Defining Gaps.docx

Defining GAPS By: Marty Armstrong Friday, January 18, 2019

What we have going on in the Dow is a classic example that the Reversal System is great at - showing the gaps in markets. I explained that the Daily Bullish in the Dow was at 24089 but there was a GAP up to the first Weekly at the 25004 level.

This is what happens when there are no reversals in an area going up or down. I look for the GAPS for big moves. This was the setup for the 1987 Crash. We elected a pair of Double Weekly Bearish and there was a GAP with nothing between there and the next Monthly. That GAP was filled in 2 days. ONLY a closing today ABOVE the Weekly Bullish would indicate follow-through to the upside. Otherwise, I would take profit against the Weekly Reversal, flip and place the stop just about the high achieved. It either works or it fails but the risk is low. Yes it can fail. But you do not lose the farm. Remember that timing is the MOST IMPORTANT. We are closing in on a Directional Change.

January21st By: Marty Armstrong Friday, January 18, 2019

QUESTION: Your reversals are amazing. The market fell back precisely to test the reversal and then stormed higher. Thank God you do not do mainstream media. I don't know how they would handle your forecasts. My question is concerning the Monday since the markets are closed. I believe you have stated that the market can make the move the day before or day after. Could you clarify what happens when the ideal day for a target is closed. Thank you for opening my eyes to the hidden order. TKR ANSWER: Yes, you are correct. We could peak on the close on Friday or first thing Tuesday morning. However, the 21st is showing up in markets globally that will

be open. So whatever this is, it appears to be a confidence issue and interestingly Prime Minister May must put forth a new BREXIT proposal by the 21st.

Gold Going into February By: Marty Armstrong Thursday, January 17, 2019

Gold has been starting to realign rallying with the stock market. This is a good sign for the long-term. The Weekly Bullish stands at 1322.50 while the Weekly Bearish lies at 1236.10 and this is a virtual Double since we have also one at 1236.30,. Technical support on a weekly closing basis rests at 1275.

Here too we have next week as a Directional Change and the strongest target remains in mid-February. Gold is simply being driven by the political events as are the currencies and share markets. This is reflecting that people just do not know what lies ahead on the horizon. On the Daily Level we have THREE Directional changes back-to-back which is giving us this choppy pattern. But here too the main target appears to be Monday 21 with a Directional Change then and the 22nd as well. Only a Monthly Closing above 1362.50 would signal a breakout and that does not really appear likely until 2020.

The Euro into February By: Marty Armstrong Thursday, January 17, 2019

The Euro has turned down from the week of 01/07 on schedule. The Weekly Bullish Reversal stood at 11559. The rally reached intraday 11570, but closed at 11461 leaving that Reversal in play.

This week was the Directional Change and that has unfolded as expected leaving the high last week. The next weekly turning point will be next week. We could see the low form then and the Dow & Euro the switch directions. Nevertheless, the strongest turning points appear to be mid February as we see also in the Dow. We did elect a Minor Weekly Bearish on Friday at 11612. This leaves us focusing on the next at 11460 which we held last week by 1 tick. Thereafter, the next one comes into play at 11310. Since we are trading with a 113 handle, this probably suggests that we may test the 11310 level going into Monday. With next week as the turning point, do not expect continued follow-through just yet beyond Monday.

The Dow into February By: Marty Armstrong

Thursday, January 17, 2019

The Weekly Bullish in the Dow stands at 25004 in dollars. In terms of Euros, the Weekly Bullish stands at 21448. As you can see, the Euro has been dropping once again because of all the political chaos on the horizon. As that unfold, we end up with a foreign bid under the market in the US that will tend to PREVENT any major crash as domestic analysts keep screaming.

Here is the Down in terms of Euro. You can immediately see we have a completely different pattern. The market stayed within the upward channel and now as the Euro declines, this brings in support even if in terms of dollars the Dow moves sideways to lower.

Now, when we turn to the Weekly Timing Array, we can see we have a Directional Change coming into play next week followed by a Panic Cycle the the week of the 28th. The strongest target will be mid February.

