With QE2 coming to an end next week I think we are about to enter a very volatile and critical period in all asset markets. For the next three days I am going to offer everyone a five dollar trial subscription.
You will have complete access to the premium website during the trial period, which will include the weekend report with my view of where I think we are headed over the next month along with complete archives back to the beginning of the year and the terminology document, COT spreadsheets, and cycle count charts.
If during the trial period you decide the newsletter is not for you just cancel following the directions on the homepage. Your trial subscription will still remain active for three days.
If you decide you want to continue receiving the SMT premium newsletter your trial subscription will automatically convert to a $25 monthly subscription at the end of the third day.
If you like the newsletter you can also cancel the trial subscription and convert to a more cost-effective biannual or yearly subscription. The directions for converting to a more cost-effective subscription are also on the homepage. (The 15 month special will remain open till Sunday evening.)
To sign up for the trial click here. Then click on the subscribe link on the right-hand side of the homepage. You will be linked to the subscriptions options page. Check the five dollar special and then follow the checkout instructions.
.
I sent it out to 3 folks I know who might be interested Gary.
I sent it to a couple too. You’re a good guy Gary.
Great weekend report Gary. Very thorough and descriptive. Thanks!
.
Chris Kimble pulling charts saying “US Dollar could rally hard”
http://blog.kimblechartingsolutions.com/wp-content/uploads/2011/06/fallinghardusdollarjune24.gif
Thanks DG for the EUO tip many weeks ago!
Great Report Gary.
I do not trade with International shares here in Australia so I deal mainly with a few ASX200 listed PM miners (pre production).
This service is still relevant to me as PM’s are PM’s worldwide.
Thanks for giving me confidence & conviction.
Conman62.
Cory
I couldn’t find your dollar chart but I have a Cup n Handle on my chart also (target ~79.50 if the pattern completes). Great to see you are doing your own homework.
It’s easy to see why you’ve made a lot of money using SMT cycle analysis along with your own interperetation. I always take note of your opinions when you post.
.
Holy cow Superman!
You already put out the weekend report? Boy that voice activated software is worth every penny you paid.
Yes it is 🙂
Gary,
You mentioned in the weekly report that we will be seeing the single best buying oppurtunity in the next few weeks for the remainder of this secular bull market…does that mean that you believe the secular bull market in gold will end with this A-Wave?
This weekend report was amazing, your insight and knowledge never ceases to amaze me. Thank you for sharing your mind with us, you are greatly appreciated.
The gold bull should still have several years yet to run. My best guess is a top around 2017 or 18.
Gary,
By then I will hopefully have made enough money to go on vacation with you.
Gary
The biggest obstacle folks have about trading the market is not knowing where to begin. I have to say if there is one place to begin trading… it would be with you and your service. I sure hope a lot of folks find you here before the next wave up begins.
I wish I had found you in January instead of February as that would have given me a better advantage to be positioned money wise to be ready to trade at the last cycle bottom.
RIGHT NOW, you are giving folks that OPPORTUNITY to read your reports, LEARN to find out what is needed and TIME to prepare to have funds READY to go to invest for the cycle run up to make BIG MONEY.
I am happy to be here, ready to go with funds intact and the last cycle experience under my belt with your service. 🙂
Gary, Thanks for your time and efforts. And thanks to all your knowledgeable bloggers who contribute their ideas and talents to our trading efforts. And thanks to those of you who keep the humor flowing when times are dull or tense. What a valuable service and blog.
William,
Yes, you’ll need a couple of C waves to vacation with Gary since he has a knack for selecting the most expensive places on the planet with the poorest exchange rates to the dollar. Otherwise, it’s a great opportunity to meet fellow trackers.
William,
Do you think she was talking about us? Lol!
^
^
Gary,
Won’t the expected 2 1/2 year low in the CRB impede the velocity of gold and the miners’ rise after their intermediate cycle ends?
Gary,
A while back I think you mentioned that you thought the gold bull might top early – about 2014. If I did not read that incorrectly, what has changed your mind?
Thank you
Elaine
RJ,
After looking at the weekend report I think we have an outline to exiting our July Puts. I’m holding July 35 so they’re sitting pretty right now. I’m revising my strategy over the weekend and I’ll post later.
