DOLLAR COILING

There is an interesting pattern developing on the weekly dollar chart.

For the last five weeks volatility has collapsed forming a volatility coil. As I’ve mentioned before the initial move out of a coil is a false move about 70-75% of the time.
If the dollar were to break upwards out of this pattern it would probably skew dollar sentiment even more wildly bullish than it already is and potentially set up a powerful reversal and continuation of the secular bear market.
Unfortunately if this does play out we can almost count on gold not taking out the critical $1161 level and the D-wave will be confirmed.
In that case I would look to get aggressively long in preparation for an A-wave advance as the D-wave bottoms.

151 thoughts on “DOLLAR COILING

  1. Anonymous

    I almost agree with everything you said…
    Long dawler, flat to negative eqities and flat to small short gold but buying on this dip 1100 and lower..GLTA

  2. Anonymous

    Gary,

    If this indeed turns out to be a D-wave, what would your expected time frame be for it play out, before you might get long for the A-wave?

    Thanks in advance, and great blog by the way.

  3. Anonymous

    No disrespect to Gary as we all go through losing streaks, but so far this year if you did the exact opposite of his calls you would be rolling in the dough.

  4. all about gold

    Gary, how does your wave compare to the arden sisters who says that the d wave for gold is over and this is the beginning of the a wave.

  5. Anonymous

    It looks like much of the QE keeps flowing into stocks. It’s hard to believe the move they’ve had, especially the Russell 2000.

  6. Gary

    It is possible but then this would have been the strangest D-wave ever having not only not tagged the 200 MA but also not turning the COT bullish.

  7. Natanarchist

    sometimes it is better to listen to what Gary says and not what he does…lol..just teasing you Gary..you might be right with last nights update..long and strong for me along with Old turkey

  8. Gary

    N,
    I’m just protecting my profits. I don’t mind waiting till gold does what we need it to do before I get aggressive.

    But until it does that we are still in jeopardy of letting every rally keep us holding on as the D-wave continues to play out.

    Let’s face it gold is making lower intraday lows and it’s on day 21. We are right smack dab in the middle of the timing band for a daily cycle low with no indication yet that today marked that low.

    On top of that the stock market is now getting lat enough in the cycle that a move into the half cycle low can start at anytime.

    With the dollar back above 80.50 I don’t think there’s much chance of a continuation of the C-wave until the dollar puts in a top. So far there is no sign that has happened.

  9. Anonymous

    Gary,

    It may be too late for the C-wave…so D-wave. But with your dollar chart, doesn’t it suggest that the dollar should drop soon enough? Dumb to sell now, if you haven’t sold that is yet. (Not saying buy.)

    What are your expecatations if the D-wave continues, we should be close to the bottom no?

  10. Gary

    Well if the dollar breaks up out of the coil I would expect gold to put in a lower low. In that case Dec. would turn out to be the intermediate cycle low and we should get the final low within 5-6 weeks. Probably a test of $1000-$1025.

    I’m a bit nervous that the stock market hasn’t corrected into the half cycle low yet.

    We are now in the same position as we were in Jan. Do we buy gold without filling all the requirements in front of a probable stock market correction or do we play it safe and wait for stocks to correct and wait for the last two conditions to fill on gold before we get bold?

    I’m currently assuming this is a D-wave that isn’t finished until proven otherwise. That means all four conditions must be met.

    Once they are and the stock market moves down into the half cycle low then I will be ready to get aggressive. Until then I will continue to lock in profits as I get them and bide my time.

  11. Natanarchist

    I hear ya Gary…and I don’t question any decision you make for yourself, or anyone else decision they make for their accounts. You know your own account better than me. I don’t get to worried about daily moves..I have lots of time. SMT has been good for my account and that is all that I care about.

  12. Anonymous

    Gary, but really D-wave would only be confirmed once we break last month’s low just like C-wave needs confirmation in the form of break of 1161…

    so either way, no one is certain..so is it better to just stay out and stop with the guess work..

    or another smarter option would be to cover most of your positions and just wait for break on either side..

  13. Gary

    Gold is making lower lows and lower highs. Normal cycle timing would suggest the intermediat elow came in Dec. Nothing has happened to dispute that yet.

    This is why I’m selling into strength for now. But I’m prepared to put everything back on if we can fill the last two conditions.

  14. Anonymous

    The dope is short gold from 1145 and waiting for 1100 to cover or 1135 stop…Notice i’m not loooosing 25% and hope it comes back…Talk about a dope…hahaha

  15. Anonymous

    Dope,

    You’re tooting your horn and up .21% in your gold trade. What a jackass.

    While I’m up 8.19% in my DGP long.

    Stooge.

  16. Anonymous

    Blah blah blah…OOOOOOOOOOOhhhhhhh…nice gain FOOLTARD… my my my you do have a way with numbers…Mr. -25% drawdown fool…you’ll be headed for the u3 line soon…

  17. Gary

    Geez can’t we think of something more intelligent to say than calling each other names over short term moves in the market?

  18. LowTax

    Sadly Gary, the answer to your question on is a solid ‘No.’ If they were intelligent, they’d simply go away and find something useful to do with their time. Thank God for the comment-less subscription service. If you blogged it all and charged for it, I don’t think it would be worth having to sift through all the detritus! πŸ™‚

  19. Quality Stocks

    miners no where near their highs while Nasdaq and RUT are past their highs…I think this is bad news for the markets in general and miners.

    Also Gary where can I find this….

    I would just watch the COT for a bullish Blees rating as a sign to start getting long.

