BERNANKE BOTTOM OR CRASH?

Today’s FOMC meeting and press conference has the potential to either put in a daily cycle bottom in the dollar index or initiate a waterfall decline into the dollar’s three year cycle low. There is a lot riding on this meeting.

Let me explain. Today will be the 26th day of the current dollar cycle. That cycle typically lasts about 20-25 days. So it’s already starting to stretch here. The last few days the dollar has been consolidating while it waits to hear what the Fed has to say. I suspect if the Fed clearly states it will close down QE2 in June that will give the dollar the impetus for another dead cat bounce.

 
Make no mistake though, this will only be a dead cat bounce. Just because Bernanke ends QE2 in June doesn’t cure the problem of the trillions of dollars he’s already printed. The foolish attempt to print prosperity is going to have dire consequences, it is going to cause a dollar crisis. There’s no way Bernanke can avoid that now. The damage has already been done. There’s no way to push the toothpaste back in the tube.

In the event that the Fed does clearly state their intention to end QE (and I think this is the most likely scenario) the minor dollar rally should drive a continuing correction in gold and silver. They are due for a daily cycle correction. It will only be a correction though. The dollar catastrophe isn’t done yet and Gold’s C-wave still has further to go (alot further).

The other scenario, and the one I think is less likely, Bernanke doesn’t state a clear intention to halt QE and the dollar tanks. Thus initiating a final dollar crisis immediately.

Only an Keynesian academic would think lasting prosperity can be created, with no unintended consequences, by printing money. But only an imbecile would risk sending the dollar over the cliff that it’s hanging on. Bernanke had better say the right things this afternoon or all hell is going to break loose in the currency markets.

525 thoughts on “BERNANKE BOTTOM OR CRASH?

  1. Karl

    Bernanke will go on to some version of QE3. He has little alternative. There may be some amount of “dancing around” the idea or the words will change. But it has to be. Inflation of some level not only cannot be avoided, it is intended. It’s the only way out… the only way to inflated housing values and support state pension funds and tax bases. Bonds will take a hit, but that’s will be part of the offered sacrifice. OK.. yeah, that’s my 2 cents.

  2. T.J. Rand

    Karl-

    Agreed, but it will not be called QE. It will be given some benign, perhaps Orwellian name like ‘Recovery Support Program’ or ‘Treasury Stabilization Program’. And in the short term,it may simply be continued reinvestment of maturing treasuries, but there will certainly be no liquidity withdrawals. This close to an election cycle, the Fed rarely countenances anything that raises the ire of a sitting administration.

    I’m betting on hawkish talk, but dovish substance.

  3. Danno

    I haven’t been to this site in a while (aside from yesterday). Can someone please explain if this ‘C Wave’ is the final shabang for gold? Or just the final leg up before a (potentially) long consolidation/correction period before another series of waves takes gold even higher. Thanks.

  4. T.J. Rand

    Danno-

    Don’t know if you’re a subscriber- it sounds like not. I’d urge you to subscribe – Gary is pretty explicit about all of this in his nightly letters. And you can slo pick it up by looking at Gary’s comments on the blog.

  5. 86d4life

    Anybody,
    I`m watching SPY in pre-trade and there are over a million shares a minute trading and it has been building to this level for almost an hour and the volume is increasing. What is this? I see this on GLD once in a while too but mostly on SPY

  6. Karl

    T.J. Yes, the new name will be part of the “dance.” Many of the states have been living beyond their means for years. Their pension funds are underfunded by mutiple Trillions! Housing values have devestated real estate taxes and layoffs have hurt income taxes. Some are near bankruptcy. A market down turn of 40% will kill them. The Fed could even orchastrate inflating all currencies world wide. Then it will all end in rebalance at a hirer level… Gas will be $6.00 gallon but wages will be up 40% too. Then “all fixed!”

  7. Edwin

    dollar bounce immeninent, ben’s speech coming down.

    gold price and dollar can move upwards together.

    gold still in run away move point which I believe is at 1490.

    now for timing an entry – gold has already dipped to 1492 (could that be the brief cycle low?), it’s trading much higher at 1512 already so it’s game on to some.

    lets see how this unfolds by 1:30

  8. TZ(4404)

    I went ahead and doubled my gold futures position at 1510 with a small stop.

    I suspect the bottom is in an this continues to creep up. I’m not risking more than 1% of net worth on the play.

  9. pimaCanyon

    Time of FOMC minutes release and Uncle Ben press conf. Times are Eastern Daylight Time:

    The FOMC will release its decision on monetary policy at 12:30 PM. It will be followed by a news conference, the first of its kind, from Fed Chairman Ben Bernanke at 2:15 PM.

  10. Edwin

    yeah it’s speculative money going in, i agree to fade this trade end of trading day. lets see what happens at comex close before ben talks.

  11. TZ(4404)

    If we don’t move up and my stop is close when they are about to announce I might close the position I just added and just deal with things after. Taking things as they go – winging it a bit.

    Overall I might mention that I highly suspect gold will rally a strong $50 or more this week and set off the stage for the final few weeks of this thing. Of course the pullback and dollar recovery is the alternate scenario as gary mentions (or even an END of the C here if the fed did something really wild), but I give that less than 50% odds.

  12. Poly

    Just means the moves before a meeting and the initial impulsive moves in reaction to the news is often not reversed. So the initial move “is to be faded”, meaning to take a trade against that move.

  13. Edwin

    yeah, it’s not an easy week to trade the market. a couple of low vol days this week. so no one’s making any big moves.

    it’s not always easy, but it’s things are at timing points/turning points at the moment. and the speech can provide some sense of direction.

    so i’m just sitting on my hands. i have my positions already working but i have some captital to deploy as I think other here too are waiting..

    TZ hopefully it works out, it’s a gamble man but you got your stops.

  14. wingman

    Kal,

    (I posted late last night under the former thread, so I thought I’d repost).

    Sorry to not get back to you quicker. Just now catching up.

    To answer your question, I averaged in to my May 39’s between 3/22 (at .89), the 24th (at $1.18) and the 25th (at $1.24). Sold all of it Monday morning (4/25) at 6:31a.m. PST at $8.05. Roughly 680% in a month. It was a nice trade, but as I’m sure you know, it doesn’t always work out that way.

    As for my SLV 50’s, I don’t really consider it a lottery play in that I fully believe the silver story and have the utmost confidence in Gary’s analysis, together with the analysis of others I trade with.

    That being said, I am careful about position size. I want juice, but balance the risk. This is why I rarely am totally invested and almost never allow myself to go into margin. I know how much I can lose and am careful when I go out of the money to not go anywhere near my freak out point so I don’t make emotional decisions.

    Gary has provided wonderful and careful advice about how to safely play options and about the importance of learning them before using them. Just stick with his counsel and you’ll be fine. Best of luck to you!

  15. pimaCanyon

    Poly,

    So is this the way you would read it? –> PM’s are moving up (since yesterday’s low). If they continue moving up into FOMC announcement, it’s likely they will head south on the announcement itself.

  16. pimaCanyon

    So the scenario we’ll all hoping for is: PM’s tank on the announcement, then late today or tomorrow that move is reversed and they rocket higher.

  17. ahain1223

    Pima its unlikely the reversal will be so quick, more likely the dollar bounce will have to play out before it tanks again, around 9 May

  18. Poly

    Pima, not trading that thought specifically, just threw it out there because this major meeting coincided perfectly with overdue expectations of a cycle low in both Gold and the Dollar. There is no better setup and a good rally into this annoucnement when expectations for a move to a low a high made me think “fade”

  19. Matthew

    …the market will do anything on helichopper benny speaking… I think unless he says something wild the market already has it planned in. It seems their policy lately has been not to say anything that will get the markets too wild on purpose..it could also change who kknows…

  20. Hot Rod

    Doesn’t hot money know the details before it goes public?

    These are strong moves this morning in the metals.

    Gotta,

    The bet was between Gary and Doc and it was whether or not the S&P would make it back to a high. Gary bet no, Doc bet yes. It ha taken a while, but SPX finally made it yesterday.

  21. Razvan

    opening position here with 1% stop will get wiped in the couple of minutes leading to the announcement when the volatility spikes

  22. TZ(4404)

    BRIAN,

    Don’t know what “had my entry last night at 1506” means. That you EXPECTED me to buy then?

    I rarely will buy in the middle of the night, you just asking for a fast loss on low vol moves.

    My thinking is the following:
    1) I think everybody INCLUDING this board is looking to buy and looking at yesterdays lows and saying “huh..that CANT be the low, CAN IT????? Hmmmm…Let me WAIT and see. I THINK it will go lower”

    2) they are also thinking “well…I want in and more, but I SHOULD WAIT until after the fed to be prudent”

    But I think everybody else is doing the same thing even though the fed has made a good deal of effort to seeminly telegraph what they are going to do. The markets are way too fragile for surprises and I think they will do almost exactly what they have hinted at – mostly stop QE2 in June but keep rates low and reinvest whatever they have in treasuries.

    So…I think there is still a ton of possible buying, but for those two reasons everybody is waiting or faking each other out as it creeps higher and higher against them. Slowly bit by bit people are capitulating, but the ‘recognition’ hasn’t hit yet.

    We’ll see. I’m not risking huge, but I think it might work out.

  23. TZ(4404)

    I’m also not touching silver for now.

    I can’t buy it large with a small stop like gold and for reasons yesterday I’m not confident it is the better investment at this point.

  24. KAL

    Thanks Wingman. Great trade. I appreciate you posting… Yeah, I’m just mirroring Gary and trying to keep an eye on what happens around my little investment. I have quickly learned to trust Gary as well, so I’m not worried if I don’t get too smart and try something cute! I’ll leave those moves to you. Haha. You’re a poker player anyway, right?

  25. wingman

    Alex,

    In response to your comment on the previous thread, by the time I sold this trade had swelled to roughly 25% of my entire portfolio, so what started as a decent position, quickly became a huge trade…banking what some would be happy making in a salary for a year.

    As for the photo, yeah, it’s Mammoth. I’m in South Orange County (about 1 hour up from San Diego), right on the coast. Beach at my doorstep and local mountains two hours away. It really is nice living in a place where I rarely wish I was somewhere else 🙂

    Have a great day, and thanks for the great trading tips you regularly post and the friendly tone you always display!

