FINAL LEG UP?

Certain conditions were met on Friday that convinced me that gold is now entering the final leg up in this particular phase of the ongoing C-wave advance. The final spurt higher last year tacked on a very healthy 19% in a little over 1 month.

A similar performance this year would drive gold to $1578. Although this year we have the added benefit that the entire sector is trading at new all time highs. It is the only sector in the world that is in this position. This is an incredibly powerful combination that could drive the precious metal sector even further than it did last year.

At the moment there is a very low risk (-3%) entry for investors and traders to get on board this final run.

I explained the setup in depth in the weekend report.

For one day only I’m going to offer the 15 month yearly subscription rate again. That works out to a monthly price of $13.33.

15 months should be long enough to get investors not only through this final spurt higher but also back in for the final phase of the C-wave this spring. Get you out of the precious metals market in time to avoid the severe D-wave correction. And then back in to ride the next powerful A-wave advance.

We have an incredible opportunity ahead of us over the next several months and year.

If you want to take advantage of the discounted yearly subscription click here and follow the Paypal link.

262 thoughts on “FINAL LEG UP?

  1. alex

    Hey, how about a special on the 6 month subscription too?? Like 6 months for $99..or six months subscription gets you 8 months??

    Just a suggestion …then we’ll be hooked anyways and sign back up πŸ™‚

  2. magazine st

    gary-
    id like to get this straight, you are looking for one more daily cycle and then an intermediate cycle correction coinciding with the yearly cycle dollar low. Then one more intermediate cycle running into the spring-time coinciding with the 3-year dollar low?

  3. alex

    Gary, thanks for explaining my error on the c-wave count , where I was using the HUI, and you clarified that you were speaking of GOLD only.

    I must admit I am still a bit foggy on the idea that elections and QE2 disappointing could cause the dollar to rally next week.

    It true that it’s supported at 77 and the ‘line in the sand’ hasnt been violated…and the coil in the s&p could roll over ,…

    but this report says ‘the final leg up” has started (which I believe to be true). The P.M. stocks acted good friday , some breaking upward with nice volume.

    See ssri, Aem, Paas, Ng etc…

    The fed speaks wednesday…he may kill the dollar with words, and the final leg up continues. time will tell.

  4. Jay M Goods

    Gary, I thought your expectation was to see Gold top in the final C wave move into April next year with the dollar bottom. Has that expectation changed?

  5. Jerred

    Gold Era,

    Not much going on so far. Silver opened at new highs and pulled back. Gold is lagging.

    I dont see any reason to buy or sell my positions.

    Sitting tight for now!!

  6. Jamal

    Gary, thinking about increasing my GDX position by 50% sometime this week.

    Any thoughts on best time to jump in / etc.?

    Thanks,
    Jamal

  7. Gary

    Ahh if only I had a crystal ball.

    Here are two schools of thought. You could wait till after the fed statement on Wednesday.

    Or you could buy with the HUI at or below 520 as it might act as support.

  8. DG

    Gary: I like the idea of buying GLD here until the dust settles, for two reason. 1) the miners are more likely go down if stocks do, even if gold itself goes up. and 2) Gold is near a good stop point ($1315), so the risk is small. I bought twice as much GLD as I would have GDXJ and given the tight stop the risk/reward looks pretty good (and again, I always have lots of cash laying around so maximizing every dollar for return percentage is not an issue for me). Make sense? Thoughts?

  9. Gary

    DG,
    First off if gold is holding steady or rising the miners will resist the stock market until the final panic.

    I’m actually going to go over a trading plan in tonights report. It’s a bit complex so I won’t attempt to explain it here.

  10. Chrys

    Gary said “I’m actually going to go over a trading plan in tonights report. It’s a bit complex so I won’t attempt to explain it here.”

    Will this plan also address SPX or only gold and the miners?

  11. Jerred

    Marc,

    For every negative/pessimistic article there are positive/frothy expectations.

    Here is an article from reformedbroker blog on the Financial Advisor Summit that just took place last week

    Gold:
    Not many people own gold as a percentage of total AUM (assets under management). Globally we are debasing fiat currencies. In inflation-adjusted terms gold still has much room to run to new highs. Combine all of this with no central banks planning to sell and most looking to acquire and it looks like gold could have another huge run.

  12. Onlooker

    Gary said: “It’s a bit complex so I won’t attempt to explain it here.”