Ah ah Gary, you agree with me on the conspiracy theory about Ben buying stocks… 🙂
Also Gary, I would love to take advantage of the 15 months subscription offer but my sub expires in Sep as well. Would love to grandfathered ….please let me know when time comes…
Kindest regards, Sophia
86,
Ofcourse she was…lol
Nice cup and handle patter on the dollar daily chart.
Yup 😉
Powerful weekend Report Gary! To anyone sitting on the fence, Gary’s insights and timing is invaluable!
Now all I need is to control some of my own impulses and impatience.
Have a great weekend everyone!
Mining Stocks & Symbols
———————————-
Market Vectors Gold Miners, GDX
Paramount Gold, PZG
Aberdeen Internat. AAB.TO, AABVF
Xtra Gold, XTRA
New Gold, NGD
Full Metals Minerals FMM.V, FLMTF
Kiska Metals Corp KSK.V, KSKTF
Great Basin Gold GBG
Western Pacific Resources, WRPSF
Golden Phoenix, GPXM
Focus Gold, FGLD
Fronteer Development Group, FRG
Jaguar Mining, JAG
Agnico Eagle, AEM
Goldcorp, GG
Kinross Gold, KGC
Royal Gold, RGLD
Gabelli Global Gold, GGN
Franco Nevada FNV.TO, FNNVF
Cia Beunaventura, BVN
Yamana Gold, AUY
Iamgold, IAG
Eldorado Gold, EGO
San Gold, SGRCF
Barrick Gold, ABX
Newmont Mining, NEM
———————————-
At ease,
Without due diligence/research on each of these stocks, your odds would be much better just following the model portfolio into the sector ETF (GDX/GDXJ) rather than hoping you were lucky enough to find a couple of rockets that will blast off. At least that’s what I discovered in C wave #1 when many of the juniors I selected provided lackluster returns while others blew away the competition.
Sophia,
I described in the June 16 report how subscribers that are grandfathered in from the old website can take advantage of the 15 month offer.
Rob,
Mine expectation is that the CRB three-year cycle will bottom at roughly the same time as gold’s D wave.
If this plays out as expected then the selling pressure in all commodities should be released roughly simultaneously. My best guess is that bottom will come with the announcement of QE3.
Gary,
do you think gold will correct past the 150 ma. Thats been it bottom the last few Intermediate Cyle Lows during the C-wave.
GLD’s botoom that is
Man I need to turn on spell check.
I think it probably will this time.
This isn’t just your typical intermediate decline in my opinion. This is a D wave. A D wave should take gold at least down to the 200 day moving average and often it will dip slightly below that level.
Once we get into the timing band for the daily and intermediate low I will start watching for a large percentage down day as a sign that the bottom is near.
Gary,
I have been a subscriber since February. Thank you for all of your guidance and help. I had a question after reading the weekend report. If QE3 does not start in August, do you think it is possible the dollar will have at least one more daily cycle increase leading to a more severe D-wave decline in gold? The Federal Reserve is notoriously unpredictable. They are not elected officials and do not necessarily act in the best interests of the economy. I think that your thesis is the most likely possibility but I am just considering other senarios.
Hi Fergie,
I totally agree with you as I don’t go for individual miners myself, too much work to research and follow up on. I prefer GDX myself.
However this list was provided by a Gold Miner guru who tracks and researches the miners and these are his recommendations on low entry buys for miners. I had signed up with this service prior to finding Gary’s service, and it’s nice to have another opinion on other aspects of the Gold market.
I figured I would pass on the list for those who like to follow or trade individual miners as he asks a hefty price for his service. I figured somebody might get the benefit of his insights, that I am not using. 🙂
Mahalo for the answer and great weekend report.
Gary,
Getting back to you on XAU.
Freeport used to be 5% of the index and is now 20%.
Barrick never was in the copper business. Now it is.
I use the HUI simply because it is cleaner.
The XAU because of its component changes is not tracking gold stocks as well as it used to.
Anyway, you might want to keep an eye on it.
Alex
Tony,
I think the severity of the stock market decline will determine whether or not QE3 is initiated in July or August.
If it’s bad like it was last year in Bernanke is going to freak out.
