The Alternative Investor
                   Providing Analysis and Trading Strategies for the
                      Broad Stock Market,  Gold & Silver,  Crude Oil
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                     Last Trading Blog: Monday, March 20, 2023

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​***IMPORTANT "CRASH" UPDATES ON THE BROAD STOCK MARKET ***
We are anticipating a very significant long-term cycle top in stock markets very soon. According to many technical indicators and cycle studies, a STRONG correction in the broad stock market is imminent. A final top most likely already happened in early January 2022 in the DOW and S&P 500 and in late November 2021 in the NASDAQ. Once this top is in, a long correction down will follow. This has most likely already started. 

The MINIMAL correction we originally projected was 10-15%.  We have already seen this exceeded in all three major market indices (DOW, S&P 500, NASDAQ). There is a possibility, however, of a much more severe drop (crash) of 70% or even more by 2024. This is why we are now focusing our longer-term trading on selling short.  Any longer-term investors uncomfortable with short selling should obviously be out of equity markets until we have evidence that the correction is over. 

UPDATE 2/22/23:  We are getting another relief rally from new lows that were achieved in October. Those lows represented a 22% drop in the DOW, 28% in the S&P 500, and 38% in the NASDAQ from their all-time highs in January 2022 (DOW and S&P 500) and November 2021 (NASDAQ).  The magnitude of these drops indicates a major long-term correction is likely underway. It is normal for a major correction or "crash" to proceed down in waves - i.e. deep plunges punctuated by temporary relief rallies. In this current relief rally, the DOW has already exceeded its previous relief rally in August 2022, but the S&P 500 and especially the NASDAQ are well below their August 2022 highs. This gives us a strong bearish divergence between these indices (until the latter two can exceed those August highs) which suggests that this relief rally could end any time now, and the long-term correction or "crash" could resume.

Even if the DOW manages to rally some more and even challenge its all-time high (36,952) from January 2022, it is very unlikely that both the S&P 500 and NASDAQ would do the same, and we would have an even stronger bearish divergence signal and probably a good place to sell the market short. The only thing now that would negate our idea that a major correction or crash is underway would be  for ALL THREE indices to make new ALL-TIME highs. Again, that doesn't seem likely, but we are in unusual economic times, so nothing would surprise me.

PLEASE CHECK THE TRADING BLOG FOR CURRENT UPDATES.




**IMPORTANT GOLD UPDATES**
Gold is nearing the end of a long-term 23 year cycle that began with a double bottom low in 1999 and 2001 (around $280) that then soared to $2070 in Aug. 2020. That $2070 high was most likely the peak of the 23 year cycle. From that high gold then fell to $1677 in March 2021. It then rallied back to $2066 on March 8, 2022, essentially making a "double-top" to the $2070 high in 2020. "Double-top" formations are bearish, and because it is VERY late in this 23 year cycle (it started in 1999-2001), those two highs were probably the final top to this long-term cycle.

This cycle has been very bullish, almost parabolic, in its steep rise over the last 20 years, but all cycles must eventually peak and then correct down to a final cycle bottom. The bottom for this current 23 year cycle is due sometime in 2023 - 2024.

Gold prices made a "double-bottom" with two lows on Sept. 28, 2022 ($1616) and Nov. 3, 2022 ($1617), and prices have been rallying strongly from there. This rally may be the "last hurrah" for gold before it turns back down to make a final plunge to the 23 year cycle bottom. We don't expect this rally to take out the $2070 top from 2020.

Despite any shorter-term rallies, the price of gold is now most likely headed down to it's final 23 year cycle bottom due in 2023- 2024. How low will it go? Prices could fall back to the $1000 level, and possibly even lower.

For those who would argue that a major crash in the broad stock market (which seems likely) would kick up the price of gold, I would point out the fact that during the early phase of the 2008-2009 "crash" in equities, gold prices plummeted with the stock market as many investors fled to the U.S. dollar as a safe haven investment. The same thing might happen again as the stock market bubble looks like it is finally taking a major correction, and the U.S. Dollar Index soared to a new 20 year high in September 2022. The dollar has corrected down from that high but could be ready to rebound back up to challenge or exceed $115.

Of course, after equity markets bottomed in early 2009, gold prices rocketed right back up and made a 170% gain by Aug. 2011 as people realized the value of precious metals in a global economy based on fiat currency.

The bottom line for gold here is that the final top in the 23 year gold cycle is probably in, and this means the severe correction to the final 23 year cycle bottom due around 2023 - 2024 has begun. Our main long-term trading strategy now should be to sell short at the top of any significant rally in gold.

If gold does make a 23 year cycle bottom around $1000 over the next few years along with a long-term cycle bottom in the broad stock market, both markets would be at good buy spots, especially for long-term investors as gold would be starting a new 23 year cycle and equities would possibly be starting a new 90 year cycle.  From those new bottoms, both markets would be pointed up for many years.

UPDATE 2/22/23: Gold made a significant cycle low on Sept. 28, 2022 at $1616. There is a small possibility of that being the final 23-year cycle low, but more than likely it was the start of the last 16-month sub-cycle within the 23-year cycle. That means we could see a strong rally from there that could take prices well above $1900, and maybe up to $2000 (a "triple-top" to the 23-year cycle). From there, however, a steep drop would follow to the final bottom of the 23-year cycle due around 2023 - 2024. Our longer-term trading strategy is therefore to sell short at the top of this potential rally.

PLEASE CHECK THE TRADING BLOG FOR CURRENT UPDATES.

                  ATTENTION ALL INVESTORS AND TRADERS:

Are you worried about instability and volatility in the stock market and commodity markets and how it may affect your investments?

The Alternative Investor monitors and analyzes the Stock Market (DOW, S&P 500, NASDAQ) and the price of Gold, Silver and Crude Oil on a daily basis (see the TRADING BLOG and Current Positions tabs at the top of the page) utilizing a unique collection of  cycle studies, technical analysis, and information resources that keeps you up to the minute on what these markets are doing.  With this information, "crashes" can be side stepped and even turned into profit with short selling.

The main feature of this website is the TRADING BLOG.   On this blog I indicate when I make trades in the specific markets mentioned above.   I spend over $2000 a year in financial market newsletters and website subscriptions and over 20 hours/week studying and analyzing this data to make the trading decisions I post on the blog.  Please note that I am a conservative trader.  I am investing my own savings and retirement money with these trades, so I do not take them lightly.  I do not make wild, high risk speculations on the markets.  Nevertheless, investing in commodities and the stock market does involve some risk, and at times some loss of capital is always possible and even inevitable when one is actively trading.  The goal is to have the gains greatly outweigh the losses over time.

Dec. 2012 - I am launching this slightly abridged version of the website right now because I feel it is important that investors and traders be aware of what is going on with the markets during this potentially dangerous "fiscal cliff" and sequester budget transition period.  My original plan was to set the site up with a free one month trial and then a subscription fee to access the TRADING BLOG.  I am now just going to post the TRADING BLOG for free over the next several months or so (until we are past the fiscal cliff) as an open blog to anyone who's interested.  I will set up subscription access later (with the ongoing free trial) for those who find this information useful for trading and investing and would like continued access.  Welcome aboard!  We are going to try and navigate the fiscal cliff without falling off!
(UPDATE 9/3/2019 - Wow, we made it through the "fiscal cliff" and sequester crisis from the Obama years, and almost 7 years later I'm still here posting my blog (still free - for now) as a much bigger potential crisis looms, i.e. a MAJOR correction ("crash") in the broad stock market. Not to worry. Rest assured that we will not be caught unawares if and when this happens. We are at high risk for this correction from now through early 2022, so stay tuned!