    Subscribers would also note that we’re paying for that advice and so putting it here on the blog would no doubt upset quite a few. Just sayin’

    I realize that you need to use some info that comes from the newsletter here on the blog as a marketing device, but sometimes it can get to the point where subscribers wonder how much of their value is being diluted. It’s a tough call, I realize, but this comment kind of made my antenna perk up.

  13. fubsy_cooter

    Man, The newsletter goes far beyond what is discussed here. Clear as day in my mind that Gary’s newsletter has been well worth the cost of 15 bucks a month considering that I have increased my PM account by appx 20k this year based on his advice. Maybe
    10k beyond what I would have done on my own….and the year isn’t over yet.

    That’s a portfolio that started the year with 78k in capital. So, a significant gain.

  14. Marc

    Jerred,

    I was actually more interested in the guy’s statement that rampant printing of money by central banks does not necessarily increase the amount of money in circulation.

    As well all know here, this is one of the central points of Gary’s investment strategy.

  15. Jerred

    SB,

    Pretty boring indeed.

    Good news is SI has held the upper composite.

    Bad news is SI gapped open but couldnt hold it (however selling has dried up and it is using a lot of energy to push lower but cant get it done)

    I am long the silver miner PAAS.

  16. Shalom Bernanke

    Some say PM’s are a reflection of the faith, or lack or it, in their government.

    I’m not too worried about how much of the new money printed makes it into the economy, only how much money out there goes into metals.

  17. makutaku

    >> “rampant printing of money by central banks does not necessarily increase the amount of money in circulation”

    If it didn’t, why would the FED try to decrease unemployment by increasing printing ?

  18. contulmmiv

    “Subscribers would also note that we’re paying for that advice”

    To rely on payed advice in order to get a “head start” is the wrong expectation from what advisory services are. Not to mention that it speaks tons about a mentality one should rather keep to oneself than display on a public board. It’s like pretending to win a race while riding on the shoulders of an athlete: every once in a while, s/he should whip the carrier πŸ˜‰ This is not the kind of customer one would welcome…

  19. Marc

    Well I DO think the Fed is trying to inflate their way out of the recession. Otherwise, I wouldn’t be in the PMs.

    Perhaps, Reagan was right, deficits don’t matter. All that matters is keeping the system going until the next boom.

  20. fubsy_cooter

    The Fed’s impact on the money supply isn’t all through printing. By keeping rates low, they allow banks to leverage up on free money which they can then invest in risk assets. A lot of this money goes into treasuries, which are considered a safe haven (haha), but undoubtedly, chunks of money finds its way into the commodities. Just look at the correlative effect of creation of liquidity by the Fed and commodities prices. That is all the evidence I need. Someone is getting their hands ona bundle of money and putting it to work in non-fiat assets.

  21. DG

    Marc: “Perhaps, Reagan was right, deficits don’t matter. All that matters is keeping the system going until the next boom.”
    The problem is we have just completed a credit bubble. The “next boom” will be a long time from now. There have been credit bubbles throughout history and once they end, the aftermath is not pretty and it take years before the excesses are cleaned out of the system. I wouldn’t hold my breath for the next upturn. With all the pumping the fed has been doing the past 2 years, we ain’t nowhere yet. You can keep letting air out of the balloon and then blowing it up again, but once it has popped, “All the king’s horse and all the king’s men…”

  22. Marc

    Hey I’m no Reagan fan but the market was a whole lot lower when he was in office. Anyone buying and holding since the 80s is rich.

    My point is that it’s easy to find fault with the system and declare that it’s all going to fall apart any day now. The reality is that despite what governments do, people adapt and life goes on. The crashes come when no one is looking. Too many are looking for it now.

    BTW, I’m totally on board with Gary’s strategy and doing just fine with PMs.

  23. Steven

    Gary,

    A few quick questions:

    1. In the weekend report said that the next leg of the C wave should be at least as large as this one or possibly larger as the dollar falls into its 3 year cycle low. Assuming we get to $1625 before the next intermediate decline then where would this put gold at the time you expect the C wave to complete next Spring (basically where did this C wave begin)?

    2. What kind of correlation do you expect from the HUI during this next phase of the C wave (2:1, 3:1???).

    3. Do you expect the gold/silver ratio to go even lower than 45 during the three year low for the dollar as you think will happen during this phase of the C wave?