  26. Gary

    There’s nothing wrong with waiting till the Fed meeting. If the dollar tanks and gold and silver shoot up then the two day dip was the cycle low and today is day one of a new cycle.

    That means there’s still potentially another 20+ days before a top. Missing one day is no big deal. The move from $1510 to $1650 is still a huge move.

    If the dollar rallies and gold and silver correct then you saved yourself having to weather quite as much draw down.

    There’s no need to jump the gun here. Just sit and watch. We’ll know by the end of day.

  27. Dan

    Golds only a few dollars away from all time highs. Looks like we may get a repeat of 2006 where we had silver correct hard after a parabolic run up and then for the next month and remainder of the C-wave, gold kept making news highs while silver just came back up to make a double top.

  28. Rob L.

    TZ,

    Your four-point post yesterday with regards to why silver might not be the best investment going forward was very well thought out. I actually printed a copy.

  29. Brian

    TZ, I will just have to check the chart and see if I find something appealing at 1510 like I saw at 1506.

    Something tells me this thing will leave people chasing again.

  30. Russell

    Gary,
    Is a correction usually only two days? And could a brief Benny bounce be followed by a dollar drop and the usual $25 gold correction?
    Russ

  31. wingman

    IMO the surprise is to the upside today with the fed speaking. After all, is there anyone anywhere who isn’t expecting them to prop up the dollar? So doesn’t it seem likely the downside to metals is already priced in?

    I for one don’t want to miss any buying opportunity on weakness during a parabolic C wave move (which is why I was buying yesterday). Nevertheless, one has to do what they’re comfortable doing.

  32. TZ(4404)

    >There’s no need to jump the gun here. Just sit and watch. We’ll know by the end of day.

    My buy is unusual and I normally wouldn’t make it. Clearly I may lose.

    Doing something before it is “safe” or “obvious” allows smaller stops and higher leverage. Once a trade is clearly “good” it usually becomes more volatile and open to correction.

    Just wanted to mention what I’m doing for whatever it is worth. I think high odds I get stopped out actually, but we will see.

    PS: I’m 3.5x leveraged now.

  33. TZ(4404)

    >TZ, I will just have to check the chart and see if I find something appealing at 1510 like I saw at 1506.

    There was no magic at 1510, it was simply the point this morning when I decided to give it a chance by buying. (And we sorta have a reverse H&S pattern over last 2 days at that line also).

    I’m out of that buy if we cant hold the lows overnight.

  34. Gary

    Usually a daily cycle decline will last 3-6 days. However in a runaway move the decline just has to cover a standard correction size. That can happen in one or two days.

  35. jhnewman

    I haven’t read all the posts. This is probably in there somewhere:

    12:30 EST Fed statement released

    2:15 EST Bernanke “propaganda conference”

    The other Fed procedure changed: the Fed “will release economic projections of policy makers 3 weeks earlier” than it used to. I assume they’re talking about the Fed minutes here.

  36. Poly

    Now if we could muster an impressive drop over the next 3 hours, that would be a very nice fade possibility and setup to mark a cycle low.

  37. Brian

    There we go. We re-tested that neckline last night and it looked like a low risk entry for a person that likes tight stops. Nothing more other than we love to dig into your brain because we know it bigs you!! J/k

  38. Poly

    Jay + Alex,

    What are your thoughts on former glory boy GPL? Has it dropped enough and forgotten to the point where it could be an excellent candidate for the final run?

    Looking at the 6 month daily chart, it’s fast heading back to test it’s Dec 2010 twin peaks of $2.93 which also happens to be the breakout point in Feb -2011. Another $0.20 drop and this former high flyer might be worth a good look?

  39. Shalom Bernanke

    I’m still sitting tight, but as the miner indexes get closer to levels where I’m willing to take a shot, I might soon have to put buy orders in.

    My limit prices remain a ways below current prices. I prefer to sww this action after the criminal Fed wraps up, but since I give them ZERO credence, I have no problem getting in before it opportunity presents.

  40. ALEX

    POLY

    Obviously NOT hoping for the 43.00 area, as though I crazily expect it to go that high, LOL

    Hoping for the $3.oo area, then look to possibly buy.

  41. Shalom Bernanke

    jhnewman,

    Only here in private, the BS is for later! 🙂

    KAL,

    Yes, NUGT is on the list, as well as SVM, EXK and PHYS so far. Still nothing done, but for example, I’ll start to buy NUGT in the mid-$35 range this morning if it presents.

    I’m only risking 2% of total capital on this trade, with very wide stops. I’ll give NUGT a $4 stop to figure appropriate size.

  42. Jayhawk

    Poly-

    Might be worth throwing a couple bucks at it for the final run.

    I’ve got “silver miners fatigue” right now. It’s a illness that makes you puke when you pull up a chart of one of the silvers like Silver Weaken, Little Pussycat Silver (formerly Great Panther), and the former SIL ticker now known as SIC.

    Joking aside, I still think these boys can run if Gary’s thesis is correct which I think it is. TZ says miners will suck wind from here on out.

  43. TZ(4404)

    >TZ says miners will suck wind from here on out.

    No. Actually both gary and my comments can be correct.

    I simply said they tend to not outperform straight metal in the final stages here – which clearly appears to be true so far. Nothing prevents BOTH going up.

    If silver went up 50% and slw went up 44% both gary and I would still be correct. Everybody still wins. My conjecture was on how to win the best with least company specific risk. That’s all.

    We can all pick apart the market remains for the truth after this C ends.

  44. DG

    I have been out of the miners for some time and will not be back into them nearly in the size I was before. They may or may not play “catch up” but I don’t see the point in guessing. We have something we know will go up if gold hits $1650. There are several ways to leverage the gold move, so I don’t see the point of miners at this point.

  45. jhnewman

    (In the voice of Gomer Pyle):

    “Well, surprise, surPRISE!!! Gee, Andy, the dollar’s popped to almost 74!!! Who’d a thunk it?”

  46. Jayhawk

    TZ-

    I hear ya. At this point, the miners are acting like the move is all over for them. A lot of work to be done down the stretch, but Gary has watched these markets more than me and thinks they will shine. At this point, I’m still trying to decide how much of my $ will be dedicated to them.

  47. ALEX

    POLY-JAYHAWK-BASIL

    Jayhawk said..”I’ve got “silver miners fatigue” right now. It’s a illness that makes you puke when you pull up a chart of one of the silvers like Silver Weaken, Little Pussycat Silver (formerly Great Panther), and the former SIL ticker now known as SIC.”

    So I am guessing ,BASED ON THAT,it is now a buy! 🙂

    The chart looks like one of those ‘shake-outs, false break to the downside’..but it still looks scary.

    The thing that I will do is this- watch the support/resistance line and try to buy a smaller position close to it, and if it breaks below that..I’m out.

    If it just doesnt run and others do, I’m out and will redeploy cash where it works best for me.

    If it starts running up, I will add to my position.

  48. The Angry Hippie

    SB,
    So you are done with silver for the remainder of the C wave? Can you briefly recap the logic of getting out of silver. Seems lots are thinking that way. Is it just a “too much of a good thing” reasoning?

    Too stretched = too much risk?

  49. Shalom Bernanke

    Hippie,

    I was only in miners later round, besides my physical holdings. I haven’t given up on silver and it’s still the best bull going, however it’s a bit extended so for new trades I prefer to be in primarily gold this round.

    Gold has held up, is less volatile, and is less likely to do much damage this late in a C-wave if things don’t work as planned. It also won’t rip higher as much as silver if things work as expected.

    I prefer to limit my risk this late in the C-wave is all. And I wouldn’t even consider selling my physical, while I might nibble on some silver etfs along with larger gold purchases.

    If one has a strong hand in silver right now, I’d be content to play it through.

  50. KAL

    Hey experienced folks. I am looking to move my IRA and taxable accounts out of my current bank to a more user-friendly web-based experience after this C-wave ends. What do you all suggest? Thanks!

  51. DG

    Go TBT! I am hoping/expecting that the charade and foolishness of buying Treasurys will soon become clear to the market.

  52. ALEX

    Yeah POLY

    I noticed when you asked , you mentioned the $2.93…so maybe I should have used a java chart like I used to and got the exact #’s. Instead I drew a fat line to $3.00- I am getting lazy and shall pay for that! SO…stop at $2.93

    It’s funny that you guys can read my charts. I like to break it down and look at everything for all the probabilities, but my wife see’s them and says…”Hey, are you drawing a leopard? Are those eyes?

  53. Marxist

    No reason at all to believe that it will be anything but the same old same old. ie. He will say. U.S. has a strong dollar policy, while in the background he is working on the next plan to print dollars.

    He will say, The economy is showing clear signs of recovery but we see no reason to end QE II early.

    Expect a small dollar bounce. Might last as little as one day.

  54. jhnewman

    Yeah, right, “Shalom”.

    What you’re REALLY saying is: “I’ve gotta go put the finishing touches on the Fed statement, and then put on my TV makeup”. (The kind that doesn’t run when you start to sweat.)

    ;^)

  55. ALEX

    JAYHAWK

    I see ‘ill sentiment’ on miners too, but I have to tell you…I remember everyone saying when AG began to pullback from $26 “AG went straight up, If it gets to the gap at $17, I will definitely buy!”
    Its at $20 and no one wants it.

    EXK back to the $10 break out is a screaming buy, but no one wants it here , saying its broken at $11. I still love that one.

  56. ahain1223

    personally i think weve already had that 1 day bounce with the down grade, surely a longer dollar rally is needed to convince others that the D wave decline has begun, 1 day wouldnt cut it for me

  57. Moneyman

    Marxist!

    He will choose his words carefully. He will end QE2..We alla know that..Its on the financials here in Sweden.

    I Do not expect any correction in precious metals either..Rather an upswing.

    What can he do? End QE2 and then? What can happen? Its such a mess now so he actually cant say to much..Nah..Neh..Maybe..And so on..

  58. Chrys

    I’m thinking what will get us down to Gary’s gold buy point. Maybe a 25 basis points increase in the fed rate this afternoon? That will tame some of the bullishness around here.

