HOLDING THE 200

Last week the market regained the 200 week moving average. I suspect after the brief  2 day move back below that level we will see the market now hold above this major support level.

Yesterday’s rally was strong enough to form a swing low and should mark the bottom of the daily cycle. I’m still expecting the new daily cycle to move back to new highs before topping in mid to late December and rolling over into a more substantial intermediate degree correction in January.

By the way, my good friend Doc, who most of you are familiar with either from his blog or from the insightful comments he posts in the SMT comments area, has offered a discounted rate for his newsletter to SMT readers. You can go here to take advantage of his offer thru Thanksgiving weekend. He might even buy me a chicken burrito or two if you sign up 😉

http://www.thedocument.com/members/smt.cfm

337 thoughts on “HOLDING THE 200

  1. ike

    My question is this: most all of the miner’s I watch gapped up on the yesterday. I am a B IG believer in gaps getting filled.

    Did Mr. Market create gaps to be filled on the D Wave correction later on, OR, will he pull back one more time to allow his “Friends from the Hampton’s” one more opportunity to load the truck?

  2. v

    Hi Gary,

    USd made the swing high and since then silver and gold have just been moving down. Is there a possibility the swing on USD will be negated and it moves above 80?

    V

  3. Onlooker

    Take a look at a 5 or 15 min chart of the dollar futures (/DX). There’s a H&S forming with at neckline at roughly the 79.75 level. The dollar dropped sharply below that level and is back now, retesting that level.

    If we have set a swing high in the dollar here, we ought to see it drop soon from there, continuing down. It looks like it’s starting as I write this, but we’ll see.

    Also, silver is just retesting prior resistance at about 26.50, and gold the critical 1345-50 area that was keeping it down for a couple of days.

    Always hard to tell, and there may be a bearish interpretation of that basic TA, but that’s one view of it.

  4. thedocument

    I’d be cautious about those dollar expectations. Not all swing highs are meaningful. Consider that left-translated dollar cycles do not typically surge 4+ index points out of a low. L-T cycles that form during vicious down legs also tend to top very quickly, often within only one or two days. The facts that the current cycle was so strong off the low and has thus far set a Day 8 peak is out of character for a L-T cycle, so it would be prudent to at least be on guard for something different.

  5. Onlooker

    Yes, indeed, it appears that the dollar isn’t finished just yet. The short term key will be whether it can reconquer that 78.75ish level and keep it. If so then the thesis may be in jeopardy.

    We watch and wait with bated breath. LOL

  6. Gary

    Make no mistake a swing isn’t a guarantee of a top. It’s just the first sign that one is possible.

    Just follow the plan.

  7. Gary

    My goodness why all the anxiety people? Long positions in the market have a stop below 1173. We still have the mental stop below $1315 on gold. Risk is very small at this point. This is the point where one should be the most aggressive not the most timid.

    So far the market hasn’t even moved back below the 200 week moving average.

  8. TZ (7006)

    The drop of gold back closer to the lows of the week (so far) continues to confirm, in my view, that gold/silver hit intermediate top last week. (And that the recent continuing strength in silver *might* be nothing more than an emotional after-effect bounce. Although I’m not as confident in that statement.)

    My work needed to see a surge up in gold to erase most of the week’s losses by the close of today. It’s still possible, but not looking likely.

    Without that surge and with another down week in a row, it simply appears the top is in for now. That’s my bet anyway by having only a core position.

    I would actually prefer the top to be in because I’d like to reset lower at the next intermediate low a few weeks from now AND because I think it means an even larger ending C rally in spring.

  9. Gary

    TZ,
    If you used that criteria out of the July bottom you would’ve missed the move. If you used it out of the Oct. bottom you would have missed the move.

  10. Gary

    And I think you and I both know that during the panic conditions of an intermediate cycle low you aren’t going to be able to take a huge leveraged position. And even if you do you will immediately get knocked out of it by the intraday volatility.

    I really need to find some way to convince you to abandon this destructive leverage mentality.

  11. Onlooker

    I hope you’re not reading anxiety into my comments Gary. I was just providing some commentary on the short term picture as I see it. Just for kicks. I’m still adhering to the strategy here.

    And even though it’s obvious that I’m peering at the intraday charts here, my main focus is on the bigger picture.

    And I realize that looking at short term charts can be hazardous, as it can cause one to panic as they take things out of the proper context. That’s probably one of the biggest mistake that novices make, IMO.

    It’s fun sometimes to look at 1 min charts when price is going up. But when it’s going down (and you’re long) you should definitely pull out to the daily in order to not lose the proper focus and context.

  12. Razvan

    SB, you missed the price action in silver last night, what happened to you? or was it sleep time for you? it was just beautiful to watch how it ran through 27

  13. TZ (7006)

    Gary,

    My comments just now are regarding the “is the intermediate top in or not” debate. That’s all. You sure went off on a tangent with your reply:

    I dont know how you get either:

    A) leverage from that discussion. It isn’t a topic or mentioned at all.

    -or –

    B) that my criteria for buying anything is based on seeing a surge. It isn’t.

    I’m discussing the continuing back and forth of whether the int top is in and whether a person should hold with the $1315 stop (as you are) or be out and watching (as doc is). You aren’t jumping on DOC’s comments. Why are you doing it to mine?

  14. Shalom Bernanke

    Yeah, I missed it. I’m not worried on the least.

    I had orders to add this morning, way below opening prices again, but didn’t get any fills. Looks like another day of sitting on the hands, unless we see a sharp selloff which is looking very unlikely.

  15. Tudor

    Would you prefer Enchilada Man? Or maybe Guacamole Gary? Trader Taco? Gary “Salsa” Savage?

    I’ll call you anything you want. Just keep doing what you’re doing.

  16. Onlooker

    Well that drop away from /DXY 78.75 sure lit a fuse on gold/silver. Interesting, for sure.

    This may have been the key moment in the Gary vs. Doc battle of short term strategies. 😉

    Now it has to get solidly under 78.60. LOL

  17. Shalom Bernanke

    True, Carlos. I like to get ’em cheap into short term contra-moves if possible. It’s just the easiest trade for me and has served me well.

    These fills make it much more comfortable to hold as well. To me, it’s much more difficult to hold a position if I’m down 5% not long after entry, even if I’m confident it will eventually work. Same with pressing winning positions if I’m already up nicely, much easier to let it do it’s thing instead of jumping out early.

  18. Gary

    TZ,
    I watch you go back and forth as every little intraday swing casues you to flip back and forth.

    I doubt you would be anywhere near this emotional if you would just jettison the leverage. You would be able to hold positions and in the long run you will make a lot more money and eliminate the risk of severely damaging your account.

    The key isn’t how much one makes. That will take care of itself. The key is not losing big. With massive leverage it’s virtually impossible to avoid as sooner or later one of those curveballs will catch you.

  19. Jesse

    It would be a shame if childish comments cause Gary to curtail his humor or to not reveal personal aspects about himself. Not only is he a great coach but he has a great sense of humor. The burrito jokes crack me up! 🙂

  20. TZ (7006)

    GARY,

    I appreciate the suggestions and I intend to modify to a cycles approach on the next intermediate low.

    I was new to cycles and didn’t trust your calls as a recent subscriber in July.

    I actually DID buy the july low, almost exactly using my own methodology. (With about 2x leverage. And with a small stop.) I exited that position about a day later, no loss, because I re-calced my work and expected one more leg down. I was wrong. I guess I’m the first person to not have a perfect system. Don’t shoot me.

    The subsequent problem re-entering as everything went straight up (with few pullbacks) is clearly documented and voiced by a LOT of people. I wasn’t alone in the difficulty there. Yes, you were saying “just get in”. No I didn’t trust you cause few other people I follow get stuff right any more than I do.

    Suffice to say I would do things different now. And also suffice to say I have an understanding and respect for your calls that I didn’t have back then.

    Since we are at or near an intermediate top here and since there is some disagreement on that, I have simply decided (so far) to be out (still have a large core) and watching instead of long but with a mental $1315 stop. Personal preference.

    My earlier posts this morn described my own views in addition to yours and docs as to whether the top is in or not. That’s all.

    Hope that clarifies things and I do agree with your comments on how to approach trading with cycles in mind. I’ve been exposed to cycles for about three months now out of over ten years trading. It has taken some time to incorporate, but it is sinking in.

  21. alex

    I was a recent subscriber in July, but i trusted his calls because once you have axcess to the subsc. page, you can look at archived calls. Pick a cycle high or low and read what he saw/reported the wk of that period.

