I have the (good?) fortune of not being involved in the day to day recently. Looking at my basic charts as an outsider, I see the following:

We are in the process creating a new buy zone, or T. I can’t say how long it will take, but I am expecting the T chart to create a W bottom. The center point will create the future length of the period of strength. It could happen any time within February. As we are working on about 8 months of 60 day cyclical lows (June, Aug, Oct, Dec–all on the 3rd of the month), that is the first day I will begin looking for strength. We did break through that Halloween ‘wedge’

The Bullish Percentage chart BPSPX is in sell mode.

On the Simple Chart, the IT breadth, Volume, and PMO have not broken down through the higher low trend line. That’s been the strength of this market, and support is supposed to hold. It is the fly in the ointment. There’s no rationality to this, but it is what it is.

I did not have FOMO on Jan 22, when I removed all longs bought early December. I do regret I didn’t keep my IEF trade longer, which I should have done based on removing the equity portion of my portfolio. That is standard procedure for pure T theory.

I am still on the sidelines in Precious Metals, and left those after the bombs fell in Iraq. Those who buy gold in the hope of it being a greater store of value in time of crisis have been let down time after time. The world doesn’t end, the flawed monetary system does not blow up. My 2019 trades are on this chart stolen from Decision Point (as is the simple chart). I prefer a deeper discount on Sprott and CEF than presently exists. A longer term view of that chart, showing the history of premium and discount, can be found here.

Sometimes it’s hard to tell. Terry Laundry looked for cycles of lows in the market. These “ringing cycles” did not always last forever. One had to watch for changes in them, but sometimes they lasted quite a while. 
We seem to be keeping to a 60 day cycle. See June, August, October, and December. Around the 3rd of the month.

As many here know, I have been forecasting another low in the first part of February since Halloween. That was before the cycle continued in December.

https://stockcharts.com/h-sc/ui?s=%24NYUD&p=D&yr=1&mn=3&dy=0&id=p48364694373&a=683534947

While the chart appears to show the VO as having broken the higher lows trendline (which I expected to happen as a key to a larger move down), the chart is no longer kept current by Stockcharts. You’ll have to wait until the end of the following day to see what today’s VO looks like.

Price is not a bear’s friend when it is above the keltner bands, but bounces off the top band as support.

My post on Wednesday was that I removed all longs. It was posted when SPX was at 3327. I have no FOMO now. I have FOLMP. I am staying out of equities till my fear of losing my profits wanes. 

I expect the VO to peak at or below the zero line before the next move lower in price.

Keep in mind that T-Theory by itself is not a formula for shorting, but one to show you when market strength is there or missing.  The rule that Terry Laundry used was when strength was missing, go to Treasuries. I am not doing that. And that cost me a bit yesterday.

The live chart can be found Here .

I had a position in IEF, which I closed out today. I have also removed the remaining two thirds of my investment funds from equity ETFs placed early December. I am starting to look ahead to the early February low that I have expected since Halloween. Here is how that chart looked at that time:

Could this downdraft happen later than early February? Absolutely, as the chart now looks like this:

I usually make an early exit from the party, and I believe this is that time. We are well above the Keltner bands width that Terry Laundry maintained in his charts. I would expect a move at least to the mid Keltner band, as per the live version of the Companion Chart. The version as of today can be found here:

Jan 19, 2020

We are no longer in the T that began early December, which lasted through Jan 14. And as I suggested near its end, this T did not look like it was going to end with a quick move down. When there is no T, one should wait in cash or bonds till the next period of strength. Right now, with the shape of this chart, and with the position of the Bullish Percentage chart as of today, there is no rush to exit.

The amazing thing about this move higher is that the Volume Oscillator on the T-Theory Chart has continued to have higher lows. That is great support and should be watched carefully. But now that the trendline is approaching zero, rather than being below zero, we could be reaching an extreme that will cause that line to collapse. In my opinion, this will be preceded by a change in the companion chart (which shows price levels for the Keltner bands) so that MFI and RSI peak above the extreme measurement and fall back beneath the extreme together. It should also be presaged by the BPSPX chart as linked above. 

This is the exact opposite of what happened at the end of January 2018 in regard to the width of the Keltner bands (which decrease in times of lower volatility). The width of the Keltner bands at that time just started to expand because the Fed began tightening, and created a wider band by increasing volatility. Now that the Fed is easing (or has given the appearance of easing), the width of the Keltner bands is shrinking. 

2018-2019 Keltner band width

While the BPSPX is in bull mode, it should be noted that we are now in extreme territory for it as well. Here is a link to historical movement of this chart.

https://stockcharts.com/h-sc/ui?s=%24BPSPX&p=D&yr=11&mn=4&dy=0&id=p3392735535c&a=622490613

And the simple chart is just about to turn up on its Volume Momentum just as its other components are reaching traditionally red warning areas. Pretty amazing times.

The Confidence Index is fighting against resistance here, but has not shown a willingness to retreat. This could either stay where it is, which would mean that Treasuries and Corporate bonds have no edge against each other, or move lower (meaning Treasuries become stronger at the expense of Corporates), or break that resistance and lead equities even higher. I am afraid that interest rates appear to be heading higher on their own, regardless of what the Fed is attempting (and even though that attempt is narrowing the Keltner bands, as noted above).

The 5 year bond may make it up to 2%

https://stockcharts.com/h-sc/ui?s=%24UST5Y&p=M&st=1990-05-01&id=p10899003811&a=436040851

The 30 year bond price may be peaking at this time, meaning higher rates.

https://stockcharts.com/h-sc/ui?s=%24USB&p=M&st=1990-05-01&en=today&id=p94368599315&a=266004789

I am old and slow, and not making any changes yet to my investment account, which has be long since early December (with 30% cash as of Jan 3). I am looking at percentages now that take a lot more points to shave a percent away in terms of SPX.  Can it really be 11 years since 7 points was 1%? 

As far as Gold, I had been hoping for a nice long run being long. The movement since the assassination and bombing has taken all the discount out of Sprott and CEF, and until more people hate gold like I do, I’m staying away. 

https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=0&dy=0&id=p50530800537&a=711579651