  59. Jayhawk

    Bob-

    Yes and took your advice and bought those SLV May 50’s with my life savings! 😉

    I actually just emailed you back bro.

  60. pimaCanyon

    KAL,

    I’m happy with Thinkorswim (TOS). GREAT charting package with real time data at no charge.

    Lots of folks here like Interactive Brokers, but I believe their charting package is more limited than TOS’s.

  61. William

    Took a little nibble on some SLV calls here. Just adding a bit to positions I already have. Gold and silver both holding up fairly well here given the bounce in the dollar.

  62. Brian

    Good to see people are getting nervous about silver and bailing. Sets it up nicely for a move higher. I am sticking to the plan instead of basing my actions on “well it could do this, but it could do that too!”

  63. Poly

    Feeling totally naked and hearing Gary’s words echoing “I told you so”, I decided to take a position around the lows of the day. So I’m in at about 40%, all SLV and GLD calls.
    With Bernanke speaking and fear off a dollar collapse, prudent to have a stake. I still feel a fast but impressive dip is on the cards, which I would use to deploy another 40% into.

  64. Nike Boy2008

    Poly, Bob and others (can’t think of who else does options),

    If you don’t mind, can you please educate me on options?

    how do you know if you wanna buy ITM or OTM or DITM calls

    at this point, I’m guessing that most are buying DITM calls?

    also how do you determine what calls to buy?

    you can email me at [email protected] if you’d like

  65. pimaCanyon

    JohnsM,

    yes, TOS charting and trading platform is free. You can download it to your computer.

    https://www.thinkorswim.com/tos/displayPage.tos?webpage=softwareLobby&displayFormat=hide

    If you open an account with them, I would think they would want you to fund it, otherwise why have the account? The trading platform (which includes the charting stuff) is “free” because they expect you to trade and they do get commission on your trades. I pay .0125 per share for stock trades, $3.00 minimum, $7.95 maximum, and $1.50 per option on option trades.

    You’ll have to talk to them about funding if you need help there. Their customer support has been great. I do most of my support stuff either via a live chat or by email. Haven’t used the phone much, so can’t comment on their phone support.

  66. seethruskin

    It should be noted and acknowledged that Bernanke is NOT printing money in the execution of QE2, contrary to what is often stated in this forum.

    That is not to say QE2 does not come with enormous risks of inflationary pressure (in a fractional reserve system, as borrowing and the velocity of money increases, so too will inflation, as the theory goes), but to state repeatedly that Ben is “printing money” is factually incorrect.

  67. PST

    In Short, No new easing….but not tightening yet either

    “In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and will complete purchases of $600 billion of longer-term Treasury securities by the end of the current quarter. The Committee will regularly review the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability.”

  68. Moneyman

    Polly!

    Same as me..Dont think we will go down but if we do I got some cash left to buy with..Around 30%!

    No reason to be nervous..Bernanke is with us.

    Shalom dont disappoint us?!?!

  69. fubsy_cooter

    Nice spike following Fed statement. Not time to pull trigger, though. Immediate trading follwoing improtant Fed announcements are typically emotional jockeying. The direction of the market following statements like this are shown by the close and following open.

    But, most likely, we will get our tell over the next several trading hours. My guess, (the opposite of my gut rxn) is that this is not the time to load up, but I’ll let the market speak before taking action.

    f

  70. DG

    Dude: I do not use charts to generate my buys and sells. As you have seen I am batting about 80% on what I post here so will stick with that. Usually I add to shorts when chart support breaks as I have a good sized profit by then, and I will do that with TBT as well.

  71. jhnewman

    Just before Bernanke’s propaganda conference:

    “The Fed will also release its updated economic forecasts for 2011 and 2012 just before the press conference begins.”

  72. Hot Rod

    Request to billionaire:

    Please, please, please can you decisively take out $1515 ASAP (if you could be ever so kind as to take out $1520 it would be immensely appreciated).

    Signed,

    Middle Class American Gold Bug “Light”

    P.S. – If you don’t feel like doing it today, it’s okay to take care of it in the next week or so.

  73. jhnewman

    The rule I heard over at Minyanville:

    — the first move out of a Fed statement is usually the false move.

    Since 1 minute GLD spiked up, that would argue that the real move will be down.

    I haven’t “back-tested” this rule at all, but there are some pretty savvy traders on that site.

  74. pimaCanyon

    seekthruskin,

    You are technically correct. However, the reason that he is not technically printing money has to do with future intent. During QE The Fed IS creating new money to buy Treasuries. New money IS being created, so why is this not considered “printing money”? It’s because at some time in the future the Fed plans to withdraw the money they have printed during QE by selling the Treasuries that the bought during QE.

    So long term it’s a wash. But short term money is being printed.

  75. Greenspansconscience

    All you need to know is that the US govt and the Fed have backstopped the financial system and this:

    The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

    Von Mises

  76. JohnsMotivation

    In theory it’s a wash. In the long-term …

    In reality, who’s going to buy the bonds back anytime soon? Figure a two decade bear market in bonds? Wonder what TBT will be worth?

  77. Wes

    I won’t be making any decisions today.

    At the start of silver corrections, swing lows are commonplace and cannot be trusted.

    Off to lunch.

  78. jhnewman

    Greenspan:

    You nailed it. And they’ve chosen “a final and total catastrophe of the currency system involved.”

    Which means the best currencies, gold and silver, will be going through the roof in the future.

  79. jhnewman

    P.S. As you know, von Mises called this a “Crack-Up Boom”, and that’s what we’re in.

    The global currency system that has been in place since 1944 is all coming down.

  80. Edwin

    funny market movements after 12:30pm, the board numbers were going crazy.

    spy vs spy, it’s a war was happening in the pits

    but lets see the commodity disturbance come 2:15pm

    sit tight..

    this time fundamentals, technicals take a back seat.

    it’s emotion that’s ruling today.

  81. GottaHaveIt

    Poly,

    Thanks for posting your option buys.

    Other traders, please post your recommended strike price and month for SLV and GLD options.

    I am looking to buy some more.

  82. Greenspansconscience

    When they backstopped and literally guaranteed the whole system (i.e., going “all in”), they sealed the dollar’s fate.

    Before doing that, they could have abandoned the credit expansion (causing a quick deflationary collapse). Now, if they try, they will kill the dollar (paradoxically).

    The dollar is doomed in either scenario.

  83. Aaron

    Too many people waiting for a dip… chances are there is no dip. This is very late in the cycle, which is why the cycle low could have come and go already.

  84. PST

    Miyagi,
    He may not have said it, but if you watched the video, he flashed the SMT gang symbols into the camera and then gave Timmy a chest bump.

  85. ALEX

    LE FOU

    I walked away for a couple of hours and started to catch up on the blog…

    You spoke, EXK listened. Nice, now if only it will hold!

    that and GPL so far.

  86. Poly

    @Gotahaveit,

    Just to be clear, I bought to establish a position, I was all cash. If I already had a significant position, I would not have added more here, just an FYI.

  87. PST

    Greenspansconscience,
    Agree with you. The Fed is effectively boxed in. If they continue with QE, then they’ll destroy the dollar and send commodities/oil through the roof. If they choose to withdraw liquidity, interest rates will spike and the economy will roll back over. They have to choose their poison.

  88. Peter

    Gold fut’s are staging a potential double top here. Not a prediction by any means. They are just showing resistance at the recent highs.

  89. Poly

    We’ve seen these turn before, so it’s wait and see.

    Although it’s very encouraging to see miners respond. Feels like last year SLW was up 5.5%

  90. Hot Rod

    TZ,

    Thanks a ton for your gold long trade this morning. Even though you stopped yourself out it gave me the confidence to switch some over from silver to gold based on your overall reasoning.

    I greatly appreciate all of the wisdom and real time trades/updates from all of you here.

    As I mentioned before, I am too nervous/superstitious to post my trades and recommendations.

  91. jhnewman

    I certainly could be wrong, but it looks like a dollar/gold/silver head fake coming out of the Fed announcement.

    It’s really best to judge how real this move is at the end of the trading day, after Bernanke speaks, or, better yet, tomorrow morning.

    As Gary has suggested, if the up move in gold/silver turns out to be real, missing Day 1 of a 25 – 30 day parabola isn’t going to hurt you.

  92. TZ(4404)

    Added back my gold futures position. Clearly I’m chasing and that usually doesn’t work well, but I’m in with a reasonable stop.

  93. Poly

    I’m starting the lean your way Alex. I’m in, last minute call change of heart this morning, phew!

    You’re miners are ripping here!

  94. DG

    Just for the record: I just got a renewed sell on gold BUT I am not going to act on it. When such a sell fails it can marks the start of a runaway move (it happens in items other than gold as well from time to time). As there is a realistic possibility we are starting the panic-buying run, it is too dangerous to lighten up here. I will buy back the AGQ I sold at 362 if gold holds its high and perhaps add to the GDP I bought to “replace” the AGQI sold, thus winding up a fair bit heavier overall. I want to be there in more size for this last bit of fireworks.

  95. TZ(4404)

    HOTROD,

    Whatever I can do to help, I guess.
    🙂

    My thoughts are still the same…that we bottomed yesterday and CLASICALLY at a price that people thought “wasn’t quite low enough yet…so I’ll wait”.

    I think many were on that boat me included and I think we might have a chase situation here.

    Again…like I said, buying/chasing like this so soon after the fed (and we now have that conference in 15min) is likely a bad idea, but I’m breaking that rule and I know it. We’ll see (again) if it pays off.

  96. MrMiyagi

    Keeping a level headed approach and not refreshing every second here.
    Best to judge in an hour or so, I’m good with what I’ve got.
    I’ll play some sim airport games.

  97. Yash

    although none of you like ew ..tony’s oew is tracking this well. as per current count we are going make token new high on silver and then come down again ..closer to ema34. then final uptrend will start.

    from 174 low on agq
    wave 1 = 174 – 231 = 57
    wave 3 = 212 – 362 = 150 (2.62 of wave 1)
    wave 5 = 311 + 57 at least makes token new high on agq.
    These 5 waves are within his larger 3rd wave. So then large 4th wave and then final uptrend of 5th wave. The top of larger 3rd wave which is coming soon (next 3-5 days) and larger wave 5 later in june may become double top like 2006 or 2008.