    I was a tech-trader with volume analysis at swing points and chart patterns along w/ certain indicators,etc…and never believed in cycles, because I only heard ‘Ackerman’ discuss 10 yr and 3 yr cycles–Kress cycles,and it wasnt helping my trading.

    but Gary has added a lot of confidence to ‘timing’ a trade and holding a position for gains sake due to cycles and sentiment.

    good stuff 🙂

  22. Gary

    I had a Chevy’s burrito after my tournament a couple of weeks ago. I’m sorry to say I’m not the man I used to be…I couldn’t finish it.

  23. Razvan

    Have you ever tried Moe’s Southwest Grill?? there a few of them in Florida, i am not sure about other states. They have this burrito they call the Homewrecker and they make it in this huge tortilla which sometimes i have a hard time finishing the whole thing. It is by far my favorite place for burritos

  24. alex

    Nov 9 smackdown I decided to cut some positions if it bounced the following day

    sold AXU @ $6.60 on Nov.11

    it tanked to $5,78 and NOW ( ONLY 6 trading days later) is @ $7.00 and climbing

    good case of why the “old turket’ method would have been fine!!

  25. alex

    Forgot to add to my last post that I missed re-entry to AXU..got left behind

    so thats why old turkey method would have been better

  26. Shalom Bernanke

    I haven’t been to Moe’s in Fl, but the best Mexican I had there was a place called Cantina Laredo. Fresh made guacamole right at your table and best margaritas I’ve had in my life.

    However, my wife makes fajitas that’ll blow your doors in! She slow cooks a flank steak in the seasoning for 5 hours or so, then has me throw them on the grill for a few minutes to char the outside.

    While I’m on the grill she sautes (I guess that’s what you call it) the onions, red and green peppers on very high heat in a thin layer of peanut oil, with more seasoning.

    One of my favorites!

  27. Robert

    G-Man, considering you live in Vegas, I think down the road you should host an SMT member poker tournament or we could rent out a Vegas card room temporarily (probably a better idea). 2.5-10K buy-in, your choice. I’d start with 75% of the chips of the rest of you b/c I’ve played more 😉

  28. Jayhawk91

    SLW is certainly the cream of the crop for the year performance. (excluding select juniors). Up 128% YTD.

    However, HL, EXK, AXU, SVM and even SSRI and PAAS are starting the play catch up the past three months. Notice how they have all out performed SIL and GDXJ. GDX is only up 14% the past three months!

    Link to three months performance

  29. Robert

    Have you guys heard about the new phenomena, ‘Silver Money Bombs’? Max Keiser and others are starting to select days where all of their followers go out and buy physical silver. Their goal is to crash JPM. lol. Their belief is founded upon that JPM has a short position in silver equivalent to 3.3 billion ounces.

    Next to get everyone to get on this ‘Silver Money Bomb’ bandwagon they promote the claim that silver is going to $500. They are also having their followers constantly Google “$500 Silver”. They claim that news reports are written upon volumes of specific Google searches. If you were to Google “$500 silver” you can see it has already been progressing.

    They claim $500 silver is $10000/gold divided by 20.

  30. Robert

    Someone asked Max, a previous professional options trader, “who were the founders of these idea to crash JPM.”

    Max replied, (quote is my summary) “Institutions. Institutions got together and realized how vulnerable some commercial banks were with their excessively large silver short positions.”

    Someone asked Max, “who personally can be accredited for attempting to move against JPM’s silver short?”

    Max replied, (quote is my summary), “Eric Sprott. (He also mentioned a Candian, if any of you truly care I can go back and find his name- he also added another name or two but reverberated “Eric Sprott”).

    Just an FYI.

  31. Gary

    I think I’ll just stick with my miners and the tight spreads rather than pay large premiums and take delivery on physical.

    Physical is good for people who can’t control their emotions but not so good if you want to maximize returns or need to get in and out quickly. At some point soon we will be exiting partial positions in order to avoid an intermediate decline.

  32. Robert

    G-Burrito-Man,

    If you’re responding to my most recent post, I’m not in any way shape or form advocating going to the physical side of the silver market.

    I am simply bringing the message here to what others are currently doing in the silver world (this may be a very small minority, but I think it is still respectable information).

    I am in shares because historically they have outperformed, no one can steal them, and I can get out without having to take steroids to lift them all when the time comes to sell them.

  33. Jayhawk91

    Bob Chapman has around 20-30% in physical I believe. You never know what kind of crap may go down in the coming years so having some physical protection may be prudent. Even owing something like Sprott’s PSLV or having a Goldmoney account could be worth doing.

  34. Robert

    Hypothetically, in a dream-world, if shares at their peak were to have advanced 40x the advance of physical silver, which would be going up 18.31X current price, shares would go up 732X from current levels.

    SLW would hypothetically be trading at $25275/share.

    To become a billionaire you’d have to have 1.36 million in silver shares today.

    Sounds like a semi-fairy-tale, but I will stand back and watch 🙂

    TZ what’s $35-$40 slw now when it’s going to $25000/share? Just get in. LOL!

  35. Robert

    Razvan,

    You sleep well at night having no silver position while we’re in the beginning (odds are high) of a new daily cycle for silver?

    You could easily find yourself chasing in the morning, and then have it reverse hard tomorrow afternoon after you’ve chased. How’d you feel then?

    What are you seeking 1.5% reward for what could turn around easily into a 5% missed-profit-opportunity?

    Not only that you are setting yourself up for the habit of trading silver in the future- a habit in which you’ll miss big silver moves in the future that you would have profited handsomely from.

  36. Gold Era

    I think that is going to happen. Since tonight is friday, shake out from weakhands and recovered, there will be no chance to get on board in monday.

  37. Gary

    As long as one follows the plan they will catch most if not all the rally while still being protected from riding an intermediate cycle correction down.

    developing a habit of trying to lock in small profits will cause you to miss large chunks of the C-wave.

  38. Razvan

    going up to 4 months back i have never seen metals gap up from Friday to Sunday evening.
    Have you ever seen the movie Pointbreak with Keanu Reeves and Patrick Swayze?? At the end of the movie Swayze, who plays this die hard surfer, is standing on the beach during a once in a lifetime storm which creating the biggest waves he had ever seen. He has his surf board in hand getting ready to jump in the water when the cop comes and puts handcuffs on him “You’re gonna go down, its going to be that way!!” The surfer then tells him this is a once in a lifetime opportunity and ends up persuading the cop to let him ride “at least one wave”.
    This is the big one Gary…let us ride !!! 🙂

    http://www.youtube.com/watch?v=CljqiQZwh-o

  39. alex

    Robert wrote:

    Hypothetically, in a dream-world, if shares at their peak were to have advanced 40x the advance of physical silver, which would be going up 18.31X current price, shares would go up 732X from current levels.

    SLW would hypothetically be trading at $25275/share.

    Alex says, this may be true, but the company would most likely do several stock splits on the way up

  40. aviat72

    I think Razvan trades with a lot of leverage and most of his trades are short-term. Those who can do it, it is very profitable and also allows you to sleep well at night. But it is not for everyone; certainly not for Gary’s Old Turkey style.

  41. DG

    Gary (or anyone), Why do people believe that JPM would short a massive amount of unhedged silver and risk going broke? Just hubris to prove they are bigger than a bull market? They may be short silver and long somewhere else or hedged in some other way. Why would they ride a short position into bankruptcy?

  42. Razvan

    when i have a good run i cash some of it and buy physical so i do have a core in hand. I am not a day trader but if i see an easy trade then i will do it mostly obvious fades or momentum moves. Going back to july the stats are 90% of my trades are on the long side. I only short when it is a down trend. I shorted silver from 25.86 to 25.26 because it was riding the bollinger band on the 4hr.Then i bought back at 25.05 and held on since then. However i do not keep out of position for more than a few hours just in case we get an upside surprise. I was on gold from 1180 to 1410 without missing any of the upside. It has worked for me so far, the only time i get screwed is when the price keeps moving up and i keep building up the leverage and get tangled in a spike reversal. I am trying to get that under control but it is psychologically hard to control the impulse.

