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How do we know that gold isn’t near a bubble top? Because mainstream financial media like CNNMoney publish one dimensional “evidence” like this to “prove” that it is. Happy reading!
Why It’s Hot:
Gold was rising even before the recession. But panic over world markets and the health of European and U.S. economies propelled it into the stratosphere. Prices have risen 150% in the past five years, repeatedly setting new records. Meanwhile, small investors have stormed in. Some fear that stimulus spending could lead to massive inflation; they believe a tangible material like gold will hold its value better than other assets.
Why It’s Worrisome:
Inflation isn’t rising. It’s falling and likely to be restrained for some time by a tepid economy.
Verdict: A Major Bubble
Gold has already started slipping. It declined 6% in July to a recent $1,160 an ounce. Some economists are warning that continued weakness could lead to deflation. If that happens, expect gold to crater.
Copyrighted, CNNMoney. All Rights Reserved.
To Anon1 from last post. Well you make a very big assumption about Gary being my chosen Guru. yes I am a subscriber but I do not blindly follow everything he does or what any one person does. For example, I did not buy back into the Gold market in late December because I didn’t think it was the best time. Gary did. He took a lot of heat for that on this blog. Instead I waited until the Feb low and bought damn near close to the low. Maybe I got lucky. But Gary does keep me focused and I am a grateful for that. I am a voracious reader and I can assure you I live in a much different paradigm than 90% of the population. Here is an example. All of you, and I mean 95% of the population, who think the US dollar will never go away are without question, delusional. How do I know this? Well the US dollar today resembles nothing of the dollar when it was created 200+ years ago, or even a dollar from 100 years ago. US coins today represent nothing like the US coins from a short 50 years ago, when they contained real silver. These are facts which any thinking human can not dispute. There have been over 4000 paper fiat currencies in HUMAN HISTORY…how many are still around today? So sorry pal the the US dollar and the US empire will crumble, like all empires crumble. To delude yourself into thinking that won’t happen would be to ignore Human history. So you can quote me all the so called experts you want I just don’t pay attention to what I know to be true throughout human eternity. And you can call me all the names or label whatever you choose, I collect those and wear them proudly.
Time is the only variable my friend.
Gary, I’m interested in more detail re your comment that if the daily cycle is left translated, that would suggest a D wave is imminent.
Can you explain that a little more?
You have said that you would try to get out of this market when it looks like a D wave might be unfolding. Would a left translated daily cycle be enough evidence for you to close your positions? Or would you wait for more confirmation? And if you’d wait, what other indicators would you be looking at for confirmation?
Thanks!
Hi Gary,
Thanks for the discount. I just signed up mainly because you helped me make about $8,000 already in the past 4 weeks.
Gary:
Thanks for your replies to my questions in the other blog post.
SO I take it you would exit at least half your positions should the gold cycle fail, and not the general stock market cycle.
Correct. Gold is the determining factor. The general stock market is meaningless. It will not effect gold and will only have a minor effect on miners and then only as it is moving into the final bottom of a cycle.
That effect will be quickly erased after the cycle bottoms.
Ultimately miners will follow gold and pay less and less attention to the stock market has the bull progresses.
“The general stock market is meaningless. It will not effect gold and will only have a minor effect on miners and then only as it is moving into the final bottom of a cycle.”
When equities tanked in 2008 and funds were getting hit with margin calls, did that not affect Gold?
Gold went from 900s to 700s during the panic sell off in equities.
What would happen if we did get another “unexpected” panic sell off in equities again?
Will Gold do something different this time around? Will funds not be forced to liquidate its profitable assets to make margin calls?
If so, it would make a great buying opportunity like in 2008, but only after a gut-wrenching drop that will shake off all but the hardest of Gold bulls.
The 8 year cycle low in gold has already passed. The next one isn’t due till 2016 so we aren’t going to be getting anymore panic sell offs.
Plus the odds of another stock market crash are miniscule. The last one was triggered by a melt down in the credit markets when the banks neede to roll over about 700 billion in debt and couldn’t do it.
The next bear will follow the economy into a new recession. Those kind of bear markets don’t crash, they grind down in fits and starts as the fundamental drag of the economy battles agasint ever larger liquidity injections by central banks.
Worrying about a crash is just a big waste of energy in my opinion.
Welcome aboard the G-train, Todd, and congratulations on your recent gains!
Natan,
Hear your read from history that fiat currencies fail because of human greed.
What do you see from the history that leads to end of USD as we know it today.
Gary:
If gold cycle is 20-30 days, then why are you so sure that we bottomed 19 days from the jul low? There is no doubt in your mind despite such a brief pullback as well as occuring at the marginal beginning of the window?
I don’t think we bottomed yet although i’m watching by the sidelines as things run away from me for now. It happens.
-TZguy
Of course one can never be certain in this business but most of the time the cycle low comes between 18 and 24 days so yes it is in the early part of the cycle.
Personally it’s irrelevant to me since I am already in with no plans to do anything but sit still for the next several months.
But a few people are still trying to enter or they took off some leverage at the top and looking to put it back on.
Since gold put in the intermediate cycle low last month it is going to become increasingly dangerous to be “out”. I can’t tell you how many times I’ve seen people trying to score a couple of extra percentage points on an entry and ultimately they just end up losing twice that because they let the bull get away from them.
I’ll tell you what I told subs today. If you aren’t already in then get a core position immediately. Then you at least have a position and the bull can’t completely run away from you. Then you can take your time with the rest and wait for a possible pullback. If it never comes then you will be forced to chase with the rest of your capital but at least you won’t be pulling your hair out because you were paralysed on the sidelines worrying about a 1 or 2% better entry.
Don’t be fooled, we go down tomorrow.
I’m already a subscriber, still had the question though. And yes I’m one of the group trying to still enter. I trade rather leveraged so my entry has to be better than someone on cash only.
–TZguy
I’ve always had my core. The leveraged part is the big swing on high reward opportunities.
-TZguy
if that dollar starts rolling over, I doubt we go down tomorrow … and I believe the $ is probably on the descent part of its cycle … I guess GTrain can cfm. On another note any TA folks out there with thoughts on a S/T target for Silver ? I am guessing we get to around 21.50$ or 22$ if we follow the $ rise of the last move .. anyone have any thoughts ?
Hi Gary,
Lot of money flow into bonds today.. Any thoughts?
To rainman;
I just posted an answer but it got erased.. must have been too long.
I will try again keeping it simple and you should be able to fill in the rest.
Part 1
Fall of Rome
1) Empire Building, endless war
2) increased taxation beyond people ability to pay
3) devaluing the Money, clipping coins
Fall of America
1) Empire building, endless war…check
2) increased taxation beyond peoples ability to pay…check
3)Devaluing currency (debt, QE)…check
examine those 3 points. Do you ever see the US not being involved in any wars? In the past 150 years at what point was the US NOT involved in war or foreign conflict?
Add up all the taxes you pay, Fed, state, local, sales, excise, school, property etc, etc etc. How much more can you pay. if your area is like mine here in Georgia, cops are out on the streets every night looking for speeders, and other assorted violations. Why? because they have become tax collectors. Think about that for a while.
Our currency is not money but evidence of debt. Think about that for a while.
For the USA to continue on the present course, the rest of the world, who are producing wealth, must continue to invest that wealth in us with the hope that they may get their principal back, plus interest. For us to pay them back, we either must massively increase taxes far beyond what they are today or devalue our currency. Do you want increased taxation? Does the rest of the world want to be paid back with devalued dollars? Think about that for a while.
Couple threads back, someone posted a a comment about the US dollar being devalued by 50% in 6 days. many folks laughed at this, because this “expert” or that “expert” said it would not happen. lets see who is fooling who. The fellow who made that charge or the “experts”. In 1933, the American Lenin, that sub human waste named FDR closed the banks confiscated all the Gold and devalued the dollar from $20.00 to $35 an ounce, all in about 3 days. what % is that? So you can believe the “experts” or you can believe the facts. The ‘experts” say people wouldn’t stand for it…really..they stood for it 70 years ago so why wouldn’t they stand for it today? Will you take to the streets in revolution? Think about that for a while.
Part 2
Here is a question. Is there evidence we know today that the wealthiest people on this planet are accumulating Gold bullion, mines, mine shares and other hard assets? If you answer yes, ask yourself what do they know that you don’t? think about that for a while.
I could go on and on, but the choice is what you want to believe or not. You can believe a so called “expert” ( I call them Propagandists) or you can believe what is right in front of your eyes, but you choose not to see…think about that for a while.