  98. coolkevs

    DXY 72.5…people who follow Demark indicators have been looking for this leg down in the dollar since September 2009! DXY exhaustion selling is coming soon…

  99. TZ(4404)

    Guys,

    So many of you are posting bad data comments. The dollar is NOT at ‘new lows’, but it as the lows of TODAY so far.

    And to that guy who said gold was at a “new high”…NO, it wasn’t at the time you posted it. Get a correct data feed.

    You guys are really posting serious data comments which might sway people that is BAD.

  100. OptionsOnly

    SLV just filled the gap at ~ 46. Let’s see what the big boys do the last 1 1/2 hours, where they are taking positions. I’d like to see it get a touch under 43, to fill that gap, then off to the moon!

  101. ALEX

    POLY

    Yeah, I like the volume up on EXK and GPL intraday chart on a 15 minute chart. looks real so far. And AG went straight up $1.00 pretty fast.

    If I buy a bottom , and it turns south later , its kind of like you have a ‘stop’ if you want to get out and try again later.

  102. Dan

    My question here is what happens with silver if we go up now….are we gong to reverse at 50 again or go right through it?

  103. DG

    JH: The broad market one (“We are going up or down 1% or more within three days”) dovetails a few indicators and it is their inter-relationship the generates the buy or sell. One gets out of line with the others. The ETF one (it does not work on individual stocks) is a modified overbought/oversold that gives few false signals. That’s why a runaway move defeats it. It usually triggers at true extremes, not the stochastic kind of stuff that is just not that reliable. Yet it gives frequent enough signals to be useful (as you have seen here). My DAMN hedge fund is still a possibility so I can’t go into m ore than that. (The guy I am starting it with is driving me absolutely nuts with delays and such. He has too much on his plate as he has several other active funds.)

  104. TZ(4404)

    AARON,

    The dollar INDEX is the measure, not the futures trading off the dollar index.

    The various futures have contango/backwardation effects and also time value of money factored in.

    Your comment is like saying “the dow dec future is a new low” when everybody uses the dow INDEX.

    The future measures a prediction of the price of a security at that date IN THE FUTURE.

  105. seethruskin

    @PimaCanyon

    When you say “New money IS being created” do you mean the Fed is creating “new money” when they use reserves (bank’s deposits) to buy Treasuries? — which is in fact what they are doing.

    I guess I don’t see how using reserves to buy Treasuries equates to “creating new money”. Yes it puts otherwise idle money (that already exists) into circulation, thereby affecting velocity, but it is not “new money”.

  106. jhnewman

    DG: THANKS VERY MUCH. I’m fairly new here, but was very impressed with some of your recent calls.

    I hope things work out on your hedge fund. All the best to you.

    (And when you’re buying and selling at 30,000 feet in your Gulfstream — don’t forget us little guys here at SMT!!!) ;^)

  107. Aaron

    TZ, the contango between the June futures contract on the USD (which I am incidentally short) and the current (spot) is approximately 17 ticks (and remains constant at least for the day/today). The low would be a new low regardless.
    On your spot quote, when do you see a lower low?

  108. ALEX

    OK

    The Fed is now speaking on CNBC and will answer questions…we’ll see how THIS bodes for the last trading hour 🙂

    Later Guys

  109. catbird

    Oooh…the Ben Bernank just said “geopolitical events” and “robust global demand among other factors” are responsible for commodity prices!

    “Among other factors” …. what a howler!

    Hey SB, how do you say this stuff with a straight face?

  110. TZ(4404)

    OK…I can see what is happening on this dollar discussion. Bear with me a moment to clarify:

    On a DAILY chart, the low of yesterday was 73.562. As of today’s ‘bar’ on a chart, we have traded lower than that point. So ‘today’ we have a lower dollar index which contradicts when I said “the dollar didn’t hit a new low yet”.

    Here is the explanation.

    The dollar index trades 24hrs. So any chart service has a cutoff from one “day” to the other.

    The cuttoff is usually in the early evening (like 6pm for gold and silver).

    Upon the cutoff YESTERDAY evening, the dollar index continued lower reaching its CURRENT LOW **before midnight** **yesterday**.

    But since we now count those trades at “today”, the dollar put in a new low “today”.

    However, the dollar index then rallied from that point up until earlier this morning and is now dropping again.

    The index has NOT broken the low (yet) that it made before midnight yesterday yet.

    So, we do have a lower low on the dollar “today” from a low that was actually made yesterday evening.

    We have not yet broken that point POST FED, but we are close.

    I was looking at an intraday chart which doesn’t cutoff the trading into ‘days’ when I made my commment that the dollar had not made a new low yet since there was a lower low yesterday evening.

    But, it HAS made a lower low (but not in the last hour) based on daily charts.

    Does that clarify?

  111. TZ(4404)

    To shorten what I said,

    the dollar index hasn’t made a new low based on all this fed stuff compared to the low it made yesterday evening.

    HOWEVER, since a “day” on daily charts for 24hr securities usually includes data from the previous day, the chart for “today’s” dollar index DOES show a new low compared to “yesterday”.

    Welcome to the nuances of these 24hr trading issues.

  112. TZ(4404)

    HERE to clarify and end:

    quotes.ino{DOT}com/chart/intraday.gif?s=NYBOT_DX&t=f&w=15&a=0&v=w

    This is a 5 day chart of the dollar index.

    You can see the low yesterday which is being counted today. You can also see we haven’t broken that yet, but are close.

  113. Ryan

    I’m starting to feel this is real and going to stick. I’m having a hard time trying to decide if I want to chase and start my DGP position. Any thoughts or wait until EOD?

  114. TZ(4404)

    >The important thing is it’s difficult to see the USD not making lower lows in the near future…

    Peter, I agree.
    I got myself stuck in a discussion that I had to explain out. Hopefully it helps a bit for everybody’s understanding. I didn’t help by saying dollar didn’t hit a new low yet. In one way of speaking I was wrong (daily).

  115. pimaCanyon

    seethruskin,

    Nowhere I have seen that QE is using bank reserves to buy assets. Everywhere QE is talked about, they say the central bank creates money at the stroke of a computer key and then uses that newly created money to buy assets. What am I missing here?

    from Wiki:

    “Quantitative easing (QE) is an unconventional monetary policy used by some central banks to stimulate their economy when conventional monetary policy has become ineffective. The central bank buys government bonds and other financial assets, with new money that the bank creates electronically, in order to increase money supply and the excess reserves of the banking system. This action also raises the prices of the financial assets bought, which lowers their yield (as long as the yield is above zero).”

    from Financial Times:

    “When interest rates are close to zero there is another way of affecting the price of money: Quantitative Easing (QE). The aim is still to bring down interest rates faced by companies and households and the most important step in QE is that the central bank creates new money for use in an economy.

    Only a central bank can do this because its money is accepted as payment by everybody. Sometimes dubbed incorrectly “printing money” a central bank simply creates new money at the stroke of a computer key, in effect increasing the credit in its own bank account.

    It can then use this new money to buy whatever assets it likes: government bonds, equities, houses, corporate bonds or other assets from banks.”

    Okay, FT says “printing money” is incorrect, but I don’t get the subtlety, how is “a central bank simply creates new money at the stroke of a computer key” NOT printing money??

  116. DG

    EWJ (Japan) just showed up on my short screen. My broker can;t borrow it *#@! This trade is worth taking IMO Short at 10.20/stop at 10.32. If you take it and win mail me a pizza (burritos…ha!)

  117. catbird

    Is it just me, or did everything in the Ben Bernank’s remarks (especially his dismissal of high commodity prices) seem extremely dovish?

  118. catbird

    Ryan,

    I broke my usual “wait til end of day to buy” rule, but I only nibbled on DGP (and even a little AGQ :fingers crossed:)

    If the Big Boyz want to get cute and hammer PMs tomorrow, so be it. I couldn’t listen to such dovishness without buying a little something.

  119. nutjob

    He’s been a dove all his life.

    “Don’t worry folks, these high prices are transitory. As long as your precious inflation expectations remain low.”

    At least he did say that high commodity prices had various factors. Of course, his $600 billion print-fest was not mentioned there.

  120. Beanie

    Hate to say it. We have hyperinflation. It’s the only thing that explains the continue rise of precious metals and the equities market.

  121. Ryan

    Catbird,

    I think I might do that too. I still have more dry powder to deploy. We were hoping for Gary’s trigger would get hit but of course with all of us waiting it’s not going to happen!

  122. Yash

    ohio rob – silver will be there but after new highs. I posted counts some time back. After new highs back to ema34 (which is around 40+ right now) for one last time.

  123. Greenspansconscience

    This press conference is a joke.

    Biggest takeaway, they will keep the Fed balance sheet the same size for now by reinvesting.

    In 2009, a stable (non growing) balance sheet actually correlated with a falling stock market.

    We’ll see what happens I suppose this time.

  124. DG

    QE3. That explains why gold is taking off now. QE3 “if conditions warrant” means “We will do QE3 unless a magic Genie appears and fixes our problems by wishing them away.” Bye-bye dollar.

  125. seethruskin

    @Pima

    What you reference about QE is accurate, but it speaks of QE in more general terms and not what is happening specifically with QE2:

    He explains that the Fed “is not printing money”. They are merely swapping treasuries for deposits. http://www.businessinsider.com/ben-bernanke-explains-that-qe-is-not-inflation-just-an-asset-swap-2010-11

    The Fed simply electronically swaps an asset with the private sector. In most cases it swaps deposits with an interest bearing asset. http://pragcap.com/quantitative-easing-the-greatest-monetary-non-event

  126. Poly

    “MANY people here (surprisingly) have delayed data and don’t know it.

    check something real time, the dollar IS dropping”

    @TZ,

    Sorry, I was just using the Gold Seek chart and from the announcement to this point, the dollar index went from 73.85 to 73.55. Yes a decent little drop, but not exactly huge or possibly in line with a $16 gold pop.

    Actually Kitco is showing $4.50 of the $16 move attributed to the dollar drop.

  127. seethruskin

    @Pima

    So I believe the difference is that in the case of this specific program, they are not “creating money at the stroke of a computer key” to purchase the assets. Rather, they are drawing upon reserves to finance the purchase. Hence it is an “asset swap”.