  20. Anonymous

    Gary:
    “…something more intelligent”

    OK, a try for something more intelligent.

    Tim Woods is on the fence with his cycle analysis and Dow theory analysis, waiting to see whether a deflationary event will unfold before an inflationary one, or vice versa, with this year obviously being critical. He’s waiting for the market to tell him as he always does, and then position accordingly. If inflation were to take hold, he sees bubble phenomena and big upside for gold, in accord with this blog.

    The important thing is he’s waiting for the market to tell him.

    Gary, I realize you’re very pro-inflationary, but timing is clearly the issue. Do you accept the possibility of a strong deflationary event first, perhaps a decline near or below the March 09 lows for example, or are you of the opinion that a big deflationary event is out of the question before inflation takes hold?

  21. Gary

    I just don’t see the catalyst for another big deflation. Let’s face it, we just saw the global financial system look into the abyss as we entered the most deflationary period since the 30’s.

    It lasted all of 9 months before Bernanke turned it all around with his printing press.

    Anyone with any vision at all would have to come to the conclusion that in a fiat sytem deflation is at most a temporary phenomenon.

  22. Anonymous

    Gary:
    “I just don’t see the catalyst for another big deflation. Let’s face it, we just saw the global financial system look into the abyss as we entered the most deflationary period since the 30’s.

    It lasted all of 9 months before Bernanke turned it all around with his printing press.

    Anyone with any vision at all would have to come to the conclusion that in a fiat sytem deflation is at most a temporary phenomenon.”

    Well, the deflationary side sees a return in force of debt obligations as the catalyst, and the need for a second round of QE.

    I suppose deflation can be considered a temporary phenomenon in comparison to systemic inflation, but it’s potentially vicious nonetheless. It makes the issue of timing critical. It influences how aggressive or how cautious you might want your market stance to be.

  23. Gary

    At this point now that they have it turned around I expect the first sign of deflation will turn the presses on again. So I just don’t see the deflationary scenario having much of a chance unless it is allowed to happen. I don’t see that as a possibility.

  24. Anonymous

    well .. thats it .. i capitulated .. had enough .. turned a 30K gain into a 20K loss. Again. Sad.

  25. Anonymous

    So, after all that, 1120 held. Any regrets throwing the in the towel too soon G-Man?

  26. Anonymous

    Brinkley over at Blue Chip Bulldog, is bullish pm’s here. She’s almost never wrong, fyi…A trading godess so to speak who doesn’t give a rip about c or d waves.

  27. Anonymous

    Brinkley is bullish, but quite cautiously so for the time being. Also keep in mind she might be trading a different timeframe.

    bluechipbulldog.blogspot.com

  28. Gary

    There will be plenty of time to press on the gas if gold and the dollar can complete the last two requirements. Until that happens this is a D-wave and as such I want to sell into strength.
    Do I hope the C-wave continues? Certianly as there will be a lot more money to be made but I’m not going to count my chickens before they are hatched.

  29. aviat72

    Gary

    Gold hit 1110 target I had talked about yesterday, in the 1125 to 1110 bracket.

    As more times passes without the Dollar correcting, the chance of a wave 5 starting in the EUR-USD go up. The Europeans are playing footsie and want the Euro to be weak.

    http://twitpic.com/17jynu has an EW interpretation of the

    From Todd Gordon
    The reason being is we are trapped in a well-defined, low volatility, 4th wave triangle in the US dollar index. Triangles are thin, choppy, disrespectful of technical levels, and tend to put downward pressure on a trader’s best friend, volatility.

  30. Anonymous

    Gary,

    You said that Gold is making lower highs and lower lows — I assume you mean their daily candlesticks.

    When I look at the chart, I see two successive higher swing highs and one higher swing low, which is Bullish.

    Today, we saw gold reach down and touch the 1109 level, which is the 50 MA. It found support there and then closed higher.

    I know that we are all waiting (impatiently) for the Dollar to rollover. But guess what, If Gold breaks above 1124.90, then Gold prints another higher swing high — that would be Bullish.

    If that happens, then 1145.80 becomes the next target to clear on the way up to 1161.

    On the downside 1106 appears to have a lot of support, a break below 1106 would signal a continued move lower.

  31. Gary

    Yes gold is making short term higher highs but it needs to make a higher intermediate high. That entails moving above $1161.

    That has to happen before we can rephase the last intermediate term cycle low to February instead of December.

    We can’t have a C-wave continuation uness the last intermediate low is rephased.

  32. ted

    Gary,

    If the market does decide to proceed to its half cycle low, do you see it making a lower low from its Feb low?

  33. Anonymous

    OK what’s the thesis now? Changes quite often but it seems like gold is in a “D-Wave” and stocks are going to 1400 on the SPX.

    MMMMMKAY.

  34. Anonymous

    man you need lithium or something. one minute it is miners breaking out, the next we are going down.

  35. Anonymous

    “No disrespect to Gary as we all go through losing streaks, but so far this year if you did the exact opposite of his calls you would be rolling in the dough”

    if he can keep this up he will be good as gold

  36. Anonymous

    “It lasted all of 9 months before Bernanke turned it all around with his printing press.

    Anyone with any vision at all would have to come to the conclusion that in a fiat sytem deflation is at most a temporary phenomenon.”

    like Japan right?

  37. Gary

    I don’t think this is Japan do you?

    Japan had massive savings to fund their bail outs. They didn’t have to resort to the printing press.. well until recently.

    We don’t have that luxury. We are broke. The only way we can keep the party going is by printing.

  38. Gary

    I’ll try to explain this slowly so you can understand.