If you are under 50, it is my belief you will see a new currency or “new” dollar in your lifetime. Or you can believe the “experts” and just go about your life whistling dixie. think about that for a while. Time is the only variable.
Hope this helps you discover the answer to your question.
Hyperinflation would be reflected ahead of time in the chart, so there’s no point in worrying about it. Take a look at a chart of the Zimbabwe dollar or the German Wiemar hyperinflation if you need evidence. Both were in clear downtrends for years before the hyperinflation got started. As long as the dollar is above the 2008 low the hyperinflationists can vent all they want but they aren’t going to get hyperinflation. A break of that level and if the trend accelarates to the downside then I would start worrying.
Interesting we’re approaching some key breakout levels on some miners so we’ll probably find out soon if this is a real move or not.
Justin;
point of fact. I never used the word hyper inflation or alluded to any such thing. What am I am talking about is a currency crisis leading to collapse, ceasing to exist in its present form. For the record, this includes our whole society as we know it, a very large change is happening, all societies or civilizations go through this, kind of like when the bubble bursts…but lets stick to the money. When you change the discussion by using the term hyper inflation, you make the debate a simple monetary event, therefore only allowing for a limited monetary answers within a defined paradigm. Monetarists, Keynesian, fiscal policies, and or mixes of all and some other silly nonsense. The real disease, FIAT currency- US dollars as they are known today, is not addressed. US dollars are not MONEY. It acts like money by being a medium of exchange and a unit of account. It is not a Store of Value. Clearly people, human beings, can only increase their individual wealth by having a way to store their labor, their productivity, their VALUE. If this is not so, then we are less than we can be and would have never progressed as far as we have as a specie. Therefore, a most efficient way for INDIVIDUALS and therefore society, is to be able to use that store of value as a medium of exchange and a unit of account. Also dividable. We kind of figured that out with Gold, silver and other PM’s over the last what 4k years. oh and Gold, silver and other assets can also be transacted digitally, so we don’t need to bother with carrying sacks of metal coins in bags.
So can you tell me what you call the devaluation of the US dollar from $20.00 an ounce to $35.00 in 3 days? while the nominal change in prices would be the zero the real change 40% plus inflation basically over night. You learned this fact in elementary school right? Do you think for all of ours sake, we should have? But what REALLY happened was a paradigm shift, where over 40% of the peoples wealth was CONFISCATED in 3 days. I guess you could call that hyper inflation. I call it theft. It has continue3d only worse, until this day. But the end is coming one way or another. I bet you’ll be alive to see the end. You watched the Berlin Wall collapse and the Soviet Union? their “experts” said it would never happen. Give it time.
Gary,
A friend and I were talking about the dollar. I mentioned that it was around .84ish in value. Then he asked me against what currency. I had no clue.
What does a display of USD-EOD chart mean? Is it an index against all currencies? or a futures basket?
Thanks.
Tom
The dollar index is measured against a basket of 8 currencies but the largest is the Euro.
TommyD: Google or Wikipedia is your best friend 🙂
“The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.”
http://en.wikipedia.org/wiki/U.S._Dollar_Index
Justin,
I don’t think it’s so much as being worried about a dollar crash that we keep buying gold. That is just one reason it might be going up, and also one extra bonus for being invested in it.
Worried is too strong a term. Gold has been going higher without a collapse, and will do even better if one should occur.
Stefan and Gary,
Excellent! I got it…
Tom
Natan,
Agree with all of your response and you keep it very lively.
Empire’s keep their hold based on military power. US is still the largest military power in the world.
But don’t see that happening when the interest on our debt overtake military spending as the biggest piece of pie.
We will crumble but will survive much like Romans and British as have.
Swing high on the dollar index. I think there is a good chance we’ve seen the top of this daily cycle and probably the top of the intermediate cycle.
Strange that gold and USD are lower together.
Silver and miners are up though.
Every empire falls. Some will be destroyed, some simply fade as another power comes in. For its citizens, its more about how we adapt to the obvious changes that allow us to survive and maybe prosper.
For the most part the US is its currency, its only real commodity. The system in itself was brilliant. Transfer useless currency to acquire natural resources, and then recruit some of the most brilliant minds in the world to transform those resources into something new. The problem then became the fact that most of the citizens became lazy, unproductive, and complacent. So the resources became wasted. The fed mistakenly viewed the lack of productive growth with the lack of resources, so it starts pummelling the system with new dollars to acquire more resources. This only serves to hurt the system more, as our already gluttonous society is rewarded for being fat pigs, and the system continues.
We are now at the point where the only commodity that the US has may be called into question. The US has been able to destroy its currency in a mere 40 years or so…the USD being different now than pre 1971.
The question then becomes does the US gain back its real productivity. Possible, hunger produces productivity, but it may be too little to late. The USD and the regime post 1970 are unsustainable as an economic policy; that empire will fall either by destruction, fading, or reform.
Justin’s “long dollar/short stocks” trade is working like a champ today.
I was expecting the market to bottom on the GDP revision tomorrow but if this swing low holds it is possible it could bottom a day early. Maybe the market is sniffing out a better than expected number.
Gary, lets say thats the case, the GDP #s come in better than the already paltry expectations .. how do you think the market reacts – and I understand its an educated guess – in terms of Gold, the U$D and Miners.
Better than expected would initiate a huge rally this late in the daily cycle. A bad number will crush the dollar which is a prerequiste for a rally anyway.
Just watch the cycles, they will eventually force a reversal.
I don’t know if anyone has noticed, but greek bond yields are edging up close to all time highs.
so you believe its win win … bad GDP , dollar gets crushed up we go … good GDP economy is back on track up we go ?
Looking at the SPY chart, and i’m no expert, it looks bullish Short term. Higher Low , looks like a rising channel, Money flows positive, we could hit SPY 117 by end mid to end sept.
Don’t forget, tomorrow Shalom Bernanke takes his helicopter to Jacksons Hole.
keys says:
“The question then becomes does the US gain back its real productivity. Possible, hunger produces productivity, but it may be too little to late. The USD and the regime post 1970 are unsustainable as an economic policy; that empire will fall either by destruction, fading, or reform.August 26, 2010 7:37 AM”
nice summary. completely agree.
Keys-
I agree with Nat– Nice Post.
Although I sure hope we can turn things around. HOPE being the key word!!
I understand the ‘get in now, things will move; new cycle day 1’ thing of late, but I want to point out that we are quite extended at this point by a number of measures (short term). SLW could easily fall $2 on a pullback. Gold $50.
I have a core position, but i’m waiting to add for leveraged position. Just a bit of contrary caution if you are buying these prices. They will be much higher in 3-6months for sure, but could be a nasty whipsaw to hit some of the recent people chasing this.
–TZguy
I’ve been away for several days, doing a lot of snoozing. What a nice surprise to see the metals continue higher.
I plan on napping my butt off the next couple months and see if I can push gold to $1500+ by Thanksgiving.
Gold up nicely, but quality of life through the roof!
It’s not looking good for the folks waiting on gold to fall back down to $1000.
Sleep away Nap Boy!!
I trade leveraged. That is the reason for my comment. Those without leverage dont need to fear drawdowns as much.
–tzguy
Possible buy signal! If the Dow closes at a new low since the recent top (down 19.62 or more) without getting killed (down 80 or so?) I will get a buy. For the record, the last 5 posted signal on this blog:
7/1 Buy, UP 275 over 3 days
7/15 Sell; DOWN 261 the next day
7/30 Buy; UP 208 the next day
8/10 Sell; DOWN 265 next day
8/16 Buy; UP 175 next day (during the day, but faded)
Given Gary’s stuff and the AAII survey (no bulls left) I will go very long (like last time; 1,000’s of SPY and QQQQ)
Let’s hope we get the buy signal.
TZ,
You may be right, but I would also suggest that you throw away your oscillators at this point. If the next leg of the C-wave has begun they are going to be useless.
It isn’t oscillators as much as simply duration of rally and extension above a short term mean. I have a few metrics in this regard. Golds also up 4 weeks in a row at this point. 5th week is rarely up.
I trade 3x leverage, give or take, and cant/wont buy in midair like this. It’s a recipe for pain.
Still waiting. (I have plenty of core position for now.)
-TZ
Just a question. If you are worried about drawdowns because of leverage why didn’t you buy when gold tagged the 50 DMA or the HUI tagged 450?
Those were both obvious support levels that you could have put a stop right underneath to limit risk.