  43. Razvan

    Poly
    that is not true. The margin call was post QE2 announcement when we had the spike from 1347 to ~1324.
    N1tro
    its not about the fee. But what i noticed is that the prices peak around 2pm and then fade slowly into close. Obviously today was not the case! 🙂

  44. Robert

    DG,


    MK: JP Morgan also holds the largest derivatives positions of any banks, at $69 Trillion (not 1.5 trillion that I mention in my conversation with Alex), according to the US OCC. Thus, it is likely that JP Morgan also holds the largest short position in silver derivatives, too, as a matter of course, since they dominate derivatives trading in general. So, to them, a $100 billion short position in silver would be “chump change” compared to their other derivatives positions, and may, in actual fact, be a part of a larger overall strategy to maintain the value of their other derivatives, (including the US dollar) to keep interest rates low.”

    http://www.maxkeiser.com (previous entries)

  45. Chicken Burrito

    I’ve got some burritos to put to work in the market G-man. I’ve been waiting and don’t want to add more here until we get some kind of confirmation. Especially with your boy Doc saying your wrong and all…he thinks even if we pop it will be short lived but by that point the pop could take silver to 35 and SLW to the 40 range!

    Anyways–What would you recommend for those wanting to add here? Wait for the swing low on gold? That sucker is not cooperating!

  46. Robert

    I swear SSRI is turning into a HL, under-performance or lagging is it’s middle name.

    You have to hold the thing forever until it just explodes. And don’t comment on this one Alex 😉

  47. alex

    good one 🙂

    however really HL just about doubled from aug to nov highs…it just exploded recently…so maybe now it’ll move out better when things pick up again.

  48. Robert

    Yeah, everyone talks about the 45 million share short position, and it does ring true; when silver is really taking off the thing pushes higher, faster, than any other silver stock pretty much. The same holds true on the downside.

    I know guys all-in, completely on HL. That’s crazy all-in on the most volatile stock in the most volatile sector.

    HL is a traders dream though. Close to 5% swings daily. You could probably retire just off HL trading alone.

  49. Robert

    Gary,

    I don’t buy into conspiracies either. I was just posting what these theorists argue to answer DG’s question.

    I do wonder though, if you were the Federal Reserve (I believe about 18 of the worlds largest banks, JPM included), and your product is the US Dollar wouldn’t it be in your interest to stifle your currency competitors? Wouldn’t it be in your interest to keep as many people as possible faithful in your product and not revert to other currencies like gold and silver which you can’t print?

    MK was saying, I don’t totally agree or disagree with him, that in the 1980s the initial price hikes were so high b/c this is where the bankers got totally blown out of their gold/silver shorts, just as we’re witnessing now.

    Either way the causes, arguably, are irrelevant, that is why it’s stupid to focus on them, as long as we just continue to pay attention to dollar liquidity.

  50. Gary

    When was the last time you or anyone you know bought anything with a gold or silver coin?

    As much as the gold bugs would like us to believe it, neither gold nor silver have any monetary function any more. And I seriously doubt they ever will again.

    Gold and silver are just a store of value. No different than oil, copper, wheat or cotton.

    Although the fundamentals are different for gold and silver than any other commodities. But that doesn’t mean our or any government is trying to suppress the price of gold. What a waste of time that would be. Most people on the street couldn’t even tell you what an oz. of gold costs within $500.

    Everyone can tell you how much a barrel of oil is though. If there was anything that the government needs to take down to cover up the lie of the CPI it’s oil not gold.

  51. Robert

    That’s good Tutor, thanks. I was more aspiring for a famous phrase that equates well with “Suprises Come To The Upside.”

    Maybe I’ll have to settle for:

    dulce bellum inexpertis

    “War is sweet to those who have never fought.”

    Translation: Don’t fight/trade bull markets- you’ll learn quick. lol

  52. Robert

    Gary,

    Your arguments are very good and I do side with you. One counterargument though is that the Euro is 5% gold backed. Of course if all currencies were gold backed then it would be senseless to try and suppress gold.

    So would you say that Max Keiser’s campaign to bring down JPM by buying physical silver, acting against their shorts (if silver is taken out of the market enough, they wouldn’t be able to cover their shorts with the subsequent price increase) is fundamentally faulty? Are you saying that a substantial JPM silver short does not exist?

  53. Tudor

    Ok. I get it.

    “Stricta pendet equitando bovis.” – Hang on tight when riding the bull.

    “Nunquam dimicant taurus foro.” – Never fight a bull market.

    “Magna comederis et avis pennis consummans cenam dives.” – Eat your turkey and you will finish dinner a rich man.

  54. n1tro

    Gary,

    In Vietnam, which is outpacing China for growth, buying real estate is settled in bars of gold. The price is listed in USD but the buyer has to pay in equivalent bars of 24K gold. Food for thought. 🙂

  55. Tudor

    Gary, the only reason gold and silver do not serve as everyday money any longer is because of legal tender laws. If PM’s (privately minted, PM-backed money) were allowed to compete directly with government fiat, there would be little doubt the dollar would have imploded decades ago.

  56. Robert

    Tutor, you have a fundamental misconception; “government fiat”. The government also has no right anymore to issue currency- in 1913 that was handed over to the Federal Reserve. We are at the the whims of the private corporation, the Federal Reserve Bank.

  57. Gary

    I don’t buy that one for one second. You telling me tha in order to buy property in South Korea I would first need to convert my dollars to gold bars? And just how would one go about dividing those gold bars so they could arrive at the correct price.

    Sorry gold and silver haven’t been used as money for a long time. Even in the thrities the money was just backed by gold but we still used paper money.

    There just isn’t any logical reason for the government to supress gold which BTW isn’t working anyway if the last 6 C-waves are any indication.

  58. K.K.

    zstock,
    The last time the VIX was in the 17’s, the DOW, steadily declined for a few days, and then tanked 175…I expect the VIX to stay in its 17’s to 23 -24 channel for at least a week more.

  59. Robert

    Tesla Motors is a very tempting stock if one were to enter the stock market. I guess if one were to enter the stock market they’d go to agriculture prior to Telsa, but it is a decent play for dollar devaluation/oil spikes.

    I drove their latest model when they were in town a few months ago, 0-60 in like 4 seconds. The torque is intense. Anyone else like these?

    http://cgi.ebay.com/ebaymotors/2010-Tesla-Sport-Roadster-Fully-Optioned-Incredible-/190464224427?pt=US_Cars_Trucks&hash=item2c588d6cab

  60. Gary

    It seems almost everyone is trying to determine future stock prices by one technical method or other when in fact we probably just have to watch the dollar. If it still has one more leg down into the yearly cycle low then it’s unlikely we see a significant decline in risk assets.

  61. K.K.

    GOLD still showing weakness, probably headed to 1260 or even 1160, it’s 200 day….
    NEM back in the 56’s, is where I’ll go long NEM. It’s showing weakness, and usually follows gold.

  62. Gary

    Weren’t you saying the same thing in Oct. right before the move to $1420?

    In order for gold to correct we would need to see the dollar rally. I seriously doubt we will see the dollar regain the 200 week moving average now that the 3 year cycle decline has its hooks in it.

  63. K.K.

    My VIX 23-24 target has 15 signals backing the retest….I don’t just use one signal, to determine market trend. Market Trend is still to the downside. The way things are going, it’s going to be a late start for the x-mas rally, maybe starts DEC 1.
    zstock.

  64. Poly

    I thought today’s action overall was positive and we at held all of the gains, managing to reverse a decline that could of gotten away. I think it sets up well for some more positive news out of Europe which will serve as the catalyst for the next cycle up.

  65. K.K.

    In Sept/OCT, I was saying gold going to $1400, and $1600 in 2011….
    zstock…
    I’m just hoping the 1260 level holds…every now and then, Gold completely retraces it’s $300 price channel, for no apparent good reason.
    Zstock…

  66. Gary

    LOL the 200 DMA is rising.

    The 50 DMA is rising.

    The 20 DMA is rising.

    Each MA is above the longer duration average and the market is holding above all three.

    As of the close the market is down 2.2% form all time highs.

    How in the world do you figure the market is in a downtrend? Could it be that you are just taking a wild stab at trying to call a top?

    It didn’t work so good with Gold in Oct.

  67. Jayhawk91

    My dad-who I’ve been telling about Gold for the past 3 years, emailed me today and said he’s buying some on Monday.

    Sorry guys, D-wave is coming starting Monday. 🙁

    😉

  68. Gary

    I beg to differ in Oct. you were calling a top in gold.

    Z you really need to learn cycles analysis so you can spot true turning points. So far there is no indication that either gold or stocks have reversed the intermediate trend.

    We don’t even have a pattern of lower highs and lower lows yet.

    It really does no good to make repeated attempts to call a top. Eventually you will be right but in the meantime you will go broke, especially if you are shorting.

  69. TZ (7006)

    GARY,

    Any comment on Doc’s argument that a daily dollar cycle that would be continuing lower (and continuing *towards* an int low; i.e. your argument) does *not* scream up (over 4 points) for 8 or so days like we are seeing on the charts? Thus lending to his conclusion (at least partially) that an int bottom has already occurred and the sharpness and duration of the dollar rebound shows it was an int low?