    Thanks in advance.

  24. Steven

    Wow Gary! These calculations are pretty heady.

    This would give us gold at $2390 and silver at $53 (assuming a 45:1 ratio) by the end of this C wave in the Spring. This is a 77% rise in gold and that would give the HUI a rise of 115%-154% or a range of 1124-1328 of the HUI.

    And assuming the juniors such as GDXJ perform 1:25-1:5 of the HUI that would indicate a rise of 143%-231% or a range of $88-$120 from the current $36.2 of GDXJ.

    Not sure if my math is all correct but these are pretty outstanding numbers even if they are anywhere near the ballpark of what happens.

    Now back to focusing on the next few days!

  25. Jerred

    Brian,

    I use the following

    GC (continuous contract for gold)
    SI (continuous contract for silver)
    DX for the dollar

    Never used IB before so you might need the $ before the contract or a /.

    You should be able to locate symbols on their website.

    I know Infinity Brokers gives you an excel sheet on symbols and dollar per tick movement.

    Hope that helps

    J

  26. Robert

    Gary,

    Was there tons of SoS in late 07 – mid 08 if you can remember? How predictable was the crash through SoS? Billions in negative SPYDER money flows (what’s the biggest you can remember?)? I think nothing of that sort is near for a while I am just curious.

  27. Robert

    Friday, March 20th 2009 was a pretty interesting BoW day. Check that one out. πŸ™‚

    Historical data appears to only go back to 07 for SoS and BoW so you can’t look at 07/08 SoS through WSJ. I’m assuming it was net even larger than the March/April 2009 opposite BoW.

  28. Robert

    Gary,

    I’m strongly considering going 60% cash, 40% fixed-income, long-term, like Schwab advocates to do. You have been encouraging similar, no?

    πŸ™‚ πŸ™‚

  29. Robert

    what’s shady about schwab is their frickin difference they pocket if you buy by market order is huge compared to what etrade just to pocket from me.

    schwab has already made probably thousands off me in the last few months.

    I guess that is what you get for not setting limit orders and dealing with a 20B market cap broker that needs accelerating profits.

    only another reason to go old old old geezer turkey (getting in and out a handful of times/year).

    anyone else noticed the big discrepancies in market price vs. your fill from Schwab??? I swear its usually .3% those bastards.

  30. Gary

    Robert,
    There was a monster SoS day in Dec. 07 right before the market rolled over for good.

    I expect we will see something similar when this cyclical bull is ready to expire.

  31. alex

    Robert,

    I use scottrade and dont see a big difference on my mkt orders/ask price … UNLESS the stock is a low volume stock. If the buy order is a large one and shares arent available it just fills at different prices until your order is complete. Then they may show your purchase at an AVERAGE of your fill lots.

    Before you place a mkt order ( if you are in front of UR computer) check the ‘bid’ ‘ask’.. if your order is for 3000 shares, and the ‘ask’ says 500 @$10.00 , once the initial 500shares @10.00 is bought by you, then you may buy [email protected] another [email protected] etc if its a low volume stock & you do mkt orders. (in my humble opinion)

    then it avgs the order at say $10.10 when all is said and done.

  32. pimaCanyon

    IAU versus GLD: I have been using the GLD etf for my gold position. (I also have silver and miners, so I’m not just straight gold).

    Does anyone have any comments regarding these two ETF’s? There was a discussion earlier about GLD and the possibility of default. Would the risk for default be higher with one of these ETF’s over the other? Or are they pretty much the same?

  33. DG

    I almost always use market orders (95% of the time). Check the bid ask. The very very few times I have gotten hosed, E*Trade has checked to see if it was a bad fill. Some of those get corrected in my favor. If I want something I want it and am not going to miss it by a penny because my limit was a hair too low. I also trade liquid items and no penny junk. I scarcely ever have a problem.

  34. Jerred

    I am with DG on this one. All market orders here and rarely get bad fills.

    I want to be part of the move and dont care about the fill.

    I would focus more on the commission side then the occasional bad fill.

  35. n1tro

    why not just do a limit order with a price above the ask? That way you are doing a market order and smack the crap out of the next level up and never exceed your limit?

  36. Shalom Bernanke

    Marketable limit orders are basically market orders, except one can avoid an outside disaster type fill and the need to get it corrected.