It will be interesting to observe those people who condemned QEII vociferously about turn and scream to Mr. Bernanke to turn on the dollar spigots again
that makes sense
Alex,
We can easily convert to the gold: HUI ratio.
I took a look at the long-term gold:HUI chart and it appears that historically overvaluation occurred at the 2.5 to 2.25 level.
The ratio has now risen to 3. So even if we clean up the ratio by substituting HUI for the XAU it’s still apparent that miners are becoming extremely cheap.
This comment has been removed by the author.
This is a link to an article with GDX to Gold chart at the bottom.
http://arch11.goldtent.org/?p=67117
Gary:
Tim Wood @ Cyclesman.net in his latest audio commentary poasted yesterday believes Gold is in for more trouble than most people realize. He does not give much away…since you were somewhat familiar with his work, any thoughts on his view?
Thanks!
Tim has been trying to call a top in gold for over a year now.
It takes more than just cycles and statistics to invest successfully. One has to also understand the fundamentals. If QE3 is announced then we are going to see a bottom in commodities and gold.
Stocks should put in a violent rally on the news but as we know printing money is not going to save the economy. If the economy is rolling over into recession then any rally in stocks will be a counter trend move.
Cycle question,
Does a D-wave encompass daily & intermediate declines/rises?
I’m not really sure what you’re asking. A D-wave will bottom along with a intermediate and daily cycle bottom if that’s what you mean.
A D-Wave is simply the declining part of the an intermediate cycle? Trying to get A,B,C,D waves meshed with daily,intermediate,yearly, multi-year cycles :*)
I guess as long as human nature doesn’t change your cycle will continue to work. I don’t get why isn’t this model more widely used.
Gary:
On your dollar chart you mentioned that around August “…at risk of extreme left translated 3 year cycle decline”. Is this referring to a new 3-yr cycle or do you mean that the last printed low (May 2010) was likely not the final low for the multi-year cycle and it will likely come in the fall?
Wav,
Thanks. Boy do I wish I had a crystal ball to know the SLV close on July 15th. 😉
Let’s ping Cory..
Cory,
Thanks a lot for your contributions.
Last Friday you posted after Op Ex that market makers were high fiving based on the GLD and SLV pin closes.
Is there a way we can start to get a read for July op ex based on the open interest? Like, will they target 30, 35, 40, 130, 135, etc?
Of course it isn’t an exact science, but maybe we can get some sort of feel.
I still can’t get out of my mind that 100,000 PUT contract on SLV that was made for July a few months ago for at 24 strike for 10 cents that were then closed at 10 cents. It was super fishy.
Highly unlikely, at this point, that we get a July SLV close below $24.
Anyone read the COT reports?
http://snalaska.net/cot/current/charts/GC.png
http://snalaska.net/cot/current/charts/SI.png
Commercials went hugely short gold and this was at the close tuesday (they’re really high fiving now). Look at the Gold small specs. They went long and got murdered (large specs too).
Silver looks a bit quieter except commercials closed a lot of longs.
Ok, I couldn’t resist. One more post and I’ll crawl back into my shell.
I didn’t see the TSI trader post from mid week. Wow (outlining through cycles the likelyhood of a gold top that day). He also posted yesterday again about ZSL upside targets…
http://thetsitrader.blogspot.com/
If Ben starts QE3 the current three year cycle would be at risk of becoming left translated.
Gary,
In the 8th paragraph of your report you mention that the jobs report will be coming out on the 8th, but on the gold chart that follows, your note says next Friday (the 1st.)
I’m thinking the correct date is the 1st, unless the 4th holiday is going to delay the report until the 8th.
I mistakenly assumed the report came out on the 1st. After checking the BLS site I discovered it is the next week. But that chart took a long time to construct and I didn’t have enough motivation to do it over.
Gary,
The government has now made it clear that they are targeting commodity speculators in an effort to drive asset prices down and provide cover for initiating QE3. We’ve seen this through margin increases, strategic petroleum reserve releases as well as the stated intentions of the Obama administration. My question is twofold. (1) Do you expect them to continue to use these tactics after they initiate QE3 in an effort to slow or disrupt the ramp of commodity prices; and (2) Do you expect this to contribute to increased volatility in prices and will it, therefore, affect how we implement our stops? Thanks
I’m sure the government will try to curtail what they consider to be speculation. But like I’ve said many times in the past any attempt at manipulating the markets will only cause prices to rise faster.
