397 thoughts on “PORTFOLIO CHANGE

  1. Avann

    Gary, you mentioned an idea of perhaps going partially in and waiting for the daily cycle correction to complete our position … would this still be a recommendation?
    Is there a good chance the correction will drop lower then 1370?

  2. Gary

    Avann,
    If you are nervous about a further pullback then that would be your best strategy. Just add to your core today and add the rest at the next daily cycle bottom.

    My thought last night was that if the breakout came today or tomorrow that it would still be early enough in the daily cycle that we could see another week or two of rising prices before the next correction and one might want to enter full positions at the open based on that.

    Without a crystal ball I can’t tell you for sure which strategy is the best. If you enter now you might catch a nice ride higher over the next two weeks and the next daily cycle correction could be very mild halting considerably above today’s price.

    On the other hand if you wait for the next daily cycle low and it holds above $1307 the odds go up huge that we are now in the final leg up in this C-wave and your chance of a draw down are greatly reduced even though you might have to enter the rest of your positions at higher prices.

  3. Gary

    James,
    Tough question. If one waits they run the risk of getting left behind by a strong trend day.

    I suppose I will just enter and be done with it.

  4. TZ(5288)

    Mmmm…tasty profits for breakfast
    πŸ™‚

    These gains in the metals since the bottom continue to be controlled rises. The fed/morgan are fighting things and only letting gold inch up about $20 every 3-4 days.

    So far I have not seen the sort of move which makes me think any buyers of that move are at risk of a correction. This means I do not believe we have rallied past a point whereby the next correction in the future will return to – although I think that point is close.

    These moves up simply don’t consist of wild or capitulation buying yet which would indicate weak hands.

  5. Gary

    Jeff,
    I’m not really sure what you mean but you can buy SLV which should track the percentage move in silver. Or Agq which will give roughly double the move in silver. SIL and SLW should be about 1 1/2 times the percentage move in silver.

  6. Gary

    Sandy,
    I tend to think the sector was waiting to see if gold could break through resistance although I do expect silver to probably back off from that resistance level at least initially before pushing through.

  7. DG

    Gary: With GDX so close to the trade trigger, does it pay to jump the gun? Looks like you would be waiting for a 1% move after GDX’s current pre-market price. Gold breaking out without the miners is a bit odd, no? Seems like 543 would be a stronger confirmation of no re-test of the lows than gold over $1372…?

  8. TZ(5288)

    Inflation raging across the world and growing rapidly.

    Mideast, India, China, UK…on and on.

    The masses are slooowly starting to understand the game – if for no other reason than they can’t eat or pay their bills.

    Gold and silver are the answers and more and more people are realizing that. Hang on, we got some catching up to do.

  9. DG

    TZ: Nicely done—a man after my own heart: nice fat position with no initial drawdown. For me, that’s what the game is all about. Now you can just sit and smile. Way to hang on with all the “dip coming” talk here.

  10. TommyD

    Hello everyone,

    I sure wish the 20 day moving average would punch through the 50 day SMA. That would be like old times back in July/August 2010. That would make me sleep better at night…

    Tom

  11. Poly

    Welcome back boys πŸ™‚ We left plenty of cold ones in the fridge for you.

    I would NOT wait for the daily cycle low. If you look at the first daily coming out of the last Aug 2010 Int low, it made up ALL of the losses in one full cycle. With 2 weeks or so left, it’s conceivable to see gold test the $1,420’s again before rolling. Of course past performance is just a guide.

    IMO, Silver will test the $31.21 30 year high’s today. When it eventually breaks through its going to be one very impressive display.

  12. DG

    Sorry Gary. My question was not about perfection nor about what things will look like 3 months from now. It was precisely whether 543 being broken through was better confirmation that no re-test was imminent (in your best-guess mode) than gold’s breaking through 1372. I suspect yes. I honestly get that there is no “perfection” in entry points in this game, but it seems useful to estimate likelihoods of various scenarios, no?

  13. Gary

    DG,
    Of course as we all know there is no perfect way to enter. I tend to think now that gold has broken through resistance the miners will follow even if they don’t gap through that level on the open.

    But if one wants to sit tight for the final confirmation it isn’t really going to make that much difference in the end. Just like waiting for confirmation isn’t going to make any difference 3 months from now.

    If AGQ goes to $350 will anybody really be beating themselves up at that point because they missed 10 points waiting for confirmation?

    I doubt it:)

  14. Gary

    DG,
    I think 543 would be the last confirmation.

    If gold then dropped back down to another lower low we would just have to chalk it up as one of those curve balls that are just impossible to hit.

  15. DG

    Thank you, Gary. Yes, at 350 I surely wont even remember. Thanks for your patience with my “low drawdown desire” syndrome.

  16. TZ(5288)

    The exiting of AGQ and SLW (on the morn of 10th) based on belief that the intermediate low might not have been in and the subsequent re-entry this morning at opening prices results in a lost gain of approximately the following:

    AGC: 146->154.80 = 6%
    SLW: 34->36.20 = 6.5%

    This is for discussion purposes only and NOT a critique of Gary’s call which had clear validity among many opinions.

  17. DG

    TZ: Yes of course it’s better to hold something that does not retrace it’s recent gains. What’s the discussion? It’s a game of expectancies. If it is 75% likely we will drop 8%, then… You just do the math and place your bets. If it comes up three tails in a row, you lose. Doesn’t mean in any way the bet was wrong. Not sure what the discussion would be…? “Never sell something that is about to rally” is certainly a good rule of thumb!

  18. DG

    For those waiting for more confirmation: As well as the the previous high on $HUI being at 543, the declining 50 day line is at 542. Getting through both for more than an hour really would be good indication, I believe.

  19. Fergie

    Caution is warranted for those entering at these levels. I think we’ll get the retest at $1350s gold, which maybe $28-29 on silver. I’ve been whipsawed so many times by this bull, we’ll see if I’m reading this right.

  20. pimaCanyon

    How about this for the IT headfake we’ve been expecting: gold breaks above consolidation area as it has done, HUI tags 542, silver tags 41, and then the daily cycle rolls over and gold goes all the way down to retest the 1308 low. silver? I don’t know. Maybe it drops to only 28, maybe all the way to its recent low of 26

    Possible? Yeah. Probable? I have no idea.

  21. Fergie

    Agreed. Portfolio management is the key so one doesn’t have to needlessly take a loss. However, some folks seem to go all in and can’t stomach the swings when they do happen.

  22. Poly

    Wiggle, Wiggle Wiggle.

    All hypothetical, just get invested, stay invested, stop refreshing Kitco and go for the ride. If it breaks down, you stop out, simple.

  23. Gary

    I think at this point one can probably put a stop under 518 on the HUI and use it as a trade trigger to stop out of positions.

    That is clearly a major pivot and shouldn’t get violated unless gold’s daily cycle is going to move below $1307.

  24. pimaCanyon

    Poly,

    You said “stop refreshing kitco”…

    I downloaded the kitco app that puts real time gold and silver prices on your taskbar. It’s great–you don’t have to dedicate a window to kitco, it just displays the prices right there at the bottom right of your screen.

    It’s also nice to run if I want to take a look at what gold and silver are doing in AH trading and I don’t want to open up the TOS app (which takes a while to open, and another while to close).

    I forget who posted the link to that little tool. Whoever it was: Thanks!

  25. Rebecca

    Based on the price action, it appears that people who bought at the current price level and held through the recent PM correction are now screaming for the door at the beginning of the next leg up.

  26. Poly

    Pima, I’m really not qualified and I’m mainly in SLV Calls, some AGQ and a little SIL. I have a stop using SLV @ $27.55 to sell AGQ and SIL. The calls I unwind manually.

  27. DG

    Nike re UNG: Nope–no change in opinion. I’m a little disappointed it hasn’t rallied yet today after bouncing on cue yesterday, but I see nothing to change my mind. I will post if I do. It really moves in it’s own rhythm and not with SPX or other commodities, so no clues there.

  28. pimaCanyon

    DG,

    UNG could be tracing out a ascending triangle. If so, we would expect it to break to the downside, probably make a new low, and then take off to the upside from there.

  29. pimaCanyon

    thanks, Poly.

    I have a few stops in on some of my positions that are green, wide enough that they shouldn’t get hit unless the PM’s are headed significantly lower. I use channels a lot and sometimes put a stop well below the lower channel, gradually moving it up every day or two as the channel rises.

    As a result of your comment about the deep in the money SLV calls, I’m starting to nibble at those. Also buying some deep in the money GLD calls. Seems like a great way to use leverage without having to borrow from your broker. I can lever up that way, effectively be fully invested (or even beyond that) and STILL have uncommitted funds available in my account.

  30. T.J. Rand

    MLMT-

    Don’t be dissuaded by those that brook no alternative points of view – keep posting your thoughts (with analyses). There are no absolutes in the markets, and any well-supported point of view is, in my book, most welcome.

  31. Poly

    I agree Pima and the pools are deep enough and tight.

    For those wanting to punt a little, some of the SLV $35-$40 OTM calls are priced well, IMO, and will really pay off if Gary is even remotely correct about this coming intermediate cycle.

  32. oa92000

    “Based on the price action, it appears that people who bought at the current price level and held through the recent PM correction are now screaming for the door at the beginning of the next leg up.”

    I used that drop to add more on slw, agq, gdxj

  33. mylifemytrade

    I was wrong in my analysis of silver.

    Further analysis of gold and silver charts has revealed to me (what was probably know to most of you) was that one needs to look at levels in gold to decide WHEN the tops/bottoms will form. The levels in silver are usually not good for that purpose.. Silver will often overshoot or undershoot the objective price level… This is why even though gold put a lower high in Dec, silver ended up putting in a higher high.

    I had stayed away from silver for most part.. Just once I tried when I was looking at that gap down in early January to get tested from below.. Turns out it was a bad idea.. and my thesis was wrong…

  34. aaronpalang

    In order for Gary to be right (and I am agreeing with him here), the dollar needs to start tanking…something that it has yet to do…
    Im waiting patiently…

  35. Jayhawk

    MLMT-

    I’ve tried to use very TA trick on the book on gold and silver these past three years and most of them are meaningless. These 2 markets are wild beasts that do whatever they want to do. They only thing I’ve seen close to being effective is the cycles tools. Getting in a close to the intermediate bottom as you can and holding on for the ride. I think we got a pretty good entry point a few weeks back with gold hitting the 144 and the HUI/GDX index hitting oversold levels deep under 30 on the RSI(7) WEEKLY for only the 2nd time in the past 2 plus years. Those have typically been the best entry points and we should have our bottom, although shake outs, freak outs, double bottoms are all possible. If we are wrong, the cycles will be our guides and most here will get out before any significant blood bath occurs.