    Perhaps I’m still thinking in terms of my younger years (things traded in fractions), when my market maker buddies used to love seeing market orders come into the station, it was like free money, especially since they have a relatively long time to fill an order. Maybe now that we trade in decimals, and even the floor is computerized, it’s not so bad as there is an easy paper trail to follow.

    And yes, I have missed a few trades b/c something has moved too fast, but overall I think it has saved me lots of headaches. Besides, I can always get in or out at the new price.

  37. Jesse

    Pima,

    Been talked about here many times…

    by “Nat” – for core american eagles, constitutional money. Can you be taxed on holding money that pays no interest?

    by “Doc” – for trading use futures, trades 24 hr./day, favorable tax treatment, 60% short term/40% long term gains

    GLD – very, very, very bad! taxed as collectible – 28%, scam ETF, gap up gap down, etc.

  38. pimaCanyon

    Jesse,

    Thanks!

    Tax issues are of no concern for me because my trading account is an IRA.

    Why do you call GLD a “scam etf”?

    I realize that all etf’s are subject to gap openings. The only way to avoid that is to trade futures.

    I wasn’t looking for a critique of GLD or IAU per se. I realize there are risks with ETF’s. What I was asking about is whether anyone had looked into BOTH of these ETF’s and come to the conclusion that one was more risky (in terms of default) than the other.

  39. Jesse

    Pima,

    Oh, gambling money. πŸ™‚ I do hold DGP and AGQ in my IRA also. Just for trading, very nimble with those holdings.

    TZ, and many other respectable analysts, have read the prospectus of GLD. I take their word that there is serious “counterparty risk” with these instruments. Derivates, swaps, all kinds of wall street shenanigans that I don’t understand. Not with my money, except that nimble gambling money.

  40. TZ (7006)

    If gold drops from here we now have a sorta funky H&S top with the shoulder around 1330 and projecting down to 1265 or so on the break.

    Just saying.

    I’m taking the approach of waiting till after tomorrow’s fed before any action vs holding long with a 1315 stop or the other alternatives being discussed.

  41. Gary

    Just let your stops do their job. Trying to second guess the market is a waste of time. We have a very clear line in the sand and a trading plan (last night’s report) if one wants to try and lock in some profits.

  42. TZ (7006)

    The H&S is “funky” cause the bounce up into the right shoulder was a congestion triangle instead of a normal bounce.

    Still…everything else looks legit and I’m naggingly feeling as though we didn’t hit bottom on this gold pullback yet (not as sure about silver).

    Maybe I’m wrong.

  43. Gary

    TZ,
    Constantly second guessing your plan is probably a waste of time and will just prevent you from entering again.

    Your original plan was to enter if $1350 was broken. Just follow your plan and then place your stops where they belong. If they get hit and you take a small loss, so what?

    The bull has a long way to go. You will recover all those losses many times over.

  44. DG

    SB: yeah when I was in the business (it’s been a long time!) they could really hose you. But now my orders are executed literally within 2 seconds at worst, it’s decimalized, I can see the bid and ask, and so I never get hosed. I’d spend a helluva a lot more in commissions than I’d save by placing limits.

    This Fed announcement has me frozen, as it does everyone else I’m sure. I bet we see high volatility tomorrow, both up and down. There’s a lot of money waiting to react that has been frozen the past few days. Looking forward to Thursday!

  45. pimaCanyon

    DG, what do you mean by saying you’d spend more on commissions than you would by placing limit orders? Does your broker charge a higher commission on a limit order than a market order?

  46. Gary

    Because of where we are in the dollar cycle I suspect a break upside will not follow the usual coil pattern. It will likely be followed by a lot more strength as the dollar collapses into the yearly cycle low.

    The dollar is the controlling factor right now and what Ben is going to do to it.

  47. Chrys

    I think all the big events have already been priced into the equities market. No surprises. We continue to move higher to 1230’s (by next week) and then a mild correction to 1177. By next January we will be at 1250 to 1300.

  48. DG

    Pima: Yes. I pay $5 for mkt orders and $10 for limit orders, and, as Gary said, you can wind up with multiple orders as you chase the darn thing higher. I do a lot of trading, so the $5 difference is a couple of thousand $ a year. No way I lose anywhere near that in getting hosed on executions.