I also don’t think they can manipulate away human emotions, and those are what control cycles.
Gary,
Nice report. I hear you loud and clear on the necessity of preserving capital to have ready at the onset of the A wave, but I can’t help but ask…
Why not short a *modest* amount of AGQ (or maybe NUGT) this coming week when metals bounce?
As leveraged ETFs, AGQ and NUGT are going to get absolutely pounded between now and late July.
Your forecast would have to be completely wrong for this trade to not make some money.
Gary,
Thanks for that report. I have a question about the next few weeks and shorting.
With a set up as strong as you project it’s difficult to understand the anti-short position. I HEAR what you’re saying..be cautious, preserve capital, Monday could be a surprise up day etc. There is a subtle difference between not encouraging the subs and DIS-couraging the subs.
I believe your comments yesterday on the blog mirrored those of Poly, DG, Fubsy and others about the rewards of shorts staying the course thru the wiggles and into the cycle lows. Yet the weekend report, even with the great multi week set-up, directly admonishes (maybe too severe a word) those contemplating a short “dispite my reservations” .
I accept all of the disclaimers and responsibility… but which is it: not encouraging the subs or discouraging the subs?
Thanks and a great weekend to all!you
Gary,
Not sure if you know this or not but Stockcharts $gold/$silver/$usd and the rest (I assume) give you candelsticks on weekly but not daily.
I don’t know if they had changed the whole timeframe display to a line chart only but for weeklies it works as before.
Hi Gary, first post from a new reader in the UK. Good blog/community here! (though a lot of the financial stuff goes over my head). I think you’re mostly talking of gold stocks, does the same advice apply to when is good to buy physical gold?
I’m considering using the last of my money to buy a few gold coins soon when the price is right, to preserve and increase its relative value as I want to save up to emigrate to a tropical country and buy land to become a subsistence farmer/forest gardener.
I have literally zero income (unfunded postgrad student) and am going to be homeless soon, so I could do with help/advice to time it right.
Thanks! Glyn
Now I’m only speaking for myself and my preferences, not judging others, but this is why I believe what Gary does in regards to options. As I see people running out of time for the market to move, even though Gary has been correct in the direction, it reminds me of my early years losing money in options. If you don’t buy DITM much further out than you expect the move to happen, it is a lottery ticket and should be treated as such. It feels amazing to see a 65% gain in two days etc., but in the end it is not a long term strategy. I have no idea where the market is going to go, or the exact timing of it all, even though we have a rough idea through cycles and sentiment. I bought my options on May 25th an have been wrong on the timing already. I was tempted to buy OTM because of the potential, but by buying Oct & Jan Mid 40’s strikes I have been able to weather drawdowns on a very large position, and am now up over 20% on the position. Not glamorous, but during this D Wave I am more than happy to have significantly higher capital than when silver topped. This is just my attempt to share from past mistakes with others, as Old Turkey long or short is the only way to go. What you actually choose to purchase is completely your own preference.
Cory
Well Said!
I used to swing for the fences and today I have less money because of it. Patience is the hardest thing to learn doing this. When you have a lot of money like you might have it’s very easy to be happy with 20%. But when you have nothing and your really trying to make it, patience is the hardest thing to have. Ultimately Patience needs to be learned, because you will blow out your account like Gary say’s.
Gary,
Digesting the comment about this being the single best opportunity to buy gold stocks for the rest of this bull, I’m thinking maybe we buy and then sell calls and puts instead of selling in the next D-wave? Do you have any thoughts on that?
Thank you.
catbird,
I don’t think you will be able to borrow the shares to short a a AGQ.
Mr. Miyagi,
The problem with the weekly candlestick charts is that they don’t capture the intraday moves. The candlestick charts are constructed by using daily closing prices only.
Glyn,
Gold is the cyclical driver of the precious metal sector. Consequently I’m only concerned with gold when I talk cycles. The rest of the sector, silver, miners, platinum and palladium will follow and magnify or minimize them moves in gold.