    One of the problems with this approach (or meddling, really) is articulated here, “the Fishtail effect”: http://butnowyouknow.wordpress.com/2010/12/09/what-bernanke-means-qe2-will-not-boost-money-supply/

  128. MarkMarin

    Looks like we have a runaway PM market. Added gold & silver futures, DGP, ANV, and EGO this morning. Still some cash left to deploy, but the action speaks for itself.

  129. catbird

    In response to a softball question, now he’s telling the sheeple how “transparent” the Fed is these days…

    I’m telling you, this is better than comedy.

  130. notGreedIsGood

    don’t you think this has the chance to be a head fake? the big boys can’t make it that easy for people… after all they had to whip people around when there was too much giddyness when silver approached 50, and then they brought people to dispair when they dropped silver to 45… now that it’s back to 47 and giddyness has returned.

    As for me, I’ll wait for silver 42 before i switch back DGP back into AGQ for the ride to 50… if it doesn’t happen, so be it.

  131. Razvan

    Dan you must have not been paying attention to the speech.
    He said it was not his resposibility to handle the dollar but rather Timmi’s

  132. DG

    Traderlady (I assume you’re a woman? “Veronica” turned out to be a guy!) My sell signal has already been fulfilled by this drop. Now it is a question of how to play it. If it gets oversold enough I will cover but that’s a long way from here. My belief is that it is dropping for the same reason that the PM’s are rallying, so we have a ways to go. I will post when I add or cover. Good luck to you! (and me.)

  133. catbird

    Hey SB, I went and changed my Ben Bernank avatar. Hope you don’t mind. I see you went back to your old standby.

    What’s up with you? Take on the speech? Any imminent actions planned?

  134. Clarkatroid

    reality check

    this forum, which has an american owner, is habited by predominantly american users, enjoys virtually 100% euphoria watching the weak leadership of the obama/bernanke steering the USA into the abyss.

    if we take a little step back and take a peep at the big picture, its not a pretty sight. at all. for anyone

  135. nutjob

    “Never a good sign when the guy responsible for the dollar speaks and it causes the dollar to fall.”

    Chairman Bernanke would like to refer any questions regarding the dollar to the Secretary of the Treasury.

    🙂

    Yes, he did say that *again* today.

  136. Ollie

    Gld shows $59M SoS n block trades, is this number significant at all?

    Are the big boys sellng into strength here?

    Still in cash at the moment…

  137. Shalom Bernanke

    catbird,

    Nice pic. I’m not sure how much more of our rugged good looks the others can take around here. 🙂

    I wasn’t filled on any limit orders to buy this morning, and have not chased this move higher. As far as the BS from the Fed, it’s the same thing I’ve heard the last 20 years, save a couple adjustments to keep people interested. lol

    As far as my next move, it was looking like it would have to be the gold only route but now I see miners getting in gear. I’ll stand aside at least until tomorrow.

  138. DG

    Dude: I rarely have time frames. I will stay short until TLT does something bullish, or behaves contrary to how something in a bear market should behave. If I am doing something for a short term trade I take the profit when it is “enough” depending no how overdone it got in the first place. Like Gary talked about $3-$6 in silver because it had gotten so stretched on the upside. Action and reaction and all of that. But TLT has serious fundamental problems, so maybe I will hold TBT until it hits 60 😉

  139. Vonda

    Hear you, Claratroid. Not pretty at all on the macro level-devastating, actually.

    And we U.S.-Amers have a ways to go before we match the aptitude for subtle irony you Brits have for taking the piss out on leadership.

  140. traderlady

    Dg and DUUUUDE, I am definitely a lady. LOL!!!!

    I look at TBT going along with PM’s
    and have a longer term outlook but
    if necessary some change could make me cover. I always appreciate your comments DG. DGP reminds me of you
    with the P, Polite, Political,or ___?
    Kerry the female, not John Kerry

  141. Edwin

    Clarkatroid – i think we all know the world is beginning to realize the jig is up, soon more and more people will start to realize.

    and guess what, ideas of revolution are going to spread.

    not good – the army training for us economic unrest.

    oh boy..

    but everything’s a cycle, so things will get better eventually how long.. who knows. but trading on the right side is key. or having some hedges in case.

  142. DG

    What is happening in our country is disgusting and has been happening for decades. Politicians are only interested in expanding their power and couldn’t give a damn about what happens to the U.S. except incidentally as it serves them. This has been going on a long time and the bill is now due as one generation after another has sacrificed the future to get re-elected. And the populace is ultimately to blame as people vote for whoever will give them the most stolen goods regardless of whether it is best for America or not. Death by a million mosquito bites. I can’t do a damn thing about it, but I can take advantage of it. I would sacrifice all my personal wealth if doing so would change it.

  143. Duuuuuude

    Not disagreeing in any way DG. Without the benefit of a trading system such as yours, all I have are charts. Just saying with my clunky old TA system, I would need to see TLT break down below 90 or so before I would want to go long TBT on a longer term trade like that. That would break about a 10 year trend line if it does. http://screencast.com/t/u2flwXpPVgd

  144. Poly

    I’m staying very guarded and won’t add more, I certainly LOVE this move and the way miners joined the party, BUT anytime I see Silver up 5% in a day I get worried about a blow off reversal. The calls I added this morning already up 30%, crazy crazy action.

    I don’t believe Bernanke necessarily said anything new, so that is a consideration. Still don’t see any clear cycle low print also!

    Who’s not having any fun here 🙂

  145. Shalom Bernanke

    Congratulations to those that stayed in their silver (AGQ) through the recent drawdown. Excellent hold, as the metal never gave you a reason to sell even if painful at times.

    Very nice!

  146. traderlady

    DG, I left that open for suggestions.
    I like DG picks! I really wish I could just invest $$$ long term and just have fun but just not in the cards with this Fed. All BS for SB.

  147. DG

    Dude. No problem. I always like hearing thoughts if the reason behind them is given. Nice chart BTW–thanks. I will probably add when it breaks there. The problem with trendlines is that the obvious ones are often broken by the big money to run the stops and pick up the panicky sellers’ shares at a good price. That’s why I have worked on low-risk entry points over the past 35 years. Now I can add on your trendline break already having a large profit, and if it turns out to be a real break, great. If not, I give back some profit.

  148. Shalom Bernanke

    traderlady,

    That’s a good observation and one reason I’ll be cautious with my purchases…they will not be long term holds this late in the C-wave.

    But when the A-wave gets served up, buy and hold is a fine plan, IMO.

  149. Clarkatroid

    vonda, Cameron and Clegg are no better.

    those 2 are just a spare of spineless wankers whose solitary goal is do whatever they can to get re-elected regardless of any damage done to my country

  150. DG

    AGQ still lower than where I sold some when I switched the money to DGP. Trying to decide whether to buy the AGQ back (I would just hold the DGP, which is of course much higher). Hmmm…

  151. traderlady

    SB, I shall look forward to the A wave. Perhaps this summer will be a long short etf play with Gary. Summer
    is fun here with golf,all the top courses are begging for business.

  152. pimaCanyon

    seethruskin,

    They have to be creating money because the size of the balance sheet over the past two years has ballooned beyond belief.

    Every website I have looked at with regard to QE says the same thing: The Fed is using newly created money to buy assets (they are NOT using reserves that are already in the banking system to buy those assets) and down the road the Fed intends to withdraw the newly created money by selling those same assets. So it’s money creation today, money withdrawal tomorrow. But for the past couple of years we have been in (and are still in) the money creation phase.

    I know most people on this blog don’t care about the fine points of QE, so for their benefit this will be my last post on the subject. You’re welcome to post another one, just know that I won’t respond to it, and it’s nothing personal. 🙂

  153. Shalom Bernanke

    The criminals in US gov’t borrowed/created more debt than any nation in the history of the world, and will never have to pay it back, at least with anything of real value.

    It’s magic!

  154. Poly

    P.K,

    Interesting concept that could be used to support a cycle low in place, in the context of a final cycle into parabolic move. I can buy the theory.

  155. Wes

    @seethruskin

    Nice article on money supply. I’ve been saying this on this site for a year. Very few believe it.

    It’s unimportant though. The fear of inflation is much more important for PM’s than the real thing, because the Fed doesn’t interfere. If it was real, they would.

  156. Poly

    “I’m kinda getting giddy here”

    Save the giddy for the selling and shopping spree 🙂

    Until then……..anything can happen

  157. Shalom Bernanke

    Eamonn,

    That trade (short silver) might very well work, but it’s not a trade I’ll take. I like to sleep easy at night, and in my career I’ve lost as much as I’ve made on trades like that, so to me it isn’t worth the effort.

    There are always attractive risk/reward opportunities out there.

  158. Leilani

    I am so glad I kept my positions. So many times I would sell as prices are dropping just to buy back at higher prices. I don’t have a talent for trading so I simply follow Gary. I must say, my stomach felt aweful the past 2 days.

  159. Jayhawk

    I went on a mass shopping spree there. I think I’m gonna have a heart attack! That action was NUTS!

    DGP, NUGT, SIL, SLW, EXK, AG, GPL, GLD & SLV calls, etc.

    :O

  160. pimaCanyon

    funmike,

    You can do that (buy some ZSL), but if you do, consider it a lotto play and/or use only a small percentage (1 percen??) of your account. Also be prepared mentally for this: what if gold goes to 1800? what about 2000? And where will silver be at those gold prices? 60, 70, 100?

    Gary has said picking a top in a parabolic run is very difficult. They can go way beyond what you might think is possible.

    Another way to do the same thing–but it would truly be a lotto pla–is to use SLV puts. But at the money or even out of the money and be completely okay with what you pay for the puts to go to zero.

  161. Shalom Bernanke

    From ZH:

    “YTD Stock Performance Indexed For Dollar Annihilation: +0.9% “

    Stocks are just barely positive when currency debasement is taken into account. The shell game should be clear to all.

  162. MrMiyagi

    The only thing I didn’t do was strenghten my EXK hand. I’m not concerned though, hopefully this momentum will carry and create new higher low for all connected.

  163. pimaCanyon

    interesting chart action in gold futures.

