financialsense.com / FS STAFF / 04/04/2016
Bear Market Rally, 2017 Low
“Everything suggests to me that the world is in fact in a bear market and that what we’re having is the end of the first bear market rally…
According to my work, the final low of the bear market is not now—it’s not even this year. It’s next year and it will be quite a bit lower than we are now in virtually all markets.”
Oil Rally Now Fading
“Whenever a move up is exceptionally violent and vicious—as it’s been in the price of oil—usually the buying power is short covering…and, of course, once the shorts are all covered, the next trade is likely to reinforce the last trade that made a profit, i.e. they’ll short it again at higher levels.
In the case of something like oil we are still in a position where the world has massive excess supply and a lack of demand so that’s the underlying fundamental. You don’t fall 80% and then make a nice little V-shape bottom on the chart and then go back to the good old days. That is just so unlikely I can’t get my head around betting that way at all. It’s much more likely that the rally runs out of steam and we go back down to make a more important base…and at much better value.”
This Doesn’t Happen in a Bull Market
“The probability of making money by running out and buying something aggressively is really vanishingly small and the probability of losing money is really rather high.
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Thanks to BrotherJohnF