“Veritas Nunquam Perit”- “The Truth Never Perishes” Seneca (the younger)

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HNY & Thanks for having me on –

Congrats on this call, Dale!

Looking for Inflection Points Across the Board

Key Astronomic Date December 26th. Gold, Silver, Oil, Stocks

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Discussing Today : No Half Measures

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For those listening, 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,” your life as a trader would be complete. “Give me one rainmaker, and I’ll never ask for anything more.” But that thought has always seemed to apply to some legendary market of the past.

Indeed there have been several in our lifetimes- notably 1987, 2000-2003, 2007-2009.

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When we are set up for a monster trend- few see it. Just as a prophet is not recognized in his own land, so too, is a market top not recognized in its own TIME.

About the 1987 top, for example, we wrote on January 21, 2018:

“It was an intoxicating time for investors. For traders, it was a daily celebration. It was August 1987, and markets had moved up week after week and month after month for the past year with no top visible:

Investors Intelligence Bullish measures were at record levels as were call buying, while Fear as measures by VIX was at an all-time low. There was NO FEAR.

By the middle of August, the following picture of the DJIA versus VIX (then VXO), the Advance-Decline Line, and the McClellan oscillator on August 17, 1987, waved a giant red flag for traders and investors alike. But the sheer beauty of this setup was seen by almost none. It screamed “massive opportunity” to any traders who would listen, but those screams fell on deaf ears.

That once-in-a-generation setup drew virtually no attention or even mild recognition at the time. As the Investors Intelligence Polls and AAII polls had recently set record bullish readings, few gave even a fleeting thought to downside risk/opportunity:

The focus at the time was not on the downside. Every trader’s gaze was set in one direction only: upward. All projections at the time were on higher targets ahead. Few even considered that prices might decline by any serios measure as the mantra day after day was ‘Buy The Dip.’ ”

{As always, this golden opportunity was unrecognized in its own time}

The would-be generational dream instead became a generational nightmare as investors, traders, even floor brokers watched in horror.

The above occurred at the 1987 peak and here is what ultimately followed over the next few weeks:

The golden opportunity before stockholders turned instead to glue in reverse alchemy.

The play is always the same. Only the actors change.

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One of the greatest traders of all time, faced a “Monster Trend” in 1929. But unlike the trading crowd at the time, he understood exactly what he was seeing

Jesse Livermore, perhaps the greatest trader of all-time, starting his trading career in the late 1800s with literally $5. After the 1929-1932 Bear Market, Livermore was worth more than $100 million. Adjusted for inflation, $100 million in 1929, equals over $1.2 billion in 2020.

“Be right and sit tight…..Once I learned this, millions came easier than hundreds had before.” So wrote Livermore dozens of times.

Being right is one thing. Having the conviction, discipline, and continuing TREND Measures that work is quite another. Those, however, are what we’re all about at Seven Sentinels.

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Now here’s to good news. The “Monster Trend” is directly ahead:

And what about sentiment? Did it produce top levels in 2017-2020?

Most Definitely! Readings in every category were of “Primary Top Levels.” Most classes established records – some that may not be broken in many decades to follow. We list some of those RECORDS below that we’ve documented here during late 2017, 2018, 2019, early 2020. (For more detail each, click on the linked articles highlighted in the first section, above):

Investors Intelligence Bulls Percentage has topped 65 only twice EVER- At the beginning of 1987 and the beginning of 2018. The all-time peak was in 2018.
Investors Intelligence Bulls/Bear Ratio Percentagehas topped 4.8 only twice EVER- At the beginning of 1987 and beginning of 2018. The all-time peak was in 2018.
The highest numbers of Hindenburg Omens EVER occurred in 2017
The CBOE SKEW Index registered the highest reading ever in 2017
VIX registered its lowest number EVER in November 2017 – indicating “NO FEAR.”
CNN/Money Greed Index registered its Highest Level EVER this last week at 97
The NAAIM exposure level of Hedge funds expressed its highest commitment in history in 2017 at over 100% LONG
Since the dawn of the previous century, there has NEVER been a period as long as in 2017 without so much as a 3% pullback:

The totality of the set up stretches over more than 2 1/2 years. The short term set up NOW over recent weeks is very nearly the same as at the August 25, 1987 top (above) and the January 26, 2018 peak (above).

“We want to be clear on this point; however: we are NOT predicting a crash. That is NOT our point in showing this comparison. Our ONLY point is that VIX is predictive and tends to run ahead of significant market moves. But VIX is a massive negative for markets ahead, as are, of course, record bullish sentiment readings and very negative internal momentum measures.”