    We have met two of my requirements. Gold managed a right translated daily cycle and miners managed to break above 420.

    There are four requirements that have to be met before we can say with any confidence that the C-wave will continue.

    The single most important is that gold trade above $1161. That will break the pattern of lower highs and lower lows and rephase the last intermediate cycle low.

    Next the dollar has to put in an intermedaite top. At a very minimum it has to form a weekly swing high. It hasn’t done that yet.

    So we have a couple of incouraging signs but the two most important ones haven’t happened.

    If you jumped the gun because you couldn’t wait for the two most important confirmations that’s not my fault. I’ve been saying repeatedly to wait for all four confirmations. If they occur there will still be plenty of upside.

    Until that happens I’m assuming this is a D-wave. I’m hoping we get a C-wave continuation but I’m simply not going to plan on it until all confirmations are met.

    Capeche?

  39. aviat72

    Gary:

    Regarding your comment about Japan. The demographic bomb there means that Japan will also have the same issues in funding their debt as the US.

    The US on the other hand is going to benefit from a relatively higher saving rate, and a stronger preference for bonds over equities as the boomers retire and become more risk averse. The amount of domestic investment flowing into bond funds is a good indicator of that.

    Another aspect to keep in mind is that a lot of foreign ownership of US debt is held in shorter term maturities. Longer maturities are primarily owned by US corporation especially pension funds. With a more conservative outlook towards risk in these funds, the appetite for longer term US bonds is unlikely to collapse.

    This does not mean that the market will not demand a higher rate than now. However the steepness of the yield curve is already pricing in some amount of Fed tightening. Hence expectations of a blowout in the long end of the curve are perhaps a misplaced; if nothing else they are too early. As long as there is tail risk in the Global economy, US treasuries will have a bid.

  40. Anonymous

    Gary-
    If this continues to be a D-wave, can we say that the price has already made its low (at $1050)? If we expect gold to bottom with the market and mid cycle pullbacks averaging 4% corrections then there is a good chance that the low of $1050 will actually hold in gold.

  41. Gary

    Since this daily cycle was right translated the odds are good it will hold above $1044. But if this is a D-wave then it will break below $1044 by the next intermediate cycle low.

    It will be a big plus if gold can hold above $1087 during the dip down into the daily cycle low as that will keep the pattern of higher short term highs and higher short term lows intact.

    That will greatly increase the odds that gold will take out $1161 during the next daily cycle and re-phase the last intermediate cycle low.

  42. Anonymous

    this gold action is very tough. another reason to take a core position and hold throughout the bull. Trading it just gets you in trouble unless you are really good.

  43. pH11

    Gary,

    Do you think we’ll hit S&P 1150 as resistance within the next 1-4 days, or will we burst through, and 1150 will become support?

  44. Gary

    The market is due for a mid cycle low anytime now. So even if the market does break through I would expect an almost immediate pullback.

    This notion of resistance becoming support almost never works out in real time.

  45. Gary

    If the darn thing could get below 79.50 that would be a big step in the right direction for the continuation theory.

    It seems like a given that the S&P and Dow are going to break throught the highs before we get the move down into the half cycle low.

    There is major resistance at 10,800 on the Dow and 48 for the cubes. That would be the most likely levels to turn back the rally IMO.

  46. Natanarchist

    gary;

    I know you watch lots of different indicators. Whats your take with the strength in the PGM’s..especially PAL..seems to be doing well. Also the Gold Silver ratio has moved nicely over the last month..from around 71/72 to 64…does this provide any insight for you?

  47. Gary

    N,
    My feeling is that this will ultimately end up being a C-wave continuation. I’m just not willing to bet on it until my last two confirmations are met.

    I’m hoping we can get one more push higher by the stock market that will drag gold above $1161 and then the half cycle low for stocks and a re-entry into miners at that point for what should be 8-12 more weeks of sharply rising prices.

  48. Anonymous

    “….and a re-entry into miners at that point for what should be 8-12 more weeks of sharply rising prices.”

    Hope you’re right of course, but after a sharp rise like the miners have had, one often sees a series of false starts up, then false starts down. That might be why your previous C-wave seemed to prematurely abort. It might happen again. And again. When it’s all over, and the market’s finally set to move higher, in retrospect it’ll be clear that what was going on was a larger scale consolidation. That’s one of the ways the market can get you, if you keep looking for the big move all the time. Markets in fact spend most of their time consolidating.

  49. Frank

    If only people comprehended that Japan did not experience deflation when it is defined properly, which is a contraction of the money supply.

  50. Gary

    Q,
    the miners and stocks both bottom together on the 5th. That’s how it almost always happens at an intermediate cycle low. Sometimes there is a day or two difference but basically the same.

  51. Gary

    Yes in that case the precious metals were showing relative strength and that was a big clue that they would be the leaders of this bull market.

  52. Anonymous

    Dawler down, gold down. That’s not a good one Gazza. Can ye justify a reason for this uncommon occurence??? Maybe time for people to sell their winners and wait for the C A L O A D O F B O L L O C K S wave up. Either that or make some money in UUP!

  53. Gary

    Simple, gold is dropping into the daily cycle low. Since the stock market hasn’t corrected yet this probably still has further to go.

  54. Anonymous

    You betcha it’s got a ways to go down yet. Dawler UUP gold down. It’s as simple as that!

  55. Jayhawk91

    On the other hand, the dollar could break lower off the coil, giving us our C wave…Since you say the first move is false, we would then get the D-wave combined with a strong dollar and stocks correcting this summer.