  36. James

    I’m always amazed at how SIL, AGQ, etc. on an intra-day basis grind higher over a period of time, than plunge lower erasing the gains in a matter of seconds. Talk about volatility!

  37. DG

    Pima: On something like UNG I buy when the rubber band gets so stretched to the downside it “can’t” go lower. Whether it makes a triangle and breaks down later, I don’t know. I try to place trades that go quickly in the black and then put in a break even mental stop, so it’s heads I win tails I break even. UNG should have a sharp up day soon, and then we’ll see (new recovery high in it as I am typing this by the way.

  38. Brian

    MLMT, The problem is you always come on here and give a beware this level and leave. No thoughts or analysis. Just a beware of darkness. It is really meaningless without some substance.

    As Jay said, most here are buying the cycle lows as best as we can identify them and strapping in. Gary has proven to be a master at this. You create only noise if you have no substance. Few here worry about daily squiggles.

  39. Jayhawk

    Rebecca-

    This was my “loose” channel on the weekly chart. I liked how GDX pulled itself together after the crash and has been in a pretty solid channel since then. Yes, the weekly RSI only dipped down 2 times since the crash and those were the yearly lows to go long. Of course this could all change this year, who knows? I like the 50 WMA too right there and the volume spikes at those levels. (Less volume than last year, but the options for precious metals longs (GDXJ, SIL, etc) is ever increasing. Many seem to have moved away from GDX)

    Also, gaining the 25 weekly MA would be a very good thing if we can do so this week.

    GDX Weekly

    I’m watching these levels on the HUI. I saw the 430 zone as being a key…We also still have the new daily trend line in place with the 10DMA now rising towards that 430 level. I think 430 support should be good now. Then, there’s the down sloping trend line from the December highs to overcome. Maybe this daily cycle will peak around there and consolidate around the 430-450 area before exploding though in the next daily cycle into 600 and beyond. Fun to dream…

    HUI Daily

  40. pimaCanyon

    Thanks, DG.

    I went out for a run. Came back to find your post and the chart of UNG that shows my triangle scenario is off the table. Good!

    I will put a stop on that trade at B/E once we get a little breathing room.

  41. Rebecca

    Thanks, Jayhawk. I use Full Sto (5,3,3) on the weekly charts. It is pretty raliable most of the time, but you do get whipsaws once in a while. That is when Gary’s cycle analysis come in handy.

  42. DG

    Brian: I agree with much of what you have said about MLMT, but if he is right and we drop to $1160, that’s not a “daily squiggle” at least to me. I doubt we will see that level, but that at least is his claim and not an insignificant one.

  43. Brian

    DG, Quite frankly I find most of what he does sensationalism. It always seems to come on a day or close to a day, that G has made an important call.

    Probably scares people that haven’t been here long enough to have their hands around the program.

  44. Poly

    Where are these MLMT posts you all talk about?

    In any event, for gold to drop anywhere near $1,170, it would need to touch the very bottom of the 10 year bull market rising channel. The channel only reaches that low due to the extreme effect the 2008 financial crises had on gold. For gold to see $1,170 again, another massive worldwide event/collapse would be required, coupled with a major dollar rally, IMO.

  45. DumbMovingAvg

    On Jeopardy, a 3-day winner of over $33,000 commented that he had always wanted to enter a $10,000 poker tournament. Now that he has come into some money, he could afford such an extravagance. He deserves to fulfil a life-long dream. To which Alex Terbek retorted, “You and 5,000 others; or 6,000 others; or 7,000 others. Alex was hinting that the odds of winning are becoming microscopically small as everyone becomes a professional poker player as their main source of employment.

    Many of us are in the same boat with our retirement saving In the eyes of emerging marketeers, we have all become old-world royals. The prospects for our economies continue to dim. We dream of the day when we can just chuck the stock market, have enough money to stock up on bonds, and live off our interest.

    Many of us, more and more all the time, a nation of traders, everyone who can is trying to make a living off the stock market’s wealth effects. Trading keeps getting more sophisticated all the time.

    SO, WE JUMPED-THE-GUN ON THE 543 HUI CONFIRMATION. All you have to do is wait another day or two if you want to play it safe.

    “Democracy is the worst form of government except for all those others that have been tried.” ~ Winston Churchill. Gary is the only advisor I have ever found who’s advice actually works, and I have looked for decades. Carl Swelin of Decision Point is second best, but all he does is trade the 50/200 EMA. Those are the only two I have ever found that work. Since the Marty Zweig, Winning on Wall Street/Fed watching days, anyways.

    Gary talks about how hard it is for investors to change their minds. EW guys talk about how they do their own counts, so they know when they are wrong. I was doing some plumbing recently, and kept getting leaks. I would try something else, and still it kept leaking. I would wait a day or so, figure out what surely must be the problem, and to my surprise I still had the tram leak. Finally, it hit me why the EW guy wanted to know he was wrong.

    Is this the place for the ex-smoker rants? Tram, this is so much more fun than quitnet. I want to get back into shape and …

  46. Avann

    And BTW … I only partially jumped … I’ll wait for full confirmation or a daily swing low to completely load up.
    I went from 100% down to 25% up to 60% … and I guess hopefully ultimately 100% again.
    I know I know I lost some profit but as they say … hind sight … and I sleep better and don’t have to wake up in the middle of the night to check the price of gold πŸ™‚

  47. pimaCanyon

    Partial jump here too. will jump some more once HUI 543 taken out.

    HUI is at mid-channel (channel drawn of 1/25 low), so more room on the upside before upper channel line gets hit. Maybe that will mark a daily cycle high. Tomorrow that line will be at 555, next Monday at 563.

  48. DumbMovingAvg

    Just call me Old Turkey. I have held 100% the entire draw down. I would never have had the courage without someone encouraging me that PMs are in vogue. I thought fundumentals went out with the stock markets PEs. Someone noted that foreign currencies still respond to relative fundumentals. Now PMs, silver, etc. It’s still a fundumetal world. Hard to imagine the dollar amounts that positions can grow to.

  49. DG

    Pima: I never watch that sort of stuff. For me the charts, sentiment, and “reversion to mean” covers everything. If contango is going to make UNG go up it’ll show up in my indicators because someone smarter then me knows it and their footprints have to show up first. BTW—new high for the day as I type this.

  50. Gary

    Daniel,
    Most brokers won’t let you borrow as much on margin for an ultra fund like AGQ as say they would SLW. But for our purposes you will be able to get more than enough.

  51. DG

    Today is the 2nd down day in a row for the DJIA. Is that legal? Where’s the PPT! Emergency! (o.k. the SPX was up yesterday, but still…)

  52. DG

    If anyone cares: I am buying NLY here. I have traded it for years. People sell it off on these secondary announcements and it’s a mistake. NLY simply reinvests the money and makes a return on the spread so there’s no dilution, though people sell it off as if it were a normal equity floating new stock. Mike Farrell is the best mortgage bond manager in the world and is always worth backing. 15% yield isn’t bad either. Nice IRA holding.

  53. Poly

    Were is the 3pm cavalry?

    What we have not seen in 3 months is a closing at the lows of the day, that would be a possible clue.

    Almost every final hour has been bought to some extent, let’s see what the final 20 minutes bring.

  54. William

    So, it’s come down to this: Gary’s cycle magic, vs. my own humble proprietary system. πŸ˜‰

    I’m not buying today folks. I think SLV leads GLD now, and SLV is not confirming today’s action in GLD. SLV has neg divergence on the 60 min chart. SIL is also weak.

    I believe that over the next 1-2 days we’ll see lower prices in the PM’s … but I don’t know if this correction is over yet or not.

    I also keep thinking of what Marc Faber said the other day.

    So, the net is, for me it’s still too early to commit.

  55. DG

    William: It’s not really one versus the other because Gary makes no claim to time 1-2 day wiggles. He just wants to commit once it seems the IT decline is over—wiggles be damned.

  56. wingwalker

    DG- NLY’s share issuance is actually accretive to book value which is how alot of investors look at the mtg reits. NLY is the best one out there but remember it is a fixed income portfolio so as rates go up the value of their bonds go down. And they have negative duration so they go down more than similar treasury bonds. As long as the px of the stock remains abv book value they will continue to issue shares. And the managers get paid on the size of their portfolio. But as you said they are best in class by far.

  57. William

    DG, this is only a battle in my mind is all. I can see that Gary is an excellent trader and very successful. Better put, it’s a battle (again, in my mind) between cycles and my own system. So far it’s cycles -3 (if today proves false), my system 0.

    A small rudder controls a huge ship. A mans small mouth can start a war. Paying attention to small wiggles may not be as insane as one thinks.

    Or maybe it is!

    Another koan from Japan for ya.

  58. marinho

    good couple of days, but we are in option expiration week, let’s see how it plays out against miners earnings. I am curious about PAAS earnings tonight

  59. DG

    Wing: As rates go up so does their spread which offsets the drop in values. Their yield goes up as the portfolio value goes down. It is, after all, a yield curve/spread play and with the Fed announcing low rates forever on the short end, NLY seems great to me. As well, the other risk is refi’s, but that’s not easy to do these days so they don’t have to worry about prepays. I view these drops as opportunities. I welcome your thoughts, though, as this is not a world i am completely knowledgeable about. Thanks.

  60. pimaCanyon

    DG,

    Contango is what has taken place in the NG futures markets for some time and the net result is that it causes UNG to erode over time. If NG price stayed the same and contango continued in the futures contracts, I believe UNG would eventually erode to near zero.

    I have not researched what kind of effect it has on the UNG price and whether that effect hits UNG at one particular day each month, whether it’s spread out over several days, or whether it’s spread out over the entire month.

  61. pimaCanyon

    From wikipedia:

    Contango is a term used in the futures market to describe an upward sloping forward curve (as in the normal yield curve). Such a forward curve is said to be “in contango” (or sometimes “contangoed”).

    Formally, it is the situation where, and the amount by which, the price of a commodity for future delivery is higher than the spot price, or a far future delivery price higher than a nearer future delivery. This is a normal situation for equity markets.[1]

    The opposite market condition to contango is known as backwardation.

  62. Poly

    Yeah, I guess the $4 Silver move in just 3 weeks is weak πŸ™‚ and if that’s not conforming then what is? If you’re looking for it to exceed gold for every 8 hour block, then you will have problems buying this market.

  63. Nike Boy2008

    Hi gary,

    Thank you…can you please explain?

    I thought a swing high is formed when the price drops below yesterday’s low and doesn’t exceed yesterday’s high?

    I am also basing this of the UUP chart..

    maybe I should look the USD chart instead?

  64. DG

    Pima: Yeah, I know what contango is and how it kills UNG over time. Thanks. I really just mean that such things do not play into my analysis. It “told” me it was going up right away and is up about 2% in two days. It’s a trade not an investment so I don’t care about the erosion. If it clears 5.42 or so tomorrow it would be appropriate to put that break-even stop in, IMO.

