468 thoughts on “$5 EXPIRATION

  1. kmisak

    I am looking to put to market my final 4% to bring my potfolio to my 135% max; hoping for a little pullback in HZU.T.

    My top 2 holdings, Great Panther and Silvermex are on a tear this morning!

  2. WalterW

    HUI and GDXJ taken down right from the opening while gold and silver were hardly moving at all. It is truly beyond ridiculous. Even if, as Gary thinks (and as I think is his genius’ single flaw…) there is no conspiracy – well, then this is just a concerted effort to take the miners down without conspiracy! These banksters with their endless shorts are seriously pathetic.

    But never mind, their raids are getting shorter and fewer. They’re losing and we’re winning. The tell-tale sign is: where it used to be frightening to have to endure these attacks, it has now become so immensely boring to have to sit through another one yet again. They’re SO waisting their time.

  3. DG

    Brain: Re CHina: re your comment from Friday regarding FXI’s swing low…a swing low is only meaningful when it comes during the timing band for a bottom. Otherwise bear market rallies have tons of swing lows that do not indicate anything. There is no particular cycle duration for FXI, so the fact that it has rallied in a bear market gives me the opportunity to reshort what I covered a week or so ago at that low. It rallied right to its declining 50 DMA and died there—again—close enough to resistance at 43.10 that I had a nice tight stop if it went against me at all (which it didn’t) At least that’s how the setup looked to me.

  4. DG

    Boy, I really don’t get what is so appealing about these conspiracy ideas. Even if true, they make no difference. The rules of proper trading deal with what is, not what is motivating what is. If the miners go down because of a conspiracy, Martians, or astrology, why does it matter? Especially since the question can never be determined. Must be something deep in human nature that finds these things immensely appealing because they have been around for thousands of years. There’s always some idea that a group of guys chomping on cigars in a back room somewhere is pulling the strings regarding (you name it) the media, the government, PM’s, medicine, oil companies suppressing technology,… Fascinating how rooted it is in the psyche somehow.

  5. MLMT

    @LowTax… They are doing fine… GDX, SLV slightly wet…

    /GC starting to shine now.. it wasn’t easy over the weekend, I must admit.. I like the gift that weekend gave me by pushing /GC to 1410 area.

  6. WalterW

    Mikey,

    Yes, the purpose is, was, to keep the pm’s from rising as much as possible. But while they’re at it, the bullion banks simply have no choice but to short the hell out of the miners as well, since there’s little point in trying -in vain- to keep the lid on the pm’s while letting their producers fly.

  7. DG

    Bought more AGQ on the pullback. It’s easy to do when sitting on decent sized profits. i am happy to give the profits back for the chance to make a huge kill. I will keep adding until I see a mainstream headline about the PM’s being “something for investors to consider.” I was amazed not to see a word about sliver after last week’s explosion. Great!

  8. T.J. Rand

    Mikey-

    It is metals and not miners.

    DG-

    I’ve wrestled with the same question regarding conspiracies. There is little question in my mind that the Bullion Banks are working to suppress the price, but the question that always pops to the fore is – so what? It matters to me for a few reasons – 1) it supports the fundamentals beneath the timing-related work, 2)it causes me to think through the impacts on futures-related ETFs (SLV, AGQ, etc…at least I believe they are futures-related) if the COMEX defaults, 3) it prepares me mentally for possible co-conspirator (COMEX, Gov’t) intervention, and 4) It matters to a lot of people in the market and may be priced in accordingly if/as physical price gains uncouple from paper price gains.

    It doesn’t really impact my % allocation, but it has to a degree impacted my specific securities selection- I have a significant allocation in bullion-backed CEF instead of having a bigger AGQ position.

  9. Gary

    Walter,
    It’s really nothing more mysterious than hedge funds shorting to fill a gap. Once the gap fills they usually cover and the asset gets back to doing what it was doing before the gap. Which in the case of the miners is going higher.

  10. DG

    TJ: But if a decoupling starts it will not happen overnight. This is why I am technician. If you have a friend of yours with terrific eyesight and you are in the woods together and his eyes get wide and he screams “Oh my God!” and runs, you should run! Doesn’t matter why. You may or may not find out why later. If GLD or AGQ starts to act strangely and decouples, I will deal with it then. Whether it is happening because of a conspiracy, a flaw in their structure, or a voodoo hex placed on them makes no difference to me. I am always prepared to adapt based on what Mr. Market tells me and spend my time monitoring his behavior rather than trying to figure out who’s doing what to whom. But that’s just my nature…

  11. Shalom Bernanke

    For sake of conversation only because I don’t trade off conspiracies, I think it’s quite naive to believe that people don’t often cheat if given the opportunity.

    Just a blatant example is Madoff, who many people knew was cheating, including firms he did business with. These firms (broker/dealers) have a legal responsibility to report but instead did nothing. Even his son in law that worked for the SEC and investigated Madoff “surprisingly” found no wrong-doing. Lastly, how about the “feeder fund” brokers who funneled money to Madoff knowing full well nobody gains a steady 12% with little risk, every year for decades.

    The bottom line is some people cheat, and when a few get together, it’s a conspiracy even if it doesn’t work.

  12. vuvvy

    To anyone who thinks GC gave a gift yesterday to short, consider that my system optimized to weekly bars has only one small loss in2008 and every other long trade since the bull began has been a winner.Looks like GC will be gifting and gifting in the coming weeks as it gave a buy on Friday:)

  13. Poly

    SLV puts are so far in the red, I doubt “slightly wet” is how I would categorize them. But hey, who am I to talk, I rode SP puts “slightly wet” until they cost a fortune.

  14. Beanie

    You know, if we adopt green energy for our cars we would rally when middle east have problems and we would rally when there’s peace there.

    Take that annual $2 trillion oil subsidy and start a green energy manhatten project and we’ll be nicely green all over within 1-2 years.

  15. basil

    The dollar is a strange animal. It should fall apart, and it might, because of QE. Yet there is always the ‘flight to safety’ whenever there is political unrest somewhere. What will weigh more, the burden of QE or the lift by Middle East unrest?

  16. Gary

    My money is on it dropping down into a major three year cycle low just like it has every three or so years for the last several decades.

  17. Beanie

    “But but but the millions of oil jobs will be gone!”

    Easy, we open new positions like “Clam Throwers”. All they have to do is pick up clams at the beaches and throw em back in the water. Go back to the waters and pick up the clams again and rethrow. Do that 8 hours a day. Best clam throwers get senior positions (Senior Clam Thrower) and so forth. Pay them 50-100k.

    At $100k a piece for 5 million people and we get a cost of $500 billion. Still much less than $2 trillion waste, and there’s no pollution or war..

  18. DG

    SB: Yes of course. I am not saying there are not any conspiracies, just that a lot of mental energy is wasted on them and they do not (or should not) have any effect on what you actually do. If people like to read science fiction, that’s great, but it has nothing to do with investing. Of course people cheat, but who, how, when, and why cannot really be known until after the fact, and it doesn’t matter in terms of investing/trading. If their footprint is big enough it’ll show up anyway, so we can deal with it then.

  19. Gary

    And more importantly in a bull market anything that depresses price below where the market would take in normally will increase demand.

    Trying to manipulate the bull lower will only speed up the process of price appreciation.

    Bull markets are bigger than governments.

    If there is manipulation going on then the price of gold and silver are higher today than they would have been without it.

  20. WalterW

    DG

    Nice picture, these conspiring guys chomping cigars in a back rooms, pulling levers all over the world. A bit simplistic too. I, for one, do not think such people exist anywhere. These things tend to spring up over time, and with some initial help from some people at the right place at the right moment, gradually ‘self-organize’, serving broad groups or fuzzily defined interests.

    Compare it to campaign financing. Of course no contributor will tell any elected politician directly what to do. But you don’t seriously think institutions donating considerable sums to both Reps and Dems do so out of sheer patriotism and the true goodness of their hearts, do you? The point is: everybody who is part of such a scheme, whatever it is, understands the basics of how the scheme works +without+ having to be told explicitly. So there is NO need for elaborate command and control structures, there is NO mastermind behind the scenes. But well, you just don’t vote against bank bailouts if your reelection depends on their contributions. In your position as a politician you understand quite well that is really ‘not done’. And if you do it anyway -which you are of course free to do- you will not be ruthlessly cut out or killed of course. But money will flow to your adversaries. Your connections will degrade. You will slowly fade.

    Such conspiracies (for lack of a better word, I fully grant you that) are not a hierarchical thing. They’re a SOCIAL thing, emerging in circumstances where they can and are allowed to thrive, when laws are not being enforced and fraud becomes rampant.

  21. T.J. Rand

    DG-

    I’ll be one of the first to strap on tennis shoes when I see others beginning to run :-)..because I certainly don’t know exactly what decoupling will look like. Is the separation this morning in SLV or PSLV an early indicator? Likely not without a ton more confirmation. I’m also uncertain what will happen if the COMEX fails…is it just a massive paper-physical uncoupling? Probably, but who knows since it hasn’t happened before.

    Obviously I’m hedging my bets, since I have CEF and AGQ…although I refuse to buy SLV.

  22. DG

    Walter: Yes to most of what you said, but they are irrelevant to proper decision making IMO. A bull is a bull, and needs to be traded a certain sensible way, manipulation or no. That’s why I called belief in them a waste of energy and not necessarily incorrect (though most of them do in fact seem hare-brained to me.)

  23. Jerred

    DG,

    Conspiracies are used by novice traders that need somebody to blame when the position moves against. Like you said it has to do with the psychology of the trader.

    Instead of blaming others they should focus on the process and what they did wrong.

    If they did that, then it would make it harder for experienced traders to make money.

  24. WalterW

    Gary,

    Clearly, we disagree on whether or not there is a ‘conspiracy’ against the pm’s and miners.

    Please note that, as I explained in my post to DG above, the ‘conspiracy’ I’m referring to is NOT one of some evil Capo di tutti Capi hiding under Obama’s desk and telling him what to do.

    Still, there’s little use to keep on discussing it, since neither of us can proof he is right. I believe I am and you believe you are. That’s fine.

  25. Poly

    Nice pullback today.

    I downloaded the opening and closing prices for Silver from Aug 20th to Nov 8th (Start of the first big decline)into an Excel spreadsheet.

    I then calculated the daily percentage change. From that, I identified any day down 2% or more and the action following that down day. I came up with 2 instances during this rally.

    Oct 7th – 2010 – Silver down -3.72%

    Following 5 days:

    1.82%
    2.00%
    0.40%
    0.57%
    2.07%
    Total 5 day gain = 9.13%

    Oct 21st, 2010 Silver Down 3.17%

    Following 5 days:

    0.77%
    -0.35%
    2.28%
    -0.56%
    0.35%
    Total 5 day gain = 3.72%

    What’s interesting to note is the volatility exhibited in this first cycle compared to the first cycle out of Aug. There was not a single up or down day of 2% until Sep 28th for +2.16%, followed by the Oct 7th drop of -3.72%.

