Rainmaker

-Published April 1, 2018/Data Updated May 3, 2018:

===================================================

Primary Trend: Bull Market

Intermediate Term: ~ Seven Sentinels Uptrend 5/2, 4-13-2018, SPX 2654

Tracking Account Valuation 1,608,482 +16.3% YTD 2018 Vs. SPX -2.7% YTD – Outperforming SPX By +19%

STS 0/7 Downtrend 4-23-18/Close SPX 2670 Position: 10% SQQQ, 20% TZA, 20% SDOW 50% Cash

STOPS: SDOW 18.28, TZA 10.29, SQQQ, 16.39

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Jesse Livermore, perhaps the greatest trader of all-time, starting his trading career in the late 1800s with literally $5. After the 1929 crash, Livermore was worth $100 million. Adjusted for inflation, $100 million in 1929, equals about $1.1 billion in 2016.

If you’ve been trading for a few years, the thought may have crossed your mind from time to time that if you could have one “monster trend” to trade, your life as a trader would be complete. “Give me one rainmaker, and I’ll never ask for anything more.”

But that thought has seemed to apply to a market of the past. Perhaps it’ll apply to one that you will see in the distant future.

If so, then this may come as welcome, if not shocking news: That “legendary trend” is setting up RIGHT NOW!

Starting at the right time is critical. But that’s just one half of the equation when it comes to what Livermore called “big money.” Livermore said: “There are lots of early bears in a bear market, but the man who can be right and sit tight is rare.”

Why? Because it is one thing to “be right”- and you’ll read about those TREND tools here in this article- but it is quite another to “sit tight.” That takes conviction, discipline, and continuing TREND Measures that work. Both are what we’re all about at Seven Sentinels.

Consider these “rainmakers” from history as compared to right now — 2018:

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It was a heady time for stock investors, traders, speculators. The US of A had never seen a time like what we now call “The Roaring 20’s.” The Industrial Revolution and the assembly line production tactics had produced jobs and growth, such as the world had never seen. Stocks roared ahead, and by the late 20’s everyone was getting rich. People were taking tips from their barbers and cab drivers. The future never looked brighter.

But a not so funny thing happened on the way to Eutopia: The crash of 1929 and the great depression.

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A generation later, the crash and the depression were “ancient history” long forgotten by the trading crowd as the USA rose to the position of the wealthiest nation either on Earth now or ever before – since humankind has walked this planet. “The USA is back again- as leader of the free world.” The markets boomed through 1960, 1961, and into early 1962 after the election of John F Kennedy in November 1960. The future, again, never looked brighter. And stocks would this time go to the moon for sure. Optimism was breaking all the records.

But then came the Bear Market of 1962 and the deep recession that followed.

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But then after a generation had come and gone, by 1987, the nation was embarked again in a period of tremendous growth. The “Reagan Revolution” had included two landslide election victories in 1980 and 1984, and by now, the ugly inflation dragon of the ’70s – and 18% mortgage rates – were passe. The country was experiencing some of its fastest growth and job creation ever.

Investor’s Intelligence showed that services BULLISH outstripped services BEARISH by an unheard of five to one! Services BULLISH hit 65% for the first time. Greed was off the charts:

Put/Call ratios showed the highest relative call buying EVER. Fear, in the meantime, as measured by VXO at the time, was at a generational low. The stock market soared. It was invincible as the crowd dreamed of massive increases ahead.

What happened to that dream? The crash of 1987- when markets dropped the most in any three weeks since the crash of 1929.

========

Looking at the four charts below (ignoring any identifying levels), can you say which is from 1929, which is 1962, is from 1987, and which is the current chart through Friday, March 29, 2018? They look almost identical, don’t they?

Now let’s add some information. We updated the first, third, and fourth charts with what immediately followed after the dotted vertical line. That line marks where the above graphs terminate.

The second chart was right now, today, so the path of the market is yet TBD- but it’s no mystery at all.

======================================================================

Starting with the presidential election in November 2016 and into January 2018, here are just some of the record RED FLAGS that emerged in markets to tell us that we are back at late 1929 or early 1962 or late 1987 or mid-2000… all over again:

The highest percentage of new NYSE yearly lows at a new SPX peak in the history of such data on November 14, 2016
In keeping with continued elevated new lows at SPX peaks, we had the highest number of Hindenburg Omens in 2017 EVER.
The CBOE “Black Swan” Index (AKA “SKEW” registered the three highest readings in history in 2017
The most negative readings for net declining minus advancing volume at new SPX peaks occurred in 2017-several times.
VIX registered the lowest fear in history several times throughout 2017
The CNN/Money Greed Index at 95 registered its highest reading in history.
The NAAIM exposure level of Hedge funds registered its highest commitment in history in 2017:
The Investors Intelligence Bullish Sentiment levels surpassed the unheard-of peaks of 1987 in 2017!
Since the dawn of the last century, there has NEVER been a period as long as the current one without so much as a 3% pullback:

And that’s just a sampling of the red flags and signals the market gave us from November 2016 to January 2018.