  65. DG

    Pima: Yeah, I know what contango is and how it kills UNG over time. Thanks. I really just mean that such things do not play into my analysis. It “told” me it was going up right away and is up about 2% in two days. It’s a trade not an investment so I don’t care about the erosion. If it clears 5.42 or so tomorrow it would be appropriate to put that break-even stop in, IMO.

  66. pimaCanyon

    Interesting SoS numbers on SLV and GLD today:

    SLV -25 mill; block trades -29 mill
    GLD -mill: block trade +.09 mill

    The block trade numbers are the ones that stand out. Looks to me like large traders were selling SLV today, but not selling GLD… ??

  67. William

    Poly, I meant today. Of course the $4 move in $SILVER over the last month was super strong.

    Does not today’s move in silver not concern anyone?

    Silver looks like it’s topping here now. I could be wrong, of course.

  68. wingwalker

    DG, you are absolutely right. I’ve managed a mtg bond portfolio so I just want to pass on the risks of the trade (that I’ve definitely experienced). One thing I’d comment on your analysis is, only the new money they raise in secondary offerings is put to work at the now higher yield. The legacy portfolio stays at it’s historical purchase yield. But you are absolutely right on your analysis this secondary will increase the wtd ave yld of the portfolio & short term rates haven’t moved – so the spread should get wider (depends on their hedging though). I don’t currently own NLY but have in the past. I’ve actually been thinking about the trade again though so thanks for the heads up on the drop. You should also look at CMO and MFA. CMO, if I remember correctly has alot more floating rate assets – so less sensitivity to raising rates. And MFA has a large credit component to it that has been a monster winner over the past two years (and I’m not sure that’s reflected in the book value).

    Cheers.

  69. aaronpalang

    Can we please not have any talk of a triple top on silver? Specially since there is no such thing as a ‘triple’ top! except in manipulated markets ofcourse πŸ™‚

  70. LowTax

    A lot of the mining stocks have decent gaps under them today – and most of them tend to fill their gaps. I think the trend is upward so tomorrow would be a good day to add if the gaps get filled.

  71. Shalom Bernanke

    I only added another 5% of capital today into the late morning dip, as I really don’t like buying into several up days. I had orders to add 10% but was only filled on roughly half.

    At 67% of capital invested, I’m not concerned about the next day or two like William. I just want to have a size I can sleep with and hold through the anticipated move the next several weeks/months.

  72. William

    Long post – sorry – my last post for a while.

    Like Gary said, this trading thing is hard. And my writing at 5 am over here in Japan in the freezing cold isn’t so great/accurate, so sorry that I didn’t write/express well earlier. There are so many things to consider; everyones comments on specifics of this and that are all valid. In the end each one of us has to decide where the risk-reward ratio prompts one to place their own after-tax money. For me, I am always cautious, as I worked too hard to get where I am today. I’ve been following gold since 640.

    FYI I am not a day trader; I’m a swing trader, using daily charts 90% of the time. I sometimes glance at 60 min charts, and sometimes weeklies and monthlies, zooming in and out to help me see straight up on the daily charts. My background is astrophysics, so for me I’m quite comfortable zooming into the quantum/paticle level, and to then zooming out to the macro/relative level, as these are all valid views that need to be considered.

    I get that cycles now favor PM’s, but for me cycles aren’t precise enough, yet. And price shows a breakout in GLD and SLW today. But on the daily charts, I can also see $GOLD backtesting the breakdown at 1380 (+/-10) or so, and I also think that $SILVER could be double-topping here, this being a B wave up in an ABC EW-type correction. I also believe that $GOLD needs to backtest 1260, as it has behaved this way (big runups, then backtests) for the last 10 yrs. A daily 10 yr line chart shows this. This despite fundamentals calling for higher prices. That’s where Faber comes into play, as I’m a long time follower of his.

    Like I said, I might be totally wrong. I sort of hope I am as I’d like to believe in cycles if they are real.

    I read this blog quite carefully, and so far if I’m not mistaken, this is the 1st day silver didn’t show relative strength, and also we do not have a breakout in the $HUI. That’s the only yellow flag I wanted to raise today.

  73. Gary

    William,
    Here are the positives.
    Silver has been showing relative strength.

    Silver had a large move yesterday. It is rare that a large move is followed by another large move immediately. Some kind of consolidation usually has to take place so today’s flat day isn’t really an underperformance in my opinion it’s just a normal consolidation after a big move.

    The XAU and GDX both made higher highs and the HUI only missed by .47 points.

    Gold broke through a significant resistance level.

    If the dollar forms a swing high tomorrow or Thursday there will be good odds that another daily cycle is going to be left translated and the move down into the final three year cycle low has begun.

    Those are the positives as I see them.

    One could always wait for silver to break out to a new high at this point. To do so this early in an intermediate cycle would be incredibly bullish. Sure you will miss a little profit but in the big scheme you will still probably make 100% or more (if you buy AGQ) by the time the C-wave is over.

  74. DG

    Beanie: Another brilliant guy to write-off (like Grantham) Here’s a quote from Hussman:

    “Last week, the S&P 500 Index ascended to a Shiller P/E in excess of 24 (this “cyclically-adjusted P/E” or CAPE represents the ratio of the S&P 500 to 10-year average earnings, adjusted for inflation).

    “Prior to the mid-1990’s market bubble, a multiple in excess of 24 for the CAPE was briefly seen only once, between August and early-October 1929.”

    Doesn’t sound like Dow 15,000 to me.

  75. Clarkatroid

    gary, a couple of novice questions please.

    As a sterling investor, how, if at all, should this affect my strategy. Im a novice investor(no shit) who follows your advice to the letter, rather than a day trading professional like most on this blog. Im worried that the $ will weaken versus the £ to such an extent that it erodes my profits. i suppose theres no real answer to this problem but any advice much appreciated

    Secondly,ive done very well from mimicking your calls tyvm, but this week i got a little flustered when we reduced to 35% then jumped back in +100% withing a couple of days. i know and understand your here to make money and appreciate your cyclical timing skills, but is there a less volatile route one can take riding this secular bull. ie averaging in over a period of time etc etc

  76. Gary

    Clark,
    As long as you aren’t leveraged you can simply ride out any correction.

    The reason we got out (we actually just locked up some profits) was to wait for confirmation that the sector wasn’t going to make another trip back down. In hindsight one could always say see we should have done this or done that.

    Unfortunately none of us gets the luxury of investing in hindsight so we have to play the game by the rules set for us.

    IMO the correct move, in real time, was to step aside and see if the miners would correct the divergence. They have so we now have the odds on our side that the intermediate bottom is in.

    We can now just hold Old Turkey for the rest of the intermediate cycle (with one protective stop which I will go over in tonight’s report).

    In regards to an appreciating pound I suggest staying in silver and silver miners so the percentage gain stays ahead of currency appreciation. You definitely don’t want to own GLD and probably not the major gold miners.

  77. Leo

    Clark, no need to worry. The pound is as crappy as the dollar. Over the last 2 years it has been bobbing between 1.40 and 1.70 to the $.

    I actually slightly disagree with Gary here because the $ index is 57% Euro, and that piece of sxxt is just as bad. So even if the $ goes down it will not go down all that much.

    Now, I earn USD and spend CAD. That really hurts. When I came to Canada the rate of exchange was 1.30 and now it is 0.98. That’s some inflation….

  78. Wes

    Gary,

    I’m going to be amazed if the dollar collapses on schedule, because, as you well know, the only way that can happen is if the euro becomes quite strong.

    You and others on this thread have made the point repeatedly that the country is awash in dollars. But, the Europeans think that Europe is awash in euros, and of course gold is going up in euros as well as dollars.

    If everybody thinks their country prints like there is no tomorrow, how do you think this can ever be reflected in a dollar index ?

    Of course gold will do well in all currencies so long as millions of people believe what I’ve just outlined above. It doesn’t even matter if it’s true so long as millions believe it to be, which is why I’m comfortable in this trade. I’m still a non-believer.

    But the dollar index plunging ? I hope you won’t get faked out if it doesn’t happen.

  79. Gary

    Wes,
    The dollar has been measured against the Euro for more than a decade. It didn’t stop the last three year cycle from running it’s course and I doubt it will this time either.

    Actually most of Europe is trying to institute austerity measures to get their debt under control so they don’t have to destroy their currency. the US on the other hand is borrowing and printing at a staggering rate. The Fed is now the largest owner of treasuries in the world.

    How’s that for monetizing debt? Does that sound like the recipe for a strong currency?

  80. Clarkatroid

    ok cheers. my portfolio is identical to yours so all good regarding the lack of gold

    apologies if i sounded like i was knocking your recent strategy, im not, your calls are remarkably astute.

    Its reassuring to know you can flippit your strategy at the drop of a hat and that your not married to a singular plan.

    Following you is pretty exciting heartpounding stuff, just not too good for old ticker mate lol

  81. TZ(5288)

    You guys are discussing the dollar index. And true, it is flawed by leaving out major currencies and weighting other currencies wrong.

    The Fed knows this (just like they know everything else for those of you who think they are stupid.)

    They quietly keep copies of their own TRADE WEIGHTED dollar index. This means the valuation is based DIRECTLY on what those dollars are used to buy and transact.

    http://research.stlouisfed.org/fred2/series/DTWEXM?cid=105

    Above is the “Major Currencies” index, I contains the main currencies, but unlike the flawed DX they are properly weighted based on actual trade.

    http://research.stlouisfed.org/fred2/series/DTWEXB?cid=105

    This is the BROAD index which includes almost *any significant currency* in the world. Look at the description. It doesn’t get much more encompassing than that.

    The main page is here:
    http://research.stlouisfed.org/fred2/categories/105
    where you have other choices.

    For example, this is the major currencies index going back to 73.
    http://research.stlouisfed.org/fred2/series/DTWEXM?cid=105

  82. TZ(5288)

    DG,

    Shillers “adjusted” “10 year” PE thing is useless from my point of view. How can a 10yr average of anything really tell you something about accurate day to day values?

    How do you average in 2000, 2006, 2008 for example into some kind of useful metric. You don’t in my opinion.

    Regular PE values based on an “as reported” (GAAP; to the IRS; where people don’t LIE like on CNBC) and yearly basis is what to look at.

    http://www.decisionpoint.com/TAC/SWENLIN.html

    First chart. You can clearly review both the PE for 100yrs and the DIV % of the S&P 500.

  83. TZ(5288)

    In other words, use the common sense test. How in the world does adding up and averaging the earnings of the last 10yrs for ANY company make sense in valuing the stock market right now.

    Citibank for last 10yrs?!?
    AIG?!?
    Nokia (which looked wonderful until last year or two when it was clear they have completely *blown* the smartphone revolution)

    So we take 8yrs of Nokia earnings, add in 1 moderate year (last) and current year (falling off a cliff) and call it a pretty good valuation?

