, 2016 @ 11:35 am traderscott
Hey Mike, It’s key now to focus on confidence. That “trade”, so to speak, can be viewed going forward by watching the long bond.
And just ignore Wall Street. I traded in Chicago with ex-Wall Streeters who considered themselves to be brilliant traders. They sucked. I never met one of them who could trade in what was then one of the truest complete free markets in the world. Those traders never lasted. And those free markets were the floor trading pits in Chicago. May they rest in peace.
The confidence in global central banks has peaked. Wall Street is in big trouble. Their cheating and front running days will decline alongside the confidence in the Fed. But they’ll go down swinging.