Another question. Do you make any more money being massively leveraged and at risk of losing trades in a bull market because of that leverage than you would by just sitting with a nonleveraged position?
Invariably I’ve found almost everyone that uses large leverage ends up losing money because they have to time every trade perfectly. As we all know that can’t be done.
This bull is going to be so huge that no one really needs to use heavy leverage to make a fortune. Why jeopardize an almost sure thing by playing with fire?
You did say you have a core position so maybe this is just a small (10% or less) position that you play with?
In that case then I can understand this is just a “fun” trade.
Congrats DG..your short term trading system seems to be putting some money in your account. Well done.
Decided to short this little bounce this morning. Long TZA, FAZ, and ERY.
Market is rolling over here. No conviction from the buy side. Everyone is expecting something great out of Obama or that Bernanke will say something to boost stocks tomorrow. NOT GOING TO HAPPEN.
September is historically one of the worst months to own stocks. This year will be no exception because there is simply no reason to own equities.
I think the S&P is heading to at least 950.
Just curious. Why the reference to “Shalom” Bernanke?
A red daily candle immediately after a daily low isn’t necessarily bearish … note the pattern of most of the recent swing lows, actually (note the major February low this year, for example).
As long as yesterday’s low isn’t tested today, I would have shorts on a tight leash.
Actually the next intermediate cycle low is due in November. That is when we can look for the worst losses. I would point out last Sept was a very good month so a blanket statement that Sept is bad for stocks really doesn’t hold any water.
Just watch the cycles. This cycle is lined up for late Oct. oand Novemeber to be bad. Not so much Sept.
That’s his name, and it sounds cooler than Ben. Are you offended somehow?
Here you go:
http://en.wikipedia.org/wiki/Ben_Bernanke
I’m proud of the fact the entire Federal Reserve is Jewish like me! 🙂
GARY,
Couple of responses for you:
-I was expecting lower than the 50dma and it didn’t happen. (I had a specific metric, but it didn’t work that time. You weren’t going leveraged and were willing to take a further drop so the buy point was fine.)
-Being long and just sitting is obviously best, but I can only start where I am NOW. NOW I only have ‘core’ and it happens to be the beginning of a large move up segment. Just being 100% long isnt’ the same as 300% long *IF* you can pull it off. (see next)
-I’ve actually managed to pull off such a situation multiple times since 2001. My weakness is that I give back much on the D down wave. I buy too early or exit late. (I didn’t even KNOW it was a “d wave” until recently thanks to you and a few others). I have learned and adjusted (and also gotten help…aka YOU 🙂 so I do not expect such an occurrance this time. I’m keeping the gains.
As for sizing:
I consider ‘core’ to be 50-75% of total net worth in non-paper metals (rest in cash). Leveraging is when i go 200% to 300% with specific stops and risk limits.
–TZguy
I thought you said we bottomed. Why we going down.
Please look at SLW chart for the following 2 periods: Jun 21-28 and Aug 20-26.
Do you see anything in common?
If we’ve bottomed, anon 10:50, yesterday’s low is the key level to watch. For now, we’re well above.
Michael: SLW is breaking out of previous resistance on strong volume. That seems to be the key *difference* from the end of June, imo. There’s also a trendline breakout on the silver chart, which also wasn’t in place at the end of June.
I really never understood why people try to “match” the present with the past. The conditions are rarely the same and neither are the results.
Probably 90% of the time trying to predict the future by matching it with the past is simply a futile effort.
The biggie at the moment is the 1937 market. Total waste of time in my opinion. The fundamentals are completely different.
There is no bottom. Epic crash is coming.
Anon 10:56,
I agree with your arguments but those double tops are very similar where the subsequent top is slightly larger than a previous one. What scares me is the part following June 28th…
No guarantees out there, Michael, what can I tell you.
Might also note another difference between end of June and now for SLW: no negative divergences on the standard daily MACD and RSI.
FWIW, as always.
If the miners do not breakout here it’s probably big trouble for them, since triple tops usually lead to washouts. If they do breakout then maybe we have put in a long enough base.
I’d still lean towards another correction since this would be the first time a new rally has been launched from above key moving averages. I just don’t think “this time is different”, but I could be wrong.
One chart that looks pretty ugly to me is platinum, that doesn’t bode well for gold.
Whenever the doubt monsters creep in I always find it comforting to remember that the bull will correct any timing mistakes.
Actually this will be the fith try to break and hold above 500. There are no fifth tops. Actually a triple top is very very rare. usualy a triple top will break on the fourth try but this time it appear it’s going to take five.
We’ll see, Justin. The line of resistance is clear, though miners have also been making higher lows in between tests. The previous two tests this year were quite gappy, perhaps reflecting the panic of the euro crisis. A steadier move to test the highs this time around might suggest something a bit more fundamental and have a bit more staying power behind it.
Who knows. 🙂
But a bull won’t correct every LEVERAGED bet. That’s the risk. The reward is higher gains. (I’ve done it repeatedly. I’m not just talking theoretical.)
SLW and gold are bull and headed higher. But shooting straight up for weeks has left them vulnerable to some smashing of recent chasers.
–TZguy
Platinum looks more rangebound/neutral to me, and copper and oil might also be worth testing against the bear thesis. The former is starting to look quite bullish, the latter cautiously so.
A bull market also cannot correct a bet when the investor can NOT handle the drawdown. It is *classic* to make a bet expecting to be able to handle the pullback, but find out you can’t when it actually happens.
–TZguy
doesn’t look like gary is going 4 for 4. He’s been right about the precious metals however.
stocks are not looking good. Bottom is not going to happen in october or november. It is happening in September (unless we crash tomorrow, monday, or tuesday.)
Offended? Hard to say. I am Jewish and used to it. I just don’t see others are called by the religious affiliation. Perhaps you meant no harm. Back to gold.
Troll boy you gotten steamrolled so many times I’m really surprised you still have the courage or maybe I should say stupidity, to jump in front of the train again.
Choo choo!!
Bulls getting slapped acrossed the face with a bat today! Tomorrow, likely to be kicked while down.
I’m afraid the emotional retail traders are going to sell into the GDP numbers tomorrow that the market has been discounting for two weeks now, and the smart money will be happy to buy on the cheap from them.
It’s getting very dangerous on the short side.
Miners will correct 10% now.
Choo Choo!
Line up on the tracks bulls! Bears got control. Let us put you out of your misery.
Gary your right. I could see the S&P testing 1020, 1000, or even as low as 950 tomorrow.
Bears may give up the train at those levels depending on our mood.
went long ESI
To be honest, stocks are acting like they might have lower to go. I’m not in them, but they seem wilted.
What time is revised GDP released on Friday morning? Also, any official comments planned from Bernanke at a specific time? Thx!
Is there such a thing as a weak or strong swing low? Do some behave better than others?
Looks good for the buy signal. I also love all the “anonymous” guys saying “look out below.” You guys and all the small individual investors (according to the latest AAII survey) are scared to death. Coupled with BonW numbers, Gary’s cycles, and my buy signal, this is going to be fun on the upside. Will be buying 1500SPY and 2000 Q’s near the bell, if we get it.
You would think the perma bears would eventually figure out that bottoms never look like bottoms. It simply isn’t possible to pick a bottom using only technical chart patterns. The technicals will always look bad at a bottom.
I’m afraid it’s going to be 4 for 4 soon. If I was trading the stock market, which I’m not, I would buy into a gap down in the morning, especially if we could get some panic tick readings in the first hour.
DG: Thanks for the buy signal…with 10 minutes to go, we look on track for it? Hopefully it plays out tomorrow!
Nice to see 2x average daily volume on many of the major silver plays.
Yes, unless we really cave in the next ten minutes (or close up for the day) we will get it. It’s good a little over 80% of the time going back to 1980. Given Gary’s stuff and other things, I expect it to work for at least a 150 point pop. Hopefully this is more of a bottom than that. Exits are on your own!
I wouldn’t bet which way stocks will gap in the morning, but I know for sure it’s not wise to fade the G-Train!
GDX will test 54 area tomorrow according to my crystal ball.
Got it! Big day by Tuesday of next week. Good luck shorts—you’re gonna need it. Gary, I’d love to see that BonW number pop tonight.
Good luck to those that went long. It’ll be interesting tomorrow to see which way things play out.
Thanks DG for sharing a real-time setup.
looking like a bull funeral tomorrow. Final knockout punch coming.
Godspeed, DG!