    Same with AIG? (those guys were flying for most of the 2000’s)

    Or do we look at what these guys look like NOW, in the last YEAR?

    I think the answer is obvious. I’m sticking to last 12months “as reported” (i.e…not FAKE) earnings for PE rations.

  84. Poly

    WES makes a good point, but I would argue the the ECB is publicly deficit hawkish and “Austrian” poised, even though they have purchased gov debt. The FED in comparison is publicly willing to fire QEx at this.

  85. Gary

    TZ,
    The 10 year average isn’t meant to be a timing tool for daily or even monthly stock entries.

    It tells one where we are in the big picture. When the 10 year average is above 17 long term returns tend to be rater poor. At the end of a secular bear market that average will drop to levels of extreme undervaluation.

    That is the time to buy in preparation for the next secular bull market.

  86. Poly

    Gary,

    Marking Jan 28th as a cycle low remind me of comments you’ve made regarding Elliott Wave marking waves after the fact. You made it clear that decline does not qualify because a cycle needs to be clearly visible ” from across the room”. In cycle theory, is marking something a low required when it stretches beyond as reasonable cause?

    If that Jan 28 is a cycle low, then there are clearly cycle lows in that 07 runawy move. That should men that this runawy move really did start end of Aug and is now almost 6 months old. What do you think?

  87. Gary

    If this is a runaway move and the magnitude of corrections is going to be 30 points then we can easily get a cycle low that isn’t visible from across the room.

    A runaway move kind of makes a mess of cycle theory.

    Unless we see a 40-50 point correction real soon I’m going to assume this is in fact a runaway move.

  88. Gary

    BTW the Nov. correction was almost 60 points so it doesn’t fit in the 30 point size limit. The runaway move would have to have started after the Nov. correction was completed.

  89. Poly

    In that 07 runaway move there were 3 x 30 point drops in 3 months, were they all new cycles?

    Why can’t they just stay “very” stretched?

  90. Gary

    Exactly! Like I said a runaway move usually makes a mess of cycle theory.
    The next 30 point dip could come at any time. Then another can follow right on the heels of the last one. Then there can be a period where the market grinds higher for quite a while.

    Case in point there’s no way to determine if the 20th or 28th marked a cycle low.

    So in the case of the stock market, unless we see an obvious move down into a cycle low soon, we can just put the cycle tool in the tool box for the time being.

  91. TZ(5288)

    CATBIRD,

    The Fed’s dollar index isn’t tradable. It’s more accurate, but finance people will always follow something with a bid/ask price.

    The Fed’s data would be more for a researcher or a person with a long historical time horizon.

    I just wanted to show it exists. Obviously DX is what we are using.

  92. Steven

    AGQ – I had my accountant take a look at the prospectus and it says that a K-1 will be sent out for any income from the ETF. I understand income from other ETFs such that they may receive dividends, etc. and this may be taxed differently. But is there any income from this particular ETF or is it taxed just like an ordinary stock and at a taxpayer’s regular short-term or long-term rates? Anyone know?

    Thx

  93. RA

    Hi all,

    Some of you may be using conditional/contingent orders for triggers.
    I had a bad experience with Etrade on Feb 14. I had a sell stop on GLD – the stop was triggered because the tape printed a low of 130.94 Feb 14! This low does no show up on stockcharts but it shows on eTrade’s chart system.

    Good thing I noticed and got back my positions on Feb 15 – albeit I missed a bit of gains.

    Apparently this is the risk I take when I use these kinds of orders. They pointed me to the fine print after and made an inquiry.

    If anyone has anyting to share on how to mitigate and avoid such mishaps, I will be most grateful.

  94. RA

    Gary.

    I was referring to GLD. My stop was set at the recent low of $132.

    You are right that I should have given myself some leeway. But even if I have a leeway of $1 and set the stop to $131, I would still have been stopped out as the intraday low for GLD on eTrade was $130.94! The intraday low for GLD that day on stockcharts is 132.7! A difference of $1.7!

  95. RA

    Yup it is! Etrade admitted it was “erroneous” due to execution timings and what not but it is a risk I take as outlined in the etrade fine print.
    They say they regret the inconvenience and warned me to be aware of these risks!

  96. RA

    TZ,

    Lol! Actually I have both my hands up! πŸ™‚

    Are you saying that this is a quote form interactive brokers, or are you suggesting that I change to interactive brokers from etrade?

  97. DG

    RA: I saw that low print at stckcharts.com that day! They must have corrected it later, but it was too late for your E*Trade order not to get picked off. I use E*Trade but virtually never place an actual trigger or stop order as I can usually watch the tape if i need to, so have not had that experience, but I have often seen bad prints on both stockcharts and E*Trade. It happens more often than you’d like to think.

  98. RA

    DG,

    Yikes, if what you say is true – that it happens more often than we think – maybe I should just use mental stops.

    I guess this would happen with any other broker.

  99. DG

    RA: I watch a lot of charts and use stockcharts constantly (I’m a member; I program their screens to find my short and long candidates) I’d say I see a 1-2 bad prints every week on one stock or another. Sometimes stockcharts corrects the charts (I guess if the data gets corrected) and other times they never do. They explain that their charts are only as good as the feeds they get. I would avoid placing stops/triggers if you reasonably can. As well if you place a stop for a large order (1,000 shares or more let’s say) they may well try to pick you off. It’s not the broker’s fault.

  100. RA

    DG,

    Thanks for your feedback – it is very useful.

    Yes I had more than 1000 shares for sure in AGQ and also in the miners. But even then I am just a small drop in the ocean. Why would they bother with me? Unless of course there were many others doing the same thing.

  101. DG

    The specialists can see the clusters of stops. They wait for low volume (say over lunch) and then drive it down to pick them off whereupon the stock snaps right back. Seeing the order book tells them what their risk is (If there are huge buy orders just below they know they are safe being long as it limits their downside risk.) At least this is how it worked years ago; it’s been a long time since I was in the business, but I have read persuasive articles about being careful placing stops through your broker.

  102. RA

    I have read those articles about the risks of placing stops through brokers too. And on this blog, Gary and others talked about big boys running stops.

    But this is sneaky and different. The run is considered “erroneous”. Never thought it would happen to me. Oh well live and learn! No major disaster – just some scrapes and bruises πŸ™‚

    Thanks again DG.

  103. Otis

    RA & DG,

    Interesting thing is that move down on GLD looks like a bad tick. It doesnt show up on GC. Never realized a bad tick could trigger a conditional order or stop as the stock never really traded down there did it? What if a stop market order gets triggered and filled at bottom of the bad tick. Ouch!

  104. RA

    Otis,

    You said it. It is not like the usual run on stops because it was a bad tick – no trades occured at that value.

    The thing is this bad tick in GLD triggered the sale of my other holdings (I do not have GLD) which fortunately was up that day.

    Quite scary.

    So for those of us planning to use triggers say on GDX, just be cautious.

  105. DG

    RA & Otis: To be fair, you’d have to be pretty incredibly unlucky to have a bad posted tick on that one stock (GDX) on a day when you had a trade trigger placed and in the direction that would trigger your order…but it can happen.

  106. RA

    Then it looks like I must be mighty unlucky πŸ™‚

    I will issue an alert when I place a trigger stop next time.

    By the way I think we just had a swing high in the dollar – low of 78.22.

  107. TZ(5288)

    RA,

    I deleted my comment cause I can already see the ones who won’t understand it.

    You didn’t get ‘unlucky’. There was a specific, correctable, avoidable reason you lost your position.

    It’s too late and I don’t want to go into it. How about I point you in the right direction? Self discovery is probably a better method anyway.
    ….

    Ask Etrade (or read up) on how a stop order is specifically implemented (hint: you pretty much already know. The problem is you aren’t aware there are different/better alternatives!)

    Now go to interactivebrokers and read up on how *their* stop order is implemented. Look at the ‘default’ implementation for stocks.

    Is it the same as Etrade?
    πŸ™‚
    What would the result of both implementations have been **for the same stop price** on that day?

    Best wishes. I look forward to your results.

  108. RA

    TZ,

    Aww, can’t you tell me what you know and save me the legwork. πŸ™‚

    Not sure if I will understand what I read anyway.

    It sounds like IB is a better choice!

  109. vuvvy

    I trade with IB, but as anything there may be drawbacks with them too. IB actually has a division that does high frequency trading and I always wonder if they’re able to “peek” at their customer’s order flow.

  110. T.J. Rand

    Rebooted- must have been some glitch or, more likely, operator error.

    Interesting commentary by Harvey Organ from last night’s update on the COMEX open interest:

    “The total silver comex open interest shook the bankers to no end as the reading today came in at 147,465 for a monstrous gain of 4965 contracts. If you exclude the non economic spreaders who basically left silver a while ago, we are now at record levels. In oz, the open interest represents 737 million oz of silver or greater than 103% of annual silver production. This is totally unheard of and this is presenting our commissioners with a dual headache. The high open interest in silver and the decline in volume in gold. It seems that players do not want to enter the gold market due to its rigged nature. On the other side we have many wish to take on the bankers in silver which is a lower market cap as compared to gold.

    The front options expiry month of February saw the open interest surprisingly rise from 86 to 121. It looks like more players are trying to get their hands on the last remaining oz of silver. All eyes are on the front month of March and to the shock of the bankers, the open interest ROSE by 483 contracts instead of falling or rolling over to the next delivery month. The open interest for the front delivery month remains resolute at 61,720 contracts. Midnight Oil night for our bankers tonight. Expect a raid again. Remember that options expiry for gold shares is this Friday night and they always raid going into options expiry!”

    And this nugget:

    “As I told you yesterday, the Chinese are massively buying GLD shares and tendering them in for gold”

    Take everything you read with a grain of salt, but the supposed battle around COMEX March contracts is at least entertaining.

  111. Shalom Bernanke

    vuvvy,

    Sure they peek at customer orders, all firms do. Nothing we can do about it other than to just trade at our levels. The desks won’t work to pick off individuals by themselves, but it would be wise to set your trade levels away from where the other “small” traders keep theirs. It’s when they see a many individuals in an area that it’s worth their while to trade against.

  112. Poly

    T.J,

    The blog world is talking about a massive short squeeze about to unfold. The fact these contracts are not rolling over seems to indicate something is brewing.

    I pay little attention to the “blog world chatter”, but when people like Turk come out and declare a massive short squeeze is upon us, it sure gets me excited.

    He is one guy throughout this bull market (although overly optimistic at times) who has made some amazing and accurate calls. Time will tell. Got to like this setup though, just need the dollar to roll over.