  70. Gary

    TZ,
    It kind of irrelevant at the moment don’t you think?

    Either the dollar breaks back through the 200 WMA and resistance at 80 or it collapses into a true yearly cycle low.

    Trying to guess the outcome before it happens is a waste of effort and trying to trade something that hasn’t happend an even bigger waste of effort and capital.

    Just follow the plan.

  71. Robert

    TZ,

    Just from a spectators point of view, the argument being that the dollar hit an intermediate low because of its reaction out of that low “screaming up” is probably one of the most ridiculous things I’ve ever heard in the markets.

  72. Carlos

    Poly

    Add a subscription. You wont regret.

    I am a new subscriber (less than a month) and i´ve already learn a lot, starting to control a little more my anxiety.

    Have a try.

  73. Poly

    “It’s clearly spelled out in the nightly reports.”

    Yes of course sarcastically. You’re a gentleman churning out these comments.

  74. Elaine

    It’s pretty amazing, sticking with the “Plan”. I purchased in September, thought I was getting in late; in October, thought I was getting in late; and November 1st right before election day I bought AGQ. Every purchase is positive, even when we had the correction a few days ago my shares were still up at the bottom. A couple of times I was pretty worried but I’m sticking with the “plan”.

  75. Razvan

    i like how strong silver closed going into the weekend. We should have more upside to come as soon as Sunday night! I wish they kept the market open 7 days a week.

  76. Walter

    Gary

    > There just isn’t any logical reason for
    > the government to supress gold

    That statement is at the very least debatable.

    Of course you may personally find such reason(s) unconvincing but that’s another matter.

    For one, former Fed Chairman Paul Volcker himself begs to differ on this issue. In his memoirs he wrote:
    “Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.”
    [quoted here: http://gata.org/node/6800%5D

    So Volcker did see such a logical reason, whatever it was (and even regardless of it being a viable reason).

    Also, Congessman Ron Paul remembers a meeting with Volcker:
    “I was in Congress when Volcker was chairman, and I had a breakfast meeting with him. I had gotten there early, and when Volcker came in, he didn’t say good morning, he went right to his staffer and said, “What is the price of gold?” “
    [quoted in: http://reason.com/archives/2006/11/02/can-we-bank-on-the-federal-res%5D

    (I hasten to add that Paul’s quote in and of itself doesn’t imply a reason to suppress gold. But it does show the goldprice was clearly pretty important to even the Fed Chairman – and therefore part of broad US interests – which the US govt would and will of course defend when it sees fit.)

    > […] supress gold which BTW isn’t working anyway
    > if the last 6 C-waves are any indication

    First, that something apparently isn’t working like it was meant to work, doesn’t mean it hasn’t been TRIED very hard to make it work, nor that even though it failed, such trying didn’t have significant impact.

    Personally I believe it has been and still is tried, and its failure did and still does have significant influence on the goldprice. I could of course be wrong.

    Secondly, those 6 C-waves can equally well be considered as indication the suppression IS working.

    In that case the argument would be that without the suppression the goldprice would have risen much more gradually and/or would have been much higher than the [imo ridiculously low] price today.
    So the bull would have happened anyway, but it’s characteristics would have been very different.

  77. Gary

    Walter,
    When the dollar was backed by gold then yes the government had a reason to care about the price of gold. Volkers comments were regarding a time when the dollar was still backed by gold.

    It’s meaningless to take a comment from the early 70’s as proof the government still tries to manipulate gold. In the 70’s anyone could go to the bank and trade their dollars in for gold. The government no longer has to worry about the public emptying Fort Knox during a currency crisis.

    So my statement still stands. There’s no logical reason why the government gives a damn what the price of gold is.

    And manipulation doesn’t slow a trend it accelerates it. If the governement has been trying to suppress gold then the current price is much higher now than it would have been if allowed to rise naturally not the other way around.

    Artifically low price causes shortages which results in much more aggressive moves once price overwhelms the manipulation.

    Gata’s stand that manipulation has restrained normal price discovery is pure baloney. If true, then gold is much higher than it would have been without the manipulation.

    As a matter of fact it would be great for us if the governement would manipulate the hell out of gold. We will just get that much richer, that much faster.

  78. LowTax

    Gary, thanks for a great week – unless gold has a trick up its sleeve, we seem to have turned the corner and timed it perfectly. And it’s been fun reading the banter this week. Have a great weekend!

  79. David

    Gary,

    Volcker’s comments presumably date to his tenure as Fed chairman — probably around 1979-1980, when the dollar was not backed by gold. (We went off the gold standard in 1971, as you know.) In fact, he would never have bothered asking the question of his staffer if the dollar were backed by gold, because he would have known the answer — $35.

    I suspect he was asking his staffer that question because it was during the height of the inflation crisis, when the price of gold was seen to be an indicator.

    We are not at that point now, but I definitely think there will be a time in the future when the price of gold will assume that kind of importance.

    At some point, the price of gold will be seen to be an indictment of the Fed and the dollar. Keep in mind that in all of our speculative bubbles to date (stocks, housing) the government had an incentive not to try to knock them down. The monetary authorities probably will come to view gold as a problem — but I don’t think we’re there yet.

  80. Gary

    Let me ask a question. Does anyone think that the government will fool anyone that there is no inflation by knocking down the price of gold?

    Sure there may be a few hapless souls that are that dumb but the vast majority will still undstand that a loaf of bread cost’s $10 or a gallon of gas is $8 or a cotton T-shirt is $50.

    The government isn’t going to fool anyone by taking down gold anymore than they fool anyone with their phony CPI numbers. So what’s the point? It doesn’t cost anything to massage the CPI. It costs a huge amount to manipulate gold.

    Hell if they wanted to they could just pass a law fixing the price of gold. They tried that in the 70’s though and it just caused shortages.

  81. aviat72

    TZ:

    Thanks for posting that COT chart. Apart from the commercials going less short, what is also interesting is the steep drop in open interest. The only thing going up is the long interest of small speculators.

    COT Report

    Gary, could you please comment on that, especially the falling open interest.

  82. Gary

    You’re wasting your time trying to gleen any useful info from the COT’s in the middle of a C-wave.

    The only thing the COT’s are really good for is spotting D-wave bottoms.

  83. n1tro

    Gary,

    I said Vietnam, not S. Korea. I’m Vietnamese and I go back every year. You pay for property in gold bars! Rounded to the nearest gram I guess. The prices are listed as USD because of how inflated the Vietnamese dong is (largest note now is $500,000…worth about $30USD) Why would I lie about this stuff?!

  84. Gary

    I couldn’t find anything with a google search about real estate sales settled in gold. I’m not saying that the odd deal isn’t settled in gold but I would think a story like that would make all kinds of headlines.

    I’d be willing to bet a burrito I could take my dollars over to Vietnam and buy a house without having to first convert them to gold.

  85. n1tro

    You got a bet! I’ll find proof on the net or get some proof next time I am back. You do acknowledge that countries like Vietnam use gold to settle transactions as common practice. The government controls the inflated currency which is quasi pegged to the USD but is not worth anything because of the screwed up way they run the country so individuals use currency to pay for day to day stuff but for big purchases, settling in USD or gold equivalent is the norm.

    Example. Since the government is communist there, the land doesn’t really belong to the owners. One of my relatives had to move out of their place because the gov’t was developing the land for a business building and the gov’t gave them 200 ounces of gold as the “fair” value of the house on the land.

  86. n1tro

    People in Vietnam don’t like to hold “trillions” of Vietnamese dongs after they sell their place because they know how weak the currency is so it’s gold or USD over there. Hell, you get interest for depositing your gold in the banks there!!

  87. n1tro

    I said they price their houses in USD and settle in either. It’s easier to carry 200K in gold than 200K in USD since most people have been hoarding gold since way before.

  88. n1tro

    Gary,

    You owe me a burrito!

    http://goldprice.org/bob/2006/03/vietnam-gold.html

    The sentence you want to focus on in the article is “those who took out gold loans to buy houses”

    translation: People have to borrow gold to buy their houses thus gold used to settle house purchase!

    I would like the burrito with all the dressings, expressed shipped to me because I don’t want it to go bad.

  89. Frank

    Volker did indeed supress gold and inflation with a ~20% federal funds rate. He was certainly talking to RP ca. 1980 and he was using gold as a barometer, not manipulating. If Bernanke did that today then the whole Ponzi scheme would collapse pronto. In fact, about 5% would melt down the system….