Well, after paying my daughter’s tuition and my tuition for graduate school I have exactly $117 ’till next payday. I’ll have to keep reading the public posts and thank Gary for his incredible generosity in sharing his hard work and insight.
Thank you, Gary. I look forward to all your posts.
Elaine,
You should’ve tripled that money with G-rock, then started next semester! 🙂
close to 100M BoY
Anonymous… yes, probably true but I really want to get my master’s degree and putting off class for a semester just prolongs the agony.
Elaine,
I do offer a half price subscription to students. You can owe me till next payday if you like. Just send me an email.
Gary, I do not see buying on weakness today at close. Am I right or wrong? Thanks!
the BoW went away at close…there was ~100M BoW at noon
–DG–
What is your expectation for this trade? 1% move up, 80% chance? Is my memory right?
Why do you say big day by TUESDAY? I didn’t think your system specified a duration.
Might join you on trade.
-TZguy
I’m betting the farm on SPY calls in the morning! This sonavagun is going to launch like Apollo 13! And we all know how that one turned out…
Hi Gary..
AAII sentiment now has Bulls down to 20.7% – I think that this is the lowest number since March of 2009.
no thanks , i dont pay for bs, like yours, i missed u jacazz
anon @ 2:07 pm: how do u interpret BOY going away @ end of day vs. 100M in the afternoon?
@Anon 5:02: I’ve seen it happen a few times now in the past month.
I think Gary might have an answer for you as I don’t…I just monitor the BoW numbers through out the day
Gary: do you have an explanation to educate us all? Thank you.
It just means that big money sold into the close and erased the earlier positive money flows. (I’ll tell you why in tonight’s report)
We already got the BoW number we were looking for on Tuesday. It really doesn’t matter if we get another one or not.
As I’ve said these aren’t perfect timing tools but they almost invariably show up at or close to bottoms.
Tuesday’s data fits the bill.
The system calls for a 1% move”very soon” so I casually threw out “Tuesday.” Optimal holding period is 5 days, but that’s data mining so I don’t trust it (Some number of days had to be optimal, right? Not sure there’s any causality there). And yes the system is a little over 80% accurate so I figured with the BonW number, the cycle bottom, and the recent AAII survey we may get a nice move. IF this is an intermediate term bottom and I can hold the load I bought for a few weeks I’m going to have a great trade. Tight stops and big positions on buys or sells is my game so I have to catch the bottom just right. (Thanks, Gary. I bought more gold at 1160 based on your 1155 call. Let’s me have a tight stop.) Give me a tight stop and I’ll buy or short anything. They run my stops sometimes but when they don’t and I’ve nailed it, it’s really fun!
Something I want to mention to everybody. In the middle of the day today I was frustrated and jumpy as hell…felt I HAD to buy something or I was gonna miss out. That gold/silver were running away from me and wouldn’t stop. I had been watching for weeks (with only core) and simply HAD TO BUY!
I didn’t (call it training or instinct) and that’s also approximately when I posted my earlier comment (see above) where I warned people that buying was dangerous here.
The market has a way of doing exactly what just happened. It has a way of triggering a common feeling in people (i’m sure I wasn’t the only one – it was widespread).
So far, that feeling is looking like a short term top and I’m suspecting we finally go down into a buy point. We’ll see. Maybe I’m wrong, but it feels right so far.
–TZguy
Everybody’s GLD chart tomorrow will look like this:
http://stockcharts.com/h-sc/ui?s=gld
reversal spike;
(same on yahoo, google too)
GLD never traded that high (122.95), although yahoo’s intraday chart shows an errant spike up to that level for some reason (other services dont)
http://finance.yahoo.com/echarts?s=GLD+Interactive#chart1:symbol=gld;range=1d;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
If this stands without correction, it will make people who look at things tonight, AND computer programs/SYSTEMS that key off that data bar want to SELL or SHORT gld due to that spike.
Interesting.
–TZguy
Anybody that is at all savvy knows that is a bad print. It won’t affect anyones trading.
Everybody’s GLD chart tomorrow will look like this:
stockcharts
a reversal spike;
(same on yahoo, google too)
GLD never traded that high (122.95), although yahoo’s intraday chart shows an errant spike up to that level for some reason (other services dont)
yahoo intraday gld chart
If this stands without correction, it will make people who look at things tonight, AND computer programs/SYSTEMS that key off that data bar want to SELL or SHORT gld due to that spike!
Interesting.
–TZguy
EDITED: to link URLS
Tim Woods is one of the best for cycles.
Everybody’s GLD chart tomorrow will look like this:
http://stockcharts.com/h-sc/ui?s=gld
a reversal spike!!
(same on yahoo, google too)
GLD never traded that high (122.95) (on esignal), although yahoo’s intraday chart shows an errant spike up to that level for some reason (other services dont).
http://finance.yahoo.com/echarts?s=GLD+Interactive#chart1:symbol=gld;range=1d;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
If this stands without correction, it will make people who look at things tonight, AND computer programs/SYSTEMS that key off that data bar want to SELL or SHORT gld due to that spike!
Interesting.
–TZguy
FIXED LINKS PROPERLY
Gary,
Yes…if the person CATCHES it. What if they don’t look intraday?
Also a computer system doesn’t have the same logic (except maybe very high end). It’s gonna run off the feed regardless.
It’s just interesting. That is the #1 gold security in the world and we just got that strange print.
Makes you wonder, eh?
–TZguy
I can assure you no computer system run by any firm managing over $100 is going to trade off that bad print and certainly not one big enough to move the gold market.
We agree to disagree.
I caught it. But, how many other people did before I said anything?
You can’t edit data in Tradestation, for example. It is whatever it comes in as.
If a person is trading 50 securities in a black box and GLD runs through it, you think they will catch it or know?
If a guy works and comes home to check EOD data or has a scanning service to look for “reversal candle trades!” you think he will know.
It’s over $100. But we can just disagree.
–TZguy
Gary
You said, “Tim Woods is one of the best for cycles.”
Is this the Tim Woods you’re talking about?
http://www.cyclesman.info/
And is he the one who taught you how to analyze the market?
Bad prints are actually not all that uncommon, TZ (and there are those who believe false prints actually represent a sort of coded message flashed across the market among those In The Know).
I’m with Gary on this one. Any algo that doesn’t take bad prints into account isn’t worth the fortune firms spend to program them.
That’s the one. Altough he didn’t teach me. I do things a little differnet than him but pretty close.
TZ,
I would also add that those kind of reversal candles aren’t really all that negative. If they come after a multi week rally maybe. But on day two of a new daily cycle I wouldn’t be terribly concerned for anything other than a minor corrective move.
a) Gary, you are assuming we have a new cycle or somehow things can’t go down here. I think that’s a bit one sided.
b) You guys seem to think there exists only joe trailer and goldman in the mkt. I suggest there are MANY entities in a continuum with MANY different capabilities and technical systems. Arguing goldman wont fall for this seems rather empty when there are a few hundred thousand funds and people with all kinds of different setups. (Goldman wants it down anyway and maybe created it.)
3) And finally i dont’ gather you guys have actually bought a program or service and tried to actually program and trade a system. What you brush off as so easy to do is nowhere near and involves all kinds of complexities (try mixing intraday data in Tradestation, for example, determine the “valid” highs and lows, and then applying that to clean up the daily data; have fun…oh..and make sure you don’t make any mistakes which then corrupt GOOD data in return.)
I’m just saying I disagree here. And arguing it simple, obvious, or ‘goldman wont fall for it’ aren’t really answers.
We may go up. We may go down. I only started this discussion because it was interesting and these are very critical times right now. Food for thought is all.
–TZguy
Of course we could go up or down from here, TZ. There are no guarantees. I just think outlier prints are the wrong place to look for signals of future direction.
Been a long time….since I posted here. I hope all is well with everyone. Gold stocks seem to be in a high danger zone with the most chance for a steep correction. I am not saying they cannot move up another 5% but upside is limited and downside is not.
TZ guy-
Getting back to missing the G-train. (gravy, Gary, gold train)
I’m right there with you my man. This kind of sucks as I missed the intermediate bottom and was waiting patiently for my daily cycle low to get on board. Come to find out Gary and Doc both said that quick intra-day was our swing low! Frickin-A!
I had 60K plus worth in SLW at 15-16 from the Spring, but sold it. Much more in GDXJ and other beaten down miners from the Spring that I dumped because of the uncertainty of C or D wave. It’s been a tricky year for me to try and trade. I wish I had just bought and held like the G-Man preaches all the time, but I have to deal with reality.