    Just some food for thought.

  26. David Kafrick

    My view on all this conspiracy thing is that if you really believe that there are large groups of traders colluding to gain an advantage over the rest of us, then you should not be trading, period! It´s just strange to me that people actually believe there is meaningful collusion going on (which makes the game very unfair to us) and still decide to trade it.

  27. Otis

    Is there any concern holding SLW into earnings on 3/3? Just remembering what happened after a couple recent miners reported earnings.

  28. David Kafrick

    If I want to play in a poker game, but for some reason believe to a very high degree that 2 or more people at the table are colluding, than why the hell would I play in that table?

  29. Shalom Bernanke

    Because in the end conspiracies are killed when they’re exposed for what they are. I would not play the rigged poker game, but IF metals are being suppressed it implies they are already massively short which potentially adds more fuel to the fire if prices continue higher and they are forced to cover. I said “if”, because I do not invest in conspiracies. I only say that they do exist, and they can exist anywhere, possibly even the metals markets.

    I’ve never put forth that metals were going here or there “because JPM is…”, however that also does not mean they are not involved in dirty acts with regards to metals.

  30. Gary

    Rav,
    No asset will trade indefinitely outside the upper Bollinger band because the band will accelerate to catch up eventually.

    But you can’t trade a penetration of the upper band like you do the lower because markets go up differently than they go down.

    Sometimes a penetration of the lower band signals an exhaustion on the downside. Most of the time a penetration on the up side just signals the beginning of a powerful rally.

    If one exits expecting a pullback because the upper band was penetrated they will often just get left behind.

    BTW the S&P is nearing the limit of the runaway corrective size. If the this is a runaway move then buying once the S&P dips about 30 points would be the strategy.

  31. Shalom Bernanke

    No thanks on the S&P, although I understand your idea. Instead, I really like what I’m seeing in the miners.

    Just biding my time for now, but looking to add to positions.

  32. Shalom Bernanke

    Pardon me, I thought you were chiding us for not exiting like you. I don’t think it’s mistake at all staying long metals, regardless of your p+l.

    Weakness will get bought, and sooner rather than later.

  33. Razvan

    Gary, i understand what you mean when you say the price can ride up along the bollinger but i am talking about the special condition when most of the candle is siting outside the upper bolinger or the entire candle is outside the bolinger.

  34. Gary

    Rav,
    Magnitude of penetration doesn’t matter. It still doesn’t change the fact that markets go up differently than they go down.

    If you try to incorporate this as a permanent strategy you will eventually get knocked off the bull and miss a big chunk of the final move.

  35. AJ

    Razvan, Selling when you reach top of Bollinger Band makes a lot of sense if you are in a trading range.

    But in a strong up move, you will most certainly be left behind.

    Since most of the time stock trading in range, you will probably have higher win ratio but lose big in stong uptrend.

  36. WalterW

    DG,

    I mostly agree with you that conspiracy-or-not is irrelevant to proper decision making. But not quite. I can probably put it best by using this quote from some professional trader I read a very long time ago (don’t recall where, unfortunately): “In all markets you sell the breakdowns and you buy the breakouts – except for gold and silver: there you BUY the breakdowns and you SELL the breakouts.”

    Now, one could say this would apply to every bull market. Maybe so, but in the great past bull market in stocks I personally never heard anything but “Buy The Dip” – and never the above +combination+ of buy and sell. (And although I’ve never been into bonds, I don’t recall hearing this “BTD” battle cry at all on the greatest past bull market of all, Treasuries. But perhaps that’s just me.)

    Anyway, at least to me that trader’s observation did really help.

  37. Gary

    Walter,
    The strategy of buying breakouts and selling breakdowns has been failing for many years now.

    Most breakouts fail and most breakdowns recover.

    Markets tend to move in a stair step fashion most of the time.

  38. vuvvy

    I sure hope manipulating the PM’s is a fact because with the rest of the world in chaos because of food/oil prices the manipulation will have to shift there and away from gold and silver:)

  39. DG

    Alex: You out there today? Would you add to GPL here? Looks a little like a high-volume blowout for now, no? How do you trade such things.

  40. AJ

    sentimentrader has some statistics that I read a while ago that outright buying of breakout and selling of breakdown strategy stopped working sometime in early last decade. Only thing I know reliably work is sell rips in downtrends and buy dips in uptrend.

  41. Shalom Bernanke

    pima,

    I typically don’t focus on specific levels, so much as direction. For example, a one-day shock lower and I’d buy into that weakness (where the miners are all down big % moves). Or, I’d be just as happy to buy more at these prices, so long as the overbought RSI or stochastics corrected. I do consider price levels, but it’s a secondary thought.

  42. Shalom Bernanke

    pima,

    One price level I pay attention to is the 50% fibonnacci retracement, although it’s also a secondary consideration. I like when I’m already looking to buy and we’re approaching the fib 50%, although that doesn’t look likely with the miners this time around.

  43. Tudor

    Ok, I need a little help with SLW options.

    TOS shows April strikes, with bid/ask and volume, but no OI. However, neither Yahoo Finance nor my broker (Firstrade for this account) are listing anything for April. So I’m assuming there are no April strikes and that TOS is stoned or something.

    Can anybody give me a clue what’s going on here?

  44. pimaCanyon

    thanks, SB.

    I added a little earlier today (more deep ITM calls), but still have dry powder. My position is large enough now, though, that I would get a bit uncomfortable if gold were to drop all the way back to the late January low of 1309, so I’m gonna sit tight till it looks like we have a daily cycle low in place.

  45. Poly

    OI on April SLW showing 0 on Schwab too.

    Bob, you also posted about double margin on SLW, but on Schwab I still see SLW at 30%, what are you seeing?

  46. Bob loves Hawaii

    Poly, when I closed my March calls and entered my April calls, I saw margin given and taken away at twice my sale and purchase price. E April 43’s cost me $2, but they took $4 of margin from me. Much higher than before for me.

  47. pimaCanyon

    we have GLD and GDX showing up on the SoS list today.

    However, the numbers are not large, and the block trades number is considerably lower than the total money flow number.

  48. Dan

    Tudor,
    I believe in TOS that you can select what info you want your option screen to show.
    Go to the layout box just above the b/a and select what you want there.

  49. Tudor

    I’ve got the OI and volume layout displayed. All the other months are fine, but the Aprils have no OI at any strike. Yahoo Finance shows nothing for April. This is weird.

  50. rkp

    Tudor,

    April options started trading today. So you probably won’t see OI until the end of the day. I see volume for most strikes for SLW on OptionsXpress.

    Ravi

  51. Poly

    Pima,

    I typically look for at least 500 traded daily and more importantly thin spreads of a few points. They go hand in hand of course.

    In the past I would trade SIL and GDXJ and get creamed on the spreads, especially if you wanted in or out with the prevailing trend.
    Now I still with the big ones, SPY, QQQQ, SLV, GLD. The volumes are massive, you know you’re getting near fair value and allow you to fairly safely enter in stop-limits too.

  52. Wes

    aaronpalang

    Do you actually read these articles ? The author, who is obviously not simple arithmetic capable, “discovers” that there is apparently more silver in the world than previously supposed, and goes immediately to the wrong conclusion that this must mean silver is underpriced.

    O.K., there is really more silver than thought, so it must be worth more?

    You actually read this tripe ?

  53. Poly

    Feels great being almost exclusively in SLV calls and AGQ today.

    I’m sure the miners will have their day, but it sure does feel like an expensive extra layer of complexity (risk) for the potential of just a couple of extra points over bullion.

  54. Poly

    You might be right David. After months of holding big put position, missed it by a few days.

    LOL. It’s the way the cookie crumbles I guess.

  55. basil

    I am holding AGQ and no miners but a small 2% position. Nevertheless I find the performance in the miners rather discouraging for silver.
    This looks like topping action in the miners today.

  56. ddn3f

    The agricultural commodities are down hard, copper is down hard, paladium is down hard, the stock market is down hard. So wherever you look, everything is down hard.

    The markets that are holding up well are crude oil, gold, silver.

    Also the dollar barely budged up.

    This must be a tell. Crude, gold, silver are in strong hands. Is this the rush of money from the stock market, ags, into crude, gold and silver? The safehaven play is not the dollar, at least not for today.

  57. mylifemytrade

    Sorry I had to delete my previous comment. Dont know how to edit it.. There were two significant typos.. hence delete and repost:

    Remember the big gap down day on Gold.. when gold gapped down about 30 points… Recall what the high of the day was that day – 1396-ish.

    What was the regular hour lows today.. 1396-ish. Think WHY?

    I could not have asked for a better closing level for Gold than where it closed today.

    And for all those who are worried about me and are tracking where puts in certain names are trading… I am doing fine πŸ™‚

  58. Ohio Rob

    Basil, I thought miners were more likely to follow the overall market. I don’t think todays action was unusual.

    MLMT, I am thinking WHY? Enlighten us.

  59. Poly

    Basil,

    You’re sweating the small stuff. We had the biggest one day sell of in like 6 months! Gold was down $8 and Silver down over 2%.

    Most of the miners closed flat. A little perspective.

  60. catbird

    I snagged some AGQ at the open because silver was well below 33.50…I could have timed that better had I waited a few hours, but boo hoo, I have a profit cushion.

    Also got a little bit of SLW at the close since I didn’t own any coming into today and it was mildly down.

    Funny, it *feels* like the metals have undergone this massive pullback because of the pre-dawn raid today.

  61. basil

    MLMT,

    are you trying to make friends or what’s the purpose of putting up these posts here? I’m not surprised by you shorting the PMs, but I am surprised that you have the urge to post here. What’s the purpose? You get a kick out of being unpopular?
    If you were an unemotional trader, which you should be as a short seller, why would you care to write these posts?

  62. pimaCanyon

    Glen Neely (who expanded EW and calls it “Neowave”) writes:

    “Mr. Neely explains that today’s collapse confirms the end of an old pattern and the start of a new one. This new pattern suggests a 1- to 2-year bear market has begun and will likely result in a 30+% drop in market valuation.

    While economic conditions have improved greatly since 2009’s low, NEoWave warns a new downturn (lasting 1- to 2-years) is beginning. As is always the case, markets anticipate future economic reality. While news has been improving, wave structure warns the U.S. stock market has turned a corner, setting the stage for an “echo” of the 2008/2009 financial crisis – but this time with a new twist. Instead of financial institutions and real estate markets being devastated, Mr. Neely suspects the most likely justification for this future market decline will be severe financial problems for federal, state and local governments. The result could be local and national transportation disruptions, public service problems and government employee layoffs around the country. Other circumstances that might justify a 30+% decline in the stock market could be a substantial increase in the cost of energy or a drastic increase in the value of the U.S. dollar (i.e. deflation). “

  63. David Kafrick

    IMO, Elliott Wave is just voodoo stuff.