    With the Japanese example, their debt servicing would hit 50% government revenues if bond rates increased to about 2%. That also amounts to sovereign default.

  90. Gary

    The bet was

    “I’d be willing to bet a burrito I could take my dollars over to Vietnam and buy a house without having to first convert them to gold.”

    You haven’t shown me anything yet that suggests I couldn’t take my US dollar over to Vietnam and buy a piece of real estate.

    I also suspect it’s probably the odd contract that is paid in gold in Vietnam as I doubt there is enough gold available to make it a common practice for the masses.

    That is the problem with using gold and silver as money. Supply is limited. It’s one of the reasons paper money was created in the first place.

    And contrary to popular belief a gold standard or gold and silver coins has never stopped governments from debasing the currency. In Rome the coins were clipped.

    So even if we went back to gold and silver money we would still find a waqy to debase the currency. It’s just what empires do over time. They all manage to destory their currency.

  91. Romeo Bravo

    Given all these bets for Burritos flying around the blog, I’m thinking being a Burrito seller is going to be pretty profitable on SMT over the next year or so.

  92. Robert

    It looks like the clearinghouse to settle these burrito bets should become the following:

    http://www.rosamarias.com/shipping

    Minimum settlement is 12 burritos, and 12 delicious burritos from them is $200 + shipping.

    Gary you might have to force your debters to go in together to add up to the 12.

    Anyone wanting to present Gary with a nice x-mas present, this might be the one.

  93. Bede

    Gary,

    Re: Core

    You said: “One’s minimum core position should be a position small enough that you are comfortable riding out an intermediate correction with it without freaking out and selling at the bottom, but large enough that you won’t be pulling your hair out if the bull throws us a curveball and just keeps charging higher.”

    I don’t make a core/non-core distinction. I’m holding my entire position “Old Turkey.” (even when it sometimes feels like cold turkey instead of old turkey)

    I prefer to just sit tight through intermediate corrections. It’s my understanding, however, that you would recommend going to cash even for my core during a D-wave. Is that correct?

  94. n1tro

    Gary,

    Technically you couldn’t take your cash and buy a place in Vietnam because you are a foreigner and foreigners aren’t allowed to own property. But my point was a counter to your earlier post of

    “When was the last time you or anyone you know bought anything with a gold or silver coin?

    As much as the gold bugs would like us to believe it, neither gold nor silver have any monetary function any more. And I seriously doubt they ever will again.”

  95. DG

    Jeff: Commercials are smart money; large spec is dumb money. COT is not especially helpful in spotting tops, and the reading now are “bearish” (in quote because of the caveat i just mentioned) but not outrageously so. Gold is more important to watch, rather than silver, as it is gold movement that calls the tune..

  96. Robert

    1776 – 2009 = 7.5 Trillion $ Debt

    2009 – 2015 = 6.5 Trillion $ Debt

    2015, 30% of revenue to go towards paying off interest on the debt.

    Sounds like a country headed for disaster. But there won’t be too much disaster solely because of our favorite, American Idol.

  97. Robert

    For sure mini-crisis in the dollar come Spring. Interesting times. 230 years of good prosperity in this country, and now I turn 23 at America’s C-wave top. The D-wave will probably last until I’m in a nursing home.

  98. Robert

    Luckily we’re shorting this SOB 😉

    (indirectly of course, playing the decline in the dollhair).

    It otay though. I have no problem moving to the caribbeaan. Jah Man!

    Bernanke = BumbaClot

  99. hiptwist

    FWIW: After the recent pullback in the miners I wanted to know:

    Which stocks decrease less after a top: The lowperformer or the outperformer of the previous bull?

    My portfolio of about 20 miners gave me the definitive answer: Relative strength rules. Strong stocks stay strong.

    So I definitely will sell my low performers when I want to realize partial gains. Somehow counterintuitive for me 🙂

    Just another version of “let your winners run” backed by hard numbers.

  100. Chicken Burrito

    Hiptwist-

    Which were your top performers and which ones stunk up the joint.

    Big money may flow into the larger boys next year, so these may finally play catch up. I’m looking at you, AUY!

    http://www.kitco.com/ind/Thomson/nov172010.html

    Bond Market Implosion. Gold Tactics

    “I cannot overemphasize the critical importance of factoring the bond market into any analysis of the crisis now.” That was the sentence I started yesterday’s update with, and it’s probably the sentence I should start every update with, for the next six months!”

    “In practical terms, meaning flows of liquidity by institutions, what the institutional awakening means is a mass panic out of bonds and into…?”

    “The history of institutional money flows in a currency and bond panic is a massive flow of liquidity into the stock market. Having said that, what do you think happens to the Gold Price Thermometer of global financial health what that occurs, or is thought to be about to occur? I don’t think most in the gold community really understand what just happened to the bond market, and what this event means for gold.”

    “Markets anticipate price and factor in what has already happened. The gold market is on the verge of anticipating the Institutional Awakening, meaning the gold price is on the verge of surging higher, not lower, while most are wasting current buy prices, standing there with no buy fills, thinking the game is to be the one to guess how LOW gold goes. Wrong tactics. Wrong tactics, bigtime. “

  101. Chicken Burrito

    Robert-

    That 14T in debt is nothing. Let’s talk “unfunded liabilities”.

    http://www.nationalreview.com/articles/229942/other-national-debt/kevin-williamson

    Our Debt Is More Than All the Money in the World

    There’s more, of course. Much more. Besides those monthly pension checks, the states are on the hook for retirees’ health care and other benefits, to the tune of another $1 trillion. And, depending on how you account for it, another half a trillion or so (conservatively estimated) in liabilities related to the government’s guarantee of Fannie Mae, Freddie Mac, and securities supported under the bailouts. Now, these aren’t perfect numbers, but that’s the rough picture: Call it $130 trillion or so, or just under ten times the official national debt.

  102. MLMT

    More pain coming this week for the dip buyers for last week. If we thought that the dollar put in a high and is going straight down – hmm are going to be disappointed IMO. Gold may very well take out its 1330 low and so would silver. Things about to get interesting 🙂

    Dollar may not put in a higher high though I expect gold and silver to put in a lower low.

  103. David

    Gary,

    How many more A-B-C-D cycles do you think we have in store during this secular bull market?

    My assumption has always been that there would be one more complete cycle after the current one.

    That would mean that the blow-off top of the secular bull would come in 2013-ish.

    But at times you seem to imply that we can look forward to two more complete waves, which would take us into 2015 or 2016.

  104. Gary

    Gold will have another 8 year cycle low in 2016. That major decline similar to what happened in 08 should separate the 2nd phase of the gold bull from the bubble phase.

    Bubble phases usually last about a year to a year and a half. So if I had to guess I would say the gold bull tops in 2017/18.

  105. David

    That would mean two more “C” waves, followed by a final blowoff top that will presumably be even more powerful than the C-wave we’re experiencing now.

    Of course, that would imply an 18-year bull market, which is very long for a gold bull market. The last gold bull was only 10-ish years long.

    Up until now, my presumption has always been that the secular bull in gold, along with the secular bear in stocks, would roughly follow the roadmap set by the 1970s — i.e. 12 years or so.

    What leads you to believe that this gold bull/stock bear will be so prolonged? Presumably the last gold bull did not have two eight-year cycles, so why should this one?

    (Not that I mind, by the way. If you’re right, we’re all going to make a fortune. I’m just curious as to your reasoning.)

  106. Gary

    The commodity bull of the 70’s was an anomally in that it was farily short. most commodity bulls last 20-25 years.

    Unless we get another Volker in the Fed who is willing to send the country down into the depths of a terrible depression to cleanse debt from the system then I don’t see any way we avoid following the same path Japan has followed.

    They are now starting their 3rd decade of the secular bear market.

  107. Elaine

    Maybe Gary should be bubble boy, not burrito boy. And maybe we should keep him protected in a hermetically sealed bubble to ensure he’s around to guide us through the next 8+ years. 😉

  108. David

    If I were to try to make an argument for an 18-year bull market in gold, it would be based upon the excesses of the stock bubble in 2000, when valuations reached unprecedented levels (35x for S&P).

    The law of reversion to the mean implies that we need to get to unprecedented low valuations (4-5x, perhaps) before we can hope to see stocks bottom.

    We’re not even close to that yet — if anything, stock valuations are still far above the historical mean. They only got close during the meltdown. We’re not going to correct that in any less than 8 years.

    If a gold bull is indeed a mirror image of the stock bull that preceded it, then this gold bull is going to have to be that much more powerful than the 1970’s, because the stock bull of the 1990’s was far more overvalued than the stock bull of the 1960’s.