  113. ddn3f

    Gary,

    This guy posting on CIGA Erik McCurdy Prometheus Market Insight, says that there might be a short term cyle low on Feb 11, 2011. From the looks of his chart, some STCL coincide with your daily cycle lows. Any thoughts on this?

    http://jsmineset.com/

  114. T.J. Rand

    Poly-

    Agreed on Turk, and hopeful on the short squeeze. Full disclosure, I am a GoldMoney account holder.

    The other guys I think are worth listening to/reading are Eric Sprott, Jim Rickards, Harvey Organ and Ed Steers – although Steers is more an aggregator than someone with original analysis, but he does have occasional Casey Research stuff in his posts.

  115. DG

    Pima/Nike: Disappointing on UNG after all that rally. I am holding for a day max and a little more downside (I am just ate BE now). If you look at previous bottoms you’ll see that there is sometimes a sharp shakeout drop like this after the rally has started. I am prepared to lose up to 1 per cent. but that’s just me. Selling at BE is fine. That’s how my trades often work: BE or a decent gain.

  116. DG

    Miners and silver acting much worse than gold this morning, which is what spooked Gary in the first place. HUI never did make it through, though some of the others ticked through by a few cents. We’ll see how this unfolds today…

  117. Gary

    1/2 percent I don’t have a problem with. If the HUI or XAU drop back down and make another lower low then I’ll start pulling my hair out πŸ™‚

  118. TommyD

    Poly,

    That you for the heads-up. I jumped back into PAAS. Maybe they mentioned on the guidance that they must continue to pay people to dig to get to the silver…lol

  119. pimaCanyon

    Thanks, DG, for the UNG update.

    My b/e is 5.32. I’m just watching it.

    Yeah, disappointing to see it drop after yesterday’s gain, but so far it’s holding near my b/e, so I’ll give it a little more time.

  120. Gary

    We have all the signs we were looking for… well with the exception of.40 points on the HUI.

    If someone was waiting to buy into weakness this is your opportunity. Of course that doesn’t mean there can’t be more tomorrow but we now have the odds in our favor that the intermediate bottom is in.

  121. DG

    I bought a little, but am still somewhat light. I’d like to see HUI really clear its 50 DMA and 543. I’m happy to pay up a little to wait for that, or if we get near 518 my stop can be tighter. For now I am modestly long only.

  122. LowTax

    Moved up to 75% invested in all but on account. Gaps are filled. Sadly, my 401k won’t let me trade due to “unsettled funds.” πŸ™

  123. Gary

    It outperformed during the last leg and I still think silver will outperform gold during the next leg so yes I like SIL better than GDXJ.

  124. funmike

    Maybe money had to go out of PM to take advantage of today’s market move. When played out then a return to PM and the trend continues up. Could be played out quickly.

  125. mamaloshen

    Laszlo Birinyi on CNBC just predicted the S&P would go to 2854 by mid-Sept. 2013 (this would translate to 26200 on the Dow).

    Confirms what Gary has been saying about a runaway bull market (and then some!)

  126. basil

    Added a small amount of AGQ at 150.50
    classic little shake out. Way too many PM bears out there. Even the biggest bulls are bearish short term.
    Faber expects PMs to correct. Morgan expects PMs to correct, etc. How can that be bearish?

  127. basil

    Mama, LT,

    Birinyi has been saying this for weeks already.
    And he’s been right with his extremely bullish call for the past two years. More right than absolutely anybody else.

  128. basil

    If the most vocal and followed gold bugs expect a rough short term correction, announcing that view all over the media – why are the PMs not correcting yet? That’s got to be bullish.

  129. pimaCanyon

    RA,

    Just now read your comment regarding the bad tick on GLD and how it triggered your stop orders.

    Are you in a position to get emails during the day OR can you have your trading platform open during the day?

    If so, and if etrade has alerts, you can use alerts instead of stop orders.

    My broker is TOS and they have a good alert system. If I don’t want to put a hard stop, but want to sell at a price point, I set an alert a little above the price point. If it triggers and I have the trading platform open (which I usually do during the day), the alert pops up in a small window, along with a chime sound. TOS also sends me an email when the alert goes off.

  130. basil

    Mama, LT,

    Birinyi was one of the few who saw the tides turn in early March of 2009. Other prominent callers of this bottom were Robert Prechter (very wrong ever since), Doug Kass (many times wrong ever since), Marc Faber (a few times wrong ever since). Birinyi seems to be the one who’s got it right all the way until today. Of course, past performance cannot be projected into the future, as we all know… πŸ™‚

  131. Poly

    Equity talk everywhere is now very speculative. Of course it has been for a while, but since S&P 1,300 + it seems the kool-aid is really flowing thick and fast.

  132. Romeo Bravo

    Poly, at some point equities will obviously correct. Gary believes it will be later this Spring/Summer as we just grind it out for now. However, I am noticing the Kool Aid drinking as well. If we get some kind of shake, I will be watching closely to see if gold and silver hold over there recent lows.

    I have been searching for charts over the past few decades in which equities went down but gold/miners went up. So far all i have found are early to mid 2008. We also have the end of 2008/2009 as well but I count that as an outlier during the panic.

  133. pimaCanyon

    I have continued nibbling today, SB. Now that we have HUI above 543, I should jump all in. But I will probably continue to nibble. Still don’t like the look of silver short term, like it’s likely to correct here.

    SB, will you buy here or wait for a small pullback?

  134. Jayhawk

    That PAAS report and HL saying they are delaying theirs = ADIOS HL it’s been nice knowing ya! Sold that POS and moved the funds in SLW & SVM.

  135. DG

    I just bought more SIL when HUI got through. I am adding slowly but am getting to where I want to be since if what Gary says is true, there’s time (AGQ at $300 would be nice!) Dollar swing high is encouraging as well. Everything seems to be lining up Sometimes when everything lines up it even actually works out as expected.

  136. Gary

    I think it’s safe to say there are relatively few traders expecting huge new highs in gold at this time. Sentiment has reached extreme bearish levels.

    Too many people trading off of charts instead of cycles and sentiment. So they will miss the turn again just like they miss it every time πŸ™‚

  137. Romeo Bravo

    Gary, yes I missed 2001-2003 as most of my miner holdings now were not traded then. But if you look at AEM or FCX, they clearly show it!

    Was early to mid 2001 considered a “C” wave in gold?

  138. mamaloshen

    I think it’s unrealistic to expect the S&P to double within the next 18 months as Birinyi is predicting, but saying so gets you the press coverage.

    Like many here I have a lot of pm stocks, yet over the last 3 months they have vastly underperformed the tech, energy and industrial stocks I own. That is true even of SLW. Frustrating to say the least.

    I hope this C wave gets going soon otherwise it may may more sense to add to stocks like HAL, KOG, EMC and CCK, even XOM, which have all been on fire lately. Some (gasp) even pay dividends!

  139. Sandy

    Schwab is charging me 8.5 % margin rate for 0-25 K and 8 % margin rate for 25-50K. I spoke to them and they indicated they would be willing to match the rates of other brokers if they are lower.

    Can sombody please share their broker name and margin rate being charged, if it is lower than Schwab’s rate.

    Will appreciate your help.

  140. Gary

    One would have to be crazy to buy tech that’s stretched 17-18% above the 200 DMA over miners.

    The miners have so vastly outperformed everything since the 08 bottom that nothing else is even in the same ball park. Well other than a few companies that were on the verge of bankruptcy and survived because of government bailouts.

  141. Josh

    SB –
    As you scale in on weakness, do you also lighten up here and there on strength as you build up a position? Or do you just build on weakness and stop when you’ve got the full exposure you want? Thoughts on this?

    Thanks!

  142. TommyD

    Silver-fornia Dreaming

    All my holdings are green
    and the sky is gray
    well I’ve been out buying silver miners
    on such a winters dipping day.

    Others feel safe in cash
    Playing golf and getting laid;
    While I SLW, PAAS, SIVR, AGQ EXK, AG and GDXJ dream,
    on such a PM dipping day…

    Well the Pundits like to sell,
    Gary says let’s hold and stay
    Ol Turkey dreamin,
    on such a HUI confirming day….

    WARNING: Do not sing this in public.

  143. DG

    Jayhawk: Thanks much for the SLW charts. Yeah, I saw the same thing at 35.50, but I always wonder if I missed something like “SLW Discovers Its Rights Are For Tootsie Rolls not Silver.” It’s why I never take major positions in individual names (I’m much more an ETF guy).

  144. Gary

    Sandy,
    You should be able to talk them down to 5 -5.5% depending on how much you are borrowing on margin.

    Obviously the more you borrow the lower the rate. At 1 million you should be able to get at least a 3% rate.

  145. DG

    Pime/Nike: That was close. My mental stop is at the low of a few days ago at 5.27. If the bottom is in we shouldn’t get quite that far again. I’ll lose about 1.5% there.

  146. Poly

    Bullion reversals and dollar action today is very bullish. PM’s want to believe it, but not there yet. Once they do, boy do they have some catching up to do!

    “You know, it’s a bull market!”

  147. Jayhawk

    DG-

    Could be a good call. PAAS proves that theory right today. I like SLW the best, but with SVM having their earnings behind them and it’s chart looks solid I increased my stake in them.

    My biggest holding is now SLW, followed by AGQ, then SVM.

    Smaller amts of AG, AXU, EXK.

    That’s it for now, just those 6.

  148. mamaloshen

    Gary,

    Two points: first, it’s true a lot of tech stocks are stretched well above their 200 dma’s, but so are the silver stocks: SLW +35%; HL +41%.

    Second, you are absolutely right that miners have vastly outperformed since the bottom in 2008 (I just looked it up). But actually since March of 2009 the S&P has outperformed the HUI (though not by a lot). So it all depends on timing one’s puchases.

    I think there’s a good chance the HUI will outperform the broad market once again when the C wave gets moving (hopefully soon), so I agree with you there.

    We would probably both agree that tech stocks are highly speculative and what they produce is not based on an underlying commodity. But wouldn’t you say some investments in energy (producers, drillers etc.) makes sense? Really, they are all miners extracting a dimishing resource from the earth.

    Cheers.
    Albert

  149. TZ(5288)

    DG,

    >Anyone have any idea what’s up with SLW today, if anything?

    In the final stage of a C wave, straight silver outperforms *everything* – EVEN SLW.

    Go look historically. SLW will lead earlier on, but lag and often even fail to make new highs in the final surge.

  150. DG

    Jayhawk: I remember many years ago when I was a broker in Philadelphia coming into work one morning and seeing a photo on the front page of the newspaper. It was a small plane sticking out of an office building that it had crash into. The entire executive team of a small company had been meeting there and a number of them were killed or severely injured. Let’s just say the stock didn’t do all that well when it opened the next day. I like ETF’s when investing in size. Individual company risk is a weird thing. As BP holders found out.