    There is absolutely no rational explanation for it. It is an unfalsifiable theory, therefore it can´t make any predictions.

    Why would 5 waves up and 3 waves down mean something? Markets are just people trading their perceptions. It all feel like black magic.

    Also, this thing was developed by an accountant who never made much money in the markets, and now is promoted by a guy who is a psychologist but somehow thinks he is an expert at economics.

  64. pimaCanyon

    DG,

    What’s your take on the action today in PM’s and the miners? Any warning bells going off?

    The thing that makes me a little nervous is the possibility of the miners getting sucked down by the strong downdraft of a falling stock market (assuming stocks have indeed topped). Do you have a Plan B should that occur?

  65. pimaCanyon

    Should have included the following the in the quote from Neely:

    “Recently, Mr. Neely warned subscribers to the NEoWave Trading and Forecasting services that a “major event” was on the horizon. In preparation, Mr. Neely instructed trading customers to go short, right at last Friday’s high and close, which is currently top-tick of the month!”

  66. Jayhawk

    Miners looked like dog crap there at the end of day. Ah well, being up 18% gives us lots of cushion. IRA up 45% because I gambled extra big there.

  67. AJ

    Last time SLV had couple of nice big days, it pulled back sharply. (Nov, early Dec last year for example). It is completely reasonable to expect pullback in silver and consequently miners in short term.

  68. Shalom Bernanke

    Volume doesn’t mean a whole lot to me b/c I don’t see any predictive value in it. It’s quite possible miners head lower for a few days, but that is something we all knew was coming sooner or later, if it happens at all. The plan was to buy more if given the opportunity and that is what I’ll do.

  69. pimaCanyon

    David K,

    May seem like black magic to you, but the waves are there if you’re willing to look.

    However, I will agree with you that Prechter and very likely Neely make a lot of money selling their newsletters. I don’t know whether Neely trades or not, but Prechter has said that he himself doesn’t trade because “he’s too busy running his business”. Indeed! (Well, if his calls were any good why wouldn’t he trade them??)

    It’s very difficult to make money using EW alone, I will agree with you there. Mainly because there are nearly several “alternate counts” and you don’t know till after the fact which one will play out. EW is great for mapping the past! But it comes up a bit short for mapping the future.

    However, EW combined with other TA tools including cycles and sentiment might be useful. But I would put it way down on the bottom of the list of those tools.

  70. pimaCanyon

    As to why market prices unfold in waves, who the hell knows? Why do prices go up and down in cyclical patterns? Who the hell knows?

    It’s part of the mystery of the markets.

    “The eye goes blind that only wants to know why.”

  71. basil

    Nike,

    I think some of the miners look like an exhaustion move.
    Look at GPL to name one, opening on the high and closing on the low. If you look at a 1 year chart and see it in context, it looks like a top to me.

  72. basil

    Pima,

    I’ve never seen any Elliot Waves that made sense.
    These numbers are random and predict nothing. THey are put ways that already show the bias of the waver, and some times they get lucky, at about the same rate as anybody else. It’s complete bogus, and you can see it in their charts.

  73. pimaCanyon

    basil,

    just because you don’t understand something or have a low opinion of it, doesn’t make it “bogus”.

    EW may not make sense to you, but it does to a lot of folks. Some traders actually use EW to make money! Imagine that. But I believe those guys are few and far between.

    I will agree with you that some EWers have a market bias and it comes thru in the way they label the waves. That to me is a misuse of EW, and a way to bankrupt a one’s account.

    I should also point out that what passes for EW is often something else. There are rules that must be followed when labeling waves, and guidelines that usually help as well. Some traders on the blogsphere break the rules and don’t follow the guidelines and still call it EW. You can’t judge EW on the basis of those who don’t know it well enough to follow its rules. And you can’t judge it on the basis of someone using it to “confirm” their market bias either.

  74. pimaCanyon

    basil,

    you mentioned today looking like an exhaustion move.

    Are you still long PM’s? Do you have a plan B if it turns out that you are right and today was an exhaustion move?

    thanks!

  75. Poly

    Exhaustion? What are we smoking here?

    Sil – A basket of MANY silver miners was down $0.04! That’s 0.16%. It’s up 10% in 8 days.

    This is going to be a long rally if today concerns you.

  76. DG

    Pima, Yeah the action was not great. But then it was worse last November and, after a brief drop, silver made a new high. And it was worse in December and, after a few days, silver made a new high. This kind of tape action, I believe, needs to be taken into account with where we are. A rest, sure, why not after what we have done? I do not believe that such a chart pattern will do much good unless we are in fact ready to tank, and I don’t see any reason to believe we are. It’s just as likely we open lower tomorrow and reverse right back up. We’ll see.

  77. Razvan

    Elliot wave is not bogus, at least in the currency market. You just have to know what you are doing. I know a money manager at a multimillion dollar fund that uses only EW to time his entries and exits.

  78. basil

    That’s what one would call an exhaustion move. A powerful move up for days and weeks and then a pop and drop. SIL opened up close to the high of the day and closed at the low of the day at 25.51.
    That is the definition of an exhaustion move.
    So as far as the miners, I would not want to touch them after a day like today. If the metals themselves continue to rally in the face of possibly declining markets, I would consider ourselves very, very lucky, and for now I am staying the course; but for stocks in general (and for me that includes PM stocks) today looks like it could be a nasty turning point, unless… it isn’t πŸ™‚

  79. bamster

    MLMT,

    Yeah I know why. because gold closed at the middle of todays range , I can see it. If you stand back and look at the chart, its staring right at you. Now if silver can do the same, then it’ll happen.

  80. basil

    Razavan,

    I used to frequently follow popular Elliot Wavers, and I still follow up on various Elliot Wave market calls. They have all been wrong, again, and again, and again. So I don’t believe that anyone can really make money off of applying Elliot Wave Principles to their trades. The guy you know must have other technicals he relies on, and then he probably throws in some wave numbers the way they fit, and will you look at that, they fit!

  81. Poly

    Basil,

    I guess it’s easy to see it from any angle, so it’s not a critic of anybody view, mine is just another version. But for me, I will stick with my 25% gains and continue riding this, worse case is a break even.

    But with such a head start, I’m not taking the foot of this one and no way will I get bucked off unless I stop out, which would require a significant decline than this. Until then, it’s all wiggles and noise.

    The last Int cycle rally in Aug almost doubled SIL (and the others) and if I (we) sold out on such reversals (there were plenty), it would have cost us a fortune.

  82. DG

    MLMT: Nice call so far. I was not impressed with people here when we were up this morning and people were posting “How ya doin’ now?” No call to taunt a trader who is in the hole. Anyway, so far you look o.k. Are you still expecting a major tank? The reversal last fall and winter looked worse and were themselves reversed in short order. I take it you still think we’re going to drop below 1300 from here?

  83. basil

    Poly,

    would you show me a similar day during the July to November rally, because I too participated and I cannot remember any day like this where stocks of all sectors and most commodities declined unisono.
    I’d like to be wrong, and therefore my question is very genuine, if you have any data or chart to look at, that would be great. As I said I don’t recall anything like that happen. The good thing, as far as I remember, about the fall rally was that one week Agriculture would correct and two weeks later PMs would correct, and then a week later a few stock sectors would correct; but not like what I’ve seen today.

  84. basil

    Poly,

    would you show me a similar day during the July to November rally, because I too participated and I cannot remember any day like this where stocks of all sectors and most commodities declined unisono.
    I’d like to be wrong, and therefore my question is very genuine, if you have any data or chart to look at, that would be great. As I said I don’t recall anything like that happen. The good thing, as far as I remember, about the fall rally was that one week Agriculture would correct and two weeks later PMs would correct, and then a week later a few stock sectors would correct; but not like what I’ve seen today.

  85. basil

    Poly,
    I am not talking percentage outcome from close to close, but I talk about intraday declines, and I am talking about decline unisono with no stones left unturned (with metals and oil as the exception)

  86. pimaCanyon

    basil,

    You wrote:

    “I used to frequently follow popular Elliot Wavers, and I still follow up on various Elliot Wave market calls. They have all been wrong, again, and again, and again.”

    You yourself said that some EWers approach the wave count with a market bias. The fact that the uber bears have been wrong again and again is not a reflection of EW. It’s a reflection of someone being stubborn and clinging to their uber bearish view and then using EW to “justify” that view.

    Did these “popular EW’s” that you followed ever post any bullish counts?

    I believe the very large EW counts that I have seen all over the web since the 2008 have been wrong, and only a very few EWers have come to that conclusion even now.

    In any case, EW for me is pretty much academic at this point, something to do when I’m looking at charts and maybe a little bored. I don’t use it much for trading (only very occasionally as confirmation).

  87. pvm999

    Today is day 16 of the daily cycle. It is still à bit early to begin working into à daily cycle low. This is still à right translated cycle and any sell off should hold above the prior bottom.

  88. Jayhawk

    “outside reversal day in miners. I got rid of some slow movers and put more money in agq and pslv. not a bad day considering the action.”

    This was my thinking today. I was thinking about cutting a few and moving it into AGQ. Even SLW I was tempted to scale back a tad. I don’t have a huge expose to the POS, just around 30% AGQ.

  89. basil

    pimaCanyon,

    I remember that you are quite knowledgable about EW, but I guess that we both came to the same conclusion, which is that it’s not worthwhile bothering too much about EW.

  90. David Kafrick

    The move in gold and silver isn´t the problem, at least in my view. What has me worried a little bit, is that the kind of action that we are seeing in the grains, the soft commodities, oil and currencies look very similar to what I saw in mid 2008.

    But I still think the most important driver of this market is the Dollar. I am watching the EURUSD very closely, so far the uptrend in the Euro is still intact. But if it closes below 1.35 I will definitely get out of all my PM positions, because in my opinion a close below 1.35 at this point is very bearish for the Euro (bullish for the dollar).

  91. Poly

    Basil,

    You don’t get exhaustion from a 10 day move. The RSI, bullish %, and sentiment are all far from exhaustion. It’s simply a profit taking event as we’ve stretch way too far too quickly, IMO.

  92. jeff

    david?

    your saying that if the euro tanks, the dollar is going to rise and then what.. the riseing dollar is going to destroy the c wave?

  93. pimaCanyon

    David K,

    Are there not times in the past where gold and the dollar have risen concurrently?

    But in your opinion that would be a low probability event, and that’s the reason you would dump your PM positions (if the Euro closed below 1.35), right?

  94. David Kafrick

    I know a trader that has made a lot of money supposedly by using EW. 10 years ago his trading account was about a million dollars, today he is worth more than a billion. I know this for a fact because he is very close to one of my best friends, who has told me over the years some of his calls in real time and they have been outstanding calls. The guy is simply amazing.