So at an intermediate cycle low for gold that should also be the appropriate time to buy any other part of the sector that you like.
book guy,
I don’t recommend hedging for the average retail investor. As a matter of fact hedging is probably the greatest scam Wall Street ever pulled on the little guy. Hedging just means you have to manage two positions instead of one.
Where hedging is appropriate is if you are a multi million or billion dollar hedge fund that can’t enter or exit the market without moving price.
For us little guys if you think the market is going down… just sell. Then buy back when you think the correction has run its course.
And that is exactly what I attempt to do by timing the intermediate cycles.
Cory, Well Done 20% in a month is a nice trade to the down side and likely to get better. I am short options also. Ditm puts also. Sold a few otm gld 144puts to lock in some profit Friday.
Book Guy, I am thinking the same thing you suggest. As we get near to the top next time I will be scaling out buy selling calls against my position. Just like I am now doing on the short side. But in D-wave drops like we had in Silver it only gives you a little more time to make the decision to sell. Last time I set it up right and sold 45calls at around 47 and normaly would have made that my stop but I was overconfident and didn’t sell the stock until way to late much lower. selling the call helped but didn’t prevent the big loss. It however I think it does work better for A wave tops.
WMP,
Let me explain to you exactly why I do not short bull markets.
First off you appear to think that an intermediate decline is a sure thing. Let me remind you that in bull markets the surprises come to the upside. Nothing in this business is a sure thing.
Second; the potential percentage gain isn’t worth the risk. An average intermediate decline will only take gold down 4 to 8%. Even if you are willing to risk 50% of your account shorting gold it’s just not enough profit to take the risk of going against the secular trend.
Now let me lay out for you what typically happens, and what I am sure has already happened to many traders that have tried to short this.
The first attempt at shorting is too early and at some point you cover for a loss. The second attempt at shorting is also too early, again you cover for a loss. This could happen 3, 4 or even five times before you catch the top. In the meantime you have now whittled away at your account to the point where even if you catch most of the move down you are not going to recover all of your losses.
On top of that if you miss time the top multiple times you are going to be so shell shocked that you won’t be able to hold your position even if you do manage to catch the top at some point. Any intraday wiggle will knock you out.
The only way I will ever trade the downside in a secular bull market is with puts. With puts your risk is known the minute you take the trade, and with puts your profit potential is in the hundreds of percent.
However options are outside the ability of most traders and I will not cover option strategies in the regular SMT any longer.
All that being said, for most investors the important thing is to just get to the bottom of the intermediate cycle with your capital intact. As long as you can do that then you have as close as one can get to a sure thing.
Even if you don’t time the intermediate bottom perfectly the secular trend will correct your timing mistake.
And that’s why I don’t suggest shorting gold or silver.
^
^ ^
/
V
One scenario where you might want to hedge for Americans relates to tax considerations. It allows you to build positions with long term capital gains if you sell them later, and generally it’s better to hold on in a secular bull market.
New subscriber here!
Are there any links/resources on the premium site that explain cycle theory?
Thanks!
Gary and Wav-ridah,
That GDX:Gold chart you linked to at 5:35 am is amazing. Thanks
Wav-ridah.
Gary, what are your thoughts on the 6th and last chart in this article? The November 2011 low date looks way late but the rest of the chart (price, sto’s, RSI, ratios etc. look possible).
Alex
Sir Robert,
Read through the terminology document, there you will find information on cycles and how I use them.
Alex,
I must have missed the link I’ll try and find it but the way the intermediate cycles are setting up we should be getting a top in November not a bottom. This also lines up with the historically high demand time of year.
okay I found the chart.
I’m not really sure why this guy thinks that ratio has to move back down to the same level as it did during the eight year cycle low. Quite a leap of faith I think.
Don’t forget this is just a ratio chart, this is not a stock or index chart that’s being driven by supply and demand.
Also when I see the infamous “wedge” pattern I tend to dismiss the analysis as virtually worthless.
The wedge pattern is a catch-all pattern. If you try hard enough you can find one in almost every chart.
Thank you for the answer Gary. Just thinking about the premiums more than anything. Old Turkey with the added benefit of collecting a premium.
Great weekend report Gary, thank you for your sharing your wealth of knowledge.