    I have a channel drawn off the january low and another steeper channel drawn off the low of april 1. The upper channel lines of those two channel intersect on april 29 at a price of approx 1540 on the june futures contract. gold is bumping up against the upper channel line of the steep channel as we speak.

    I’ll try to post a chart.

  164. funmike

    Pima,
    I was thinking about 4-5% Maybe it would be better to try and discern when we are nearing the C wave top (SMT Premium) and use this to take advantage of the D. Gary has been using the 1650 number as a rough target and that is why I’m thinking like I am.

  165. Poly

    Alex + Jay,

    GPL, up 16.5%, You’ve got to be kidding me, we just discussed this stock THIS MORNING as a buy setup!!

  166. DG

    oa92: I am 1/2 AGQ and 1/2 a combination of DGP and GDX. Pretty heavy but plan to add this week. Bought back the AGQ I sold right where I sold it.

  167. DG

    Traderlady! Butt out! I can use the 98¢ royalty I get and put it into AGQ! (j/k)

    Can you believe an author gets about $1.50 a book typically? Amazing people want to try to write for a living. Talk about starving actors and actresses!

  168. Brian

    Alex, I looked at your charts this morning and they all looked real nice. Started to buy some, but realized I already own all of them.

    Gary, Thanks for the super-sized helping of Old Turkey!

  169. Poly

    Pima,

    In a final blowoff/parabolic cycle, don’t we expect all channels to be smashed?

    Begs the question regarding P.K’s charts, should we expect a channel breakdown to confirm a cycle low?

  170. MrMiyagi

    funmike,
    I started buying options back in 2007. I lost a fair amount of money because I’d always go for the cheap, out of the money lottery-style calls with dollar signs in my eyes.
    After a while of losing money I stopped and read and read and learned. In the last couple of years I’ve had 3 option trades that lost me money and one of them was an insurance type of put option, the rest, let’s say over 75 trades, netted me gains from 80$ to over 20k$. I can say that my education has been paid off in full now but even then when I joined SMT Premiuim in early March, I learned even more by reading Gary’s options posting and doing more research from there.

  171. Josh

    There was a tell this morning that I hadn’t noticed before. At about 11am EST the silver futures were off about 1.5%, but SLV was barely off at all. AGQ was bid very strongly and was printing green while the futures were printing red. I wonder if we’ll see more divergences between comex and the stocks/etfs in the future.

  172. sophia

    DG & Traderlady,

    Shortb30y bond and will stay likevtgat fora while….I only see more expensive things around me, I really don’t understand how the Fed can be so blind!!

  173. San Diego Jack

    Sophia,
    Keynsian Economics makes them blind to it. Plus, once committed, they don’t want to acknowledge that they made a mistake, yet we all pay the price.

  174. KAL

    Hey veteran types:

    Anybody see SLW today? Wondering about what Gary said about the miners doing well at the C-wave blowoff. Considering moving from AGQ into SIL/SLW when the time is right, as well as DGP/NUGT. Seems like that will allow some exposure to silver as it continues to rise, without the volatility of the double ETF or SLV, may give me a chance to avoid D-wave carnage in AGQ. Or, I could just go all the way on NUGT and DGP… I’m too small-time to do a bucket of miners, prefer to minimize trade costs and keep it ETF until I’m experienced like some of you… Any ideas about that when it’s time to sell AGQ at Gary’s trigger? Thanks!

  175. DG

    The Fed is not blind. These guys are very smart, they just don;t have the goal they say they have or that you may think they have. They know there’s inflation, but if they said “we see inflation” there would be even more, so they have to talk it down. Bernanke, in spite of what people say, is no fool. He can let things collapse and face a possible depression or keep pumping and hope for a miracle. Whatever choice he makes is miserable. I blame Congress and Greenie much more than Ben. Greenspan had the option that Volcker actually took previously that worked, but Greenie chickened out and sold us down the river. It’s too late for Ben to do the same without courting disaster.

  176. pimaCanyon

    Poly,

    Yes, and that has been the pattern in silver: it makes a new channel with a steeper slope, then another one even steeper and then blows thru the upper channel line on the first one, then the second, etc.

    Gold has not done that yet because it hadn’t entered the parabolic phase yet–until today that is. So it’s likely gold will just blow right thru the tops of these two channels. I was thinking maybe we’ll see a pullback there, but in looking at what silver did in a similar situation, there was no pullback, just blasted right thru it.

  177. PST

    DG and Trader Lady,
    I’d be careful about TBT as a long-term position. I agree that the US is a fiscal disaster, but they can’t let interest rates get too out of control. For every one percentage point increase in interest rates, the CBO projects that the US interest expense goes up by $100B. Also the treasury has shortened its average duration of treasuries outstanding from around an 8 yr. average to about 4 yrs., meaning that they will need lower interest rates to continue to rollover the debt as it comes due. For these reasons, the government CAN’T let interest rates rise too steeply or our financial position goes from dire to terminal. This doesn’t even consider the impact higher rates would have on the housing market.

    Rumor around trading floors today is that the Fed is going to sell all the worthless MBS and agency paper that it has purchased and use the proceeds to purchase securities at the long end of the yield curve. Also, once the secular bear that Gary’s projecting arrives, look for that money to go back into treasuries as a safe haven.

    Just some thoughts, which hopefully don’t come true. Good luck with the trade.

  178. Poly

    Why signal out the FED? The entire system is rotten to the core, it’s a cancer in stage 4, it’s gone terminal!

  179. Driver

    Hey, The Bernanke owns a sh*t load of silver, so he’s doing what he has to so he can make his fortune and head to Paraguay. Isn’t that right, SB?

  180. Poly

    Pima,

    You’ve got my attention. Same as the charts from P.K. Makes some good sense if a parabolic move was unfolding.

  181. sophia

    PST,

    If there is really a US dollar crisis, you might see people leaving the stock market and the bond market all at once…that would be never seen before, but believe me, in the European trading floors, they have been waiting for that for 15 years and it would be well derserved…

  182. Shalom Bernanke

    Poly,

    I suppose I should have said today was the biggest net dollar change for SLV. 🙂

    Josh,

    Yes, when we start seeing these multi-dollar jumps each day it is getting frothy. It could go much higher and that is the only direction I’d bet, but the excitement has me looking for the end of the C-wave rather than just happily riding drawdowns when long.

  183. San Diego Jack

    PST,
    You make a valid argument, but this beast will become uncontrollable, at some point, and we’ll see a replay of the Carter Administration where mortgage rates rose to 21% (my sister had a bridge loan at that rate for 3 months, and they were nervous wrecks the whole time).

  184. Jennifer

    A quick story,

    I started following Gary more than 3 years ago, but had no real money to invest. I had a few stocks that I bought right after the crash because they were super cheap, Ford, GM, Netflix, but no actual investing experience. When I read Gary for the first time I took my whole savings account (2K) and bought some silver miners. When my grandmother passed away a year and a half ago, she left me 8K dollars and I took that and also put it in some silver miners. With 10K total seed money, my account today just topped $40,000. I know this is a miniscule amount to most of you on here, but I am elated.

    I know I’m probably jinxing us all by sharing this, but I’m over the moon.

    Thank you Gary and everyone on this blog for your great advice and patience!

  185. pimaCanyon

    Poly,

    I think you’ve got what I believe really great traders have: call it a 6th sense, call it intuition. The fact that you had NO position this morning and your plan was to wait till after the Fed BS to put on a position, and then you changed your mind and went ahead and bought before PM’s started going up–that is quite amazing IMO. You did exactly the right thing at the right time. Congrats on boarding the bus early and not having to chase.

  186. Rick 4779

    Jennifer

    A wonderful story, and one that is probably very similar to many of Gary’s subscribers. Hang in there until the next C wave starts and lets see how Grandma’s seed money grows.

  187. fubsy_cooter

    Well,
    I added another 1/4 to my DGP. i had hoped to do it on a swing low around 1480, but it turns out the swing low was around 1520. C’est la vie. This makes adding the second half a little tougher equation, but I’m sure the oppty will unfold. Perhaps it will be a matter of leggin in a bit at a time. Or perhaps we’ll get a nice bull flag to consolidate this move, after that I’d add another 1/4 position on a breakout from the flag. Also added to my GDXJ today.

    On vacation with the family today, so I missed the fireworks in real time.

    Overall, I’m in good shape. Silver is now at the point where I sold all my related positions in the premarket on Monday. So, I’m shifting from Silver to Gold. I will probably add a small bit (5%)of AGQ on a bull flag, as well.

    f

  188. Poly

    Awesome Jennifer.

    Now watch the magic of Gary + Compounding work over the remaining years. If this bull market goes the way we expect, that will grow into an impressive sum.

  189. Poly

    Thanks Pima,

    A little luck, but glad to have the trade on.

    You see the move in those calls? That’s why I need to lighten on expectations of a top, because you can get slaughtered! Gary’s cycles really make it happen.

  190. Charles

    I was unwilling to stomach the possible drop if Bernanke announced that he would end QE2 early so I sold all silver this morning and waited for the 12:30 report. As soon as I heard the words “not changing our plan” I bought Sept $41 options for $5.60 while the market was trying to digest what this meant. I have to say that creating a plan based on Gary’s post was very rewarding today. Minimal risk & very high gains. Great work Gary!

  191. Moondoggie

    Congratulations Jennifer ,

    Your account may be smaller than some but I imagine that you have better returns …

    It sounds like you’ve managed your funds wisely.

  192. PST

    Sophia/SDJ,
    I’m not suggesting that what you’re saying won’t happen eventually. All I’m saying is that the government has alot of incentive to keep rates low and will do everything in it’s power to push them down again if they start rising. Ultimately, they will likely lose this battle, but you can get whipsawed in TBT with the gyrations.
    Before I get the emails, I know that the Fed can’t control the long end of the treasury curve, only the short end….but they can certainly influence it. If the market expects them to direct their next round of purchases at long-dated maturities, expect the Pimco’s of the world to front-run them first.

  193. KAL

    Great job Charles! Glad I pulled the trigger this AM on SLV July 40. Nice return for one day for everyone here I bet. Thanks Gary! You should take a few days off every week! haha.