  56. Jayhawk91

    I don’t get some of these comments about the dollar taking a beating (down -.15%?)

    Silver looked really good in the AM, but has really reversed. Strange action.

  57. Gary

    Jay,
    Gold is now caught in the daily cycle correction. This will be a crucial test for gold. It has to hold above $1044 and it would be good if it can hold above $1087. I odubt it will though as the stock market still hasn’t corrected into the mid cycle low yet.

  58. Anonymous

    Damn lost some faith today and sold 2k slw 2k svm and some hl. hope i dont regret but the nasty gold drop 16$ in 10 seconds was too much for me. BTW, sold all close to lows doh;)
    Anyone else panicked today, or did you all followed Garry yesterday?
    Alex

  59. Gary

    I’m afraid the need to second guess the C-wave before we have proper confirmation is going to be expensive for traders if this turns out to be a D-wave.

    If you don’t mind hanging on for the long haul and a multi month consolidation is meaningless to you then just hold on and don’t worry whether this is a C or D-wave.

  60. Gary

    The SoS numbers are starting to build today too. When the stock market does decide to roll over into the midcycle low it’s probably going to exert more pressure on gold and miners.

    I certainly wouldn’t try to pick a bottom in gold yet until the stock market corrects.

  61. Jayhawk91

    Anonymous said…

    Damn lost some faith today and sold 2k slw 2k svm and some hl. hope i dont regret but the nasty gold drop 16$ in 10 seconds was too much for me. BTW, sold all close to lows doh;)
    Anyone else panicked today, or did you all followed Gary yesterday?
    Alex

    I’m teetering on the edge of cutting my losses right here, which means we explode higher on Thursday/Friday. If I hold, we will sell off further. πŸ™‚

    Overall, I’m down only 5% on the trade with some green, some deep in the red still…I’m about 75% invested in the trade currently, so I’m trying to figure out the best strategy to sell these positions. Major disappointment, but happy I’m not down 15-20% like I was a few weeks back.

  62. Gary

    Jay,
    Remember this is a secular bull market and the only way to lose in a bull market is to sell for a loss.

    All those positions will be huge winners as long as you don’t put a time requirement on them.

    Also consider if you do sell them do you realistically have any other trade to put the capital in with better prospects or will you just continue trading in and out and taking losses that will eventually wear out your portfolio?

  63. Anonymous

    lost faith yesterday … sold some of my options at a loss … sold my SLW at breakeven, and STILL hold some miner stock options deep in the red and not worth selling.

  64. Anonymous

    Gary, I agreed with that liquidity is abundant and will flow to undervalued assets. But I believe for now, liquidity will flow to areas that pays them a decent yield such as oil and gas companies or trusts. These are regular folks who have no clue what gold is valued. They are getting nothing at the bank now and if they decides to move some of that money back to the stock market, it would be yield that tastes and smells like honey for the bees. In 2011, when the real inflation hits the fan, gold and your miners will do well. For now, high yielding stocks.

  65. Anonymous

    Short gold? Now THAT is an amateur trade if ever I saw one. πŸ™‚

    i am so glad you believe me now!!!

  66. Gary

    Actually it is an amateur trade. I learned my lesson on this one a long time ago.

    Here’s what happens, you get lucky once or twice and think you have the bull figured out. Then comes the seris of trades where the bull surprises you and destroys are portfolio.

    It’s just not safe shorting a secular bull market. You won’t win enought times or big enough to offset all the times the bull kicks you in the teeth.

    If you think gold is going down just get out of the way and let it happen, then buy the dip. That way you always have the secular trend in your favor and I guarantee your portfolio will be many times larger by the end of the bull.

    If you continue trying to short gold there’s a good chance you won’t even have a portfolio by the end of the bull.

  67. Jayhawk91

    Gary-

    Yea, I do get that as you have pounded it into my head for a year now. πŸ˜‰

    I was dumb enough not to listen in 2009 and jumped into my first hard core miners trade back in Jan. You’ve talked about a D-wave and consolidating for up to year possibly has me a bit gun shy to hang on…I guess my strategy would be to wait for the D to bottom and re invest when the A (Blees rating signal) looks to be ready to run. Yes, I think I would be able to pull the trigger as I was adding to my positions during the Feb sell off when I felt like puking! (That experience taught me that I did indeed have the balls (stupidity) to buy during the dark hours.

    I’m about break even on largest position SLW, another huge position GDXJ is down 8%, then I have RLGD and VGPMX up 3%. A lot of other little positions-some green, some break even, some way down…

    2 option positions down about 40%, but these were smaller plays. (June SLW 15’s and June GDX 48’s)

  68. Anonymous

    “I’m afraid the need to second guess the C-wave before we have proper confirmation is going to be expensive for traders if this turns out to be a D-wave”
    you mean like you?

  69. Anonymous

    Remember this is a secular bull market and the only way to lose in a bull market is to sell for a loss.

    then why did you sell for a loss?

  70. Gary

    I’m sitting mostly in cash and waiting patiently for the last two conditions to be met before I jump back in aggressively.

  71. Anonymous

    Actually I didnt sold with a loss, I am keeping it with Garrys strategy sell the winners keep the loosers. If you dont have one I would find it easyer just keep it all and look away for a while.
    I bought SLW HL and SVM all the way down last month so my average was quite good.
    I still have some winners from way back last year, but i will not sell them cause they are real strong hands. For theses positons to become red , they have to drop 50%+ and I dont see that happening in the near future.
    @jayhawk please inform me when you sell than i will start buying πŸ˜‰ no seriously, I will buy back what I sold today if gold hits something around the 1050 ish, if it starts running up I jump back in even that I know selling before was wrong but doesnt matter, and if than it starts falling because it was a head fake action i will just keep holding. You see I am absolutley sure I did something Stupid today, actually I know for sure,I sold because of feelings rather than reason. The last couple of month ups and more downs left there marks with me.
    ALEX

  72. Anonymous

    Gary:
    “So I would strongly advise you not do the one thing that will allow you to lose money in a secular bull market. Sell a winning position for a loss.”

