Attributed to the great man but sadly there is no evidence that he said it, or anything like it. The phrase does encapsulate a great truth however – to succeed in markets, go against the crowd when it is most difficult to do.
Now there is a general bombardment of Ukraine and multiple Russian troop incursions so the ‘phoney war’ has ended and the real war has begun. We are on high market alert. Our extension signals try to do exactly what Rothschild didn’t say – to identify when the ‘last buyer has bought’ or the ‘last seller has sold’ in order to ‘fade the move’. Any of our outstanding views will reverse if we see such a signal and those views are (with links to editions):
Short US stocks (originally January 24th 2022, most recently February 11th 2022)
Long Gold (originally June 21st 2021, most recently February 11th 2022)
A bounce in bonds that we want to sell (many, including the bad pun on January 12th, & recently February 11th
Bullish energy (since January 12th)
Each of these views has led to trends in the relevant direction and any one of them could produce an extension that signifies the imminent end of that trend. Because mood tends to swing in unison cross all markets in times of crisis, then the best warning we may get that say, US equities will stop falling might actually come from a top extension in bonds or energy or from something quite obscure.
So far there is a possible top extension in Comex Gold futures forming today. It comes only from intra-day data and is only at a daily scale, so it doesn’t seem likely to mark ‘the end’ of the market response to Putin’s violent petulance. Here it is anyway, to remind us that things can quickly move and also reverse and we will write more very soon:
All signals generated by software produced by our friends at Parallax Financial Research www.pfr.com