  194. traderlady

    Good going JENNIPHER. I hope as a newbie of a few months, I can do 400% in 3 years. I feel right now I am just getting the tail, but a long one.

  195. Wes

    Jennifer,

    Great job.

    Poly,

    What do you make of the USD BB trade ?

    Odds favor a bounce, here. I’m not talking about trading it, of course, just the implications for PM’s.

  196. blakemancillas

    @KAL,
    Glad I held old turkey 🙂 I hold some July 40 SLV Calls as well and today was definitely a good day! I think I am still going to position myself in all DGP and GLD calls when we reach 50. Maybe a smattering of SLW and SIL DTM Calls for some extra juice and so I don’t kick myself if silver rockets to $60!!!

  197. DG

    Jennifer: Well done. If I may, your greatest risk at this point is thinking you know what you are doing, but judging from the humility with which you have written this seems unlikely to be a problem. Many, Many beginning traders/investors win at the beginning and then lose their stake due to over-confidence. The market is a PITBULL. One false move and you can lose a finger (or more). Stick with Gary, stick with a plan, don’t react emotionally, don;t get greedy, and you will have a tidy sum over the next four years I bet. Way to go!

    (Remember that guy Rob who blew his account out a few months ago and then blamed Gary? Thought he was smarter than everyone here, leveraged using TZA to short the market, and wound up with nothing. Wound up missing one of the great bull markets ever. Oh well. A good cautionary tale.)

  198. KAL

    Blake, awesome man. Sounds like you’re sticking with Gary mostly. Do you think SIL has the volume to let you get out before the D hits? I don’t want to be trying to push my way to the exit with silver calls in the mass exodus at the D. GLD feels way better. I’m not wise enough to answer my question, but that would be my concern. SIL had volume of 1 mil and some change today, GDX 12 mil, GLD nearly 22 mil. Can’t speak for the options but I assume it’s similar?

  199. Ryan

    DG,

    I’m curious what you’re going to do if silver reaches 50? My portfolio changes seemed to have been similar to yours. I sold out of all my silver miners already and still hold a pretty full position in AGQ and I have some GDX and added DGP today. I think I recall you sold off on Monday and bought today? Will you be swapping that out for DGP and are you touching any silver miners? I still have dry powder and will be probably adding to GDX/XGD.TO and DGP on pullbacks. What are your thoughts?

  200. Jennifer

    DG, Don’t worry. I still have no idea what I’m doing 🙂 I just follow Gary and only play around in very very small amounts here and there. I got really lucky on a couple of Jr’s and have been mostly in AGQ since Gary pointed it out. The day before we had the pullback in the middle of April I started thinking about what I started with and pulled out my original 10K just incase something really goes wrong, I can start over 🙂

  201. David

    DG,

    There’s a lot of research that indicates that women make better traders than men because they don’t suffer from the kind of overconfidence that men are prone to.

    In other words, we don’t have to worry about Jennifer.

  202. ALEX

    Jennifer- CONGRATS!!thats a great story and its going to get even better 🙂

    Now Jennifer , stop reading, I just want to mention something to the other guys…

    She bought…NFLX 3 yrs ago was $30 and today its $240

    and Ford was $2 and now its $18

    I’m not going to do the math, but…

    I think she might have that special touch !! she really would have done tremendous on her own too!! 😉

  203. Poly

    WES,

    I’m defensive right now because of the cycle counts and relationship to the moving averages on both the dollar and metal. So yes that does concern me, that’s why I’m still very liquid. I get the sense you’re in a similar boat.
    You would think it has to bounce here, but then I’m buying more and more into the idea that the bounce could be brief and benign. I’m also buying into the idea that any dollar bounce may have little impact on the PM’s and metals, specifically because they have sniffed out it’s eventual 3yr cycle drop.
    In any event I’m keeping a 50/50 type pose, staying defensive but now with plenty of exposure.

  204. pimaCanyon

    Just now noticed GLD on the SoS list for today. Not huge number but not small either. -46 mill total money flow, -57 mill in block trades.

  205. ALEX

    P.K.

    really appreciate your charts as well as others.

    PIMA

    I have your chart up right now. I Do believe we could just go straight up through trendlines like Silver, but notice this…On Your Chart

    we just went from below $1420 in early April to $1528 ( $100+ points) with only about 4 down days…so

    If we repeat that just riding the top trendline up , we’d be around $1650 in a month too. So its all good!

    PIMA’s CHART

    http://content.screencast.com/users/pimaCanyon/folders/Jing/media/30129026-5817-492e-a9cd-1efb2519ae40/2011-04-27_1310.png

  206. Vonda

    My favourite kind of story, JENNIFER: 4x return that means something to someone!!

    And awesome instinct (and courage) to roll that egg over to Gary’s nest to tend . . . congratulations, happy celebrating, and thank you for sharing the milestone!!!

    ****

    P.K., LOVE the charts – thanks!

  207. W

    Seems to me Ben (not a our Ben the Fed’s Ben) is having serious guilt issues. At the same time he is presintly the gov’t line, he gives more than enough tells to keep us (and many others)on the profitable trades.

    btw Gary has a new, short, post. Let the good times roll……

  208. diana

    Question for the traders out there:

    Do a lot of you sit at your computers most of the day watching for the signal to buy or sell? Occasionally someone will mention leaving for a few hours, or maybe after the NYSE closes.

    What if I can’t be watching the market all day? I know Gary has not had stops on, at times. TIA

  209. ALEX

    Elephants have bigger brains too, but they stink at stock picking

    the best part is…unless she sold everything, Jennifers 4x isnt even done yet .

    Check this out…when this ends up for the week, all the GPL doubters are going believe. It should have record volume off of that 20sma.

    http://www.screencast.com/t/QXCRGza2

  210. Neo

    Doc, if you are here, can we have your opinion about Gold and Silver ?

    Do we have a daily cycle low yesterday ? Do we have a runaway on silver and gold ? Or the BB Trade in USD can make a daily cycle low in gold and silver in the next few days and streches the daily cycle ?

    Thks.

  211. ALEX

    Diana

    I am now in front of my computer most of the market hours. As a trader, you catch the moves better…

    There was a time when I wasn’t, and I had to do things quite differently. Not nearly as easy.

    If I still worked my old job, I would mostly do what Gary says “buy and hold”, because the gold/silver mkts move very quickly, especially Now-the final top. Way too fast to trade part time.

  212. ALEX

    Hawaiian BOB

    Yes, I have noticed that you and I like many of the same miners.

    I sold 1/2 my Gpl early on, and rode the rest (sweating it out a bit this week) but I bought it all back this a.m. and since it dropped so much, I got quite a bit more shares.

    Same with EXK, they are my heaviest positions %-wise.

    Goodnight all, dinner time on the east coast

  213. Brian

    Alex, I am the same way. Fully invested and all these great looking charts. NSU is definitely ready to go.

    Jennifer, I am sure that present company was not included in that last comment!

  214. DG

    Ryan: (Just got up from my after-the-close nap here in CA) I am not sure that I will switch at silver $50, but I will sell all my AGQ and move into DGP at some point. I will post when I do. Bought some AGQ back this morning and held the GDX and DGP I had replaced it with so am now heavier. With today’s rally, the chance that we will not rally further seems about 0% to me. I will be adding something at least a few days every week. I always have a lot of cash.

  215. Wes

    Poly,

    I think price discovery is too complex to be resolved in one afternoon. There is still that item of off the charts high favorable public opinion on silver.

    Now maybe the gold opinion will override the silver, but I’m 47% invested and holding for the present.

    And of course, there’s that matter of the BB crash trade on the USD.

    Another day will tell us a lot, IMHO.

  216. Shalom Bernanke

    diana,

    I often step away, especially when trading a larger mover or longer time frame like this trade with Gary. Less effort and confusion with better results.

    However, the bulk of my career has been wired 14 hours day as I typically trade shorter term moves with larger size and tighter stops. It all depends on what a trader is expecting out of a potential move and the time it might take. Also, it helps to let the market tell you when it might be ok to leave. Even day traders that scalp will often step out from 11:30am-2pm.

    Some find short term trading too labor intensive so are not suited. Then again, short term traders have less stress holding overnight or into events like today’s Fed BS. It depends what one is looking to accomplish, and although today everybody wants to buy and hold for 300% gains, these moves do not happen all the time. This is a strong trend, but when markets are in flux deciding the next direction, I like to shorten my horizon which also means more time watching quotes.

  217. Rick 4779

    Eamonn, Gary is recommending July calls. Unless you are a gambler, I would suggest you get a strike price that is 4 to 8 points in the money. Gary likes a delta of .80

  218. Poly

    True. Sentiment during parabolic runs go off the charts, actually isnt that a requirement?

    On another lightly discussed topic, SPY looks hot to me. It’s clearly broken out of those Feb INT highs, formed a reverse H&S, has a falling dollar behind it and a relatively fresh INT Cycle count at its back. Looking a lot like that Summer 2010 pattern, only the drop and consolidation were nowhere near as big this time.
    This bullishness will certainly aid the miners.

  219. DG

    Bob-L-H: I am in Mountain View/Palo Alto, but train at the Navy Base at Port Hueneme several times a year, so get down your way then.

  220. David

    Some have bounced around the idea of a trackers meetup in SoCal after the C-wave is over.

    If so, I’m game.

    The menu? Burritos and margaritas.

  221. Romeo Bravo

    Hi Guys, wow, what a day. I know Gary mentioned in his update that he is to busy climbing/enjoying the outdoors to check the blog so I hope he isn’t reading this.

    How about at the end of the C Wave for those of us that can’t make Switzerland we have a little surprise weekend or just night in Vegas for those that can fly in?

    The only question is we would need someone to bring him to our surprise location?

    Anyone game for this?

  222. Haggerty

    I’ll tell you I really question if Silver is going to just go to 50ish, that move today was unreal. That Turd guy has been pretty spot on lately and he thinks it’s going much higher.

  223. Jayhawk

    Romeo-

    That would be great…Our wives can compare their unique supplements. 🙂 (We are expecting AGAIN and she’s gonna do what your wife brought up. 😮 I told her fine, just please don’t mention it to anyone.)

  224. Wes

    Brian,

    I agree, but I still think tomorrow will answer most questions.