    That makes no sense. If it’s a winning position, it’s not at a loss. By definition it’s profitable.

    If you mean that it will eventually BECOME a winning position but is in the tank at the moment, the advice still doesn’t mean much, because ALL positions will eventually become winners (a rising tide floats all boats)in a bull.

    What DOES make sense is to get rid of those positions you hold that are acting weaker than other positions that you also hold, and immediately transfer the money to the stronger. You can use whatever criteria you like to define strong and weak. At least that’s an internally consistent framework for money mangement.

  73. Gary

    I have sold no position for a loss. Maybe you should get your facts straight.

    I’ve only sold winners, locking in profits in case this is a D-wave.

    If it is i will have dry powder to use in the A-wave. If the C-wave continues I will re-enter as soon as the last two confirmations complete.

  74. Gary

    Anon,
    You do realize that strategy, even though it is common dogma among all traders, is the only way one can manage to lose money in a secular bull market.

    Why would one want to follow the one single strategy that will allow one to lose money?

    Apparently it’s immpossible for almost everyone to grasp this concept but selling losing positions is the single stupidest thing one can do in a secular bull market. These aren’t really losing positions they just need more time to work. Give them the time they need.

  75. Anonymous

    lets ee, you were 125% long in early JAnuary, now you are 25% long and you have not sold anything for a loss. quite a stockpicker you must be

  76. Anonymous

    Gary:
    “Apparently it’s immpossible for almost everyone to grasp this concept but selling losing positions is the single stupidest thing one can do in a secular bull market. These aren’t really losing positions they just need more time to work. Give them the time they need.”

    There is no net sale involved, only a transfer of money that was already committed from one equity to another. If one of my positions is showing less of a loss than another, THAT’S where I want my money to be, assuming we’re talking about the same sector of course. Both stocks will eventually go up, but the one with the smaller current loss is resisting downside pressure better and will almost certainly outperform on the way up.

    It’s not dogma, it’s common sense. Time-tested common sense at that!

  77. Gary

    I had positions that were taken back in April. The ones that went back into the green on this last push I unloaded yesterday.

    I did lose a bit on two option positions so in that sense I did lose on some. Since my options have a time component I didn’t have the luxury of allowing them to work.

  78. Gary

    And it’s time tested common sense that will allow you to lose money in a secular bull market.

    You have to think outside the box otherwise this so called common sense will be like a cancer eating away at your portfolio.

    It’s all about time. As long as you don’t put a time condition on your positions they will all be winners. If you do require timing then you can manage to lose and lose and lose, etc., etc. until you’ve destroyed your account in a secular bull market.

    Why would one want to do that? It doesn’t make sense.

  79. Anonymous

    so, there were some losses taken.
    just options? hmmm…50% long december, 125% Jan, then 25% now, but no equity losses at all?

  80. Anonymous

    so since timing is of no value, and one should just ride the bull long, why bother blogging every day?

  81. Gary

    I have sold no underwater stock positions. Those positions I have the luxury of letting them work as long as they need.

    Hey if I didn’t blog then what would everyone do all day? It would give me more time to go climbing though πŸ™‚

  82. Anonymous

    Gary:
    “It’s all about time. As long as you don’t put a time condition on your positions they will all be winners.”

    Isn’t selling your winners during a C-wave putting a time limit on them? And in your case, the money wouldn’t even reinvested immediately in an equivalent, though stronger equity, as proposed here.

    Gary, you have a very weird way of thinking about this that’s not at all logical. Best thing would be for you to write a book, reveal your secret to the world, since you’re doing it here anyway, and go for it.

  83. Gary

    You have to understand how the Cand D waves work. I never want to ride a D-wave down if I can help it. I may have gotten caught in one so I’m trying to exit winning positions and take some profit out of the C-wave.

    If this does turn out to be a D-wave then I will have plenty of cash to re-invest as the A-wave gets started. If the C-wave continues then I will miss a little bit of it.

    I’m willing to sacrifice a little bit of the C-wave in order to have cash for the A-wave if thats what plays out.

  84. Jayhawk91

    Here’s my positions. I entered SVM, CDE, HL, SSRI, SLW around the same time in January…GDXJ was entered mid January. Some of these others were added in Feb. Gary, you say hang on?

    Symbol Shares Gain %
    SVM 1600 -3.14
    CDE 1300 -12.9
    AUY 450 -15.21
    GFI 225 -11.18
    HL 1000 -15.64
    BAA 1400 -5.77
    VGZ 1000 -24.24
    GDXJ 2100 -8.5
    SLW 3150 -1.75
    GDX 400 -6.57
    RGLD 870 2.11
    EXK 1425 -3.22
    EGO 300 2.21
    VGPMX 1426 3.8
    NGD 415 -8.21
    SSRI 450 -22.65
    PAAS 400 0.18

  85. Gary

    Jay,
    If this is a C-wave continuation then I expect every single one of those will be winners, some big winners.

    If this is a D-wave then the next A-wave will probably make winners out of most of them.

    The ones that don’t move positive will certaily be winners during the next C-wave.