    I started looking at EW a couple of years ago because of him. But after looking at EW, I can say that the reason he makes so much money isn´t because of EW, but because he has an incredible intuition about the markets (a mixture of talent and experience) and he uses EW according to his bias about the markets, which come from his uncanny intuition.

    IMO, EW is just like the bible, just like we don´t get our morals from the bible, we simply pick and chose whatever we read from the bible and fits in with whatever moral intuitions we already have, with EW is just the same. Since it is something so subjective, if someone has a good intuition about the markets, he will end up with a good wave count that fits his intuition about where the market is going.

  95. jeff

    gary

    maybe a good question for you. why does gold and dollar move up and down at the same time. is it only when its safe haven events, or other times also?

  96. pimaCanyon

    basil,

    you wrote:

    “I guess that we both came to the same conclusion, which is that it’s not worthwhile bothering too much about EW”

    yep, we are on the same page there.

    (except to my detriment I have found it hard to give it up completely. but almost without exception whenever I do that–try to count waves and trade them–I end up short changing myself on this PM bull. I hope I have learned that lesson–so far on the move up from the late Jan low I have not succumbed to that temptation, so there’s hope πŸ™‚

  97. David Kafrick

    pimaCanyon,

    PMs and the Dollar could definitely rise together. But I would be very unconfortable holding PMs if I thought the dollar would be rising for the next few months.

    But that´s just me, it has nothing to do with cycles, just my reading of the Euro right now.

  98. blammo

    Agree with DG re: MLMT. That is his real money at stake and I don’t think he should be flamed for having a contradictory opinion. With his method he is able to spot ‘possible’ inflection points and that is valuable to us all.

    Beanie on the other hand…

  99. vuvvy

    DG, gold up at pit, and USERX down today. Let’s see what happens tomorrow but remember this usually works better when it’s the inverse; also we had USERX closed yesterday and Globex open and I don’t know how to backtest for similar situations as I’m sure they’re few and far between.

  100. Razvan

    Basil he was employed by a broker i was using and he was posting his trades before executing them so it wasnt just word of mouth. Again it was in the currency markets so i dont know if it applies to other markets.

  101. Poly

    Isnt the fault with MLMT that he just throws out arbitrary numbers without any backing, theory or justification?

    I would never flame anybody for a bad call, but don’t just throw out numbers and comments that appear to be motivated to “go against the crowd”.

  102. catbird

    I have to say, I am surprised by the level of anxiety the last 24 hours has sparked in some people. If silver dares to pull back for a day, or–horrors–two days, some of you are going to be flipping out.

    What has changed in the world?

  103. rapper

    mlmt of course can say what he wants and we are taking the other side of his trade BUT it’s the watch out
    and never again stuff the seem to bother folks. I think it’s good for the board. If you are that easily rattled then you better re-evaluate your position.

  104. DG

    Vuvvy: Funny I just looked at that two minutes ago and wondered if you would post about it. Seems to me it is a confirm/non-confirm situation. I bet it would work with GDX as well. That is, if GDX is up and GLD down that’s bullish, and if GLD up and GDX down it’s bearish.

  105. Jayhawk

    I’m really not anxious, just thinking about tweaking things. I put my inlaws into SLW, SIL and GDXJ a few weeks back and GDXJ has sucked.

    The price jump in silver coupled with the overnight trashing and then the miners (esp SLW) reversing off 4-5% up positions to finish negative is a bit concerning. I’m wondering if dumping some decent gains in AG, AXU and EXK into AGQ might be worth considering.

    Cat-you follow Turd’s blog. I think some of our expectations (Dan Norcini’s posts) seemed to be for an utter explosion to the upside this week. Seeing SLW roll over like a little girl doesn’t fit those expectations. We will see what Wednesday brings/

  106. basil

    I agree with David.
    MLMT is not doing himself or others a favor writing doom-ish posts like “its coming…it’s coming!” (1388 that is) or “Monday is a big gap down day”. That’s just trying to spook people and make them feel uncomfortable and enjoying that part.
    As for his trade itself, he might turn out to be right…
    or not. And I wish him that he’ll make money as much as I wish all of us to make money.

  107. David Kafrick

    DG,

    You are right that there is an important low at 1.3430 or so. But in my opinion, if the Euro is going higher today should be the start of this uptrend. Today looks like a classic shakeout, the Euro dropped really hard to 1.3525 and then quickly retraced all its losses for the day. So in my mind, if we are going higher, this is it, trading below today´s low would be very bearish in my opinion. Today´s low was 1.3525, but I give the trade a little bit of room, so that´s why I said 1.35.

  108. jeff

    david k

    just curious
    so if you dumped all the pm postions, then what. how would you jump back in? i was fighting temptation to sell on contract today and just buy it back at 10 dollars cheaper.. but that is chump change. well i would be glad for a thousand, but i often blow those moves.

  109. funmike

    What’s the better stop? HUI at 518? or GDX at 55.22? Is the HUI a little slower than GDX? If so then GDX could get you out faster. On the other hand if we barely hit the stop HUI may be better and will keep you in. For HUI to stop we drop 5.66% for GDX its 5.5%. Collectively we have enough stops set at these that it could provide temptation for someone who wanted to pull them out.

  110. DG

    Fair enough on MLMT, that he writes like he’s just trying to tweak people. How about it MLMT? How about becoming a decent citizen of this blog instead of a pain/troll? Just post your opinions and have reasoned exchanges with people. No need to pretend you are Jason or Freddie here.

  111. mylifemytrade

    Ok. I will try to watch out for how I comment here.. Thanks for the feedback. All taken in good spirit.

    WRT to PMs, I still think the first move will be down to sub-1300 (minimum) before up (if any). Biggest sign is a very strong negative divergence with miners (inspite of the equity indices painting a higher high compared to when gold was last at these levels).

    Yes, in between Gold may get spikes to the upside due to news events.. there are gravy for those long and are used to shake out those short.

    Going back to 1396 that I have mentioned so many times. The day we gapped down big on gold, 1396 was the high in NYSE hours. Today by gapping over that level and HOLDING above that level, almost anyone who managed to short gold was killed. AND they got a lot of people buying the dip as well… If gold stays here for another day or two above 1396 without really breaching today’s NYSE hour highs, it will get really bearish and there will be a potential for island top (which in fact exists tomorrow as well in case gold gaps down).

    As for silver, I think silver is in no man’s land.. so any kind of TL or technical analysis etc will be useless. One can use levels in gold to enter/exit positions in silver at this point.

    IMO the equity markets are on the verge of a nice sized correction… which will likely bring PMs down…

    Because of the action in dollar, I am taking the sub-1260 scenario off the table for gold for now. One will have to see the action that materializes below 1310 and then re-evaluate.

    A definite possibility is that the down move in equities will really scare Ben to put printing presses into over-drive and we *might*, just might see the scenario that Gary has been talking about… However, IMO that is a lower probability scenario. Now, if you ask me how I assign lower probability.. well I have no answer… it is based on gauging the sentiment right now – that is why I say that we will have to re-evaluate when gold is sub-1310…

    For now, I believe that a very high probability scenario is that gold will go down along with equities and gold will see sub-1310 soon (= next 2 weeks).

  112. basil

    MLMT,

    why aren’t you shorting stocks instead of gold?

    Also, don’t you think it’s misleading to talk about gaps and island reversal in gold? Gold, unlike stocks, are traded around the clock and around the world. So there is no gap as whatever gold price we start with in the morning got there in overnight trades elsewhere.

  113. vuvvy

    DG, I’ve tried it in many other combos but it never seems to work. Only pit and USERX.It’s bewildering sometimes to see small one penny moves in Userx and sub one dollar gold moves that set this system off.Anyway, it’s working so far and hopefully we are seeing gold forming a bull flag here over the next several days.

  114. mylifemytrade

    @basil

    equity futures are also traded around the clock…

    technically speaking, you are right that I should use GLD instead of GC when talking of island reversal.. But I can tell you that the vast majority of volume happens during NYSE hours… and thats why if you limit your chart to just NYSE hours, then talking of island reversal makes sense..

  115. DG

    Jeff: I think what MLMMT says is reasonable. The question is whether Gary’s view of the dollar collapse and the IT bottom being in takes precedence. There is lots of analysis of MLMT’s that is right sometimes and not other times. If we are going to spike up his view will look right for a day or three. Gaps and such will not stop a raging bull anymore than a trendline will. Lots of people look at these things so it works for a few days (like Gary’s crawling pattern) and then blows through. So, to my view, he is basically saying the strong bull case is wrong and the gaps, lines, etc. will rule. We’ll see.

  116. Poly

    At least you have providing your rationale, thanks. If you’re going puts on Silver on just that, I would recommend you get out quick if it doesn’t work!

    On a side note, big day for equities tomorrow, a real show me the money day.

  117. Ryan

    Well, after seeing the action yesterday I thought I would wake up to heavenly bliss but I guess things weren’t that bad considering how the rest of the market fared. SLW was definitely disappointing though. After reading the weekend post a couple of times, I did take the opportunity to finally add a large chunk to HZU. I know I should of put more in when Gary gave the signal but I just waited and waited and waited. I still have dry powder left so I can put more money to work if things go sour. I just have to remind myself to BUY THE DIP and keep focused on the bigger picture.

  118. Poly

    DG, there are no gaps in gold. What else do you like about the post? To say that any non NYMEX move in gold is a gap is rather silly, IMO.

  119. jeff

    dg

    holding above 1396 for a few days, or anylevel for a few days is bullish, not bearish. that is called support

    and after a climb it is called consolidating

    and i dont think he was describing a bull or bear flag

    final disclamer is that i am just a flea trying to ride the dog

  120. jeff

    not a expert. but i have been beat up for 2 years trading gold. got my first beating with monex. i cant talk about it to much. ill puke =)

  121. jeff

    david k
    this is g-force’s call on the euro. bullish at this point

    Eurodollar (ED): The Eurodollar continues to project a move up to 99.90. Look to buy dips in this market back near 99.62. Only a close below 99.60 will void the near-term bullish forces.

  122. mylifemytrade

    What I expect in equities tomorrow is gap up and then close near the highs of the day. And I expect metals to sell off.

    Some rumor/news out of Libya will be considered as positive and will be used as an excuse.

  123. james r

    Funny… but the gap we had today was caused by yesterday’s holiday in equities.

    So if we didn’t have a holiday yesterday chance are we would not have gapped.

    Therefore I’m thinking we should go higher tomorrow.

  124. mylifemytrade

    @Poly

    Then by same reasoning, there are no gaps in the world of equity indices either – right?

    S&P futures trade around the clock just like gold futures.. But we still say that S&P gapped down / gapped up (I do understand the difference between the ETFs/Index/Futures)…

    Essentially the actual hours don’t matter.. In reality, what matters is the hours during which most/majority of volume trades. If on a certain day/date, a ton of volume trades overnight.. then the price action and the price range in which that action took place becomes important.