  49. pimaCanyon

    DG, I have $3 comm on TOS, might be worth looking into. But Tradestation offers even lower commissions, so if you’re going to go to the trouble of switching platforms, I would check them out also.

  50. alex

    Gary, your reply to S B about moving upward out of the coil was helpful, because I (and others most likely) were thinking that the initial thrust up and out would last 3 days ( a false move)and a more prlonged journey south.

    However the dollar cycle timing didnt seem to fall into place with that (yrly cycle low coming).

    But isnt the markets cycle VERY EXTENDED at this point , or do you concider the coil in the SPX as a possible low?

  51. alex

    Thanks, thats right, you had already said that in your report (when you mentioned that the dollar was somewhat early in its intermediate cycle and how a failure could affect the mkts). I got stuck on the ‘false break’ of a coil theory.

    The SPX has closed in such a tight range for what?..9 days? The mkts are so uncertain that I wonder if bullishness is weak and a rally at days end will push fwd. possible short squeeze if Oct 25th highs are taken out, and dollar drops.

    thx again

  52. pimaCanyon

    DG, I believe TOS’s posted rates are $5. But I asked for a better rate because I was doing a fair amount of trading and $3 is what they came up with.

    So if you talk to them, ask them what’s the best they can do, and tell them how much trading you do. Maybe they would match tradestation’s rates?

  53. Natanarchist

    Pima says”Tax issues are of no concern for me because my trading account is an IRA.”

    Pima..you can hold physical gold, coins/bars in an IRA also. Just in case you didn’t know. Personally i wouldn’t hold coins in an IRA but physical Gold bars would be fine in IRA as bars are taxed as collectible if not. Maple Leafs and Krugs also taxed as collectibles. Presently, Eagles and Austrian/Euro gold/silver coins not reportable.

  54. Gary

    As long as the world continues to fight the secular bear with ever larger amounts of paper there will only be one secular bull market.

    Emerging markets can do OK in the short run but when the US sinks back into the next recession/depression because inflation got out of control it’s going to take down the rest of the world right along with it.

  55. DG

    Boy, it’s appropriate to vote (and I did) but I really don’t think it matters much. You just get to pick which set of self-serving people you want in there and which palms they grease to stay in power. As long as the system lets politicians get power and money for themselves by selling out to the highest bidder, we’re merely picking which bidders gets access to the levers of government. Most of our problems would be solvable if solving them were actually the priority. Geez, we’re still subsidizing tobacco, for crying out loud! Most legislation makes little sense and is designed to pander to whatever voting group needs pandering, or whatever lobby is going to pony up the cash. But for the money-driven system to change the people benefitting from it would need to change it. Lots of luck with that. Sigh.

  56. DG

    Barton Biggs is a very good analyst and has been for many years. No one is always right (Not even Gary!) but Biggs has been through it all for decades and is worth at least taking into account.

  57. Gary

    Not to mention that the way campaigns are run nowdays one has no idea what a candidate stands for. All we have is a pretty good idea of all the bad things their opponent did or how they can spin it that they did.

  58. fubsy_cooter

    I’m just curious since this seems to be an educated crew, what do you all think about the ramifications of this election for the health of our country? Do you believe that a shift in the leadership of the congress will make a difference for the direction of the country, and if so, how?

    I personally think the liberal vs conservative debate masks a depper issue which is that both sides only know how to spend. Our populace has become accustomed to a quality of life that was the result of living beyond our means. That is the framework by which AMerica measures “normal” I don’t think either of the two main parties has the fortitude to make policy that really cleanses, solves, or heals our economic and political issues. I see a lot of excitement about dems getting voted out, and my guess is that in 2 to 4 to 6 years there will be another reversal as the populace wants the good life, but the only way to the good life is through pain via paradigm shifts that I believe are bound to come that force frugality, and that will be blamed on whomever is in power.

    Don’t get me wrong, although I voted for Obama, I am deeply disappointed with his true agenda. I think he and his administration threw away a real shot at helping Americans understand the situation we are in and how to manage it. I blieve he lied. I believe he and the current congress earned their demise.

    But, what politician other than Ron Paul is walking the talk? Republican/Democrat…both look to me like spoiled siblings who are having their toys taken away and are slinging sand across the box at each other.