    Maybe that takes another year to happen and maybe it doesn’t. Remember the next three year cycle low for the dollar is due next year. We could start the next C-wave as early as this fall.

    If you knew your positions were going to rally 100, 200% or more would you be willing to hold for 7-8 months?

    I bet you would.

  86. Anonymous

    EVERYONE PLEASE LISTEN. Do yourself a favor and 1st get rid of all your pm stocks, 2nd do not listen to Gary or read his blog any longer, and 3rd there is a Bull market out, and you are missing it by wasting your time listening to Gary.

  87. Anonymous

    Gary, so you believe that gold will flounder for the next few months ? Dollar strength through the fall ?

    Are you sitting on the sidelines in the meantime ?

  88. Jayhawk91

    OK, those newer to the trade should just ignore you recent selling because you were locking in profits and raising cash for the A or for when the C is confirmed. A really nasty D would hurt to sit through, but if it’s mild I could stomach it. I was thinking selling here and putting the capital into the ones like SLW as they have been strong. Most likely will just bite the bullet here and see what happens. I’m a huge procrastinator, as I showed by not taking this trade until January :(.

  89. Gary

    I don’t believe any such thing. I’m hoping for a continuation of the C-wave but I’m prepared if it turns out to be a D-wave.

    So I have no opinion one way or the other at the moment.

  90. Gary

    If this is a D-wave then it’s not going to help you to put capital into SLW. The D-wave will eventually take that one down too.

    Take profits where you have them and then wait for either a confirmation of the C-wave or the beginning of the A-wave to put that capital back to work.

    Folks I don’t know how to strress this strongly enough.

    THERE IS NOTHING TO DO RIGHT NOW.

    WE HAVE TO WAIT FOR CONFIRMATION. TRADING JUST BECAUSE YOU HAVE TO TRADE ISN’T GOING TO IMPROVE YOUR POSITION AT THIS POINT.

  91. Anonymous

    Anyone watch FAST MONEY just now. well if you did, follow his lead and sell your gold shares and don’t look back. Thanks for nothing Gary.

  92. Gary

    I don’t watch Fast Money but I have to ask, do you think any of those traders have a working crystal ball?

    Trust me you can guess the future just as well as anyone on that show.

  93. Jayhawk91

    No, I would reinvest my losers into the winners like SLW at the end of the D wave. I’d just hold cash and wait. Like I said, I’m going to hang on.

  94. Anonymous

    Jayhawk –
    If you don’t mind my asking (and since you’ve posted your positions and stakes)approximately what was your total dollar amount invested in PM’s and what are they worth now?
    Also,what % is this of your investment portfolio?
    I’m just trying to gauge how much people have at stake on these boards. Sometimes people act like they have huge sums (I know it’s all relative and that’s why I’m asking) I’m curious as it relates to my own investments.
    TIA if you care to share. If you do sell some or intend to buy more, I might have some suggestions based on fundamentals that might be a little more helpful. Not all PMs are created eaqually.
    Sign me KB

  95. Jayhawk91

    KB-

    I put about 280K on the stock trade and I’m down 5% or around 14K. (I was down 15=% at one point) My options are around 5K and I’m down 50%.

    This is about 75% of my portfolio. 25% cash position. Thanks for your advice.

  96. Anonymous

    JH .. I will give you a piece of advice … this is based on experience … you lost 14k$ .. dont sweat it … dont do anything DUMB trying to make it back in your next deal. During the last crash, I had lost about that amount, and kept doubling up trying to make it back. End result, I was way overextended, and ended up losing about 200K$ which was about 70% of my savings. I would have made that 14k$ 5 times had I just accepted it and walked away and bought back when the time was right. Actually, I thought the time was right now … i was betting pretty decent $$ on the miners too … just got burned a little worse than you .. dont lose it all trying to make a little back.

  97. Frank

    Fast Money. What a joke. I DVR it for contrarian reasons and zip through it. Today they had this wise-ass from Skybridge who is short gold. So what? Yesterday, they had Peter Schiff on, which is good entertainment.

    Also, the biggest nitwit on the panel is a former gold trader at Goldman (probably during the 1990s) and he is naturally a gold permabear.

  98. Natanarchist

    I don’t mind divulging my holdings;

    Core holdings:

    just over 300 (i think 310-15) 1 ounce gold coins almost equally divided between maple leafs and eagles..stored in safe boxes in both countries..I have been buying for just over 10 years, with the most expensive with premium about 940.)

    approx. 700 ounces of 1 ounce silver coins again ML and eagles
    about 1200 oz of small silver bars

    3 bags of junk silver coins..dimes/quarters

    Trading positions

    7k oz of silver avg cost approx 12-12.50

    166 oz of gold avg cost about 830

    stocks..which i do with my kids

    Core..180 sh CEF cost 9.70-11.00

    trading positions..meaning I wold sell anytime in next year
    100 sh MDAS 15.50
    100 sh IAG 10.00
    100 sh SLW 10.00
    125 sh CDE 9.50-9.90
    100 sh GDXJ 22.90-this was last purchase bought last month from profit taking in Nov(when gary sold) on part of IAG/SLW/CDE

    little bit of cash left to buy some more miners..just waiting.

    never had IRA/401K and collapsed CDN RRSP(similar as IRA) in 1995 wife still has her RRSP.