  125. james r

    Anyone else thinking…

    I do not want to lose my profits, yet I do not want to lose my position if gold/silver runs higher.

    Just can’t have it nice and easy

  126. james r

    If in fact this is the C-wave run to 1600, then by all means we must go higher.

    I just can’t see correcting to 1370 how we will manage to grab back our momemtum. There will be too many sellers by that time and sentiment would have changed.

  127. mylifemytrade

    @james r,

    you are getting too emotional.. sorry for unsolicited feedback..

    unless you have futures position that you want to manage/baby-sit tonight, the best thing is to shut the computer off. Otherwise, it just means that you have a position too big for your comfort.

  128. Gary

    I wouldn’t worry to much about bouncing back from a correction. Gold’s been bouncing back from daily cycle lows for more than a decade now πŸ™‚ Not that I’m saying it’s due to correct.

    I actually think it will explode higher soon because the dollar still isn’t in the timing band for it’s daily cycle low. It still has 6 to 14 days before we can expect a bottom.

    How many people think gold will drop or the stock market for that matter, if the dollar takes out the November lows?

  129. Gary

    Folks gaps aren’t turning points in markets. Gaps are just the bread and butter trades of hedge funds.

    They either buy or short to fill a gap on a chart. Once the fill occurs they typically take their profits and run.

    The fundamentals then take over and the asset gets back to doing what it was doing before the gap formed.

  130. basil

    Gary,

    don’t you think the action in PM stocks was a bit discouraging today? Opening on their highs and closing on their lows, for the most part, and having 5% drops on average in between? Wouldn’t you agree that it’s one reason more to invest in AGQ rather than the stocks?
    The entire stock market sold off together and took the PMs stocks down with it. How is that a sign that PM stocks will do well if the stock market tanks?

  131. basil

    Found that on financialsense today:

    “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves.” – Peter Lynch, manager of Fidelity Funds Magellan Funds.

  132. Gary

    basil,
    You are reading way too much into one day’s action πŸ™‚

    The miners are still making higher highs and higher lows.

    Silver is still leading the complex and has broken out strongly to new highs.

    Gold has followed silvers lead.

    The COT still had a 100 Blees rating a couple of weeks ago.

    Gold is now making higher highs and higher lows.

    Gold has been down all of 4 days in the last 16.

    The current daily cycle is now extremely right translated.

    The daily and intermediate dollar cycle is currently extremely left translated.

    What about any of that is negative for metals?

  133. bamster

    for options traders,

    Anyone notice the april options started trading today, but my trading system only has the option chain reaching 168, while march and june have the last stike price of 230. Anyone find that odd?

    By the way Gary, I followed thru today and sold my options,(except for some way out of the money that I’m using as a lotto play)and bought AGQ stock.

  134. pimaCanyon

    Poly,

    You are technically right that there are no gaps in gold because it’s traded around the clock.

    However, because the vast majority of the volume occurs during NYMEX trading hours (RTH), you can essentially treat the market as if it is traded only during those hours and then look at gaps based on that. (Anyone know the exact amount of volume that is traded during RTH versus volume traded AH?)

    But an argument against that (against using only RTH in your charting) is that traders who use stops can have those stop hit any time of the day or night. This is unlike stock traders whose stops will be hit only during RTH. So it’s really not apples to apples (comparing the stock market and using gaps there to the gold market and using gaps on NYMEX RTH).

    MLMT, what about that, that stops in the gold market will get hit AH whereas gaps in stocks will not. It’s really not the same, is it?

  135. Tudor

    BLH, good to see somebody else digging on GORO. It has to be one of the most under-the-radar emerging juniors out there. I’m amazed that RBY trades nearly two million shares daily, while GORO moves only 250K.

    Hell, they even pay a dividend. How many juniors can you say that about? Truly a monster in the making.

    It’s my largest holding, with an average cost of $9.50. My initial buy was at $3 in ’07, although I’ll confess it was pure luck.

  136. Poly

    No offense Pima, but you argue that only nymex price matters because of it’s volume, but have to ask if anybody knows the volume on Nymex compared to the other exchanges. ?

  137. Poly

    Last post.

    Gary, don’t you think the dollar action was very bearish today, in light of the geopolitical turmoil and equity market sell off? That intranet day reversal was something also.

    We might even get an after hours “gap down” πŸ™‚

  138. pimaCanyon

    The last paragraph in my last post should read:

    “MLMT, what about that, that stops in the gold market will get hit AH whereas STOPS in stocks will not. It’s really not the same, is it?”

  139. Gary

    Like I said the dollar should still have 6-14 days before the next short term bottom.

    Nothing about the dollar chart for the last 9 months is bullish. It looks like its heading down into the three year cycle low and QE2 is just exacerbating the decline.

  140. pimaCanyon

    Poly,

    So you want to nitpick. Okay.

    I am taking MLMT’s word for it that most of the volume occurs during NYMEX RTH. I was being lazy asking if someone knew the exact numbers.

    The fact that I don’t know those exact numbers–what does that have to do with the argument?

    (And what does “no offense” mean?? Wasn’t your comment intended to be some kind of dig? If so, the “no offense” is a bit disingenuous.)

  141. basil

    As we all hear many times over, it’s the Chinese and Indians who are all nuts about buying gold and silver. You think they’d care to trade it on the NYMEX instead of say Hong Kong?

    Would indeed be a good exercise to compare the trading volume on the various exchanges.
    Will try to find that myself, but I’d be surprise if Nymex would dwarf the volume of all other exchanges, because why would it?

  142. jeff

    poly

    my broker considers the comex the main market. everything else is after hours. 8:20 to 1:30 is comex, but the whole rest of the market is just as important

  143. pimaCanyon

    basil,

    you have a good point, we ought to look into those numbers and not just take MLMT’s word for it. Because if he’s wrong about those numbers (the volume at NYMEX versus the volume traded elsewhere), then his gap logic doesn’t make much sense.

  144. pimaCanyon

    okay, poly. thanks. you are right, we need to look into those volume numbers. Seems that that is the key to whether MLMT’s gap logic would make any sense at all.

  145. pimaCanyon

    And my other point was that even if the volume is as lopsided as MLMT says it is, there is AH trading and futures traders can and do trade during those hours and stops get hit during those hours, so it ain’t the same as trading stocks.

  146. ALEX

    I read of some concerns that miners put in either major exhaustion tops or reversal tops and would now go down to the bottoms. They COULD pull back…but how much?

    Someone pointed out GPL as an example of Major reversal.

    I am linking a chart of GPL to show that its no big deal at this point. Maybe your miner has the same supposed reversal, this may help.

    http://www.screencast.com/t/Vcg7sYEdM2

    .

  147. Jayhawk

    Alex-

    Nice to see the new picture of you and your wife on vacation.

    Take a look at the extremely large volume bar on SLW. Does that tell you anything? I’m just curious.

    Are you in AGQ in addition to your miners? I’m still holding AG, AXU, EXK, SVM & a boatload of SLW. I have a 30% or so position in AGQ, but was thinking about moving some of the miners into AGQ. Just curious what your strategy is this c wave.

  148. DG

    Alex; I don’t know that anyone would call what GPL did a Major reversal. It was probably a trading reversal, however. In each case on your linked chart it took at least a week to get back to the midpoint of where it was that day, and those volume reversal were dwarfed by today’s volume. The 11/8 reversal took a month to make a new high; the December 6 reversal took two months to make a new high; the Feb 7 reversal just made a new high yesterday…and reversed today. And, again, the volume today was multiples of the previous ones, so this time it will take…? IMO it’s just an indication not to expect much for a little while now. Of course if silver explodes it’ll probably get dragged up with it.

  149. ALEX

    Hey Silver Surfer

    Thank you..that is who it was, and I recommend Aruba very much for a relaxing vaca with very kind people,if you like tropical areas.

    I have a mix of miners and I own alot of what you have ( AG , AXU, EXK, SLW, AGQ, GPL)

    Sometimes it looks like some are lagging, but on days when my good ones are down, the laggers often move up-so its difficult to know if you should dump it or wait. GPL ended up almost 4% today, while EXK was down…but thats not everyday.
    Often they ran like pistons in a car, some went up while others that went first came down and so on.

    SLW , I’ll be right back and tell you what I think.

  150. ALEX

    hey DG

    I agree , but my basic point was that after those reversals..they sold down the next day ‘intraday’..just look at feb 9 and 11. IF one paniced and sold at /near the low the next day…huge mistake.

    the one I pointed out as a miss on a double. The low the next day would have been a double the next month. If someone see’s it going down tomorrow and sells…maybe hard to get back in. watching the 10sma here.

    On all of those, the 10sma held support , and tomorrow its right below it to. one day down to the 10sma and bounce up just isnt a worrisome reversal of any concern. ( and it wasnt you who said it anyways πŸ™‚ it was someone else in the first posts pointing it out at day end.

  151. ALEX

    Jayhawks…SLW

    Usually I call that a bearish engulfing , and I worry when I’m ‘trading’, I sell on a bounce tomorrow…but for quite a few reasons (and Gary mentioned them a lot, Blees, Dollar , etc)I’m trying not to trade this move, UNLESS I see cracks in the structure.

    SLW-
    Jayhawks, the only thing I can say for comfort is look at Nov.9 on SLW…

    The next day was up , then went down to fill a gap at 20sma, then came back in a couple wks. ( boy, thats cold comfort!! haha)
    Now , we have a gap down at 20sma too..and draw your downtrendline from Dec 7 and JAn 3 to- (it hits the 20sma also).

    It may go there and come back. IT may not,if Slver takes off , ya know?tough call. And tomorrow when Gary reads this he’s going to say ,

    “we have the plan, dont lose your position for the wiggles πŸ™‚

    http://www.screencast.com/t/trj4dDvZ

    .

  152. TZ(5288)

    Holding long, no change for weeks now. (Although my leverage has naturally gone down due to gains – normal math result.)

    The action today was interesting, but insufficient to cause me to buy.

    If silver moves to 30-31.50 I will add, but otherwise remain on the sidelines.

    The almost $2 swing in silver is indicative of growing volatility now that we have moved off the lows and are ‘in midair’. I don’t want to add in the midst of this or on a single day down move. I want a more clear ‘deal’ to buy.

  153. TZ(5288)

    You guys arguing about low volume or nymex trades off hours need to understand that those quotes are LEGIT. Any hardcore hedgefund, algorithm, or technical trader knows that. Believe otherwise at your own risk and result.

  154. Poly

    Dollar dropping, equities futures snapping back, could be a big up day, which of course should be expected after yesterday, despite the gloom.

  155. pvm999

    77.41 for a low on the dollar overnight and the last bid is 77.44 as I write.

    This will give the dollar a failed daily cycle.

    Fasten your seat belts …

  156. David Kafrick

    Of course after hours and holidays count, in the sense that those transactions did take place. But much more often than not, moves in after hours and holidays tend to get faded. The high probability outcome was that the move on Monday was going to be faded when volume picked up.