    So that gives credence to your theory.

  109. David

    Gary,

    You have also said that you believe this C-wave will be the most profitable of the secular bull market for PM stock investors.

    This implies that you think this wave will be more profitable than the final blow-off for PM stock investors.

    Is this because of the level of undervaluation coming out of the 2008 meltdown that still has to be corrected in the PM stocks?

    Or did I just misread you?

  110. Beanie

    2018 sounds just about right, that’s where the next big crash will be.

    Meanwhile, everything goes higher from here.

    See you fine folks at Siegel’s Dow 36,000.

  111. Razvan

    wow, for a second i thought the chart was the stock market futures but then i saw USD. This is bad news for the dollar but good news for us.
    Shiney metals to the moon !

  112. fubsy_cooter

    Silver futures are up this evening. Could be the commercial shorts trying to cover prior to the holiday shortened week.

    If we are beginning a new daily cycle into an accelerated rally, and this is only leg 2 of 3 of the current C-Wave, then this C-Wave will likely take Silver well into the 40s. Man, that would be good for my portfolio.

  113. bamster

    from what i’ve been reading this weekend, the next 2 days are supposedly going to be very volatile. can’t wait for that to end. i have been waiting to get a full position again in Gold, but it has not felt right yet.

  114. fubsy_cooter

    It can feel not right for a long time. Might as well pick up a small portion of what you want in order to get you in the game. Once you have a little, it becomes easier to add into a rally or correction. As Gary says, its a bull market. Any timing mistakes will be corrected.

  115. Mark

    I attended the S.F. Hard Assets Investment Conference today, which I’ve done on and off over the last 20 years. In 2000, they called it the Precious Metals and Technology Conference because there was so little interest. That, after absolute euphoria in 1996. This was my yearly check of optimism, albeit not a very scientific one. In general, folks were subdued and a bit fearful of the prices.

    Tom O’Brien said sell and look to reload around $1,100. Ian McAvity, a very down to earth analyst thought that the crazy stage was still ahead, that we’ve only had 3 weeks of 80% bulls as opposed to 15-28 weeks during the 2005/2008 tops. Still, he recommended having one foot on the exit and said to take some profits. Rick Rule was looking for out of favor stocks and didn’t mention gold.

    Lastly, Dines talked about the mother of all bubbles: money printing, and to make your money prior to the coming currency crisis.

    Not a lot of smiles, not much optimism at the biggest of the gold shows.

    Some good juniors, but that’s another subject.

  116. David

    Mark,

    Interesting. What was the level of attendance? That’s usually considered a contrary indicator.

    I’m told that at the height of the meltdown in 2008 there were a lot of empty seats, and what attendees there were were mostly old-timers. It was as bad as at the 2000 lows.

  117. DG

    MLMT: You post things like “Gold is going to get killed this week!” Do you have reasons for your claims or is it just a swollen bunion or some other “tell”? Supporting evidence would make it a lot more interesting than just “Gold is going to $1150 in the next two weeks.” Why?

  118. Mark

    The conference was pretty full, but not as full as last year. The general assembly area was smaller. There were only crowds for the biggest name speakers, but not crowds at the miner’s booths. Last year, the early morning workshops were standing room only. This year there were plenty of seats. In other words, it was nothing like 1996 and not even at 2009 levels. Again, it was rather subdued, but not complacent. Also, it seemed like there were fewer miner booths and a lot of new names trying to drum up interest.

  119. Gary

    DG,
    I think top callers rarely have a reason. They just make repeated attempts until one finally turns out to be right and then they can brag about how the called the top.

    Of course what they always fail to mention is they went broke in the process.

    Trying to call tops has to be one of the most useless strategies in the investing business and one of the costliest if you are trying to short.

    One has to wonder how many bears destroyed their portfolios this summer because they couldn’t wait for all three confirmations.

  120. catbird

    Gary et al — I’d be grateful for your thoughts here. Kind of a serious conundrum I have.

    I’m young (28) and next autumn I am going to pay off some graduate school loans. Fortunately I have enough money to do that, but it’s in muni bonds…and we know munis have a grim future, no?

    So far all my silver investments (AGQ) have been with money I can afford to lose. Not so with the money I have in munis. I NEED THAT money next autumn when my loans come due.

    Question: how best to protect my purchasing power without having a heart attack some time in the next year? Corollary question: What do y’all think of Sprott PHYS?

  121. Gary

    I think you are finding out that there are no “safe” investments. If you hold cash the Fed is going to debase the dollar so you lose purchasing power.

    If you hold the stock market it’s in a secular bear market and at some point the next leg down will begin.

    Bonds have most likely begun a secular bear market. So that’s not a good option.

    Gold and silver are in secular bull markets but are volatile. If you can’t control your emotions you can manage to lose money in a bull market.

    There are no easy choices at this time in history.

    You know what I’m doing if that helps any.

  122. David

    Since the alternatives don’t yield anything, why not keep the money in cash (an FDIC-insured savings account)?

    You are paying in dollars after all.

  123. catbird

    Thanks for the thoughts, guys. This really is a great community Gary has going here.

    HYG is interesting…but it looks no less volatile than holding a non-leveraged gold ETF like PHYS.

    The reason I’m considering PHYS is I think it’d be less nerve wracking than holding a silver ETF for a year. (I know the real money is going to be made in silver, but it’s more volatile.)

    Then there’s the idea of simply selling the munis and putting those federal reserve notes in an FDIC insured account. My loans are fixed, so I know what I have to pay.

    I’m leaning toward half in PHYS and half in cash.

  124. n1tro

    HYG volatile? 1 year charts shows a $16 range but it pays dividends every month! Its better than leaving the money in the bank earning waht…1% or 2% interest.

  125. catbird

    n1tro,

    yeah you’re right, it’s not as volatile as the chart looked at first glance.

    Have you looked at DNP? It’s mostly the stocks of utilities and telecoms.

    Uggh…I feel dirty talking about these things on Gary’s blog. Sorry Gary. I am still a proud owner of AGQ!

    I just don’t know if I have the stones to park all that bond money in PHYS!

  126. Natanarchist

    Re; Gold bull of the seventies…

    I think it is hard to know the dates of the last gold bull market. Price was fixed until 71 and it essentially took off after the close of the Gold window. However, I tend to think it started earlier, in 1964. The case being made by the removal of Silver from dimes and quarters. Silver, the longest serving form on Money and always the Peoples money, told us all that the fed/government was debasing the dollar. Silver traded freely and gold was fixed. I think we can safely conclude that had gold traded freely at the same time its rise would have begun around the same time, perhaps even sooner. Therefore one can make the case that the Gold/Silver bull run went from 1964-1980..16 years. if we say this Bull market began sometime from 2000-2003 then it might conclude between 2016-2019..which seems to fit into Gary’s cycles.

  127. Frank

    HYG may not look volatile, but you have to realize that there is very little opportunity for capital appreciation at this juncture but quite substantial risk for 10-20% correction. So it is not a good investment for no risk tolerance.

    In 2008, HYG lost nearly 40% from peak to bottom so just as bad as your typical S&P stock.

    You are better off buying junk bonds in specific companies where you manage the maturities and mitigate your potential loss of capital. With a bond fund then you have risk of capital loss.

    However, finding specific bonds for purchase is often very difficult for the retail investor.

  128. hiptwist

    Chick,

    my best performers were
    Genco Resources, Silvermex Resources (now joined)
    Rare Element Resources
    U.S. Silver Corp.

    my worst performers were
    Eldorado Gold
    Tanzanian Royalty Explor.
    Iamgold

    BUT be aware: I used relative performance (distance from 200d SMA) AND don’t trust strangers on the web: Do your own research to confirm theories.

  129. Gary

    That’s a tough one. I like to see it on the chart myself. If it’s overnight it won’t show up on the chart. But considering that silver clearly appears to have made a cycle low I would tend to say yes.

  130. DG

    Better get a confirmation, though, as it may have just been the futures and I assume you use the spot price. I am having trouble getting the spot price range vs. merely a current quote

  131. alex

    DG

    If you look at kitco’s high..it is the ‘day high’ and I think it resets at 6 a.m. , but scroll to the right and look at the gold cgart for 24 hrs , and you see it went there last night 🙂

  132. DG

    Alex: Where does it “”say” $1366? I just see the price chart you pointed out, where it appears to have ticked at $1365 overnight but does not show a precise price.