Of course, I was ready to buy in and decided things were looking like a reversal. Who knows, maybe the market is pricing in some sort of QE2 announcement from BB on Friday and when it doesn’t come, gold will get rocked.
So what is your strategy from this point? Also, Gary…give some advice for those on the sidelines to a large degree. I know you like to say buy in and let the bull fix your timing mistakes, but we ALWAYS get oversold at some point. Right now the charts are screaming “OVERBOUGHT!”
–Sideline Guy.
I’ve got that fake GLD print on my Thinkorswim chart as well.
Gary, what do you think about Charles Nenner on his cycle?
Let me tell you what you are risking. When this C-wave gets going and I’m about 80-90% sure it is now starting the next leg, it’s going to amaze everyone. The people that get stuck in this overbought mentality are going to miss one of the most profitable opportunities we’ve seen in several years.
Write this down and paste it on your computer. When gold is in the grip of a powerful C-wave thrust oscillators become meaningless.
Gold will get overbought, then it will get more overbought, then it will get even more overbought and finally at that point things will just be getting started.
Gold is only $25 from breaking out to new all time highs. As soon as it does that it will be trading in a vacuum with no overhead resistance.
When the miners break out especially after a three year consolidation and 4 attempts to break through 500 it’s going to be like throwing gas on the fire. The entire precious metal complex will be trading in a vacuum.
I can guarantee if you don’t learn the lesson of Old Turkey you are going to miss most of the move. Andf when the move is finally over and you step back and see just exactly how huge the move was you are going to want to shoot youself in the face if you blew it because you were trying to trade overbought levels.
Using DeMark indicators, Kevin Depew on minyanville.com recently identified a qualified propulsion up momentum break of Gold in the low 1210’s. The current upside target is 1260ish, which is the next break level, which serves as resistance until broken. So, we should have at least $20 upside from here in the short-term. Depew is very bullish on silver – if it qualifies a weekly break level around 18.50ish, this is a bullish trend up. For those of you not familiar with Demark, this might seem like mumbo jumbo, but I have found it to identify trends, especially the rally out of the July 09 lows. It wasn’t so good at the Feb 10 lows as it was indicating something more bearish, so just like everything else, you need to have risk management in place. Currently, in terms of the S&P and other indexes, it is indicating a short-term buy signal, so it lines up with what I’ve been reading here.
Hi Gary,
It seems Tim Wood is not as optimistic about the current opportunity in gold as you are. I would even describe him as suspicious of gold’s current move.
Here is a snippet from his latest August 26 update on gold…
“Given the behavior of the oscillators in the wake of the last couple of days I do not feel that the evidence favors the trading cycle low having occurred on Tuesday as I said in Tuesday night’s update. I do not trust this short-term buy signal and I feel that the advance seen the last couple of days is more likely the final push into the trading cycle top. Once another daily swing high is formed and confirmed by a downturn of the daily CTI, the trading cycle top should be in place.”
Any comments on this? He seems to have different take.
There is still time for another move down. Gold isn’t past the timing band yet. But it will still be an extremely right translated cycle. I’m going to assume we did see the cycle low until proven otherwise. And even then it won’t make any difference to me since I know better than to try and trade.
I would add the move in silver certainly looks like a rally out of a daily cycle low.
Thanks Gary.
If I had acted on Tim’s updates, I would still be on the sidelines and missed the PM train when it left station!
Thanks to you 3/4 of portfolio in now in silver and miners! The other 1/4/ is in grains and sugar.
For some reason Tim has fought this bull the whole way. First he kept looking for a nine year low long after the crash. That was obviously the 8 year low. I have no idea why he wasn’t able to see that.
Now he’s nervous about gold topping in under three years. He’s basing this on history. Again I don’t know why he can’t see that gold was in a secular bear market or “managed” as the anchor for the dollar during his history period. Not exactly the best period to model bull market behavior from.
I think Tim might need to back away from his dozens of technical indicators and see the big picture.
And for all Tim’s expertise in cycles technology, the bottom line for investors is making profitable decisions.
His system may not be able to do that for this gold bull.
Yes I think he may have missed the bigger picutre.
Also he does not rely on other things like sentiment and money flows. I presume you got that from elswhere 🙂
Correct I use on all four tools. Cycles, sentiment, money flows and TA.
Just got home from my cross country flight (FL to CA) and see the futures are up nicely. Tomorrow ought to be fun! (I hope…)
Ross: Did you put a trade on?
TZ: There are often gaps up after a buy signal so “the next day” is often too late. I find it’s usually buying at the close or miss it, because I hate getting in the hole right away and thus avoid buying gaps up.
Good luck to us (or maybe just me).
Hey DG – Yes, I did, but very small position due to uncertainty abt the GDP pre market. Good Luck!
And the cash flows out of Wrong-Way TK’s account, into our local DG’s account. 🙂
Nice call DG! Futures up on GDP – looks like we gap higher – as to whether we come back down or gap and run, is anybody’s guess!
Ross: I know what you mean as the gap risk is higher, but news follows the market not the other way around. 9/11 would not have happened in a bull market. I “knew” the news would be positive this morning (or at least interpreted that way) because it was time to rally. Almost odd, I know, but I have been watching this for so many years I’m used to it. The markets almost always give a tell that anticipates news. I remember predicting the oil price collapse in 1980 because the oil stocks were acting like garbage. Somehow they “knew” before the price of oil collapsed, and somehow the market “knew” the GDP numbers would be a boost. Doesn’t always work (especially short term), but it’s really quite reliable. Good luck on when to exit. If Gary is right and the AAII is right we could rally for a while here. In any event you can put in a stop at break-even and play with the house’s money.
Shorts are getting CRUSHED, and it’s only going to get worse for the next few days, maybe weeks. LMAO!!
Yup – thats what I intend to do – @ worst, break even. Consumer Sentiment @ 10 and Bernanke speech are the other 2 big news items for the day.
DG, sharing your work is much appreciated!
For people who missed that intermediate bottom in gold: What Gary did was prefect. He called for no close below 1155 and we got to about 1158! You always have to take the trade that lets you know you are wrong within .25% Why not take it? You lose almost nothing and may make a pile. I’ll trade any damn thing that gives me a tight enough stop. Why not? There’s almost no risk. Gary: keep that sort of stuff coming and I’ll buy you a car out of my gains! (please don’t hold me to that…)
DG: I trade futures so if i’d wanted to join the trade i could have done so 24hrs including middle of night (we discussed this before). I’m not doing it though. I think precious metals are only play and stocks are out of my comfort zone for now
GARY: I’m not really ‘using oscillators’ and i’m aware this thing is gonna rally like hell for months. My metrics (which HAVE worked in the past in the SAME situation) still call for certain pullbacks every 2-3 or 4 weeks. I’m not expecting some kind of massive selloff. It is much more gentle than that, but it can still be $50 in gold or close to $2 in slw at this point. Since i trade *quite* leveraged (like DG i guess), i simply can’t buy in midair like we have now.
I’m pretty sure the high at 1260 will offer some resistance and the market is known for convincing people (perhaps you now?) that it is off to the moon with no pullbacks ever again….just before it pulls back.
I feel it, trust me. But buying a bucketload of gold contracts right here isn’t a smart idea imo. We’ll see.
–TZguy
I missed a great entry, no doubt. And i’m not winning things now. But it makes for good discussion to see what some people are really doing – including when it isn’t working (instead of a bunch of anonymous’es who always seem to know everything and are never wrong – or dont’ post when they are).
My time will come and i’ll be with you guys soon enough.
–TZguy
You can buy me a dinner in Maui if you feel inclined to join us for the first annual “Trackers on the Beach” gettaway. We are tentatively planning on the first week of December when gold should be dropping into the next intermediate cycle low.
Just for clarity’s sake: I virtually never use leverage. It makes me tense to be so heavy which screws up my trading. Position size and risk management are the most important things in trading, IMO, and they get about 10% the attention that entry points and stock selection get. Doing well with the other two almost means you can throw darts to pick stocks and flip coins for long/short and still win over time.
TZ,
If you buy far enough out you will have plenty of time for the bull to correct a timing mistake. Or if you think gold will hesitate at $1265 (I think it probably will too) you could buy now and sell at $1265.
I’ll say again:
-we are up 4 weeks now in gold; it usually doesn’t last five.
-we are in ‘midair’ after all these weeks. There are a lot of people who have bought who are due to get tested on their positions.