Keep in mind that TIMING is #1 and PRICE is #2. Therefore, which it remains possible to test the Weekly Bullish Reversal in the 25,000 zone, we run out of time by Monday 21st. That means WHATEVER high we reach on Monday will most likely be the end of the bounce. The market closed too far above the Daily Bullish so it moves back to retest. The fact that the market is not running away to the upside, warns we may not be able to reach the 25,000 area by Monday. We do have a Daily Bullish at 24952. There just appears to be a large gap between the 24,000 and 25,000 levels. Normally, with the Weekly Bullish not coming into play until 25,000 when the market fell to 21,712, This setup also warns that we may yet make a new low but hold 21,600 on a monthly closing basis. That would then bring the Weekly Bullish down significantly closer to the current trading levels. When that happens, it will increase the chances that the low for the year is in place. Something needs to happen between now and January 2020 that begins to seriously undermine the confidence in government. The Democrats are acting absurd. If Trump says the sky is blue they would say it is black. They must oppose whatever Trump says just to win the White House in 2020. Government will no longer function. The damage the Democrats are doing on all levels being aided by the Neocons who just want war and are not loyal Republicans, is really profound. From here into 2032, do not expect government to function. It has become permanently polarized. This is NECESSARY to aid the shift from Public to Private Confidence going into 2032. The Republicans and Democrats can no longer work together to run government. God help us for whoever follows Trump will be a full fledged pro-government person who will do whatever is necessary against the people. Trump is ONLY the reaction - not a change in trend. Those who hate Trump hate anyone who disagrees with their

politics. This hatred is pervasive. In South Carolina, a friend reported that a car in a parking lot with a Trump sticker was shot numerous times as a warning to Trump supporters. The 2020 election is likely to be the most violent in American history. This is all part of the collapse in faith in government unfolding into 2032. There is just nobody willing to run for office who is now middle of the road. All we will get are extremely from both sides.

The Dow into Week of 1/21 By: Marty Armstrong Wednesday, January 16, 2019

The Dow is pushing higher to test the key resistance area in the 25000 zone both technically and on our Reversals system. The key day for a target will be Monday 21st. The following week of the 28th remains as a Panic Cycle. We still see a closing above 24089 should point to the test of the 25000 area. There will still be the risk of a retest of the lows after the 21st.

Keep in mind that we nearly reached the Monthly Bearish which was the ideal target at 21600 stopping at 21712. That means we could still make a new low, but the bulk of the decline is normally confined to the first two time intervals which was therefore December. Only a monthly closing BELOW 21600 would signal a more pronounced decline. This is all a setup for what will be the Greatest Trade of most people's lives. Support right now lies at 23775 on a closing basis.

The Great Alignment By: Marty Armstrong Thursday, January 10, 2019

QUESTION: Thanks for your reply. Am I correct in observing many assets are deflating in value, not inflating anyway, and that eventually the DOW, gold and (USD if not monetary change) will eventually reflate very strongly? Also, is it possible that commodities will come back at the same time as the DOW, gold ? How do they relate to each other? It would seem that the time targets may be pushed back to 2032, so when would the deflation cease? Have been to 2 conferences, read your reports. It seems I might have to reset my timelines. Regards RM

ANSWER: Yes, we are still in the Asset Deflationary Mode. However, the ECM turns up in January 2020 so the next cycle is upon us soon. I warned at the WEC that we would make a correction in the Dow given it was an reasonable high on average of 8.6 years from the 2009 low. But it was also 86 years from the 1932 low. The correction appears to be setting the stage for the realignment where assets will rally and we should then see commodities, including gold, rally with the share market as was the case between 1976 and 1980. Keep in mind that the Great Alignment is the shift from Public to Private Assets. This is when people begin to lose confidence in government. In Europe, we have rising discontent by not just the Yellow Vests, but strategic alignments between Italy and Poland to which we may yet see Hungary join. In the USA, the battle against Trump and the mainstream media even opening calling him an idiot does not speak well for firming up confidence in government. This war against Trump is undermining the confidence completely in government as a whole. The Democrats are out for blood and just want to win in 2020 ignoring what they are doing to nation. It no longer matters what a politician says they stand for. Both parties are told to vote party lines.

So this is part of the Great Alignment. The next ECM Wave should be an inflationary wave. We we have about 1 year for this to unfold.

The Euro By: Marty Armstrong Thursday, January 10, 2019

The Euro has been treading water since the low made the week of 11/12. December turned out to be an inside trading month and the array on the monthly level pushed off into January since it was straddling the week of 12/31. We have a Weekly Bullish at 11550 which the market is testing. For whatever reason, it seems to be the latter part of January that is the key period. If we were to elect the Weekly Bullish in the Euro, we might see still a corresponding dip in the Dow. The weeks seem to be the same as targets. The Directional Change comes into play next week and we see the volatility rising the week of 01/28 into February with the key week becoming 02/11. There has really been nothing to write home about, just consolidation.The Euro bottomed in August and then rallied into a September high. That reached the 11815 level the week of 09/24 and then elected 3 Weekly Bearish Reversals taking the market down into the week of November 11/12. December was appearing as a critical month which has migrated into January. However, that was not destined to be a major high or low. Nor is January 2019. Yet, January could form an important turning point here in 2019 for we have BREXIT and the May elections while Italy & Poland are forming an alliance being an anti-EU faction. This is clearly instigated by the Refugee Crisis that both never agreed to in the first place.