    But as Gary said, these are just short term moves that don´t really change the big picture.

  157. Dan

    Gary,
    You said the dollar may take out the 77.50 pivot today. But since it had already taken that out in AH does that mean you only count regular trading hours?

  158. Gary

    Dan,
    It’s below that right now. That counts in my book. The fact that it’s still early in the dollar cycle is a very strong warning that not only will 77.50 be taken out but the Feb. and Nov. low also.

    I would never short a bull market anyway but with the dollar acting so weak one would have to have a death wish to short any commodity.

  159. pimaCanyon

    Poly,

    My apologies for my comment re your “no offense” comment last night. I usually take people at their word, so I don’t know why in this case I did not, but I should not have said what I said. And thank you for responding the way you did.

  160. Dan

    Gary,
    For what its worth you have converted me on the “never short a bull market” theory in PM’s.
    In an effort to rapidly build an account I day traded/scapled gold futures. I made really good money, increased the account by six figure profits, until one day recently I got in pretty heavy, walked away from the computer and got caught in a conversation in the hall with an employee and came back to see GC had spiked and I gave back about 40% in minutes.
    My ah-hah moment. You were right and its only dumb luck that I still have any profits.
    Thanks for repeating sound advice enough times that even I finally got it! πŸ™‚

  161. Razvan

    just so you guys know i have traded the currency markets for many years and the biggest action takes place during the european session that starts between 1-3am ET. these european guys are big on currency trading…

    we tended to ignore big moves that happened on a monday because many traders are not at their desk that day and the market could be pushed by select few players with large accounts.

  162. Jav

    @ Shalom

    I read that article and, although I like what he’s saying, I don’t think he makes a strong case. Are there any other examples in history which support that 2 bull markets have similar percentage moves?

  163. Shalom Bernanke

    Comparing 2 markets to one another can only give us a general idea of what one could expect. To me, it doesn’t matter much if holdings rise say 300% instead of 400%, as long as I have as much size as I can comfortably hold for a large move, without getting shaken off the bull (or losing sleep).

  164. Poly

    Pima,

    Hey no problem and you certainly didn’t need to reply, but thanks. We’re all here to contribute, pass time, learn and profit.

  165. Razvan

    there is no saving MLMT he has decided to jump in front of the moving train and now he is sitting on the railroad tracks.

    choo choo!!

  166. AJ

    I agree gasoline is not following WTI crude at all. I found it funny that Goldman came up with a report that we will lost 1.5m barrel of crude from Libya yet lowered the oil target .LOL

  167. Sandy

    Gary,

    Amazing set of calls especially on big picture. I was finding it very difficult to believe your scenario on dollar/oil/ag/PMs last year. Seems like everything is coming together.

    Now if only we see 50 $ silver and 1650 $ gold; it will be an amzing ride:)

    Thanks for your great work.

  168. Jayhawk

    GDXJ getting schooled by big brother GDX today! I’d hate to be short GDX. I wonder if the big funds are pumping money into the majors. This year we could see the majors shine a bit.

  169. Jayhawk

    Alex-

    Thanks for the charts and feedback. The old Jayhawk might have sold yesterday. The new turkey style Jayhawk is riding the wave this year.

  170. Poly

    LIGHTS OUT!

    As predicted, yesterday’s 3% pullback served as a wonderful buying oppurtunity, just as it did in Aus, Sep and Oct.

  171. vuvvy

    MLMT, I feel bad for your positions, sure hope you can somehow get out relatively unscathed. Good luck, and I am not being sarcastic just from the heart.Volume profile yesterday looked positive to me as the lows were on low volume and the snapback to 1400’s was where most of the volume ended up being.

  172. AGQ

    Everyone is not going to get the right calls all the time. I don’t think kicking a guy when he’s wrong is cool. He’s a big boy, and I’m sure he has an exit plan when he feels he is wrong.

  173. Gary

    I expect the dollar to test and maybe slightly break the Nov. lows before putting in the next short term bottom. That should drive gold down into it’s daily cycle low.

    At that point I will decide if I want to ad more exposure.

  174. ALEX

    Jayhawk

    did you see that AG chart comparison I posted?? I’m not sure if I was clear at what I was pointing out with the 2 charts, but that was amazing when I stumbled on it.

    Many stocks had high volume reversals yesterday-

    Last night I found that same high volume reversal on SEPT 7 2010 with ticker AG.
    I may have sold…

    Chart #1 shows the sept 7 high vol reversal

    chart #2 shows the following 4 months. WOW. I’ll post again in case someone missed it

    chart 1 (see Sept 7 reversal ,high volume)

    http://www.screencast.com/t/ZxL32mn4VnM

    chart 2, same stock , look at Sept 7th to Nov

    http://www.screencast.com/t/cFGQpouZWW

    HANG ON πŸ™‚

  175. Avann

    Paranoid question here … would it be a good idea to hedge the paper ETFs … in Canada I use HZU … with a true physical ETF (CEF for example).
    I’m thinking perhaps allocate 15% to the physical ETF just in case something happens to the paper market?
    Am I being paranoid or does this make any sense?

  176. pimaCanyon

    After a couple of days where the OEX options traders were buying way more puts than calls, today they are buying the calls again. As DG has pointed out, they seem to have lost their mojo since November, but maybe they are getting it back?

    We’ll see whether this drop in stocks turns out to be the really big one. Prechter has called a top (again, and again, and again…), so I would say the odds are against it.

  177. ALEX

    mikey

    I cant remember which other junior Canadian ( other than GPL) was also soon to be trading in U.S. markets.

    Do you know if it was Impact? nice 12% gain today…I do not own that one.

  178. basil

    Glad to see things are looking up today.

    Friday and Monday I sold most of my other, non-PM holdings. I am now down to just holding some MGA.to (Uranium), some AVL (Rare Earth), and a small amount of SBR.to (Silver) in stocks. Yesterday I also increased my AGQ holdings from 60% to 80%.

    Cannot go into margin, much as my account has margin restrictions on AGQ. Don’t your accounts restrict margin on AGQ?

  179. ALEX

    POLY

    It MUST BE a bull market when stocks that go up 40% in the past 4 weeks are called ‘dogs’ πŸ™‚

    ‘I dumped AXU and EXK, those dogs not cutting it :)’

    I think they may just be taking a breather, but I was hoping for more today too.

  180. Poly

    LOL Alex you’re right, they have not done anything in two weeks, so they’re dogs πŸ™‚

    I should have qualified it by say relative to GPL, they are dogs.

  181. ALEX

    No Mikey

    I still have my EXK (its up 40% from my entry). I see a reverse head and shoulder pattern on a 3 month chart, and so I imagine there’s a little selling here as it works it was through resistance. All time highs will make this a rocket soon (I.M.H.O.)

    Poly, just jump back over and ride this up when it breaks above the highs πŸ™‚

  182. DG

    Gary: You think the dollar will break below the 3/08 low of 70.70 on this current leg down?? Wow! I can see where that would give us a bit of a rocket ride in the PM’s.

  183. DG

    Alex: GPL ticking above the reversal high of 3.40 negates whatever implications that had. I can see that these juniors are never going to be more than a toy for me as I will never put real money into them. I do, however, hope you make a pile! I’ll just have to live with having a large chunk of my net worth in AGQ πŸ˜‰

  184. ALEX

    I know you all do not look at energy/oil much here,but…

    I was looking at charts of IO,BRNC, KOG , and PDO a few weeks ago. Missed Io and it broke up big.

    I went with KOG (still looks great to me-) but look at PDO today!! Ouch.

  185. ALEX

    Blogger Gary said…

    I expect the dollar to test and maybe slightly break the Nov. lows before putting in the next short term bottom. That should drive gold down into it’s daily cycle low.

    At that point I will decide if I want to ad more exposure.

    February 23, 2011 7:41 AM

    After saying that-I imagine that in no way you will let go of maybe 1/2 position in SLW or AGQ and try to re-enter lower? Surprises to the upside ,I know…no trading at all though on a dollar bounce, just adding if it looks conducive?

    Is there much waste in holding leverage/AGQ for maybe a week of down days?

    Thx

  186. Gary

    Alex.
    Look at what exiting in expectation of daily cycle low would have got you in Aug. and Sept. and then tell me if you think its a good idea to lose ones position.

  187. ALEX

    I think someone is ignoring my possibly redundant question …or getting his rock climbing gear ready.

    I shall choose to believe the latter πŸ™‚

    Going out too…happy trading (riding old turkey) guys!

  188. Slumdog

    oa92000 said…

    gary,
    good call on silver will outperform.

    Gold is money. Today’s move proves the point.

    Some say the price rise will end in silver. Some say gold. As for me…

  189. jeff

    Gary
    The way things are developing it looks like

    The dollar is tanking
    Gold is coming into a cycle low
    The dollar bounces
    Gold is still in the daily cycle low =

    Buy at 1370ish. ?

  190. LowTax

    TZ – good point about global trades being legit around the clock. I am reminded of that movie about Paul Tudor Jones back in the 80’s; there’s a scene where he gets up in the middle of the night to trade gold and currencies in Asia. Money never sleeps and all trades are legit.

    On a related note, although NYSE volumes may be higher for equities, I somehow doubt it’s that much higher (if at all higher) for gold, especially in light of the London gold market…

  191. Gary

    Jeff,
    Gold hasn’t even made a swing high yet so it can’t be moving into a cycle low.

    And there’s no telling where the cycle low will come in. gold could break big time above $1432 and then trade back down to test the breakout. That would put the cycle low considerably above today’s level.

    There’s just no way to know without a crystal ball.

  192. MD

    Hi Gary,

    What do you think of Rare Earths? I know you tend to focus solely on the Silver/Miners segment, but supposing you have your desired allocation to the Silver/Metals, what do you think of starting a position in Rare Earths?

    Thanks so much!

  193. alysomji

    Gary,

    Is there any concern about how SLW would be affected if the stock market corrects say 10% from here?

    I notice SLW is not performing as strongly due to the stock market weakness, in the past two days.

    Thanks

  194. Gary

    I think rare earths are probably a fad that will pass. If you are just now hearing about them it’s because they’ve already rallied huge.

    Aly,
    The miners can get temporarily dragged down by general market weakness but in the end they will follow gold and silver because that’s what drives profits.

    Besides I don’t think any of us are in this to worry about short term wiggles.

  195. Romeo Bravo

    Jayhawk, I think we have the perfect analogies for Gary and Beanie.

    Gary’s profile pic is a fit climber reaching up for his goal, climbing a wall straight up.

    Beanie is a fat dog, on his back, on a couch!

  196. basil

    I forgot, today is Wednesday, not Tuesday. So I made the changes to my Portfolio on Tuesday, of course, as Monday was closed.

    Transports breaking down quite aggressively.

  197. Poly

    Something odd going on with GDXJ, no way that basket of juniors could be down .3%. I wonder if there is somehting up with the fund itself. Premium is obviously being given up here.