-we have overhead resistance coming up shortly (and are already in the zone roughly)
-gold and slw are significantly extend EVEN BASED ON A STRONG C WAVE metric.
-in previous instances in the past when C rallies started in july/aug, there were pullbacks as late as early september before new highs and massive gains. there is still time.
-yes i missed 1158; it didn’t look like a bottom yet to me and once it moved up it was too high for me to enter with proper stops
I’m waiting for the time being. I’ll mention when and where I get in.
–TZguy
Gary: If I hand;t just been to Hawaii a few months ago I might join you there! If this becomes an annual event I probably will show up some day. Then, if you turn out to be right on gold, dinner is on me! And… how about a stocks troll meter? Lots of “Crash” posts yesterday. Just a thought…
TZ: I like your posts. Yeah, sometimes it’s just a question of waiting for a setup you like. Let me know when you pull the trigger, if you feel to.
I really enjoyed all the “anonymous” posts yesterday warning about how the bulls were toast at the opening and how we were going to crash by 10:00 a.m. today. Funny, I don’t feel like toast (except maybe a warm feeling right now.)
Once a strong push starts I tend to watch the 10 DMA. When gold or miners get stretched aobove the 10 it’s usually time for some sideways consolidation or maybe a minor bull flag to let it catch up.
At the moment the only thing that’s stretched is silver.
Stock troll meter hmm…
950 troll boy is a pretty good contrary indicator isn’t he?
GARY:
My last post “i’ll say it again” was a cross post. I wasn’t ‘saying it again’ to you. It was just a continuation of earlier.
Buying LARGE size gold contracts here (i’m still not getting that you guys realize HOW large) for a *possible* $20 gain ahead of a expected pullback is not my game. The pullback is just a likely now and there is nothing but AIR under this.
As for ‘buying far enough out will give you time’ this doesn’t make sense. Futures are marked to win/loss in real time (daily). If I buy, then it’s a buy. I’m in and vulnerable to any sort of pullback.
I need some support or vol selling points to enter. Midair like this (jeez…we dont even have a *congestion* here) is just asking for pain i think.
–TZguy
So tell us then TZ,HOW large?
Gary,
Shouldn’t we meet in Hawaii on an up move in gold? Seems like we’d get more time at the beach, and have more fun, while we’re making money relaxing?
TZ,
You need to re read what DG said about position size and risk management. Huge leverage is going to cost you your portfolio. Never fails.
The market teaches this lesson to every trader eventually. Better to learn the lesson early before the market takes all your money away.
TZ: I don’t think you guys are disagreeing, but are looking at different time frames. And even with futures if you don;t use leverage you can just hold it. You are trying to apply Gary’s tactics to something he has not designed it for. I use his stuff but draw out of it what applies to my style. It’s not that what he is saying is wrong or doesn’t make sense. it just doesn’t apply to what you are doing. If it’s the wrong tool for the job it’s not the tool’s fault. At least, this is how it looks to me.
I sure hope Justin stopped out or he won’t be with us much longer. 🙂
I will be taking my margin off and possible a decent percent of my positions at the top of this leg as there is a possiblity the C-wave could top this fall. (I’ll go into it more as we move into that time frame). So I thought that would be a good time to go. Plus late fall is when the big waves come in on the north shore and I want to watch the surfers.
Sounds good. I haven’t indicated I’ll join you guys, as it’ll depend on what’s happening with the family. I can make the decision spontaneously, and thanks to Gary I already have plenty of funds, but will need to make a last minute decision. (wife join me or solo?)
Although I’ll miss the special deal price, I can get on a plane in 2-3 hours notice.
Discussing position or account size is unnecessary and simply unwarranted on a message board. If I do well or not, the % change is all that is needed.
I will, however, give an example of what i’m talking about.
If you have an account that is $300,000. You would then trade 8 comex gold contracts which notationally is about $1 mil.
Thus, you are at 3x leverage.
If properly entered (on a support or relatively sure bottom point), your stop would be no more than $10.
That would mean approx $8000 loss if you are wrong which is easily acceptable for the account size.
If you have 2-3 buy levels at lower points (presently, i could make arguments now for 1225, 1200, and 1190), and then execute this leveraged trade at each point (assuming mkt doesn’t compeletely collapse), then you are likely to get in long on one of those.
If it’s the 1st you never lose anything.
If it’s the 3rd, you lose $16k before you hit. (If we completely collapse BELOW your “it can’t go lower than X level”, then you have 3 losses and you sit out and try to figure out what the heck is going on. Your loss is still ok.)
The key is, once you hit, you HOLD and SIT. (There are levels to add higher up, but that’s a different discussion.)
–TZguy
I quite happy with gold’s performance, but equally so for staying out of Nat gas on Gary’s advice. Often it’s the trades you don’t make that are most critical to overall results.
In other words, I plan to be just a long and ‘old turkey’ as Gary. But I will choose (rightly or wrongly) to use some leverage and thus I need to have a better entry. (Again..his was perfect, but everybody makes mistakes in this.)
–TZguy
Oh crap, stocks are getting hammered!
Note also that my comments are on how to play a C wave blowoff. AFTER this, the leverage comes OFF and I go back to a core position with more like 1x (non) leverage.
I’ve successfully traded the C wave moves before. My flaws have NOT been in making the gains on this end of it (the starting point). Instead, I have held too long past the top and/or bought back too soon on the D.
I have learned my mistakes and believe those problems will not happen this time. I have plans and procedures in place (not just vague assurances) to counteract those previous errors.
–TZguy
Stocks are up, how is that getting hammered?
When I was younger, I watched the surfers on the north shore of Oahu (Diamond head?). 10 minutes after I got there, they pulled a guy out on a stretcher from trying to surf a monster “C wave” so to speak. He wasn’t dead, but looked like it.
Bonds AND stocks puking, wtf?
Sorry, it was a misprint on the bonds.
In seconds gold has already dropped over $5. I think i’ve made my point that buying here or trying to get in with a $10 stop when we are hanging in midair is asking for pain.
The pain is happening now.
–TZguy
Actually gold is down $1.40.
Bernanke essentially committed himself today to no significant easing in immediate future (at least a few days).
Stocks and gold were expecting something more. Weakness likely.
–TZguy
The VIX is at a lower level than it was at the July, June, and May lows where the market still currently sits. Not good for the bulls if people are less fearful of breaking the same technical level we’ve been at before.
Shalom Bernanke not giving traders what they want.
Sold a bunch. I don’t stick around if it looks like I am wrong. Have about 1/3 left, but may buy later today. Lost a little (stops near breakeven help a lot) Will try to post if I rebuy. There will be lots more signals to trade if I don;t blow capital here on this odd looking one. Patience, patience (and darn it!)
If I was trading (I’m not) I would buy on a break of 1040, especially if we can get some panic tick readings. Then I would wait till the cycle bottoms. Obviously one can’t do this if their position size is too big. 10% of ones portfolio would be plenty large enough.
Not a bad trade at all, DG.
If silver get’s back to $18.50 or so, I’m buying my tits off!
I figured right when I guessed TK would already have a post up gloating about this last 10 minute decline. LOL!
gary, the $5 drop is clearly visible
http://www.kitco.com/images/live/gold.gif
–tzguy
Bought back 1000 Q’s I sold at 43.20 at 43.24. Nice bear raid. They shook me out of some longs the slime dogs! This is the best game in the world!!
Back to about 60% long. I was concerned we’d tank. Once we stabilized I “knew” we’d rally. Volatile day coming up though. Stop on that last Q buyback near break-even again.
Well there goes Wrong Way TK’s profits, just like that.
DG: I got out about break even…
Gary: Looks like we do have a new low on GDP Friday. Lets see if this holds.
Nice job, Ross for showing discipline. Break even is a great place to be after entering an order. If you take a great setup and break-even, you just keep entering trades over the coming months. They aren’t all going to be this whippy! Wait for the pitcher to throw a gopher ball and then swing. Don’t waste capital out of boredom or on bad setups (or if you are seriously bored trade tiny). My Q re-buy is out of here at 43.25ish, but i bet I don’t get hit. I think that was the Bernanke puke and last gasp for the bears today.
TZ,
When you posted I checked Kitco and gold was down $1.40.
The irrelevant anon who always posts how the shorts are getting crushed every time the market is up .1%, give it a rest. Saying the shorts are getting crushed after a small move up in the downtrend in stocks since April is the equivalent of saying gold bulls are getting crushed when it pulls back to $1160 in the bull market.