To Gary or anyone else, this Dodd-Frank issue with PM’s coming July 15th, does this do anything to the PM’s value or traders in the futures market. I am currently trading Silver futures and am wondering if I should be preparing for anything before hand as I am eager to trade Silver at the bottom of the D wave in Gold. Thank you in advance for any insight.
Marty,
I just heard from someone today that it would only apply to OTC products, since they’re not regulated. This would not include ETFs or futures, as they’re regulated.
Gary,
Thanks for your reply. I’ve understood your aversion to shorting a bull market for some time. But now I think I understand that by “shorting” you mean shorting in the strictest sense.. as in borrowing shares from your broker. Is that right? I’ve generically (and probably incorrectly) assumed that shorting or going short could also include being long an inverse fund or buying puts in a long stock or fund.
Are you, then, playing your own very strong anticipation of an intermediate decline with puts in the super duper extra premium portfolio??
Thanks again for your feedback but I have to say that, for someone who’s been a multi year subscriber,
the bifurcated portfolio is disappointing.
I wouldn’t advise buying an inverse fund as it has the same risk/reward as shorting.
With put options you know your risk from day one.
If you are an experienced trader and completely understand the risks involved with options and how to control that risk then yes perhaps a small put position on the precious metals sector could be taken.
However, if you are experienced then you don’t need me to walk you through setting up a put option position.
Sir,
Read the terminology section on the premium site. I would recommend studying it. You’ll hear the terminology over and over during the day especially in the reports.
driver
both my brokers (and one of them is a member of fmoc) confermed that dodd frank only applies to otc ( over the counter ) tradeing. it does not involve physical, equities, futures or anything else. when you trade otc you are tradeing with one specific company and thats it.. if they go under you have no recorse and your cooked / done/ finished and broke
um fomc not fmoc
Gary,
With regards to buying an inverse fund, if you create a mental stop your risk is no longer infinite. This may seem overly simplistic, but it is true.
For the right person, this could be valuable way to play the downside if trading options is not an option.
Yes but what often happens is that you get stopped out multiple times to the point where you can’t recover your losses. So in the long run all you end up doing is whittling away at your account and then you have less capital to invest at the bottom of the D-wave.
The little bit of profit that you might make on the short side just isn’t worth the risk. The safe bet is just to be patient and then when the time is right stomp on the accelerator.
I think the key is discipline – don’t get stopped out multiple times. Buy in once with a reasonable mental stop if you are convinced the trade will be in your favour. If you are wrong, and sell, then wait for the intermediate bottom and go long with the bull.
In the end, we all want to make money, so your concerns are warranted and appreciated, Gary.
ssl.v is looking pretty nice right now. I think I’m going to drop a bit in on it.
I would be wary of these volatile penny stocks, especially right now when everything is in a downtrend. The bottom can drop out of these and before you know it you’re down 50%.
Hey Gary,
What is your opinion on Crude Oil right now, is it in a similar phase as silver and gold? TY.
Christian,
At last, one voice (Ben Davies) on King World News is saying Gold will bottom as bad as $1450 in July/August.
Aligns well with Gary and this forum.
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/6/25_Ben_Davies.html
Hi Gary, thanks for the great weekend report!
What do you think of some carefully selected silver miners or SIL for the A-wave next to the gold miners?
Think it was Alex that said a while ago that even after the broken silver parabola silver miners (EXK, AG) move 5-10% a day, gold miners move 3-5% on a good day.
So % gain wise silver miners could be a good play for the A-wave
Thanks
Ollie,
That’s a tough one. I’m pretty sure we want to be in mining stocks for the next run.
Silver had its run it’s not coming back soon. Broken parabolas can take one to three years to recover.
So I would tend to think that gold, gold miners, and junior gold miners might be a better investment this time than silver miners.
youks,
I update the cycle chart for oil daily in the premium newsletter.
Great blog and terrifics comments Gary. Here my view on Cash Metals Rates (Jun.26) 2nd post. – thoughts.com conversation engine http://bit.ly/jAE1iP
Gary,
From what I understand a lot of the JR miners might get bought out by the larger miners at the rock bottom prices they are at now and going lower.
