Neely Calls for a Crash

Glenn Neely, author of The Neely Method, just put out a public announcement that all of his trading indicators are signaling a market crash in the next 1-3 months.

The only other times in the past 35 years that he’s gotten this strong of a crash signal were the high in 1987, the high in 2000 (the internet bubble), the end of the real estate boom in early 2008 and the high made in August 2015. He hasn’t announced a major impending correction since the 2015 meltdown.

He says his crash call is based on current wave structure, U.S. margin debt, insider selling, overbought warnings from his intriguing Moat Index, a rising interest rate environment and the volume of new accounts being opened at brokerage firms in 2017 around the country.

He says the only ingredients missing are volatility and media coverage, and that may mean the market needs to put in a blowoff top in the next month or two. But he also says the market could simply sell off and start a violent decline after a retrace to a lower high.

The kind of crash Neely is looking for would be the largest, fastest decline in 10 years and the start of a 2-4 year bear market that retraces at least 50% of the move out of the 2009 low. He feels rising interest rates might be enough to crash the market on their own, but international tensions or the end of major stock buybacks could also stress the market.

I’ll post charts Thursday showing the most likely scenarios for a crash, or a crash following a blow-off top.

Neely runs a fund that trades his method and offers trading advice at Neowave.com.

16 Comments (To enlarge images, right click on image & then click "view image") → Neely Calls for a Crash

  1. Jerry

    Neely has had one of the worst (if not THE WORST) track records over the last several years …. and he has even admitted as much in a recent marketing e-mail that was sent out last month, offering a mea-culpa.

    A Full Disclosure of his track record should be offered to put his market call in CONTEXT.

    Reply
    1. Trader-Moe

      Neely has a good record when it comes to a call this strong.

      However, even with that good record, he has problems with things like entry points and stops. He tends to jump in the moment he has confirmation of a trend change, which tends to be far from the top, and then set a stop an enormous distance away.

      Then, if the call is iffy, your stop gets eaten for a big hit to your bankroll.

      I hate big hits to my bankroll.

      I regard Neely calls as something to keep in mind, not act on. I showed the potential crash set-ups on the long-term charts. If they trigger, I’ll bet them. If they don’t trigger, we’ll see a set-up for another move up and I’ll post about that.

      Short-term, I still expect the markets to go higher, but I’m very watchful right now for something unexpected, especially since I have a strong set-up for a melt-up in gold.

      Reply
  2. Ida

    I think there will be a crash too, but Moe, Neely said the same thing in Jan. I think , that it would crash by April. The problem is the timing. Do you believe him this time? I believe you, him less. Once you wrote that his method is excellent , but that he is not so hot applying it.

    Reply
    1. Trader-Moe

      Ida, yes, all of that is true.

      Still, the long-term technical charts do require deep corrections at some point, and I noted my own concerns about fundamentals.

      Check out this morning’s post. Neely’s crash call is at least sufficient for me to post some charts. But I won’t be getting short unless I get the technical set-ups I need.

      Reply
  3. AdecsRay

    Moe: I have been waiting to post an update and seems like the right time- Please refer to the weekly NYAD moving averages and plot geometry of the MACD of the NYAD. The process looks for acceleration tops where the larger degree moves start. The associated conditions on the MACD are- (i) 9 ema creates a descending channel (ii) 30 ma moves below the zero datum (iii) 9 ema hits and penetrates the zone minus 100 to minus 200 [red arrows] (iv) There is downward persistence of the 9 ema that looks like a terminating move of the 9 ema channel.

    Of course there are variations as can be seen on the 2010 top where the terminating move on the 9 ema was a series of oscillations with increasing higher price tops. The main essential observation is to watch for these lower levels on the weekly NYAD plot ma’s and compare to previous yearly tops.

    Reply
      1. AdecsRay

        A more complete picture.. gray boxes show some similarity on peak #1 of 9 ema channel if that is what is happening currently with this recent structure. Could lead to a few expanding mkt tops and/or bottoms if plays out similarly.

        Reply
  4. Sam

    I have been waiting for that crash as well for many months. According to my wave count we havent hit the fib target yet, we are close but not yet. I hope it can stay here until September though.

    Reply
    1. Trader-Moe

      QQQ has a rising megaphone inside its year+ rising wedge, and the rising wedge has the minimum touches on the sides.

      If we’re heading into a crash, that rising wedge should either extend or spin off a megaphone top with higher highs.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>