  198. Beanie

    Jim Rogers was on the air about 2-3 days ago saying to buy silver. Popular guy plus low float on gold and silver can do wonders.

    Enjoy the ride while it lasts, because it won’t.

  199. ddn3f

    Gary,

    Is the runaway move in stocks over? I have stocks in my 401k, should I go ahead and sell since the correction in the S&P is greater than 35 points?

  200. basil

    silver going up, but agq sliding a bit. That’s the disadvantage of holding paper, when liquidation takes place in the market. weak hands liquidate across the board, unfortunately.

  201. Gary

    I’m not sure the runaway move is over yet or not. But that doesn’t mean the stock market rally is over.

    I think spiking oil is going to end the stock market cyclical bull and the phony economic recovery though so at some point you need to sell.

  202. Beanie

    Libya gets a blood clot and oil goes thru the roof and the market sinks as a result. And the pm people thinks its about them. Tells ya how much speculation is in pm’s.

  203. Gary

    The price of oil has nothing to do with Libya. That’s been baked in for weeks.

    Oil is going up for two reasons. The intermediate cycle has bottomed and oil is sniffing out the coming dollar crisis.

  204. Ryan

    Is anyone thinking about scaling back their SLW holdings b/c of earnings in March? I’m as exposed in SLW as I am with AGW. Any thoughts?

  205. Poly

    GDXJ is trading at a DISCOUNT to it’s NAV. At the close yesterday it’s NAV was $38.21 and it closed at $38.07.

    Looking at it’s top 10 holdings, their essentially ALL up today, so it appears there will be a further discount to NAV by the close today.

    Although by no means unusual to trade at a discount, I do find it odd that it is trading so, considering the current rally. Trading well above avg volume.

    A red flag possibly.

  206. Beanie

    When Libya news hit, I went to the gas station and boom it got raised .20 cents. Yep, it’s Libya.

    PM’s are no longer a rational trade, but a bubble trade. PMs went thru the roof as soon as Libya news hit. So now everything and anything wrong with the world, pm’s rally. They rally on any negative headline. If a ufo is spotted from this point on, I betcha pm’s rally.

  207. basil

    “Saudi King Abdullah returned home to the world’s biggest oil exporter after three months abroad for medical treatment on Wednesday and unveiled a series of benefits for citizens estimated to be worth $35 billion.”

    Oh my, that means he’s already shi…. his pants about going Mubarak style. It’s like he’s raising his hand, saying “I’m next!”

  208. Gary

    PM also have nothing to do with Libya. Do you really think anyone decided to buy precious metals because of what happened in the middle east?

    How many people do you think told themselves that they needed to buy gold because of unrest in the middle east?

    People are buying gold because it’s in a secular bull market. The trend is up. The Fed is debasing the currency and the intermediate cycle just bottomed.

    Oh and I almost forgot. You can’t have a bubble when something hasn’t even hit new highs yet. In inflation adjusted terms gold is about half what it was in 1980.

    You also can’t have a bubble until the public piles into and asset class thinking they’ve found a sure thing. When we see lines in front of the local coin dealer then it will be a bubble.

  209. basil

    Gary,

    while I agree that no one is buying PMs because they are thinking that it is a ‘safe trade’, I do think that some people buy PMs because they think that other people think that it’s a ‘safe trade’. Yup, it’s complicated, but it’s human.

  210. Jayhawk

    “Jayhawk, do you use Twitter to track stocks/various commentators? Looks like lots of people looking at 1300 which makes it to obvious.”

    I have some Twitter traders I follow…I don’t watch SPX too much but looked at it today and saw a potential trendline. I’m sure many others are watching that one too. 1300 seems like an obvious place to find support too.

  211. basil

    Gary,

    let me adjust the wording. A safety trade it is anyway, safety from fiat decline. What I mean is, of course, that some people might buy PMs because they think other people might jump into PMs because of the Middle East.

  212. Jayhawk

    GDXJ. Frustrating…I put my inlaws in a chunk of that one thinking it would be safer. The contrarian in me thinks it will play catch up soon.

  213. oa92000

    ” Beanie said…
    MU and CY are stupendous buys, by the way.”

    Beanie,
    i agree with you that cy is a good company, but i don’t think now is the time for semi (seasonality).

  214. kohai

    @Poly — GDXJ at a discount to NAV is good no? You would have the benefit of reversion back to the mean and the additional gain from the spread tightening.. Why a red flag? Thank you for your thoughts!

  215. Poly

    Kohai,

    Yes I agree that’s possible, which is why I said it’s not unusual to trade at a discount.

    But my red flag (possible) was because why is it trading at such a discount when $HUI is up 2%, GoldSilver up 1%. Around 50% of it’s holdings are pure Silver plays. Just look at it’s performance, it’s clearly lagging and it’s not because of its ETF holdings.

  216. Romeo Bravo

    Jayhawk, @jfahmy on twitter is a very smart guy. He runs a fund in Boston. I have never met him in person like I have some of the other twitter guys I respect but he is cautious when it is warranted and hits trends when they are good.

    You’ll notice a few jokes on his twitter stream but his thoughts are pretty solid.

  217. kohai

    @Poly -thank you.. looking at the major holdings, a few are soft today like GBU.. I added yesterday @ 38.01. With the GSR this tight I thought it was good add.

    Was thinking the discount was an extra cushion (I could be so wrong!)

    Will keep it on watch, thank you again.

  218. mamaloshen

    Beanie wrote: “If a ufo is spotted from this point on, I betcha pm’s rally.”

    Too true! I spotted one on the way to the Finchley Road tube station this morning, and both gold and silver are up pretty solidly today.

  219. DG

    Beanie: Yep, that’s the definition of a bull market: “Whatever the news, they rally.” Glad you finally recognize that gold is in a bull market!

    Ryan: Re SLW earnings, I plan to hold through them (nervously).

  220. Wes

    This is the first day since the AGQ breakout that I haven’t added something, primarily deep in the money SLV calls.

    Seems odd, somehow.

  221. Wes

    Pima C,

    I recall from years ago that when trading DIM calls, the graceful exit was to short the common and execute the call to cover.

    This is because you usually cannot get a buyer for a DIM call at a decent price. So, realize that this strategy requires that you have sufficient margin to short the common.

    You should probably become familiar with executing options if you aren’t already.

    Just a heads up.

  222. pimaCanyon

    Wes,

    Thanks for the heads up regarding exiting DIM options. In my case I don’t believe I will be able to short the stock because I’m trading in an IRA. Margin is not allowed in an IRA. I –CAN– sell covered calls in the IRA, so if this would be considered some kind of stock/option spread, I could do it.

    I’ll have to check this out with TOS to see whether I’ll be able to do this in an IRA account.

  223. pimaCanyon

    Wes,

    What about excising the option as an exit strategy?

    I would have to do this one at a time because I will likely have more options than I would have $’s available to buy the stock at the strike price.

  224. Wes

    Pima,

    As I recall, the market maker is obligated to buy 10 contracts at the bid. Now, that’s an old rule and many MMs wouldn’t abide by it anyway.

    The other problem is when you offer more than 10 for sale.

    Just be aware of the many ways MM’s have of fleecing us, and plan ahead.

  225. Rob

    I found that Barrick(ABX) and Goldcorp(GG) lead the way down in the mining sector during January. They are both up over 2% as I write this….for what it’s worth.

  226. Ryan

    Thanks DG and Brian. I guess if I had the guts to add heavy to AGQ/HZU yesterday, I might as well hold on for the ride through earnings with SLW.

  227. Wes

    Exercising and selling is a way out, but you need to find out how soon after exercising you can sell (without margin). I don’t know this.

    They may have rules that say you don’t own it for 3 days, etc.

    But that will work and if you’re fortunate enough to have a double, it will work exponentially, i.e. 1,2,4,8…

  228. pimaCanyon

    Wes,

    Just checked with TOS and exercising the option is simple and fast. essentially like placing an order to buy the stock.

    I can sell the stock as soon as the exercise process is complete (a minute or two).

    I can use those funds to buy another positions BUT I cannot sell that new position in the same day. Have to wait till the next day. (Normally I can buy and sell in same day with funds that are just sitting in my account, but funds that are there because of a sale of a position I have had for more than one day have this restriction).

    So if I am exiting options over a period of days, I can use this strategy. But if I can get a buyer who’s willing to pay what the exercise process would bring in, then I won’t have to mess with this.

    Good to think about this stuff ahead of time. Since I have available funds in my account, in the future maybe I stick to shares for SLV and leave the options for GLD (which has a much higher per share value).

  229. ALEX

    anyone see ROYL and PDO ??

    So I took another look at my KOG at lunchtime (good volume coming in and near breakout all time highs) and sold 1/2 my EXK and Bought more at $6.60.

  230. Poly

    Pima,

    10 cent spread on the DIM SLV calls and all bids show at least a few cent premium. Selling at the bid is going to be fine, especially after these gains πŸ™‚

  231. pimaCanyon

    that’s what I think too, Poly.

    ‘course if all goes according to plan, these options will be VERY DIM (say SLV is trading at 40 or even 45), will there be any willing buyers for options that are $20 in the money?

    (This will be a nice problem to have and I won’t complain a bit if that’s how it works out πŸ™‚

  232. james r

    Off topic a bit.

    But did anyone followed Bob Brinker?

    As much as I was upset about his call back in 2008, I probably would not be here on this blog investing/trading with Gary and you guys.

    My how things have changed!

    James

  233. pimaCanyon

    James,

    yes, I used to use Brinker for timing in my 401k and IRA. But yeah, he blew it pretty bad in 2008, so I stopped getting his newsletter then

    Do you still subscribe to him?

  234. Poly

    Pima,

    Look at the April $10, $22+ ITM, BID $20.65 with BIDQ of 48 contracts. In this case you are pay a $0.10 premium on the underlying.

  235. Poly

    and ask $20.80. (15 cent spread)

    Of course if you were to sell, you would never place at bid, right? I’m sure “the computer” would snap up an offer of $20.75.

  236. Driver

    James,

    I used to follow him until he blew a call badly. That must have been your reference to 2008. It sounds like he somehow saved you money?

  237. james r

    pima,

    I let the subscription run out in early 2009.

    I used to listen to his am radio station just about every Saturday, but after his terrible call in 2008and not even apologizing to his subscribers I stopped listening to his program.

    I had to conclude from his epic failure that his “model” of the markets were flawed from the very beginning. And he relied too much on the government’s GDP numbers and other stats he used from the government.

    The guy was clueless.

    James

  238. Uatatoka

    Regarding DIM calls, if there are no outright buyers why not just execute the contract and buy the stock at a deep discount. Or if you don’t have the funds for that, sell “just in the money” calls right before expiration to collect the spread? My 401k account allows selling covered calls like this (vertical spread). Like you said, a good problem to have…

  239. james r

    Driver,

    I lost most of my 401k and private investment with Brinker.