Be a bit more consistent g-string in what constitutes getting crushed
Kitco must have a small lag. I have real time futures and the spiked down pretty quickly.
So far the weakness didn’t hold and the relentless upward move continues. I’m aware i’m wrong so far.
–TZguy
Anon1,
I think he’s just making fun of the bear who comes on to tell everyone the market is crashing anytime we see red.
TZ: If I had a nickel for every time I was wrong I’d be a wealthy man. You have to trade your own style and it works sometimes and not others. Oh well. If it always worked you’d own the whole planet! I like reading your thoughts. Please keep em coming.
That’s correct, Gary, I’m not even talking to anon1 although I wouldn’t expect him to realize that with his limited deductive capabilities.
Besides, I’d LOVE to be a G-string, on the right lady of course! 🙂
WHOOOT!
SSRI now down only 20% from Gary’s all in call back in January that included SSRI!
Just shorted some GOOG at 452. It’s acting very badly today and if it breaks 450 again today I think it’ll tank, given it’s narrow range this week (what Gary calls a coil?). Partial hedge against my longs having covered GE yesterday.
That’s what the shotgun approach was for.
Like I said before when they decide to move they can move quick. I’ve seen some of these miners erase 3 or 4 months worth of losses in a matter of days.
One has to keep the big picture in mind or they get side tracked by the daily wiggles.
The bottom line is every one of those silvers will be up hundreds of percent if not thousands above the Jan. levels by the time this bull comes to an end.
DG: There’s your 1% – Great call yesterday!
Well, there’s the 1% move the system predicted. Happened the first day again and that’s six in a row (though admittedly this was a tough one to hang in there for). It’s not THAT good, so perhaps a bad one is due, but so far I am not complaining. Hopefully the bad streak won’t start when we open the hedge fund doors!
http://slopeofhope.com/2010/08/hey-bulls-there-goes-your-ride.html
LMAO!
Congrats, DG. nice trading.
Hi Gary, I followed your call and loaded up miners earlier this week. Also picked up physical gold at 1160 few weeks back. Hats off to you.
Any thoughts on DROOY & ANO?
Thanks
Vamsee
I do have ANO in my basket of juniors but it’s just one of many that I shotgunned.
Thanks Gary, great to hear you hold ANO. Now am gonna add more of it.
Can you list a few juniors that you like most from your basket(if you dont mind)?
Gary,
Do you think there’ll be much resistance in SLV at these levels? I’m referring to the weekly chart.
Thanks and good luck. YOu’ve been on a roll.
I can assure you I don'[t know anything special about ANO and I certainly wouldn’t add here. I would be inclined to add to things like SLW that are acting positive.
I told Justin to cover his stock shorts yesterday, and sell out of his dollar long, but he doesn’t listen.
My suggestion is quit worrying about short term moves and just go Old Turkey until the end of the C-wave.
I’m going to discuss this in depth in the weekend report. We are now right in the most dangerous part of the rally. The initial overbought readings are just beginning to show up. Trying to trade those overbought levels could be the worst possible thing to do.
NG is a dandy today. I like to invest alongside Faber, Paulson, and Soros, even though Soros is a convicted felon.
Hello Gary,
I find your cycle and sentiment analysis to be extremely interesting. Are there any particular books/websites etc. (or past posts of yours) that explain this in more detail – especially weekly, daily cycles? Thanks. Eric
Gary—I’m with you on this one. The last buy came at a time when I wasn’t particularly bullish and so got out quickly. This time is different and I plan/hope to hold on for a heck of a lot more. I’ve got a pretty good load, so it’d be nice if the mkt accommodated. You suggested a break even stop last time given the good entry point, and that’s just what I plan to do this time around. That AAII survey has me pretty intrigued! When is your timing band for the next daily cycle top? (Though immediately upon gold’s new high I will become a subscriber, and I suppose it’ll be in there somewhere).
If you are a subscriber I have a detailed discrption of cycles as I use them in the terminology document on the premium site.
Great thanks! How did you initially learn about cycles? Were there any mentors, books or other resources that you would recommend? Thanks
Inigo,
I didn’t know Soros was a felon, but felons always have the best info! 🙂
DG,
Cycles are pretty much worthless for predicting tops as a cycle can be either right or left translated. There is no way of knowing which it will be ahead of time. (I tend to watch the money flows to help me spot tops.)
Sometimes one can catch a top with a swing high if the cycle is right translated and runs deep into the timing band. Aka it’s running out of time so one is expecting the top.
That might be the case with the dollar right now. It formed a swing yesterday and it is about to enter the timing band for the next low so there is a pretty good chance the swing marked the top of the cycle.
If it breaks 80 the last two conditions will be filled and the dollar will be on its death bed and headed down into the yearly and 3 year cycle low.
Tim Woods is probably the best on cycles analysis. I use them a little differently and I incorporate sentiment and money flows but for just pure cycles analysis he’s your man.
Thanks, Gary. I’ll just have to use my own boring stuff to figure out when to start selling my Q’s and SPY’s. What, you have no magic bullet for me!
Tops are tough 🙂
I will say that a daily cycle rarely rolls over in less than 10 days and then only when an extremely bearish move is brewing.
Of course sentiment usually has to get bullish too before a cycle rolls over. Obviuously we are a long way from that happening yet.
I would say there is a decent to good chance the market breaks above 1130. It is still making higher highs and higher lows after all.
Poor 950 boy just got run over by the G-train again. When will he ever learn?
I think bonds have probably topped. The bond cycle usually mirrors the stock cycle. And todays big jump in interest rates looks like the kind of explosive move that accompanies bottoms.
Gary: I know you have said multiple times nothing is certain in this business and I hear you, however, I think we may go down again next week and finally bottom next Friday after the unemployment numbers…Nothing drastic like SPX 950, maybe another small break below todays low.
Anything is possible but I certainly wouldn’t bet on it. That would put the market outside the timing band for the cycle low.
I think the jobs report has pretty much lost it’s ability to move the market. Until we start losing jobs again the jobs report is probably useless. I doubt we are going to show a big loss next Friday.
I know everyone thinks we are slipping back into recession but I just don’t see it yet. I went to Ruby Tuesday’s last night and it was fairly packed on a Thursday night. Doesn’t sound like a recession yet to me.
what was that? gold just took a dive..
I tend to agree with you on bonds, Gary. TLT just barely missed triggering a short for me. I own a lot of High-Grade Intermediate funds and high-grade muni funds and have to figure out what the heck to do now. They aren’t Treasurys, but they have had a enormous run and everyone is piling in now.
Gary,
Looks like the SPX daily is showing one of your coils, albeit a large one?
Doesn’t really look like a coil to me the range is too large. It just looks like a bottoming formation.
We’ll know next week. If we did just put in the bottom then we will get a swing low Monday or Tuesday and there should be some strong follow through.
This should mark the cycle low for oil too. Now we just need the dollar to break down convincingly.
TK is shorting again with his 10K account! market will explode higher next week LOL!
There is a coil in play on the BKX. If this is the daily cycle low then this coil should play out as expected.
I love being on the other side of TK’s trades!
Thanks again, Gary.
ruby tuesday’s on thursdays doesn’t count! ; )
Shorts are getting the piss squeezed out of ’em, and it’s not going to get better any time soon with so much upside left.
4 for 4 G-train. Choo Choo!
Where’s 950 boy now?
Gary, I thought u said before that if oil doubled which it did, it always cost a recession. Which word do we take? Packed ruby tue or oil cost recession.
It doesn’t cause it immediately.
We have a mitigating factor in the squatter stimulus also. People that aren’t paying their mortgage have extra cash to afford higher energy costs.
Eventually the Fed will spike energy far enough to where it will overcome even the stimulus but for now one has to realize this rally is built on liqudity and that liqudity isn’t going away. As long as that holds the market could go up even though the economic fundameantals are deterioating.
950 boy is drinking flat keg beer for a nickel a pop down at his local dive, waiting for a call from social services giving him a thumbs up.
Hey Coach,
Thanks Again
Gary: I notice the SonS number is near $100 million today. If that should hold into the final posting, is it concerning to you? This obviously can;t be a top as we are only up for a day, but with big money selling the initial pop…?
We’ll have to wait and see how the day ends and then there is always the poosibility that we test the lows on next Fridays jobs numbers.
We also have to get a swing low Tuesday to confirm the bottom.
Hey Gary, have an important question to ask you.