World Collapse Explained in 3 Minutes
http://www.youtube.com/watch?v=NOzR3UAyXao
Good morning you guys,
Anybody else here looking at PZG?
Might be my own ignorance or inexperience but PZG looks to be holding strong. I might take a small position with them when Gary gives the green light. A wild guess of mine says it will cave at the very end of the correction?
Gann,
Great video. I don’t know what the world is headed financially, probably China.
Ultimately, these European countries might just cancel out eachother’s debts and reset.
Hey
Mr M
Funny but True Video..At One Point. Something gotta Give.But the 64k Question is When !
The video is inaccurate in that the countries don’t owe money to one another, but to one anothers’ banks.
It’s not about Germany or France bailing out Greece, but European (and Through the IMF, American) taxpayers bailing out Deutsche Bank.
Just as in the US, the banks are laying off their malinvestments on taxpayers under the guise of a national bailout.
This comment has been removed by the author.
Fort Calhoun going to the dogs. PMs not looking so hot.
I have a question on how to play small cap options right now. I am new to option and thinking of buying a small August 80 IWM put to play the down trend.
However, before I start play, I am thinking of which direction market is more likely to go, I am a little concern of small cap recent strength, and it also have be down for about 8or 9 percent.
I would like to hear opinions of more experience option traders and what is best way to play IWM at this time.
I bought GDX call at top, and I am not about to let it happen again.
TIA,
Jin
JIn, just use money you can afford to lose! If it doubles, sell half and let the rest ride for “free”, otherwise if you are playing for a 3 times or 5 times your original money that is a less likely outcome.
Thanks,Romeo.
30Month Cycle in SPX SP-500
http://screencast.com/t/MbEJPEdcG5Q
Jin,
If you are a beginner with options, I would suggest that you either avoid options all together, or if you want to learn about them, then use a very small position that won’t damage your account if you lose it all. Remember, Gary recommends preserving capital for the coming A-wave.
Gary recommends deep in the money options with a delta of .80 or greater (-.80 for puts). For IWM that would be Aug 87. The Aug 80 is almost all time value. That means you will lose everything if it expires at 80.
You also need to consider your tolerance for draw downs. IWM is very volatile around 80. It could go up or down from here. You are coming to this trade late. Are you willing to hold through a steep draw down? Or are you more likely to panic and sell.
Why not wait for a good set up? Even if you completely miss the opportunity going down, Gary will get you in for the A-wave. Spend some time reading up on options. Learn as much as you can. Read, read, read. If you must learn by trading, you can learn just as much from small positions as you can learn from large ones.
Good luck,
Le Fou
Gary, I just signed for 15 month subscription. I have learned a lot following you all guys and looking forward to gain some knowledge and money.
Thanks, Le Fou. This is what I want to hear. IWM 80 is volatile, I am late for this trade, and it is not a high probability trade. I do not mind wait.
What do you consider a good set up? Do you mind give me some examples?
Gary:
I’ve seen some comments that “normal” (non-QE2) money that flows into US bonds as a safe haven may flow to US stocks and support the stock market.
Do you ever follow bonds, or TLT, cycles to confirm targets, or analyze if this may negate or reduce the potential stock decline at the end of QE2, for example?
Jin,
A good set up for an IWM put, for example, might be a tag of the 50 dma and a swing high coupled with a strongly trending dollar.
Conversely, a good set up for an IWM call was the June 16 tag of the 200 dma and a swing low coupled with a fall in the dollar.
Lots of good set ups get posted on this blog. Gary is all about good set ups. He won’t use options except at intermediate tops and bottoms. That’s the way to make money, and that’s his sole purpose.
Best,
Le Fou
Very nice, Le Fou. Now I realize I uses use setups too myself, and I need to think more of if the current market fit the set ups or not before I take a trade. Obvious improve, and increase them.
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Jin,
Without a clear setup that you believe in I would stay away from options. Best bet might be to sell some of the option premium. After you study and read and understand options. You will not get rich quickly that way but the odds can be in your favor by selling time. I am trying to learn to just wait on the setup. Options can be a great tool but you have to understand them and know that the odds of buying them and being successful are against you without a very good setup and then I would follow Gary;s advice of DITM options. But even then know and understand the risk.