    Anyway, I’m going to vote as a proactive action, but other than a couple local measures and offices, I have little hope that we will see healthy change. I also fear the ramifications of increased hawkishness that will likely come over the next four years or so in that just like the misguided attempts to “fix” the financial sytem, our arms are raised at ineffective and way too expensive targets.

  59. catbird

    Fubsy,

    I tend to think history needs to pass through stages. Waypoints, if you will.

    Joe Sixpack is always behind the times…that’s what makes him Joe Sixpack. That’s why Joe didn’t buy tech stocks until 1999, and in less than 12 months he was wiped out. He didn’t get in in 1994-96 like he should have. Because Joe Sixpack is distracted.

    It takes a LOOONNG time for people who don’t pay attention to catch on to what’s really happening.

    Right now Joe just knows he’s angry. He has this unsettling feeling that something is very, very wrong (and he’s right) but he can’t put his finger on it yet. That is, he doesn’t know the system has rotted down to its core, like a grand old mansion whose walls have been chewed up by termites.

    But Joe doesn’t know that yet. He thinks the mansion (the system) can be saved if we hire a new housekeeping crew. As if elections can solve our problems! Anyway, this is why the GOP will do so well today.

    I’m looking forward to the next stage of our ride through history. You know, the stage where it dawns on Joe that electing new “housekeepers” to mind our metaphorical mansion won’t change a darned thing.

  60. Tudor

    Fubsy,

    This election, in the grand scheme of things, won’t make a damn bit of difference, because a significant portion of Americans, and not just the poor, but the middle-class and affluent also, have come to expect that the purpose of the government is to take stuff that belongs to other people and give it to them. So of course boobus Americanus will only tolerate the goring of their own ox for a short period of time. I gave up on democracy when the Republicans in congress passed the Medicare Drug Act and Bush I signed it. That was a WTF moment for me. It was clear at that time the two parties were the same crap with different candy coatings. Although it should have been obvious sooner.

    For generations Americans have believed the lie that everybody can live at the expense of everybody else, and this has virtually guaranteed that the only outcome possible will be a collective economic suicide as fewer and fewer productive members of society are forced to support more and more parasites, until the parasites finally start turning their guns on each other in a desperate attempt save their own skins. This is not surprising, given that we have a nation of economic illiterates who would rather watch Snooki romp around on the Shore than learn what makes an economy work.

    I won’t be going to the polls today, or ever. It’s a waste of time, besides, choosing the lesser of two evils is still choosing evil. I withhold my consent of the state.

    George Carlin said it best: http://www.youtube.com/watch?v=xIraCchPDhk

  61. DG

    I just don’t agree that it’s because people are illiterate. Would YOU vote for against increase in income for yourself? If a union (just as an example) has an opportunity to vote for a guy who promises to increase benefits for union members, they will. It is human nature to vote for what benefits you. Illiteracy has nothing to do with it. You think the banking crooks were illiterate? They placed risky bet after risky bet, knowing darn well that if the bet failed their company would go broke. They made hundreds of millions a year doing that until, well, they lost…but they didn’t lose; their shareholders, employees, and the U.S. did. They’re still all rich. and they were not illiterate. As long as people vote for their own selfish best interest at the expense of others we are going to have a problem. Maybe if a big enough disaster happens people will wake up. WW II had people willing to actually sacrifice for the greater good. But until then it’s get what you can until we are bled dry. Death by a trillion mosquito bites. San Jose, CA is going broke and it’s disgusting to watch the police and firefighters fight to keep their incredibly bloated pensions. They actually just voted to fire 10% of the PD rather than taking a cut in their retirement benefits. “I want mine—let’s throw our colleagues under the bus!” God help us all.

  62. fubsy_cooter

    Well, i voted. It was an exercise in futility from my perspective. Its amazing that we don’t have better options to choose from. I guess really talented leaders are smart enough to work in the private sector where they can actually have an impact on outcomes. Sent from my mobile. Hope it doesn’t0look too wanky.

  63. pimaCanyon

    DG, you’ve described the inherent flaw in democracy. Most people vote for whoever will give them the most benefits. Now. The candidates cater to the voters, give them what they want now, the future be damned.

    No one, voters and candidates alike, is taking the long view. No one is thinking about what is best for the country as a whole.

    We need enlightened rulers, leaders who will do what is best for the country for the long haul. But even if those potential leaders are out there somewhere, they will not get the vote. That is why I fear that our democracy (and maybe all democracies) is doomed to fail.