After this C-wave, what do you expect will happen? I’m looking to get out in the spring, so when should i be looking to redeploy my capital? What’s your guess on how will the D-wave and the next 4-year cycle low in late 2012 work out?
Some thoughts to our future. Ignore for those interested in price action and only want to see things as they come.
Two times the fed has referred to QE. It is getting the market ready for a pretty big stimulus package. I figure the fed will most likely be the catalyst to a bond bubble burst that is quicker than a normal grind. When the fed runs out of darts to throw, interest rates will probably increase much quicker than would have happened if the Fed hadn’t interfered. Higher rates at a quicker pace will put pressure on the economy, causing the stock market to fall to our 5000 level or so. Bonds I will add will mostly likely fall with stocks, to rates not seen since the 80s. Gold will rise to at least $5000. Silver may be the last metal to be affordable, causing its rise to $500. 10 to 1 ratio.
At this point currencies will be replaced or self-adjust. This will be the bleakest hour for those that are having employment troubles, high borrowing costs (double digits), high inflation until the currency crisis ends, devastated portfolios(both stocks and bonds collapsing). Gold and pm’s should soar and help those that hold them. Moreso at the bleakest moment will be our time to sell. Bonds will be at their cheapest rates possible (ie very high yields), and stocks will be way undervalued.
People, the same way they are flocking to bonds, we run to the next safe bet due to fear. First to gold, and then to silver. I fully predict that banks will start interest gold denominated accounts. Ie you lend the bank 100 ounces and you get 102 ounces in a year. Digital gold. Bring your dollars to the bank, buy some gold and lend it immediately to the bank. To the average Joe, he will scoop this up…too afraid of the USD falling any further compared to real inflation, and giving up the 15% interest on it for something safe such as gold. What Joe will not realize is that the banks will be establishing a short position in gold, borrowing your gold, selling it, and buying it back in several years as the gold bubble bursts. The average Joe will also not realize that the system is already self mending. IE the party is over and we are at the toilet bowl praying for Sunday to come so that we can join the Priesthood in thanks for surviving a 40 year binge. Of course once we get to the Priesthood, we start noticing some other sins. And the process continues.
Anyways a process in thought, not really a prediction.
Tom,
I don’t think this will be the last C-wave so I will look to re-enter when I think the D-wave has run its course.
There are things to look for as clues that a D-wave has bottomed. I’ll go over them with subs when the time comes.
DG: Your trade worked out super in a day. Nice going. As Gary says, smart money runs stops – apt for this morning. Hopefully next time I will join in the fun!
Unfortunately, my indicators didn’t give me a buy signal in stocks when Gary called the bottom.
This afternoon they are screaming buy for early next week, even though I wish I caught today’s rally.
Keys,
I would say you are going to be pretty close.
Secualr bear markets bottom because of valuation. Bears won’t be able to understand why the market is going up. The fundamentals will be as bad as they ever get. The difference willbe that gold will simply be too expensive and stocks will be way too cheap.
Then the large secular trends will flip and we will have another long term secular bull market in stocks again as they gradually work their way back up to extreme valuations all over again.
The shorts caught today’s rally…right in the tukus. LOL!
Yeah, Ross, they got me too a little. I sold 1000 Q;s at 43.20 and bought ’em back at 43.25. 500 SPY I never got back (bought some other stuff though that worked, so not too bad a miss) There are plenty of times they don’t run the stops. But I’m not going to sit there and get killed because I think they are just running the stops. Tough game. If a light went on that said “Don’t worry. This isn’t a break down; they’re just running the stops” it’d be a hell of a lot easier! See you next time…
Nice hold, DG. Great trade.
Any trader that would stay short over the weekend after this beating needs their head examined.
Gary,
I remember in a previous post you drew a chart of the 4-year cycle low taking gold on a huge correction from something like $2000 to 1300ish… do you still expect there to be one huge correction before the final parabolic run? and might it better to wait for that drop rather than after the initial d-wave next year?
The 8 year cycle has already passed in gold. We won’t get anymore selling climaxes like that till 2016.
I expect gold will contnue to follow it’s normal ABCD wave pattern until we hit the bubble stage.
Gary,
Your reply to Keys on gold getting overextended on one end and stocks on the other end would be the point to switch trades makes good expectation.
Would that be the case when when you add in the picture painted by fall of US empire based on history ?(There was a conversation on this topic.. maybe yesterday?)
I will add one more thought. If interest rates are back to double digits, the ability to take advantage of stocks and bonds way undervalued positions will be limited. Today, one can borrow low and stay in gold perhaps with little cost but some minor interest. The bull can correct your timing mistakes (in the words of our coach) even if you borrow to do so(not referring to margin, more like a fixed line of credit or something). In the future, even if people saw the value, people would not be willing to borrow at double digit rates in order to invest in a value stock (especially with a drawdown). Cash non-levered infusions will probably be the only source of funds at that time. Anyways I am thinking to far in advance. I have to do something…old turkey is so boring. 🙂
Have a good week-end all. I am out.
Gary I really would love to see a stock troll meter. I honestly bought a little bit more than I might have because of all the “look out below” posts on this blog. There was quite a pile of “We’re going to crash tomorrow!” We may even get to 950 some day but not when the anonymice are posting it and bragging about it with such confidence! (Where was that guy today anyway?) I was disheartened to see the guy who said “anyone who stays short over the weekend is nuts.” If there had been a bunch of those I might have had to sell something. Amazing how fast people go from scared to cocky isn’t it? Maybe today will help make it clear will make it clear why you and I agree that sentiment is king. I was nervous as hell all night last night after buying my load. If I hadn’t been I’d have been more worried I was wrong.
Yep usually the right move is the hardest one to make.
How hard is it to chase this move in metals and miners?
Credit where it is due: You laid out a perfect (hypothetical) trading plan for the day, Gary. Anyone buying the first-hour weakness would have had a sweet ride into the close. Beautifully called.
Occasionally I get lucky 😉
Gary, looks like there SOS today. Can’t keep up with the smart traders. Still, gd work on the call today!
How many times must the trolls like 950 boy and anon1 get flogged by the markets to realize they never, ever fade the G-train?
What a BEATING!
I swear, the next best thing to getting paid is watching these clowns and their so-called “analysis”. LOL!
Have a great weekend all. I wouldn’t want to be short come Monday morning. 🙂
yup, great week for the SMT followers … nice calls the past few weeks GTrain. Like my boss tells me all the time, now isnt the time to let our guard down … so Gary, we have high expectations for the next few weeks too !
Just kiddin … kinda
Its very mild and it may disappear by the end of day. I doubt it is going to amount to anything.
I just expect to sit and twiddle my Old Turkey thumbs for the next couple of months 🙂
Keys is basically right on all points, though I think $500 silver is a little too optimistic. But I certainly hope I’m wrong…
Gary-
Rode some TBT and X calls from the AM for a nice day trade…your call about the market reversing on the revised GDP was spot on. I’m signing up again after my summer with the Aden Sisters. They were fun, but almost TOO big picture. I need a little more in the trenches advice!
The Aden sisters will be good for keeping you on the bull but they will probably miss the D-wave. They don’t do cycles work.
Anon 1:23,
Anon1 never said he was short equities (in fact, I don’t believe he has a position one way or the other), and he’s long gold. I don’t know why you keep making a project out of him, but it sounds pretty silly.
The 950 guy (and Gary_UK), on the other hand …
$500 silver??! Sheesh, I need to buy some more SLV.
Gary, if you were adding to your positions here, would you wait till the next daily cycle low, or intermediate cycle low, or just start adding now, a little at a time?
Do you have any idea where silver might end up price-wise at the top of this C wave?
Thanks!
Not a clue.
It is only day three after all and the bull will correct any timing mistake. If one can remember that it’s not too hard to chase.
What’s up with some of those massive blocks of stock being bought right at the close & AH on some of the miners? (One minute chart-take a look…)
RGLD, SLW (500K), NGD, EGO (800K), TRE (129K), AUY (1.2M)
Short covering?
Rumor today that AUY is gonna be acquired. Anyone hear this?
Jay, no but that’s the kind of rumor that I love! What I love even more is when a miner discovers a rich new vein to dig in, like AAU did a few days ago. I’m up over 100% on that one – too bad I onl bought a small amount 🙁
Nice day. Gary, your analysis has been holding up pretty well lately. Thanks!
I too am thinking that silver is getting ready to bust out. There may be an attempt to shake out the weak hands first but tension is building there.
“Discount window is closed”
I wish the Fed would do the same 😉