While traders will not recognize this TOP in its own time, history will most assuredly reflect upon 2017-2020 as one of the very most important market tops of the entire 20th and 21st centuries.

Precious few see that– in January 2020.

The years immediately ahead call out for the Full Measure of Serious Market Trading. These years will not be a time for day trading for pennies or half measures in “swing trades.”

What lies ahead is the real deal.It calls for our Full Measure of professional trading.

“Veritas Nunquam Perit”- “The Truth Never Perishes” Seneca (the younger)

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

HNY & Thanks for having me on –

Congrats on this call, Dale!

Looking for Inflection Points Across the Board

Key Astronomic Date December 26th. Gold, Silver, Oil, Stocks

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

Discussing Today : No Half Measures

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

Indeed there have been several in our lifetimes- notably 1987, 2000-2003, 2007-2009.

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

When we are set up for a monster trend- few see it. Just as a prophet is not recognized in his own land, so too, is a market top not recognized in its own TIME.

About the 1987 top, for example, we wrote on January 21, 2018:

“It was an intoxicating time for investors. For traders, it was a daily celebration. It was August 1987, and markets had moved up week after week and month after month for the past year with no top visible:

Investors Intelligence Bullish measures were at record levels as were call buying, while Fear as measures by VIX was at an all-time low. There was NO FEAR.

That once-in-a-generation setup drew virtually no attention or even mild recognition at the time. As the Investors Intelligence Polls and AAII polls had recently set record bullish readings, few gave even a fleeting thought to downside risk/opportunity:

The focus at the time was not on the downside. Every trader’s gaze was set in one direction only: upward. All projections at the time were on higher targets ahead. Few even considered that prices might decline by any serios measure as the mantra day after day was ‘Buy The Dip.’ ”

{As always, this golden opportunity was unrecognized in its own time}

The would-be generational dream instead became a generational nightmare as investors, traders, even floor brokers watched in horror.

The above occurred at the 1987 peak and here is what ultimately followed over the next few weeks:

The golden opportunity before stockholders turned instead to glue in reverse alchemy.

The play is always the same. Only the actors change.

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

One of the greatest traders of all time, faced a “Monster Trend” in 1929. But unlike the trading crowd at the time, he understood exactly what he was seeing

Jesse Livermore, perhaps the greatest trader of all-time, starting his trading career in the late 1800s with literally $5. After the 1929-1932 Bear Market, Livermore was worth more than $100 million. Adjusted for inflation, $100 million in 1929, equals over $1.2 billion in 2020.

“Be right and sit tight…..Once I learned this, millions came easier than hundreds had before.” So wrote Livermore dozens of times.

Being right is one thing. Having the conviction, discipline, and continuing TREND Measures that work is quite another. Those, however, are what we’re all about at Seven Sentinels.

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

Now here’s to good news. The “Monster Trend” is directly ahead:

And what about sentiment? Did it produce top levels in 2017-2020?

Investors Intelligence Bulls Percentage has topped 65 only twice EVER- At the beginning of 1987 and the beginning of 2018. The all-time peak was in 2018.

Investors Intelligence Bulls/Bear Ratio Percentagehas topped 4.8 only twice EVER- At the beginning of 1987 and beginning of 2018. The all-time peak was in 2018.

The highest numbers of Hindenburg Omens EVER occurred in 2017

The CBOE SKEW Index registered the highest reading ever in 2017

VIX registered its lowest number EVER in November 2017 – indicating “NO FEAR.”

CNN/Money Greed Index registered its Highest Level EVER this last week at 97

The NAAIM exposure level of Hedge funds expressed its highest commitment in history in 2017 at over 100% LONG

Since the dawn of the previous century, there has NEVER been a period as long as in 2017 without so much as a 3% pullback:

The totality of the set up stretches over more than 2 1/2 years. The short term set up NOW over recent weeks is very nearly the same as at the August 25, 1987 top (above) and the January 26, 2018 peak (above).

While traders will not recognize this TOP in its own time, history will most assuredly reflect upon 2017-2020 as one of the very most important market tops of the entire 20th and 21st centuries.

Precious few see that– in January 2020.

The years immediately ahead call out for the Full Measure of Serious Market Trading. These years will not be a time for day trading for pennies or half measures in “swing trades.”

What lies ahead is the real deal.It calls for our Full Measure of professional trading.