  151. DG

    Thanks TZ. Of course we are nowhere near the final surge yet, and today’s action seems quite aberrant (except for Jayhawk’s point), but what you say is good to know. I’m going to be focusing on AGQ by far, but have a few shares of SLW now.

  152. Gary

    I would never waste my time on energy. The fundamentals are impaired. Too much supply and not enough demand.

    Energy was the leader of the last bull market. It will underperform during this bull and it has consistently underperformed for the last two years.

    Sure one can data mine and always find a period where something has outperformed something else. But living in the past isn’t how one makes money. And you surely don’t do it by chasing a sector that has already logged a tremendous gain.

    The way to make money is to find an asset that is depressed and on the verge of the next big move. That’s what we use cycles for and it’s why we are now positioned heavily in the PM sector because the odds are good the intermediate low is in and over the next 2-3 months we could see 100-200% gains in names like SLW and AGQ.

    You are never going to get anything close to that buying tech or energy that have already run higher for months now.

  153. Gary

    Typically we will see the miners start to underperform during the last week or two of a C-wave as smart money starts selling into the top. It’s way too early for that now.

    I suspect SLW is just the victim of hedge funds trying to fill the gap.

  154. ALEX

    Gary Said..

    …”Too many people trading off of charts instead of cycles and sentiment. So they will miss the turn again just like they miss it every time :)”

    Correction if I may…Maybe the majority do not know how to use Tech Analysis & read a chart PROPERLY?? — I.M.H.O.
    Jayhawk and I have continually posted / read the charts as very bullish for a couple of weeks now on GDX and HUI and GLD πŸ˜€

    I bought Jan 25th and haven’t sold yet -using charts and sentiment.

    I Like those charts today too Jayhawk..I use ‘stockcharts’ and really like ‘bigcharts’ for javacharts at times. What are you using, your brokers charts?

  155. ALEX

    By the way-

    I’ve been running around a lot last couple days , and catching up on all the posts…good stuff by everyone.

    Gary- your blog– with your comments reminding of cycle timing , blees and c.o.t ,Dollar cycle, sentiment etc…and your guests comments ,some of them very well thought out with a mix of experience…is really the only one I’ve read that’s consistently rewarding.

    Its actually the only blog I read now,along with web pages like 321gold, Kitco, king World, etc etc

    Thanks

  156. Patung

    Jayhawk’s slw chart is on linear scale, on a log scale slw has failed to break thru the upper trendline and just from a technical chartist perspective looks ripe for short term shorting, not saying I’m doing that at all, it just depends on what kind of charting system you’re using, you’ll get different results

  157. ainaget

    Sandy,

    I don’t use them, but Interactive Brokers has pretty low margin rates (1.65% for under 100k right now). You could try asking them to match that one.

  158. ALEX

    Gone for the rest of the day , just thought I’d add

    sold AVL and REE for good gains ( no volume up lately)

    Added to my position in AXU

    looks to be breaking over recent highs with nice volume already…maybe near 800,000 by days end.

    IF gap below fills on lighter volume in the next few days (but I doubt it), that would be a stellar buying opportunity -i.m.o.

    DG , UNG LONG!! wow-no shorting?? you got a fever?? hehe j/K

  159. mamaloshen

    Thanks for your comments, Gary. While I don’t think the fundamentals of the energy market are flawed longer term (geopolitical problems, Saudi reserves at half what was thought), all this stuff is probably baked into the price of the oil majors.

    I take your point about undervalued sectors, and with some miners selling below their 2006 highs the potential for substantial profits can’t be denied.

    Psychologically, I find it tough to resist “chasing” a sector on the move (as with oil and tech right now).

    Impatience is a problem.

  160. DG

    Alex: I will trade anything that gets stretched to my standards for a reversion to mean trade. I like catching an inflection point and then holding a month or two (or longer) but then I have to feel that that particular market is on my side. I bought SIL at 20.03 using my methods (I sold it when Gary cut back to core), but that one I’d have held for months. It’s just that most of the “stretching” has been to the upside for obvious reasons. I bought the toxic debt crap ETF’s near the bottom in 2009 (That was fun!) Next plunge I’ll be long.

  161. Shalom Bernanke

    Josh,

    I buy or add into weakness, and only sell into strength (unless stopped out, but I use very wide stops).

    That doesn’t mean I sell just because they’re up, they have to get extended on the upside before I trim exposure.

    The way I trade, there was nothing to do today even though I was ready to buy the dip if it extended. Miners didn’t get sold down hard enough for me to add to longer term positions, and there is absolutely no reason to sell anything, either. I’ll welcome a two-day pullback if it comes (to buy more), rather than try to avoid it by cashing out profits now.

  162. Gary

    You guys really need to quit watching the day to day wiggles πŸ™‚

    Now that the miners have joined the party there’s nothing left to do but go on vacation for a couple months.

  163. Bruce

    go on vacation? hmmm …

    we may miss your next portfolio flip-flop! … uh, I mean change

    touchee! πŸ˜‰

    just having fun .. no dart throwing around here, pls

  164. Gary

    No offense taken. The only reason to flip now would be for the miners to reverse and take out the recent low.

    I doubt that will happen though.

  165. bamster

    Gary,

    Now that the miners have also lined up with all the other indicators you look at, are you giving an all clear that the final leg in the C Has begun?

  166. Gary

    We’ve got as many confirmations as is possible to get.

    Barring another curve ball that no one could foresee at this point, I think one has to assume the final leg up has started and invest accordingly.

  167. bamster

    Gary,

    I’d like to see the dollar down under 78 before commiting 100%. It seems to mess things up on a constant basis. Like right now, it’s hanging around the 78.28. Die already.

  168. mamaloshen

    Hi Alex,

    Just bought some AXU. Like you, I don’t think the gap will fill; besides I love to chase stocks:-)

    Last week I bought PAL. Have reported supposedly good drilling results in Ontario since then (tho’ I don’t have a clue how to read those things). It mines gold as well as palladium. One for the watch list I think.

  169. Steven

    Here is a follow-up quote from Bill Fleckenstein on silver.

    “Monday you quoted an expert who said “it would not take much for silver to do something really stupid on the upside”. What price would be stupid? I am heavy in silver and silver stocks and would not know stupid if it hit me in the groin. I am such a pig I never want to sell until I get to thinking “hey it might go even lower”. Then it is ready to go back up.

    If I was not a subscriber I could well be broke. As it is I am retired, live well, and my net worth is nearly as high as it has ever been. Thank you.

    Fleck
    » Glad I have been of some help. “Stupid” would be a parabolic like sprint to 45 or 50ish in a short space of time. If that happens, you will have to lighten up, but let’s see if it does.

  170. kevin

    FYI on watching to many of the daily moves. I did an intense study of MDW for my spec portion of my account. Purchased in October or so time frame at .57. Sold half at 50% gain during the Nov correction. Bought when it broke out over .94 based on chart. It consolidated below. Of course I lightened up.

    I turned a 200% gain into an 80% one. All the work was done, chart, fundamentals, plan, ect. But I traded in an out and deviated from my original business plan based on watching daily moves. This was NOT based on a change to my original plan, just the wiggles.

    Just sharing my story based solely on the day to day price action.

    Like the blog and the conference call you had Gary. Very good stuff and a lot of knowledgeable people here

  171. pimaCanyon

    Yahoo front page:

    “Some Fed Members Talked About Cutting Bond Program

    Some Federal Reserve officials last month raised the possibility of scaling back the Fed’s $600 billion Treasury bond purchase program out of fear that a strengthening economy could spur high inflation.”

    Gary, if they cut QE2 short, or even if they let it run out but do not continue further QE, what is that going to do to the dollar and especially to PM prices?

  172. Bob loves Hawaii

    Pima, that is all noise. The government must buy, and re-issue $ 4 trillion in bonds over the next twelve months. The Fed is now buying almost all of the bonds now. If not them, then who? If they do not buy and the interest rates float to attract that kind of buyer, banks, municipal borrowers, and the government itself is bankrupted. Plus the stock market crashes and with it capital gain taxes.

    There will be QE until people are literally starving in the streets.

  173. pimaCanyon

    Thanks, Bob.

    OR… the government might do QE in a different way. Instead of selling bonds to pay for their overspending, they could just print and pay directly. In other words, monetize the deficit as they go along.

    Has this ever been discussed by Congress or the Prez or Treasury or Fed Reserve? They control the currency, so why not just pay the expenses of Federal government in newly minted currency, instead of doing the shell game of issuing bonds and then having the Fed buy the bonds?

  174. Bob loves Hawaii

    Pima, then Congress can’t redirect the funds to their contributors. Remember all of the interest the FED collects on those bonds are considered revenue to the Treasury, so net affect is the same. The FED can simply tear uo the notes too.

  175. Gary

    I expect QE2 to exacerbate the dollar’s decline into the three year cycle low. It will spike inflation to the point where it collapses the economy not to mention the rest of the world is going to be in a complete uproar over the collapsing dollar and soaring inflation at the time.

    It will be politically impossible to float QE3 in the middle of a dollar crisis. And of course without the backstop of constant money printing the phony economy will collapse.

    The dollar crisis generated during the three year cycle low will not only propel the economy and stock market into the next leg down it will also prevent the Fed from taking the steps necessary to halt it.

    Like I always say there is no free lunch in this world and any attempt to get one will ultimately cause catastrophic unintended consequences.

  176. Techperson

    But dollar collapse = hyperinflation = roaring stock market (Germany, Israel, Argentina)

    Framework Thoughts

    Dollar up, Stocks up, Gold up – Economy looks stronger, but inflation fears
    Dollar up, Stocks up, Gold down – Economy looks stronger, no inflation problem seen
    Dollar up, Stocks down, Gold up – Safe haven reaction to geopolitical problems
    Dollar up, Stocks down, Gold down – Deflation trade
    Dollar down, Stocks up, Gold up – Inflation trade and hyperinflation trade
    Dollar down, Stocks up, Gold down – Geopolitical problem resolved, reverse safe haven trade
    Dollar down, Stocks down, Gold up – Inflation raising corporate raw materials costs
    Dollar down, Stocks down, Gold down – Stagflation

  177. Gary

    No need to guess, we already know what happens because we saw it play out in 2008.

    Dollar crashes, inflation surges. Stocks enter a bear market because profit margins get squeezed and discretionary spending collapses.

    The economy collapses because it’s being driven by money printing instead of productivity.

    Without true productivity it’s just a house of cards waiting for a strong wind.

    If the Fed can’t keep running the printing press at ever greater speeds then as soon as it stops the economy crashes.

    If politicians had just a little common sense they would foresee the catastrophe waiting at the end of this road.

    They are too busy manufacturing phony inflation indexes though so the can continue the shell game as long as possible.

  178. William

    Thanks for your comment yesterday, Gary. I’m still in cash, seeing the same thing.