The Euro is testing the first Weekly Bullish at 11550 and if that is elected, then the next comes into play at 11615 level followed by the 11745 zone. We warned back in the post of 10/15 that the Euro "has been unable to exceed even the breakout line and it has fallen back within the previous Downtrend Channel. This is technically a weak posture and resistance is forming at 11583 level and the Euro must rally back above this level to see a bounce back to the 119-120 zone. However, that requires a restoration of confidence in Europe which is also difficult to find." With the November low, the Bullish Reversals came down and are more formidable now under the 119 level. Back on 12/21, we wrote "This week was also a Directional Change for the Euro as well. The main turning point is the week of 12/31 and then look at January into February - rising volatility. ... So hang tight. Everything is unfolding in line with the cycles rather nicely." So there is obviously nothing fantastic here. January can still unfold as a 2 month reactionary high from the November low. The major crack in the Euro is not due just yet. 2016 was the lowest Yearly Closing, 2017 was an outside reversal to the upside so the intraday low was in '17, and then '18 was the 2-year reactionary high reaching 12555 but then crashed and closed lower finishing at 11459 electing a Yearly Bearish (MINOR) at 11640, which is not out of the question for a retest. We have system resistance at 11620. If the Euro can exceed that level, then such a rally is IMPRESSIVE warning that there can be a delay for the low pushed off into 2021 which will be a 13-year decline. Therefore, watch the 11620-11640 area for overhead resistance. The major support is still at the 11300 area.

Dow Clarification By: Marty Armstrong Wednesday, January 9, 2019

Some people seem to be confused. What I am saying is the Directional Change on the Weekly level implies the low for the 26th and that cannot be a low without a bounce. January is also a Monthly Directional Change. Therefore, we have the distinct potential to just consolidate and hold off any new low until May. To do that would REQUIRE a closing above the Daily Reversals.

Now, the next turning point is the week of 01/21 and notice the Panic Cycle due the week of 01/28. That means, if we rally into the week of 01/21 and we CANNOT achieve a Weekly Closing Above 25005, then we must respect the fact that we could still make a January low the week of 01/28 completing a 3 month reaction from the October high. A 5 month decline would bring us into March. The first Daily Bullish Reversal stand at The Daily Bullish Reversals are 24058 and 24089. followed by 25100. Therefore, we can take out the first two and then bounce off the 25000 zone since that is where the Weekly begins and the third Daily Bullish. There is no indication that we are in a major bear market. Nor are we ready to breakout to the upside just yet.

The Dow Bounce into Early 2019 By: Marty Armstrong Wednesday, January 9, 2019

We can see that after we achieved the low on the 26th, the next week was the Directional Change and that should have given us a bounce, but not a change in trend, The next Directional Change was due the week if 01/21 so consolidation until then is possible. We have another Panic Cycle the week of 01/28.

The top line has now moved to agree with the Directional Change the week of 01/21. The volatility models are also picking up now for the week of 01/28 and this is followed by back-to-back Directional Changes in early Feb. Keep in mind that the major thrust in a correction is ALWAYS in the initial stage. Therefore, which we can still see a lower low, it is unlikely to be a major thrust down a second time.

The bounce after the first 1929 Panic low lasted 22 weeks. The Weekly Bullish Reversal stood at 329 but the rally only reached 29720. However, the Breakline was retested and exceeded slightly intraday but not on a closing basis.

Here the Breakline from the first high in 2018 rested at 22430.17. The market penetrated it intraday but could not close below it. This technical pattern also tends to confirm we do not have a major change in trend for here the market is testing the Breakline from above compared to below in a bounce following the 1929 Crash. Here the first Weekly Bullish stands at 25005. January was also a Directional Change on the monthly level also confirming a bounce with the next two targets being March and May. We still could make a January low later in the month and then rally into March. So look at the week of 01/28. If the market continues to consolidate into March, then this type or pattern would imply perhaps the final low in May with the reversal in trend at that time. This would also line up with the EU election cycle. The low on the 26th was 21712 and our primary target remains 21600, which is the Monthly Bearish we stated we should test at the WEC. Therefore, a rally even up to 25000 which fails to elect any Weekly Bullish, could still be followed by a lower low, but one that then holds the 21600 level on a closing basis. Don't for get we have BREXIT in March and the the EU elections in May. The model is picking up both periods suggesting they may indeed be influential.

Where are we WRONG on the scope? That seems to be a Weekly closing above 25005