    It’s not like I’m short, here. Like most, my account closed at all time highs today.

  225. ...at ease

    Eamonn, I believe Gary is going to recommend one when Silver hits $50.
    So I would hang on until then before purchasing a GLD option. It would be in the money, similar to the silver one he bought with a July and .80+ delta.

  226. David

    Vegas is a stretch for me, as I have three kids, but anywhere near LA is a possibility.

    I also think Gary said he would be in SoCal sometime in May for some weightlifting thing, so that might be an opportune time for us to buy him a good LA burrito.

    I’m sure we will hear this discussed more as the C-wave frenzy continues.

  227. Poly

    WES,

    I’m with you, still needs time to develop. A runaway wouldn’t be he end of the world, but really would suck! Nothing better than solid cycle low confirmation to jump in hard.

    Now that we’ve broken higher again, I’m of te belief Silver has to polish of $50 Silver here before “potentially” printing our scary dip.

    As always, many possible outcomes, got to beat position to be a player in each.

    I’m clocking off, night.

  228. bamster

    Geez, Look at silver go. Looks like a replay from monday where we will probably see silver approach $50 in th overnight. I wish it will happen during regular hours.

  229. thedocument

    Neo,

    I do not think yesterday was a daily cycle low for gold, but that might not stop the parabolic move from accelerating here. There is a parallel to the 2007-08 run which I will review in my letter tonight.

    As for a runaway move, I do not know how to define such a thing, so I can’t really answer that question. Nor do I follow the BB trade.

  230. Shalom Bernanke

    Before we start throwing victory parties in SoCal, let’s remind ourselves that since the middle of 2010 our purchasing power with all these profits is roughly 18% less in the same time.

    Much work to be done.

  231. Romeo Bravo

    Maybe we do a meet up in the LA area during the tournament and this is the surprise? I am up in the People’s Republic of San Francisco so not that far for me. May is a good time period.

  232. David

    SB,

    I think we can all afford a burrito at this point 😉

    But to your point, we will hold an Irish wake and raise a Margarita glass to our lost purchasing power.

    We may even drink a toast to the Ben Bernank himself.

  233. n1tro

    Doc, since Gary is not around to answer,

    In a parabolic move, does the move move faster than a typical cycle? So if they was not parabolic, we would be on day 1 which should last 20-25 days.

    Need to know because I’m heavily leveraged and don’t want to be left holding the bag. 😉

  234. David

    SB,

    And keep in mind, the D-wave will be in full swing at that point, so our currency’s purchasing power will be increasing rapidly by then. Something to celebrate.

    Romeo,

    Probably best not to surprise him at a meet. He may not even be up for it, since he’ll need to make weight. His presence is not mandatory.

  235. Yash

    i am with doc that daily cycle low may not be yesterday. as you know i follow tony oew count, I think daily cycle low is going to come on next correction which will be his minute iv. we are 5th wave of minute 3 and only needs higher high above 49.85. the entire minute 1 and 3 are supported by daily ema8 (yesterday was exact touch) and minute 2 is gone to ema34 so minute 4 may go to ema34 too which is above 40 now.

  236. Vonda

    David, SB, Romeo, et. al,

    If you’re having an Irish wake in SoCal, please wait until I return from Ireland in June! I’d hate to miss and opportunity for face-to-face w/ y’all. Definitely would hate to miss the historic peace treaty toast!

    I’ll flip for Gary to fly back over . . .

  237. pimaCanyon

    Seems like we have a number of possibilities for the elusive cycle low:

    1) It was a stealth low that occurred on day 30, yesterday, so today was day 1 of the new cycle
    2) It occurred on day 20, April 12, which would have made a very short cycle. If that’s when it happened, then today was day 11 of the current cycle.
    3) It hasn’t happened yet! That would mean that today was day 31 of the cycle.

    If number 3 is playing out, then maybe Poly is right that when silver hits 50 during regular trading hours, we’ll get a real move down into what will look like a normal daily cycle low. Silver could hit 50 tomorrow at the rate it’s going. It’s already over $48 in after hours trading! Or Friday if it slows down a bit.

  238. Vonda

    Eamonn,

    Pilgrimage. Carrying the weight of the ancestors back “home” with me. And spending a lot of worthless dollars, whilst at it! 🙂

  239. David

    The C-wave should be crescendoing in early June, so that could be the best date for maximum enthusiasm.

    Of course, if Gary decides he wants to come, we can decide based on his schedule. Pasadena may work for him if his meet is in Monrovia, but I may try to persuade you all to come out to the beach.

  240. wmp

    DG, Poly, SB and all the rest who lend a helping thought:

    I have a strategy question: I’m better than 50% positioned in AGQ and will plan to follow Gary’s plan to switch to DGP soon. I’m not leveraged but began adding DGP and GLD calls today after $dxy broke to new lows. I’m 95% invested with 30% still in cash (I think). Given the likely parabola is it prudent/wise/good/bad or indifferent to use the cash now to purchase additonal calls roughly equal to the AGQ position I’ll be disposing of in the near future? Leveraging now, leverage to be reduced when I sell AGQ?

    I appreciate the direction all of you provide..I’ve been a sub since 2008 but rarely read the reports after blowing an account out late that year. Didn’t even know there was a blog until three months ago! Such a wasted period for me not knowing all this support existed.

    Thanks in advance, and in arrears for all your guidence!

  241. Moondoggie

    Considering this discussion regarding the ‘elusive’ daily cycle low, I seem to remember Gary saying something to the effect that “cycle theory goes out the window in a runaway move”.

    As much as I would like to see a definate cycle low, perhaps we should keep in mind that if this is a runaway move … there may not be one.

  242. BlueHawaiiFan2025

    Hey JayHawk,
    This one is for you. It’s from Gil Morales’ free e-letter.

    During Bernanke’s press conference which just ended, the dollar continued lower while precious metals (gold, silver, etc) headed higher. The general market headed higher as well. In other words, the market sees a continuation of devaluation, money printing, and rising prices.

    SLV also just hit a pocket pivot for today, and GLD had a pocket pivot earlier today (as members received in real-time).

    Thus, the intermediate top we saw in silver April 21-22 looks as if it may be short-lived as silver and gold look poised to continue their uptrends.

  243. Duuuuuude

    For those of you with some charting software, you might want to look at a corn chart (zc) from back in 2008. Corn went parabolic then also, but it did not end well. The gains though in that final month were astronomical….money made nearly as fast as it was lost on the way down.

    http://screencast.com/t/EmlGedsY

  244. Vonda

    Gee, I imagine that would be really tough, David, to “persuade us all to come out to the beach.” 🙂

    And versus love-the-architecture-hate-the-smog Pasadena?

    I am totally up for a jaunt down the old coastal highway. Hopefully Gary will feel in the mood for a Pacifica sunset after the Matterhorn.

  245. Vonda

    Hawaii Bob,

    So many of you?! Love it!

    My neighbor’s an SMT follower too, the one who recommended Gary to me. Looks as if we could be quite a gang at the beach!

  246. Moondoggie

    Bob L H

    I don’t get to Cali very often so I won’t be able to join you guys on the beach.

    I heard you say that you were going to Maui… you should rent a standup board and paddle Kihei … It’s flat water and a good place to learn.

  247. TZ(4404)

    http://www.zerohedge{DOT}com/article/how-comex-lost-20-its-registered-silver-one-week-or-where-theres-smoke-run-theres-probably-r

    The comex has lost 20% of its silver inventory in a WEEK! This really could be the big one where the comex ends up defaulting. Note that gold warehouse is shrinking too.

  248. MarkMarin

    I live Marin, but commute to LA every other week and stay in Santa Monica. If we pick a date, I’ll be there.

    Not to change subjects, but REE miner Quest Rare Minerals (QRM.V) broke out to new highs today. Rare Earths are the other bull market….

  249. Rob L.

    Maybe someone here can help me out. We are roughly 10% away from Gary’s target for gold and about 30% away from Gary’s lower-end target for the HUI. Why wouldn’t we concentrate on the miners in this final leg of the C-wave?

  250. Moondoggie

    Bob L H

    That’s what I’m doing too.

    I’ll also be windsurfing Kanaha.(where that video was taken)

    … assuming that I can get away from this computer 🙂

  251. Workfriend

    I’m up at Tahoe but would try to join you all in SoCal. New at precious metals since Jan and would like to meet others trading this market.

  252. Brad

    There has been a lot of talk on Turd’s blog about a possible Comex default sometime in the future due to them not having enough silver to meet delivery. Does this concern anyone here and how would something like that affect a derivative investment like AGQ?

  253. Moondoggie

    Bob L H

    I am pretty far west … I live in Hawaii.

    That’s a great webcam! Does your wife sail in those conditions ?

    It sounds like you’ve got a lot of response to your SMT Cali Beach Party idea ! Cowabunga !

  254. SkepticSquirrel

    “… to the last I grapple with thee; from hell’s heart I stab at thee; for hate’s sake I spit my last breath at thee.” Bernanke’s nightly journal

  255. Bob loves Hawaii

    Moondoggie, are you in Maui? My wife has hung up the athletics, still in great shape at 51 but too much wear and tear on her joints. Spin class is it for her.

    I have great friends on Oahu, and visit Big Island every year.

  256. Dan

    My understand is that Comex is contractually allowed to settle in cash and such, they inherently will not default unless they are unable to provide the silver OR the cash.

    Thoughts?

  257. Razvan

    silver will be back at $50 by tomorrow. The price action is just incredible.

    I wonder what we are going to be doing when the C wave is over and we cant make money like this anymore. It is going to be depressing

  258. jc

    Hopefull miners can rally hard to finish off the week. bought exk last week @ 12.04. (they always correct 10% after I buy)

  259. catbird

    Those of us following Gary could quite possibly be selling our silver today or tomorrow.

    I want to increase my NUGT exposure.

  260. njhomecare

    Does anyone who is familiar with DGP now whether the volume makes any difference. For example, AGQ may have low volume but if you put in a bid where it makes sense for the market maker to buy it based on th arbitrage of SLV (or the futures) then one could sell even 100,000 shares fairly quickly. It really is just a matter of a perhaps 20-30 cents and one can move as much AGQ as they want. Is it the same ith DGP?

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