    FYI I just saw this on MineWeb:

    “Obama Administration calls for 5% royalty on gross proceeds of mines”

    bit.ly URL: http://bit.ly/g8AKoy

    If true, this could be the “reason” for another dip down in the miners. How far I don’t know.

  179. TZ(5288)

    >Now that the miners have joined the party there’s nothing left to do but go on vacation for a couple months.

    There will be an add-point in silver soon. A pullback at or around the old high.

    I plan to take advantage of it (with normally tight stops).

  180. William

    fyi I should have bought at Jan end when my TA showed a strong buy – if I had, I’d still be holding today, as for me I’m not on a sell signal yet – but I do think that a correction is next – maybe small like TZ and Poly think – will wait and see. We are in a bull market, so I’m ready to commit. Just wanted you to know that I missed my own buy signal on Jan 28th is all. So my score is -1, and yes it hurts. πŸ˜‰

  181. Techperson

    Gary – Big difference between inflation and hyperinflation (=currency collapse). You don’t want to be on the wrong side of the trade on that one. From Survive The Great Inflation (pp. 169-170):

    So what happens to stocks when a country can’t or won’t deal with its inflation? In Germany in January 1919, their stock market index was at 99. Inflation began and by January 1920, the index was up to 166, up 67% in one year. Inflation and the stock market continued up, right to the top in January 1925 at
    26,890,000
    Of course, there was a deflationary crash after that, and stocks collapsed. They do that in a deflation. But in the inflation they rose and protected people’s real wealth, because stocks are part-ownership in real assets – buildings, machinery, patents, products, distribution systems – and real assets go up in an inflation. Precious metals, commodities, stocks and even real estate will protect you when the dollar hits the fan.
    The same thing happened in Argentina. That country has been the scene of several hyperinflations, with the circulating currency replaced every so often by a new currency that typically offers one new peso for 10,000 to 1,000,000 old pesos. Most recently, in January 2002 the appointed President, Eduardo Duhalde, abandoned the fixed 1-to-1 peso/dollar parity that had been in place for 10 years. In just a few days, a provisional exchange rate of 1.4 pesos per dollar was set, and all bank accounts denominated in dollars were converted to pesos. After a few months, the 1.4-to-1 ratio was abandoned and the peso left to float…or, rather, sink like a stone. Inflation hit 10.4% per month in April 2002, and business was collapsing. By the end of 2002 the peso/dollar ratio was down 80% to almost 4-to-1. The unemployment rate hit nearly 25% in 2003, and thousands of people were homeless, living by scavenging cardboard off the streets. After a new election in early 2003, President Nestor Kirchner took over in May and stabilized the situation. He took advantage of the dramatically devalued peso to boost Argentina’s exports, while creating credit for business investment and improving tax collections. He also increased social welfare spending to get people off the streets. By December 2005, Argentina had $28 billion in foreign currency reserves and was able to pay off all its International Monetary Fund debt.
    The most commonly-watched stock market index for Argentina is the Merval Buenos Aires (^MERV on Yahoo). It is only 12 large companies, but it is reasonably representative. Here’s how it did during this most recent hyperinflation:
    12/28/2001 272.76 Begin
    1/2/2002 323.69 Duhalde abandons peso/dollar parity
    1/4/2002 343.22 Stock market closes for eight days; 1.4-to-1 peso/dollar ratio set
    4/30/2002 387.79 Peso left to float; monthly inflation hits 10.1%
    12/31/2002 525.95 Peso down 80% to 4-to-1
    4/30/2003 635.95 Unemployment hits 25%
    5/5/2003 653.67 President Kirchner sworn in
    12/31/2003 1,071.95 Situation stabilized
    12/31/2004 1,375.37 Argentina well on the road to recovery
    12/29/2005 1,543.31 Argentina has $28 billion in foreign exchange reserves to pay off IMF debt
    Through all the chaos, currency devaluation, hyperinflation and economic hardship from 2002 on, the Merval protected shareholders.
    ————–=
    Same was true in Israel

  182. Gary

    William,
    At this stage of the game I think one has to just accept that no matter what entry they make there will be some kind of draw down.

    Investors got a pullback this morning but almost no one took it.

    If the swing high in the dollar is signaling the beginning of the end for the buck then it should have at least 10 days before the next bounce. That should drive gold higher for a couple of weeks, probably testing the old highs before this cycle tops.

    Anyone still in cash is in the unfortunate situation where they either have to close their eyes and buy on an intraday dip or risk watching as the rally gets away from them.

    This is where cycles can help to make a decision that technicals will not support.

    If you believe the dollar has rolled over and you know the cycle lasts 20-25 days on average then you can guess that even if you chase right here, and even if you suffer a short term draw down, gold should generally trend up as the dollar is falling.

    Knowing that makes it a little easier to add into higher prices or buy into an intraday pullback.

  183. Gary

    Tech,
    I’m not talking hyperinflation yet. Just an aggressive move down into a three year cycle low.

    Hyperinflation is at least 5-10 years away and who knows maybe the idiots at the Federal reserve will come to their senses in time to avoid that.

  184. kmisak

    Poly,

    My biggest holding (20%) is Great Panther. I have experienced the tremendous upswings when silver goes up (it was shockingly delightful last November!), and the gut-wrenching drops when silver goes down. If you are okay for a wild ride, I believe it is going to be a breakout ball-buster when silver does its thing. πŸ˜€

    I lived in Mexico a long time ago and spent some time in Guanajuato, where the Panther’s main mine is. That place is literally made of silver! Management wants it (so I’ve heard); shareholders are very loyal to it; and recently it listed stateside. I have bought it for friends and family, so I hope it continues to outperform.

    K.

  185. Poly

    Thanks Kmisak, I really do like what I’m reading. Even after the recent move they appear fairly valued. For a relatively small player, they appear to have great management and they really have their act together. The recent listing on NYSE is positive and they only have 2% institutional holding. I wonder if that will change with the recent price moves and listing.

    William, I don’t believe a “correction” is next, I only refereed to a few days of holding to work the $4 move. The way Silver has acted I wouldn’t be surprised if that hold last only a few more days and $30 to act as resistance.

    Gary is right, there is zero reason not to be fully leveraged right now and ready to ride this higher.

  186. Bob loves Hawaii

    Anyone else find it interesting that AEM reports record earnings and increased reserves and fall AH. Cleveland Cliffs reports in line results and rocket higher 5.8%PAAS also struggled today with disappointing guidance.

  187. Ken

    What worries me is how the miners will handle the stock market drop after the expected April-June top? The USDollar will be rising, and the general equities market falling,,, and we remember how the miners did in the 08 meltdown. BUT, I could see gold going up, whereas in 08 gold went down badly. Does it make sense to have NEM drop in half like 08 along with the equity market, and its earnings double?? What are your thoughts

  188. mamaloshen

    Gary,

    Just curious, and maybe jumping the gun, but supposing silver hits your target in the $40’s somewhere and then we get the D wave (I’m sure you’ll call it correctly when it happens).

    How long do you think it will last and what should we do when it happens (having sold all our silver items by then)? Stay in cash for the entire D wave, short silver via ZSL or something else, buy an inverse ETF like SDS or go long the dollar?

    Apologies if you’ve covered this elsewhere, but I like to think ahead and, who knows, silver might be in the $40’s sooner than we think.

    Thanks in advance, Gary.

  189. Jayhawk

    Poly-

    Very interested in Great Panther. They are on my watch list as well as Revett Minerals who is also going to come to US exchanges pretty soon.

    My junior basket is AXU, AG & EXK. AG & EXK kind of look a bit gassed here, hopefully they will take off soon. AXU has been my best performer-up 17% since buying late Jan.

  190. Gary

    Ken,
    Gold should drop down into a D-wave decline as the stock market begins the move down into the yearly cycle low this summer.

    Mam,
    I might short stocks during that period.

    I never short bull markets though. I learned that lesson a long time ago. I think it’s safe to say many people are learning that lesson right now.

    Those that are or have been heavily leveraged short have probably learned a lesson they will never forget for the rest of their investing career.

  191. TZ(5288)

    GARY,

    The mountain background image and how it is coded into the premium site causes an extreme lag during scrolling of a page.

    It is very bad with Firefox and still noticable with IE8. I can’t speak for other browsers.

    If you experience this and agree it is likely only a small modification to the page will remove the problem.

    (Anybody else with this problem who would like a fix please mention.)

  192. pimaCanyon

    Gary, isn’t is ironic that one of Bernanke’s stated reasons for QE2 was to make people feel richer due to their stock portfolios increasing in value, yet he completely denies that QE2 has had any effect on commodities prices?!

    QE2 has this selective inflation effect, it inflates ONLY stock prices, but not commodity prices??

    What is this guy smoking?

  193. TZ(5288)

    Gary,

    You will not notice the issue when scrolling page-by-page. I also said it was less noticable with IE than Firefox.

    Assuming you have firefox, load a newsletter then hold down the down arrow key to scroll down the page. (You tech guy undoubtedly has firefox). You will see the problem.
    (Firefox represents about 1/3 of the internet).

  194. Gary

    I only use Firefox and there is no delay for me. It scrolls perfectly. I’m using the scrolling wheel on my mouse. You might try that instead of the up and down arrows on your keyboard.

    If you need it to scroll faster that is.

  195. Bede

    TZ,

    I’m a Firefox only guy, and I’m not having any problem. I click in the channel for faster movement, but the scroll button works as well on the premium site as it works anywhere.

  196. Glen

    TZ said,
    “The mountain background image and how it is coded into the premium site causes an extreme lag during scrolling of a page.”

    I’m having this problem, too, but didn’t know what was causing it. It scrolls very erratically, sort of a “chunk” at a time.

    Thanks, TZ. At least now I know it’s not my computer. πŸ™‚

  197. William

    Sorry I meant you said “consolidate”, not “correct”

    Well, I eat crow here – I just noticed something that has eluded me – after a long bike ride my head is clear and I see that the gold/silver correction is over, and that we’re going up here, on another relentless climb.

    So I call “Uncle!” here as I CLEARLY f’d this call up. I didn’t loose money, but I now have a late entry. Thankfully this time “better late than never” holds true.

    You can all call me Willy now (same as Patton’s dog πŸ˜‰ !

    Now, to the back of the bus I go.

    Thanks much to Gary, Poly and others who have set me STRAIGHT.

  198. Brian

    Every time Gary has said shut down the computer and come back in a couple months he has been spot on! I can’t do it, but it would have saved me much distress over nothing!

  199. Bede

    Great Zerohedge post on silver demand.

    How Much More Demand Can Silver Handle?

    . . .

    So how much more demand can silver handle? As much as it takes to make it the household name I’m convinced it will be before this is all over. When SLV is a favorite of fund managers. When Silver Wheaton is a market darling of the masses. When Pan American is Wall Street’s top pick for the year.