  133. alex

    DG

    Kitco has on the upper left inside a box

    current price in the middle

    it has ‘BID/ASK’ Low-High price , and below it has ‘Low-high” for the day… 1350-1366

  134. alex

    SPOT MARKET IS OPEN
    closes in 7 hrs. 39 mins.
    Nov 22, 2010 09:36 NY Time
    Bid/Ask 1353.80 – 1354.80
    Low/High 1350.80 – 1366.00
    Change -0.30 -0.02%
    30daychg +26.10 +1.97%
    1yearchg +202.90 +17.63%
    Charts…

  135. DG

    Sorry, Alex, That was pretty damn obvious. Thanks for answering a dumb question (never noticed it before…I guess I’ve never cared about it till now). Gary: I assume that quote works for you?

  136. DG

    If the swing low has now been established (which it has according to Gary) then the stop can be raised to $1333. In that case, adding here makes sense because your stop is less than 2% below current prices.

  137. alex

    HHMMM ,

    ANO (anooraq resources is up 10% and almost has the avg daily volume for the past consolidation already this morning)

  138. coolkevs

    Dollar index still has a bit of strength left. We are on week #3 of 4 of a Demark Buy Setup. Also, last week, we did not perfect a Dollar Sell setup on a DAILY basis – these patterns eventually perfect which would require the DXY to go above 79.47.
    Prof Depew looked at other markets today on Minyanville. DAX (German) is on bar 4 of 13 of a WEEKLY sell setup. What this means is that there is at least 9 more weeks of bullishness in this index. Depew is very bullish on Japanese stocks – if the Nikkei closes above ~9500 (which looks likely) this month, this confirms a MONTHLY buy signal – good for a year! Finally, a MONTHLY buy has recorded on the UNG natural gas ETF (This took 28 months to happen which might explain why people have been frustrated in trying to call a bottom in that one). With a price close above the 6.30ish level next month, this will be a bullish signal for a whole year as well!
    As a reminder, the major indices (SPX, NDX, DJIA, Russell) as well as gold and silver are on weekly sell signals good through the end of December or so. While this may not mean a big drop, it will definitely mean sideways action for a time. Still waiting on DXY 72.5 – bring it on!!! 🙂

  139. Jerred

    Nick,

    If there wasnt wild swings then you wouldn’t be able to make money in the market.

    Embrace the imbalances, that is where the money is made

  140. Nick

    Oops…sorry…

    Yeah, I am embracing the wild swings and am glad to be making money…my point was more philosophical – destroying currency, creating inflation etc. Sorry for not being clear.

  141. DG

    Isn’t that some incredible set of stats? Implies gold good for another 5-7 years still (and stocks awful) Happens to agree with Jeremy Grantham, probably the very best macro hedge fund manger in the world

    Yeah, I have noticed that links get cut off on this blog. make sure you get the whole thing.

  142. Dean

    I have a question for Gary (and other readers). I was reading the TSI Trader on the weekend and John presents some exciting (and reasonable) stats that argue for another big run in silver.

    If we do get another big spike in silver spot and equities how do you plan to get out?

    If you look at the charts and examine the previous run-ups in John’s charts, they don’t last very long. Admittedly, even catching some of the move will be beneficial, but its going to be fast (and emotional) so managing your exits will be of prime importance.

    Personally, I sold most of my holdings into the last spike and have been slowly accumulating over the last couple of weeks. In fact, I am almost back to my intra-day high for that day with most of my holdings still below their highs (for that day) so I think I managed that trade pretty well.

    At any rate, just wondering if anyone has any input on how they are planning their exits.

  143. catbird

    DG,

    It’s certainly comforting data for we who hold PMs…it would be stunning if the gold bull ended sooner than 2014 or so, let’s put it that way. Especially considering the “story” for commodities, especially PMs, right now in the early 21st century is better than it was for any of the periods in that table.

    So yeah, Old Turkey.

  144. Jerred

    0a9200,

    es, nq, gdxj, gdx, slw, paas (options) (otm, atm).

    i believe the market is a pure auction and i trade based on volume profiles

    Gary helps me with the longer term perspective

  145. alex

    Dean

    no offense but I dont think anyone is answering your question because you ended that whole question with how well you are doing with your own trading plan.

    just repeat that one and its all good.

    I personally rode HL and EXK and slw NG and a few others up…sold 1/2…got back in.

    I am not even with where I was at the top of that upthrust day yet…so you did better.

    Gary will help you understand time frames with cycles. daily analysis..well worth even just trying a 1 month at $25..THATS MY BEST ADVICE

  146. Dean

    Thanks Alex, no offense taken. I am already a subscriber (agree it is a good deal).

    Here is the specific chart I am talking about:
    link

    Yes, I’m doing fine, and I concur with Jerred (use Gary’s info as perspective and trade around that thesis).

    Personally, I am likely to sell too soon. I know that. But if you look at the chart you can see how multiple weeks of gains can be wiped out in a very short time (sometimes a week or less). So I think being cautious is warranted. Just putting it out there…

  147. Jerred

    Dean,

    trade your plan and dont worry about the outcome.

    If you focus on the process then the outcome takes care of itself.

    Too many people want to control the outcome before they get into the trade.

    Trade the process/plan.

    The market is random and you can not control the outcome!! If you are looking at your p/l on a daily basis then you focus on the outcomes too much.

  148. alex

    Dean,

    no doubt about it..you can lose $$ in a sell off fast. Thats why I sold 1/2 positions when the heavy volume down day came in , I looked for a bounce the nxt day or 2 and got out with 1/2 , then just repurchased after a retest of that high volume days low came in on lighter volume.

    Its just like you said…Gary gives a good overall , ‘where we are and where we’re heading” and you can rideit or trade it.

    HL getting some good buying and PAL and EXK are starting to now too on daily charts.

    ANO and MNEAF for the brave 🙂

  149. TZ (7006)

    GARY,

    >That’s a tough one. I like to see it [overnight gold peak] on the chart myself. If it’s overnight it won’t show up on the chart. But considering that silver clearly appears to have made a cycle low I would tend to say yes.

    $gold on stockcharts, by examination, DOES including 24hr data. However you will notice the chart label is “Gold…continuous..EOD” so the data is only added once each evening (one day at a time).

    The highs of last night should be there, but not till later today.

  150. TZ (7006)

    GARY,

    If stockcharts $gold didn’t including 24hr data, you would see a ‘gappy’ chart like you do for gld. Same with $silver and slv.

    But intraday you have to use other sources as you know.

  151. Razvan

    this puppy finally decided to give us a late day kick. The market has been strange lately and I say this because we are getting action post US close sometimes during the asian session and not much on the New York open.

  152. TZ (7006)

    DEC contracts for gold and silver futures are the largest size all year. If a delivery squeeze is going to happen it will generally occur here.

    “First position date” for the contracts is next monday. Anyone holding a long contract after 5:15pm on monday evening is holding for delivery which begins the following day (but can last the month of dec. WHEN to delivery is at the discretion of the shorts. Not the longs. A long, even holding for delivery, can close out before if they want.)

    Options on futures expire tomorrow (tues) at 5:15pm (all times eastern.)

    Should see some interesting action tomorrow and monday.

  153. Razvan

    i think Gary went to the local mexican gentlemen’s club. He said something about spending the dollars before they loose value and as hard as he has been working we should give him some free time.

  154. alex

    HEY!! Gary-DG- and friends!!

    I have a new buy signal…works EVERYTIME…let me know if you’ve seen it, it looks like this…

    MLMT said…
    More pain coming this week for the dip buyers for last week. If we thought that the dollar put in a high and is going straight down – hmm are going to be disappointed IMO. Gold may very well take out its 1330 low and so would silver. Things about to get interesting 🙂

    Dollar may not put in a higher high though I expect gold and silver to put in a lower low.

    November 21, 2010 12:46 PM

  155. Leo

    TZ,

    Did you ever pull the trigger on SLW? I remember you were trying to get a better price for a while but I do not recall if you ever got in.

  156. Dean

    Thanks for the link Frank, I think this comment would help to explain First Majestic’s out-performance to date:

    “First Majestic is also likely benefiting from its cachet as the “purest” silver producer and anticipation of a U.S. listing in early 2011.”

  157. Jayhawk91

    Frank-

    Are you a member at that site? Is it good?

    I know you recommended Fortuna a few days back over Majestic…I’m guessing based on that article. SVM looks terrible after seeing those numbers.

  158. Poly

    Are we in the sweet spot here?

    Swing in place. Today we had gold up on EU debt fear buying, so it was a pure safety play. So the Euro weakening rose the index, with little effect on gold.

    If we get some resolution on the EU debt, the Euro will strengthen and all risk assets will rally, good for gold and the miners.

    Seems like we’re playing both side of the possible outcomes here. Certainly having equities join the party would be most bullish.