    I figure the Gov will be coming after folks IRA/401k..within a couple years

    I am sure folks will tell me to sell this or that and some may encourage to buy dollars… I never will-but I am sticking with my plan. It may not be the best but works for me. I could be valid or I could be void or I could be ppppparanoid…LOL…and I despise politicians and governments..all of them.

    so I guess my trading positions are small compare to many. not a large $ value account.

    and I have a lot of time. I am only 50 and my kids are teenagers

  99. Natanarchist

    oh and I lost about 22k in the big D wave decline in ’08 on some silver positions due to stupidity and not sticking with gary’s advice..c’est la vie

  100. Anonymous

    Jayhawk –
    I would preface this by saying I am not in any way qualified to give financial advice, so don’t take it this way. My comments are only based on my study and personal profile. I did rebalance my PMs awhile back (when Gary did make a good call)because I dug deeper to see that you can’t just shotgun at names and hope you do well. I had too much overlap with large caps that I had bought a couple of years ago, they never really did anything and I lost a lot of opportunity. Again, imo.

    On the surface level, you seem to have a lot of silver oriented miners.
    Think about:
    1. Dumping AUY and putting that into GDX. It is already a solid component of the index and you don’t need the unnecessay exposure to single name risk. Especially a large cap.
    2. Dump VGZ as they recently did not get gov. approval for mine. ie. they f’d up with paperwork (read some historical PR’s) I’ve talk to the company as well when recently the CEO sold almost at high some stock options. Didn’t like what I heard.
    3. Do take a look at NXG – It is a producer, as well as working on new finds and a relative sm. cap. To me this is a sweet spot relative to other miners.
    4. SSRI is a certafiable POS – Unfortunately I own too much and probably will let my position sit. Their cost of production is too high relative to other producers. MFN for example is better, but doesn’t have as big a supply.
    5. There is one more very speculative non-producer that I like and am trying to be patient in buying more. I don’t want to mention here.

    Good luck. Personally, I would hold at this point if you don’t need the money. Maybe think about a little readjust. Although I watch PM daily, I don’t get sucked into short term moves unless I want to make a little trade. I believe (based on other data I read) that PMs will still have their day. The US gov. has done nothing to fix “the banking system” – We are f’d and no matter what the nay sayers spew, Gold at the very least is perceived as safe and will become more so as people around the world wake up.

    KB

  101. Anonymous

    “You do realize that strategy, even though it is common dogma among all traders, is the only way one can manage to lose money in a secular bull market.”

    That’s a pretty bold statement.

    Please enlighten me how I will lose money in a secular bull market by taking money from a stock that is currently below water and immediately transferring it to a stock that is currently showing a profit, and then allowing the secular bull to continue to its successful conclusion.

  102. Gary

    Anon,
    I don’t know how many more ways I can go over this. Let’s just say I don’t consider any of my positions as underperforming.

    Some just need more time to work. So I’m not going to trade those for something else. As soon as I do then it will take off.

    Look where one would be if they traded CDE in for SLW recently.

  103. Anonymous

    “I don’t know how many more ways I can go over this.”

    “…that strategy, even though it is common dogma among all traders, is the only way one can manage to lose money in a secular bull market.”

    Please listen to what I’m asking. You’re saying that I’ll lose money by how I will lose money in a secular bull market by taking money from a stock that is currently below water and immediately transferring it to a stock that is currently showing a profit, and then allowing the secular bull to continue to its successful conclusion.

    How will I lose money doing this? I don’t see it.

  104. Gary

    If you want to immediately trasfer money into another miner and are willing to hold that miner no matter how long it takes then you should be OK. But that strategy will eventually concentrate your capital into very few stocks.

    If one or two of them have a mine flood or some other unforseen trouble your portfolio could be in trouble.

    I prefer to just let my positons work instead of constantly trying to shuffle things around.

    Let’s face it every time you take a loss on something you add that loss to what ever stock you put the capital into. So now your new position has to not only go up it has to go up enough to cover the loss you took on the other trade.

    If you had applied that strategy to the SLW/CDE combination recently you would be even further underwater than if you had just left it alone.

    This concept of relative strength is usually a waste of time.

  105. Anonymous

    “If you want to immediately trasfer money into another miner and are willing to hold that miner no matter how long it takes then you should be OK.”

    YES! Finally you see it! There’s not necessarily any dire consequence to doing what I was suggesting unless you do additional things that weren’t part of the discussion, like narrow all your holdings down to only a few, etc. One can always do things that worsen a situation. So there’s no need to scare people away by saying it’s the only surefire way to lose money in a secular bull. That’s nonsense.

    Now, is it a BETTER way of doing things than what you have suggested? I realize you definitely feel it is INFERIOR, but it’s a bit suspicious that no one seems to understand your reasoning. Maybe it’s a communication problem. Why don’t you try using numbers to show us how the two methods compare in a hypothetical?

  106. Gary

    As I said I would not choose that method because it will concentrate capital into fewer and fewer positions and just because a position outperforms one time doesn’t mean it will continue to do so.

    If it doesn’t then you could continue to lose money because your strong names might underperform and then you would sell for another loss and go through the process all over again trying to find something that will allow you to make back your compounding losses.

    IMO one is better off just taking a position and holding on. That strategy is virtually guaranteed to make money. Whereas shuffling does still hold the possibility of whittling away at ones capital.

  107. Anonymous

    “As I said I would not choose that method because it will concentrate capital into fewer and fewer positions and just because a position outperforms one time doesn’t mean it will continue to do so.

    If it doesn’t then you could continue to lose money because your strong names might underperform and then you would sell for another loss and go through the process all over again trying to find something that will allow you to make back your compounding losses.”