    Imagine what those bars on the right will look like when most everyone you know is talking about poor man’s gold. The rise could be breathtaking.

    Remember that silver rose over 3,646% from trough to peak in the last precious metals bull market; it’s up about 630% in our current run. A return matching the 1970s advance would push the price to $152. This price level is further supported by the fact that this is about where it would be when inflation-adjusted for its 1980 peak.

    When you look at the potential growth in market cap of the world’s biggest silver investments, it becomes easy to view any downdraft in price as nothing but a buying opportunity. I know I do.

    Read the rest here: http://preview.tinyurl.com/4sgu84u

  200. Rob

    William,

    You do not have a late entry. Gold still has not reached December levels. This is still early, in this, the start of the latest rally. I think we all need to be reminded of this. Also, we are all very fortunate to be in this ‘position’.

  201. ALEX

    Basil

    I believe AVL could explode to the upside too (maybe later), but right now I had great gains (30%)…so I looked at the chart (on re-evaluation) and thought..”Would I buy this here ,looking for a break out?”.. its not one that I would buy right now ,thinking it would break out. I DO see a cup, but weaker volume at this top…a handle/pullback is due.I.M.H.O.
    so I didnt want to give my gain back. πŸ™‚ Maybe I’ll be back in later near $7?

    Mamaloshen

    AXU broke up on decent volume today, looks good to me , think you’ll be glad you’re in. This one ran GREAT last time πŸ™‚
    PAL…I sold in Dec , but still looks great! Palladium/gold miner.

  202. Gary

    I learned a long time ago, never, never, never short a bull market.

    The surprises come on the upside and even if one is just trying to day trade they usually just end up whittling away at their account when it’s all said and done.

    Much safer if you think it’s going down to just stand aside and then buy into the dip. That way you at least have the secular trend on your side and a timing mistake will get corrected.

    The time to sell short is when the 50 DMA moves below the 200 and the 200 turns down. (a bear market)

    Then you have the cyclical trend in your favor.

    I never have been able to figure out why the average retail trader thinks he has to catch every wiggle up and down in the market.

    Virtually none of them every do it successfully over the long haul. Yet they usually continue making the same mistake over and over throughout their entire career.

  203. Brian

    MLMT, I think there will be plenty of folks to take your trade. Best of luck. Barring that, Gary has done everything he can to discourage shorting a bull market. For the sake of you portfolio, give him some consideration.

  204. ALEX

    POLY

    I bought Great Panther , it has done GREAT , and I think it’ll even do a lot better, because it will have more exposure now that its on the NYSE.

    To see the Strength on this, consider this…

    On a 1 yr wkly it ran roughly $.65 to $2.90 (gain of $2.25) , so in January it pulls back 50% of that move-

    ( $2.90-$1.12= $1.78), and then regains it all in the last 2 wks…now sitting again at all time highs. Great relative Strength.

    2 Cautions though..

    1) is it going to form a right shoulder to a reverse H&S now?

    2) if you buy..SELL THE D-WAVE, It’ll be down big πŸ™‚

    Did you see a chart of $4 AG last Aug? Maybe a repeat of that?

  205. ALEX

    I actually agree 100% with Gary, but if you ‘re going to short it anyways…I meant be ready to close it FAST , INTRA-DAY around $56-

    if ya know what I mean πŸ™‚

  206. DG

    Nike: UNG needs to hold above 5.27. I am still long, but obviously we are close. A tick below and I am out. It popped right after my “rubber band maximally stretched to the downside” call. but now has given the whole rally back. I had hoped it would keep going, but losing 1.5 % is not a big deal if it winds up breaking 5.27. NG futures are up well overnight so far, so we’ll see.

  207. Bob loves Hawaii

    Alex, too funny. I was just looking at Great Panther to post on my blog on the 4th time it has hit this resistance area, and when it breaks, $4+ is a good next level.

    IHS is a possibility, as well.

  208. Otis

    MLMT,

    I find the volume analysis fascinating. Question for you or anyone else who studies volume, on the silver chart we had a high volume sell off on 11/9, but when silver rallied back to that level later it broke through with little pullback and on lighter volume. Does this fit with volume analysis? Another interesting thing I note is our recent pullback in late January reached pretty close to the closing price on the 11/9 selloff. Again is this expected or just a function of an important technical price level? Thanks in advance!

  209. ALEX

    Hawii Bob

    I was thinking the same thing about GPL. When it breaks above that resistance , thats it…its an all time high.

    But my mentality ( for myself) is that I look at it on a 1 yr weekly , and the volume is right…very strong buying , so I may add more on any light volume pullbacks πŸ™‚

    And yes, that IHS has been running nicely too

  210. Ryan

    Hey guys, just wanted to give a quick hi, I’ve been following gary for awhile now and finally subscribed! I started to dip back in the last couple of days and today and I’m about 50%. I know gary is back in but I’m just thinking should I wait to see if we get a intraday pullback or should I just close my eyes and put in the rest of my 50% tomorrow?

  211. Gary

    Perhaps add a little tomorrow and then add the rest into the next daily cycle low.

    Or you could just enter and then sit tight for the duration of this intermediate cycle. If you do that you have to be able to think like an investor and ignore any short term draw downs.

    You don’t want to add and then freak out and sell for a loss because you didn’t time a perfect entry and got caught in a short term correction.

  212. ALEX

    Ryan

    It really depends on your personality and maybe experience with the markets. Some people go all in , and if it starts pulling back (say for 2 or 3 days) , they really get nervous. Others know it can be normal/harmless.

    Example , look at GDX. It has a small gap in price below it from Monday. If Gold goes up tomorrow and you buy when GDX is near $59…then next monday through Wed it drops to that gap..will you be ok?

    Possibly , no one can answer that but you. I wish you the best πŸ™‚

  213. jeff

    open question

    would anyone have a suggestion for selling physical silver? how do you work the timeing? also any recomendations for a company?

  214. jeff

    gary

    if i want to go from comex gold to comex silver, how do you time that? intraday and just try to sell on a bounce and buy silver on a dip? sounds hard. ill probably have to let the bull correct the move.

  215. jeff

    gary

    sorry , second question was a different topic.. i guess im just catching on the silver should do better. it did not dawn on me until you said the other day ” i probably will never buy gold again”
    so i should just sell 3 contracts and buy the silver. the timeing is not that big of a deal?

  216. Ryan

    Thanks Gary and Alex, I’m definitely trying to learn. Today, I added more to my SLW position thinking if it does go down again to close the gap, I’ll put in more but I am already quite overweight with SLW compared to my other holdings. I’m trying to rebalance it more in lines with Gary’s portfolio. I do have a question regarding AGQ. I’ve been burnt really bad playing with HNU.to (2X natural gas futures). But from my understanding, AGQ follows 2X SLV and not the futures? So there’s no contango effect with AGQ just the daily rebalancing effect just like every other 2X etf?

  217. jeff

    you said that you never looked at futures that much? if the taxes are lower, wouldn’t that be a big factor. plus you would not be feeding the beast as much =)

  218. Arun

    MLMT

    You won’t be alone for shorting around 1390. There are others who believe this is a rounding top. What’s your TA for that top?

    I do believe though there will be pullback around 1390 – chart linked for couple reasons
    – IHS target achieved. This was on a 60-min with head at 1310, neckline at 1350.
    – shakeout weak bulls

  219. Conman62

    Hi Gary, an appreciative subscriber here from down under.
    Really enjoy your posts however I can buy only ASX listed shares at the moment so your USA shares are used as a guide.
    Not really that much on offer here in Silver miners thats worth looking at but having bought SVL (ASX) yesterday (Wed 16th) I had a nice little earner at approx 12%.
    Also looking at AYN & CCU to ride this next wave up.
    I own PRU & AZM….both gold miners in Africa & I beleive these will keep me happy as well.
    Thanks for your excellent subscription & Blog Posts.
    Con.

  220. Ian

    Con, like you, I can only invest in ASX listed shares. As there aren’t any silver miners of note, or any ETFs I stick to the gold miners.

    Currently I have EAU, GRY, MML, NCM, PRU, RMS,BDR and SBM. I think the ASX gold index bottomed at the end of January the same as the HUI.

    I get jealous of the guys in the USA who have a much greater choice of investments.

    Gary, thanks for this blog. The knowledge here is awesome. Your subs reports are indispensible!

  221. Gary

    Gold will have it’s intermediate correction no matter what the dollar does. The same thing happen this summer. Dollar down, gold down.

    But it really all boils down to whether the dollar still has one more move down into a final three year cycle bottom this spring.

    If the buck breaks below the Nov. low then any question about whether gold is going down will be off the table. The dollar crash into the three year cycle low will drive the final C-wave just like it’s driven all final C-waves.

    Not to mention if gold gets anywhere near $1300 again we would expect the COT to hit another 100 Blees rating.

    If is going to be pretty tough for gold to drop significantly if the commercial traders are buying.

    Folks this always happens any time an intermediate cycle approaches the old highs. There’s always a slew of double topper’s that come out of the wood work. And so far everyone of them has been wrong for 10 years now.

    BTW the Aden sisters were calling a D-wave last spring also.

    It all boils down to the 3 year cycle in the dollar.

  222. Gary

    Arum,
    I’m not really sure what your chart is showing. Are you suggesting that the gold market is going to act exactly the same as it did this summer?

    Kind of dangerous since the fundamentals are completely different as the dollar should now be collapsing into a three year cycle low (and it is making lower lows and lower highs).

    Not to mention the move out of the July bottom was one of the most powerful of this bull market.

    If you are expecting something similar why on earth would you sell short?

  223. mamaloshen

    Just for the record, the latest Aden sisters monthly newsletter said that it’s possible their ‘D’ wave in gold might have been a mild one and could have ended with the late Jan. low at $1308, though still too early to say at this point (I deleted their letter so trusting to my recollection of it).

    BTW I much prefer Gary’s cycle analysis and instincts which are far better in timing gold and silver than the Adens, though they, like Richard Russell, are fine for long-term investors in ‘Old Turkey’ mode.

  224. Gary

    Yes the only problem with both is that they won’t get one out in time to avoid a D-wave.

    Even Old Turkey’s are best to avoid those if at all possible.

  225. Gary

    BTW there is no such thing as a mild D-wave. D-wave result from the crash after a final C-wave parabolic top.

    We haven’t had that parabolic move yet.

  226. mamaloshen

    I agree with you Gary. Probably easier to tell subscribers it was a mild D wave than that they got it wrong and it never existed in the first place!

    One thing I like about your service is that if your timing is off by a few days, you say so and move on.

    I suspect a lot of ‘Old Turkey’ Aden subscribers may end up throwing in the towel near the bottom of a genuine D wave instead of loading up at that point which is what they should be doing.

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