All of the above is not as overwhelming as is the evidence of what’s ahead via Seven Sentinels. The 2-hour (on SELL), the daily (on SELL) and even the weekly mode (on a scarce but massively significant SELL Signal)

Deliver a powerful confirmation of the developing rainmaker.

This developing trend is a monster that will ultimately be a career-maker for traders.

We ended last week with 100% cash and will look to reload over the next couple of days, likely starting with SQQQ.

We’ll have a pre-opening analysis at 9:15 AM as we recap Futures, Momentum issues, RUT, and VIX and summarize our market outlook.

-Published April 1, 2018/Data Updated May 3, 2018:

===================================================

Primary Trend: Bull Market

Intermediate Term: ~ Seven Sentinels Uptrend 5/2, 4-13-2018, SPX 2654

Tracking Account Valuation 1,608,482 +16.3% YTD 2018 Vs. SPX -2.7% YTD – Outperforming SPX By +19%

STS 0/7 Downtrend 4-23-18/Close SPX 2670 Position: 10% SQQQ, 20% TZA, 20% SDOW 50% Cash

STOPS: SDOW 18.28, TZA 10.29, SQQQ, 16.39

======================================================================

Jesse Livermore, perhaps the greatest trader of all-time, starting his trading career in the late 1800s with literally $5. After the 1929 crash, Livermore was worth $100 million. Adjusted for inflation, $100 million in 1929, equals about $1.1 billion in 2016.

If you’ve been trading for a few years, the thought may have crossed your mind from time to time that if you could have one “monster trend” to trade, your life as a trader would be complete. “Give me one rainmaker, and I’ll never ask for anything more.”

But that thought has seemed to apply to a market of the past. Perhaps it’ll apply to one that you will see in the distant future.

If so, then this may come as welcome, if not shocking news: That “legendary trend” is setting up RIGHT NOW!

Starting at the right time is critical. But that’s just one half of the equation when it comes to what Livermore called “big money.” Livermore said: “There are lots of early bears in a bear market, but the man who can be right and sit tight is rare.”

Why? Because it is one thing to “be right”- and you’ll read about those TREND tools here in this article- but it is quite another to “sit tight.” That takes conviction, discipline, and continuing TREND Measures that work. Both are what we’re all about at Seven Sentinels.

Consider these “rainmakers” from history as compared to right now — 2018:

=======================================================

But a not so funny thing happened on the way to Eutopia: The crash of 1929 and the great depression.

=============================================================

But then came the Bear Market of 1962 and the deep recession that followed.

================================================================

Investor’s Intelligence showed that services BULLISH outstripped services BEARISH by an unheard of five to one! Services BULLISH hit 65% for the first time. Greed was off the charts:

Put/Call ratios showed the highest relative call buying EVER. Fear, in the meantime, as measured by VXO at the time, was at a generational low. The stock market soared. It was invincible as the crowd dreamed of massive increases ahead.

What happened to that dream? The crash of 1987- when markets dropped the most in any three weeks since the crash of 1929.

========

Looking at the four charts below (ignoring any identifying levels), can you say which is from 1929, which is 1962, is from 1987, and which is the current chart through Friday, March 29, 2018? They look almost identical, don’t they?

Now let’s add some information. We updated the first, third, and fourth charts with what immediately followed after the dotted vertical line. That line marks where the above graphs terminate.

The second chart was right now, today, so the path of the market is yet TBD- but it’s no mystery at all.

======================================================================

Starting with the presidential election in November 2016 and into January 2018, here are just some of the record RED FLAGS that emerged in markets to tell us that we are back at late 1929 or early 1962 or late 1987 or mid-2000… all over again:

The highest percentage of new NYSE yearly lows at a new SPX peak in the history of such data on November 14, 2016

In keeping with continued elevated new lows at SPX peaks, we had the highest number of Hindenburg Omens in 2017 EVER.

The CBOE “Black Swan” Index (AKA “SKEW” registered the three highest readings in history in 2017

The most negative readings for net declining minus advancing volume at new SPX peaks occurred in 2017-several times.

VIX registered the lowest fear in history several times throughout 2017

The CNN/Money Greed Index at 95 registered its highest reading in history.

The NAAIM exposure level of Hedge funds registered its highest commitment in history in 2017:

The Investors Intelligence Bullish Sentiment levels surpassed the unheard-of peaks of 1987 in 2017!

Since the dawn of the last century, there has NEVER been a period as long as the current one without so much as a 3% pullback:

And that’s just a sampling of the red flags and signals the market gave us from November 2016 to January 2018.

All of the above is not as overwhelming as is the evidence of what’s ahead via Seven Sentinels. The 2-hour (on SELL), the daily (on SELL) and even the weekly mode (on a scarce but massively significant SELL Signal)

Deliver a powerful confirmation of the developing rainmaker.

This developing trend is a monster that will ultimately be a career-maker for traders.

We ended last week with 100% cash and will look to reload over the next couple of days, likely starting with SQQQ.

We’ll have a pre-opening analysis at 9:15 AM as we recap Futures, Momentum issues, RUT, and VIX and summarize our market outlook.