    Thankfully I still had a good job and was able to save some money to reinvest.

    James

  240. james r

    Heck, I remember on the radio Brinker used to taunt gold investors..

    He would say.. “They were taken to the wall..”

    He’s no longer on the radio on Saturday. Probably for good reason.

    James

  241. Driver

    Yeah, I remember that Brinker used to be on both days, then he went to one. I had a friend that co-subscribed with others who use to think he was good. I heard of someone that thought he was a plant by the gov’t, but he was probably just crappy.

    I never subscribed to him because I had my own model at the time (and still do.)

    Gotta go catch up on Tiger.

  242. DG

    James R: I am always “trying to short” and always trying to go long. On a trading basis, if I see a good set up I will take it regardless of direction. I have posted several shorts here (FCX and FXI) that have worked consistently over the past few weeks. My major money is in the PM’s though where I intend to just sit. Bought some STP today when it pulled back to its breakout at 9.50, covered my China short (for now), etc… I actually got a sell signal on Friday and didn’t take it because the last three have not worked. Oh well. On to the next setup… I try to cherry pick my best ideas and don’t post a lot of them because I don’t want to clog up the blog with stuff most people are not interested in.

  243. Jayhawk

    “Options have far too many moving parts to make them viable.”

    I’ve had pretty good luck with them. I don’t get why some here are so down on options if they are used selectively and position sized correctly. I just use basic calls or puts, not the complex strategies. Here’s some recent ones-

    I had 300 buck left in my Vanguard brokerage account so I bought 12 SLV 33 March contracts on 2/7. That position is worth 1300 bucks. Wish I put more in my account at TOS!

    Grabbed some SLW March 37’s early Feb in my IRA…25 Contracts-cost me around 4K, those are worth 11.5K now. Day traded GOLD calls last week for a nice 3500 profit.

    I know these can go the other way on you, but with the intermediate cycle wind behind our backs & the dollar sliding it was worth a stab.

  244. n1tro

    Silver carry over rate raised to $2.10 from $1.60 per 500 ounces. Guess they want people to let go of their contracts before the 28th.

  245. Jayhawk

    Alex-Wow, those gas exp companies went nuts. KOG your favorite in the sector? As much as Gary is trying to talk us out of energy, I think a piece of something in the space makes sense in light of the middle east mess.

    Any other ideas for this play?

  246. Brian

    I’m with Jay on this. I buy very small option positions, but they have added nicely to my account. My big rule is that I only buy them as we approach intermediate cycle lows. I also only buy them on liquid names. ANV, HL, SLW, SVM. The big difference is I buy very cheap and out of the money, with only money I can afford to lose.

    Speaking of ANV. It broke out over 29 last week. It came down and tested the breakout today. So far a successful test.

  247. DG

    Nike: Happy to. I almost posted that STP buy this morning but figured no one would care… The NLY buy turned out well so far. It pays to buy that stock when they announce a secondary as the perceived dilution is not actually dilution, and at a 13% yield it’s worth knowing about this stock. It’s been great for years. If we bounce I will re-short China and post it. Do you ever short?

  248. Poly

    It’s sad to lump all options trading in the same boat, because there are a million and one ways to trade with them. I too keep it rather simple, but it’s funny that most are leveraged 2x with AGQ but talk down options. Sure you can blow your account, but that’s more like gambling, Gary is right, high leverage will blow your account, seen it happen.

    Jay, nice pickups, a few weeks back I picked up 100 March SLV $34’s for $0.14, posted here, they now trade at $0.74. That was my “lottery ticket”, the rest are DIM. I could sell them, but if Gary is right, I’m shooting to offload them at expiration for $5 a piece.

  249. Nike Boy2008

    Hi DG,

    I do short…but haven’t in a while (following gary’s advice)

    I got burnt a little when I bought some TZA at S&P 1270…haven’t shorted since

    thank you

  250. David Kafrick

    I never trade options, because in my opinion options are about pricing and not about direction. If one doesn´t understand the sophistication of the option pricing models and doesn´t know how to price an option, he will probably lose money in the long run even if his directional bias is correct.

    The people I know who make a lot of money with options are all doing arbitrage, none of them do directional trades. In fact, they don´t even care about what the underlying asset is doing. They are trading to capture distortions in the pricing of options with different strike prices and different expiration dates.

    If one is trading options simply because of leverage, then go with futures.

  251. ALEX

    Uatatoka

    Happy to help-glad it’s working out as good as it is (almost 9% today…sweet πŸ™‚ I think I’m going to ride this one for a while in this C-Wave

  252. ALEX

    Jayhawk

    I’ve been playing a little energy on the side this fall/winter (first Uraniums,then I traded BRNC and BEXP)…now bought KOG last week and added today. I just like the charts.

    Not thinking its a favorite, but it looks ready and if it breaks out, it could run good after this 3 month consolidation.

    It went $2.50 to $7…

    We’ll see.

  253. Ryan

    DG,

    What are your thoughts on UNG. I know you’re out of the UNG trade you posted a couple of weeks ago. I still hold on to some from a very long time ago and needless to say it’s deep underwater. I kept hoping for a good decent bounce but it never materializes and just gets grinding lower. I should of just taken the loss and stuck it in AGQ or something. What are your thoughts about UNG?

  254. Gary

    Ryan,
    New drilling technologies have flooded the world with natural gas. There is a reason this thing hasn’t moved despite Ben’s insane printing spree.

    This one probably isn’t going to recover anytime soon. Just get rid of it.

  255. mamaloshen

    Jayhawk,

    Don’t go by me, I’m no expert but I’m a proud KOGger, having bought it around $4. I am holding on and they just announced a big increase in reserves today. Management owns a lot of the shares, plus there’s a big short position and they will have to cover (already are starting I reckon).

    Another I had and sold for only a small profit (I tend to sell too soon) was MHR, Marcellus shale, N.Dakota and Louisiana properties. Worth a look.

    Finally, not a double but PBR looks great. P&F target of 50 and just had a triple top breakout. I bought 2 days ago at just under $39. Oil production only in S. America, no mid-East exposure so really outperforming lately.

  256. ALEX

    I traded MHR..it was acting correctly all fall.
    back on the watch-list (I forgot about it for a bit)

    Thanks MAMALOSHEN!

    Out for the night! Later!

  257. Ryan

    Thanks Gary, I think I’ll just do that. I know when I do, I’m going to feel so liberated. It’s just so sad that I rode it down for so long.

  258. Brian

    David K,

    I completely disagree with you on this options issue and my portfolio will withstand your arguments to the contrary.

    The fact is, when I try to identify an intermediate cycle low, I am placing a directional trade.

    The returns have been well worth the patience….

  259. Poly

    Gary, a fine closing in tonight’s report. Those who question have not ridden with you through one of these waves, no amount of preaching (although very commendable) will substitute the experience of leaving SO much behind. I know i left a boat load behind the last time, never again.

    Fine calling.

  260. Wes

    Poly,

    I just pulled up a graph of your SLV 34’s. You’ve got a real chance here to get in the money, but getting to $39 (which would be almost a dollar more for silver) by then seems a stretch.

    I’ve bookmarked it and will be pulling for you.

  261. TZ(5288)

    JAYHAWK,

    >GDXJ. Frustrating…I put my inlaws in a chunk of that one thinking it would be safer. The contrarian in me thinks it will play catch up soon.

    GDXJ has been a clear and increasing loser against silver now for (going on) 5 MONTHS!

    http://stockcharts.com/h-sc/ui?s=GDXJ:SLV&p=D&b=3&g=0&id=p72127576767

    Hardly something out of the blue or something which I would bet on “playing catch up soon”.

    It’s only money. Don’t get emotional, just get on the right side.

    If GDXJ has shown that it doesn’t work for the last 5 months, then there is little hope it will suddenly change in the month or two we have left. That would be my conclusion. And my including would include GDXJ “showing me the money” before I decided I wanted some.

  262. Wes

    Poly,

    My bad. Somehow I was thinking silver was $10 lower than it is. You’re in great shape.

    I’m brain dead tonight. Sorry.

  263. Poly

    WES,

    Thanks for that, appreciate it. I suspect you’re spot on, but it is a lottery buy after all and hitting $5 ($40 silver) was actually my lottery target when I purchased it. A cool $50k.

    I also promised myself i would let it ride to expiration, i now feel comfortable i will at least get something for them.

    You’re a fan of lottery buys, any on your fav Q’s?

  264. Poly

    TZ, Silver miners have not performed well, use SIL:SLV. So its more a question of miners vs bullion, not GDJX. I tend to agree with you to stick with the Silver bullion via AGQ or calls seems best, based on recent performance.

    But we all know miners are way undervalued historically compared to the metal, so getting married to recent performance may cost in the future. There have been times when miners have gone simply ballistic.

  265. Wes

    Poly,

    No lottery plays right now, but if we ever have a stock market correction, I’m going in big on one if Gary can identify the bottom.

  266. dallascfp

    Gary,

    I want to humbly express my gratitude and appreciation for your post and advices. I lost a lot of money trading this market until I joined your blog last December. I thought I knew everything about this market, and man I was so wrong (Would you believe I am a CFP?). I would have to admit this is the first time I have kept my positions intact since you told us to hold the positions and at times bought on dips. I have seen a lot of distractions here and other blogs, but your posts and your advices have kept me strong. Just wanted to say, Thanks Dude.

  267. DG

    Ryan: Sometimes I have an opinion about a stock, but often it’s for a trade under a specific setup. The setup for UNG has come and gone. That ETF is a wasting asset though. That is, because of the futures rebalancing they need to do it is NEVER right to hold it over time as it is just wasting away due to fees. If you hold it for a year and gas goes sideways you still get killed. I’d sell it, learn from the mistake, and put what is left in AGQ. Try never to “hope” a loser will turn into something better. just kick it the moment you realize you are probably wrong.

  268. Gary

    Nike,
    There’s always talk of the comex defaulting as gold and silver move into a C-wave top.

    Eventually price moves high enough to bring more supply into the market. Just basic economics 101.

  269. Ryan

    DG,

    Thanks for the link, you’re probably right, had many chances to get out too just too stubborn. I’ll chalk it up as a learning experience.

  270. Rob

    Anyone,

    Silver has had a $7+ move in the first daily cycle, so far. Will the moves in the metals get larger with each daily cycle?

  271. Bosco

    Hi Gary,

    I understand the miners stock price can go up significantly along with both commondity and bullish stock market. Do you think the miners stock price may drop along with the general stock market drops despite commondity price goes up?

  272. Gary

    Bosco,
    The miners will ultimately follow gold since that’s what they sell. Sometimes at final intermediate cycle selling climaxes the selling pressure coming off the stock market will temporarily drag the miners down. They quickly pop right back up after the selling pressure is released though.

    We are a long way from a selling climax though.

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