    Hmmm. It all seems to boil down to the fact that you think there is no reasonable way to discriminate strong positions from weak ones. What you think are strong ones always disappoint and in fact become the next weak ones. So you are content to take what you can get from any winners that you accidentally stumble upon, and sit and hold the bad ones in hopes that they will not only eventually become winners, but that they will in fact outperform previous winners.

    It sounds to me like you’ve just been burned too many times in the past and have given up trying to do it right. If you look at someone like Nicolas Darvas, his entire strategy was based on identifying the very best leaders that were likely to continue to be the very best leaders. Hard to find fault with that.

  108. Gary

    Like I said, if you jump around you run the risk of taking multiple losses if your positions don’t perform and if they don’t perform enough to recover previous losses.

    Eventually weak names do recover as liqidity will flow into undervalued assets. So unless the company has a fatal flaw you will eventually do just fine by holding positions.

    I’m just not willing to get into a tangle trying to forever stay in performing stocks. You won’t be able to do it on a consistent basis so why try.

    Now if you want to take a loss and then stick the money in another position and then stick with that position OK. But if you are going to continue to jump around if your position doesn’t perform within a certain time frame you just get stuck in a nasty spiral trying to guess the next winner. Not worth the trouble and probably not a very high percentage way to invest.

  109. Jayhawk91

    KB-

    Thanks for the feedback on my positions, I agree with you on AUY and VGZ (even though this is a tiny position, I did read the bad news on it recently and had in mind to dump it). AUY is a smallish bet, but it’s been struggling as of late. I had a big position in this one at first, but sliced it down pretty quickly.

    SSRI is my biggest turd without a doubt. I will never buy them again …CDE and HL too.

    Long term, I completely agree with the fundamentals of this trade. Perhaps we are a year early? This is shaping up to be the year the dollar gets it’s bounce and the euro gets trashed? The dollar will eventually take it’s much deserved beating.

    What do you think about holding my June calls? Take a loss on those while I can? I’d hate to have them expire worthless.

    Also, anon who lost 70%-That’s painful, sorry you went through that. What’s your opinion on the action in the miners today? Are you saying you think I should sell now and take the loss? TIA

    With all this talk of how the banks will be protected, maybe we should have been long banks vs pms? Stocks like X have kicked major league tail as well…Frustrating to be chasing this trade and seeing other sectors trending up so easily. Oh well, we will have our day in the sun.

    Thanks all.

  110. Gary

    Jay,
    Look at a five year chart of SSRI. It’s still up almost 300% from the Nov. low.

    There’s nothing wrong with this stock that a continuation of the C-wave won’t fix and fix in a hurry. It’s just working off a huge move.

    A little trick I use whenever I find myself getting caught up in the day to day noise is to pull up a long term weekly chart and see if I still see the same thing I did from the daily charts.

  111. Anonymous

    Wow, the other blog is all your analysis Gary. I’m very confused by why you would have a parter (Toby?) who would post the exact same comments on an almost identical blog. Are you trying to get away from having your name out there in public?

  112. Anonymous

    “I have sold no underwater stock positions”

    Pretty amazing how that could be so: you were 50% long in December went to 125 long then now at 25% long but you sold no losers.So the stocks you chose were all massive gainers past 2 months?
    Nice trading!!!

  113. Anonymous

    “I have sold no position for a loss. Maybe you should get your facts straight.”

    “I did lose a bit on two option positions so in that sense I did lose on some. “

    I see, IN THAT SENSE you sold some positions for a loss”

    bs pretty thick around here

  114. Gary

    No not at all. It’s just a joint venture and we need a separate site to keep track of traffic and commissions. I still do a good deal of the writing while my partner does most of the marketing and editing and an occasional article.

  115. Anonymous

    “A lot of my positions I’ve been holding since April”
    Yes, so you have said. And I said that at most those positions represented a 50% of what became 125% in January and now 25%. How could you have no losers there given the miners performance?

  116. Anonymous

    Whoppie gold is down $30 in 2 days! What a contrarian sign, great post Gary, keep it coming, more dollar collapse posts and I would be able to afford gold with my minimum wage soon.

  117. Anonymous

    Dollar coiling? So that means Euro and Yen and Pound rising? Somehow it seems like more hope and smoke than reality non?

  118. Gary

    In case you missed the meaning in the post, I was speculating the dollar would rise sharply followed by a storng reversal in the opposite direction.

    So if you want to take a contrary position you would need to short the dollar and buy gold.

  119. Natanarchist

    wow…based on some of the comments on here lately it sure seems some folks failed reading comprehension back in elementary school. I suppose they are the ones working for minimum wage. $30.00 dollar move in gold in two days is nothing. You might want to go back over the archives here at SMT from 2 and 3 years ago where Gary discussed multiple, multiple times about we would see $50- 100.00 dollar moves a day in the Gold Price. And he also discussed why that would be so.

    I will rephrase something Gary also said many many times…

    pull up a 10 year chart of Gold..stand back from your computer about 6 feet and see which way the chart is moving.

    Now do the same with the US dollar.

    get it? Is that clear enough?

    This doesn’t apply to day/short term traders of course..but Gary has been clear he is not a day/short term trader.
    It doesn’t get easier than that and anyone who can’t figure that out doesn’t deserve to call themselves a thinking human.

  120. Gary

    Jake,
    Why would you want to sell the NDX now it’s not even up to resistance yet, not to mention that’s a very dangerous trade?

    Safer to just let the correction happen and buy the dip.

  121. David

    Looking at the chart from your Mar 15th update, I have a question about your cycle theory. Why is the early October 2009 dip in the SPX not classed as a daily cycle low? It would certainly affect any further thinking about recent cycle durations.

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