  159. DG

    Cute Alex. I bought more PM stuff this morning after I posted that, with a stop at $1333, there’s no reason not to buy more. The risk is small and the upside substantial. I now have 1/3 of my net worth in PM’s. Here’s to $1600!
    Gary: I’m very impressed, You really have been calling this incredibly well since I discovered your site six months ago. I hope this doesn’t mean I have to call you some ridiculous nickname like G-zeppelin or something. I am having a great year which would have only been a good year had I not found the G-spot.

  160. thedocument

    I’d be cautious about calling a cycle low in gold just because a swing low formed. We’ve seen plenty of head fakes around swing lows (just go look at the declines into the Feb and Mar daily lows), and I still believe the dollar is in a new intermediate cycle. Now on Day 12, any new high for the current dollar cycle will give us a lock on a right-translated nature and pretty much put postage-paid on my burrito!

  161. Frank

    No, I don’t subscribe to Metal Augmentor. Another site (TSI) linked to it last summer. If you do a Google search you will find a PDF from June 2010 that gets into this in detail. This October article appears to be an update. According to this analysis, SSRI is a very good bet.

    I subscribe to the The Speculative Investor and Gary. The former has some big picture analysis and recommends specific junior miners. It had First Majestic as a recommendation, but dropped it just before the run up because the valuation was too high. (TSI added FM in 2004 so had several hundred % profit). Similar story with NGD, which I own.

    TSI has a sort of value investing angle on miners, which means that they usually recommend selling too early. I am not convinced it works any better during drawdowns.

    If something hits a valuation target then it’s gone. It also removed Fortuna Silver recently, which I like better than First Majestic.

    But my only silver exposure is (a lot of) SLW, GDXJ and a little bit of SLV. Oh and the disastrous MGN in my IRA, which is the only PM stock purchase that I have ever lost money on.

  162. alex

    DOCUMENT (and all other readers)

    Please look at the dollar for the month of august (roughly 80 to 83…it went up)…then look at GLD (gold or gdx if you wish)it went UP (115-122)

    I am not afraid 🙂 equities had good buying volume at the days end ( HL ,SLW,PAAS)

  163. Gary

    Sorry folks I’ve been out climbing all day. The blog is starting to get to busy for me to keep up with so you may be on your own most of the time from now on unless I’m taking a day off lifting and climbing.

    Even on those days though I detest sitting in front of my computer all afternoon so no guarantees I will be able to answer your questions.

  164. Frank

    DG. I also have about 33% of my net worth in PM shares.

    However, half of my net worth is in over-valued real estate that I would never sell anyway. It’s in a place where the RE bubble did not pop yet…..

  165. Dean

    According to Metal Augmentor SLW is also fair valued (if not over-priced) relative to silver.

    Frank, I take it you are in Toronto or Vancouver then, and like me, looking to offset the (inevitable?) RE hit with gains in the PMs…

  166. Tudor

    Gary, although I keep an eye on the market intraday, it’s your nightly reports that I use to guide my trading. So at least for me your absence during the day is not a big deal. Personally I find the constant hand wringing both comical and annoying.

    So no need to apologize for not providing a babysitting service. At least to this subscriber.

  167. DG

    Frank: I seem to have a predisposition against real estate. As a trader, I like being able to change my mind in a moment, so I everything I own is liquid. We even rent (moved to Italy for a year and a half once—that was fun!) People made fun of me for a few years “missing” the real estate boom. No one is laughing any more. All of my “chips” are available for the game. Bought some ag ETF’s a few days ago (DBA and RJA).

  168. catbird

    DG,

    What made you branch into the ag ETFs?

    Diversifying for the sake of diversifying?

    I’m hesitant to do that because I don’t have the “edge” of Gary’s cycle analysis to guide me on agriculture like I do with PMs. Thoughts?

  169. aviat72

    There is less exuberance in GC/SI tonight. Silver seems to be hitting some resistance in the high 27s. It had been going straight up after the double bottom so some consolidation is great. However, there is some news of silver producers hedging now.
    http://www.us-silver.com/s/NewsReleases.asp?ReportID=427825&_Type=News-Releases&_Title=U.S.-Silver-Announces-Hedging-Transaction which means that we have to be cautious and tighten stops, IMHO.

    Also Gold hasn’t been able to build volume above 1360, swing high or not.

  170. Gary

    Volume was pretty light for most of August. Not sure you are going to get much of an edge by watching volume and tightening stops just runs the risk of getting kicked off the rally too early.

    The only stop level that has any signficance at all is $1330 (if you believe it marked the cycle low) or $1315 if you think the cycle low is still ahead of us.

  171. aviat72

    Gary:
    I am a bit confused since your reports now suggest that it is silver which should drive the action in the PM space. However that 1330 stop is based on the price of Gold. I guess the corresponding stop in Silver will be 25 (the double bottom low).

    BTW, by my volume comment, I meant intra-day volume; i.e. the market being able to trade in a certain price area for some time, which signifies “acceptance” of price in that area. From a market profile perspective, Gold has single printed twice above 1360 since last Tuesday (Thursday and Monday), leaving behind two selling tails (Pit session only). All this means that the price of Gold is having a tougher time moving about that 1360 zone, and is probably encountering longer time frame sellers. On the flip-side it also single printed in the low 1340s on Friday on the flip-side,finding support to define the bottom of the current range.

    That is why I also talked about the larger time-frame sellers (commercial hedgers) entering the silver market being important, since the higher prices are bringing in other non-naked sellers into the market.

  172. David

    Robert,

    Pan American Silver sells bullion as well. I bought some during the meltdown — the price over spot was better than anywhere else, including First Majestic.

  173. Bede

    Ya know jayhawk,

    Those look like nearly identical charts if you compare them apples to apples.

    The Gold chart covering 180 days has a short rising channel that you’ve labeled a bear flag.

    The silver chart covering 20 days and a lot more hourly data presents the same rising channel in a bullish fashion.

    What’s up with that?

  174. Gary

    Silver does not drive the sector gold does. But silver has been leading the sector.

    Stops have to be based on gold not silver.

  175. Jayhawk91

    Bede-

    Not really-Silver is in a much steeper incline. Gold is a slight move-When I backed it out to 4 hour and daily it looked bear flagish. I’m not trading that flag, I’m long gold and silver miners. Just happened to notice it…If it breaks down, 1330 will give way and we will exit what ever we see fit.

    On the longer term silver chart, it’s not a flag at all.
    4 Hour silver

  176. Frank

    No, I am not in Canada. I live in the US (Japan in January) but my RE is not a primary residence.

    Hint: it is in a country that is more over-priced than Canada according to the Economist. http://www.economist.com/node/17311841?story_id=17311841
    and hockey is also a popular sport. And I am actually only using the land value based on an adjacent house that burned down and what the guy sold it for after pocketing the insurance money for the structure!

    I agree about RE, especially buying it with leverage unless it is good value (i.e. potential rental yield of 8+%). In Japan you can get a mortgage for like 1.5% and you can find a decent house in Tokyo for maybe USD 1 million. But the interest rate is variable. Imagine what is going to happen to prices and your mortgage payment when Japan faces its judgment day when its bond bubble bursts.

    I mean this is what The Bernank & co. are trying to achieve here: push interest rates to zero and prop up RE to infinity. What you’ll get is an artificial plateau that is only supported by these interest rates, never allowing the market to clear. I guess Japan hit this plateau after falling 60-70% over 20 years.

    I am looking at high end property for rent in Tokyo and you see houses that have been for rent since early 2009….. Sure you might get a decent rental yield if you can rent the damn place, but you might go broke waiting for a tenant….. (The Economist claims it is 34% undervalued and you can get a rental yield of 12% for low end property according to the FT.)

  177. DG

    Catbird: I’ve been trading without Gary for the past 35 years, so have a few things I use myself. I have learned a lot from him about cycles, but generally like to buy intermediate lows in bull markets, and ag is obviously in a bull market. I never put everything into one item and thought some ag would work well. Bought DBA when it hit both its rising 50-day line and the lower Bollinger Band. Bought some SGG (sugar) as well that day, and RJA. There’s a limit to what I will put into the PM’s (a third of my NW is plenty) and ag is a great story as well, I believe. I am aware that they are somewhat correlated, but that’s fine for now.

  178. v

    Gary,

    After today’s incident in Korea, people are buying dollar and gold as they are both moving higher. Silver somehow is moving down??

    V

  179. Chrys

    Gary – are you concerned with the gold:silver ratio spiking. Doesn’t it usually mean a tradable top for both metals is approaching?

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