  64. Andrew Jackson

    The republic died a long time ago. We have a Corporate Fascist state with a false left/right dichotomy. They keep our eyes off the true ball, which is a debt based monetary system which creates a perpetual debt vortex-from the left fueled by social spending, from the right fueled by the military industrial complex. See Damen Vrabel’s Youtube series on this important issue.

    By the way, what time does the Not Federal No Reserves make their announcement regarding QE Infinity? 2:15 EST?

  65. alex

    ahh…how ’bout those markets…waiting on the fed for real action most likely.

    one mkt altering event down (voting) …yet many more to go.

    did anyone see TGB in afterhours??

    wow!

    Good day

  66. v

    Hi Gary,

    Precious metals and crude are breaking their recent highs/ resistances well ahead of the FOMC. Is it possible smart has already has whiff of FOMC.

    V

  67. TZ (7006)

    We just took out the first level of stops of people who were expecting imminent moves higher in gold and silver.

    It occurrs to me that the LEAST expected result today is for gold and silver to go LOWER.

    Below $24 in silver is a break of the entire uptrend since about $18.

    Below about $1328 in gold is a H&S breakdown leading to 1280 or so.

    Not saying it will happen, but obviously things moving UP will take care of themselves. So let’s evaluate and consider the opposite.

  68. contulmmiv

    @ Mr. Mom: Could you please let me know where are you looking in order to tell in real time and with such precision the dynamics of the number of contracts? If it is not a free web based source, perhaps someone could indicate an equivalent source of data. Thanks.

  69. TZ (7006)

    CONTUL,

    Any gold and silver futures feed.
    You can use GLD and SLV volume as a rough approximation (delayed will work, but you obviously won’t know till later).

  70. TZ (7006)

    POLY,

    The fed is comprised of some of the smartest people in the world. I don’t think they will make that mistake.

    They are not up against a wall here. This isnt 2008. They can announce a small program and grow it large in the future quietly, etc. They can announce they want to wait a month or two to see if “the republicans will propose corretive measures to the finances of the US”. Etc.

    YES (before gary says it) we are still going to inflate to the moon and the bull is in place. But they can raise hell for a few weeks if they want.

    Just my thoughts. STICK TO PLAN. DON’T PANIC.

  71. TZ (7006)

    Conversely the fed could announce something big and this is a hit (as I postulated weeks ago) to make sure that the news tonight isn’t “…and gold makes new highs on QE2”.

  72. Poly

    TZ,

    Who said anything about it being a mistake. The FED places enormous emphasis on asset prices and has repeatedly shown it’s not afraid to allow or foster an environment where asset prices appreciate. That’s basically the point here!

    The key is not the actual $$$ number of purchases, but the wording on its ability and flexibility to expand their balance sheet under this announcement.

    As for panic, I doubt even a $100 pullback is a huge deal considering where we have come from.

  73. Shalom Bernanke

    TZ,

    Saying the Fed is comprised of some of the smartest people in the world is ridiculous.

    If so, then at a minimum they’re liars as they didn’t see anything wrong with real estate in 2007 even though the whole rest of the world did.

  74. TZ (7006)

    POLY,

    Despite Gary’s comments to the contrary, the people who run the fiat currency system do NOT want the value of gold and silver to rise AT ALL. If you believe they do, then you don’t understand the game. It is a MISTAKE to not keep gold and silver as low as they can and to keep focus off of them.

  75. aaronpalang

    The discrepancy in the snp and gold, is a very telling sign…QEII could easily be huge, thus sending the snp into orbit, while showing a modest gain on the PMs…
    Speculating…its all psychology

  76. Jayhawk91

    I sold everything, will wait and see what happens later…Still have my old turkey core but wanted to book trading profits where they were there to be had. I’ve got a bad feeling about today.

  77. Gary

    Arron,
    No need to speculate. As long as gold holds above $1315 we still have an intact daily cycle. If it trades below then we may have an intermediate degree correction in process. Just follow the plan.

    If you wanted to lock in profits you should have had a trigger to sell as soon as the swing was formed.

    If you just want to protect against getting caught in an intermediate cycle correction then sell down to a core if $1315 is violated.

  78. contulmmiv

    @ Mr. Mom: Thanks for the pic. So it’s the Ameritrade platform. For those interested, Barcharts.com, which is accurate but delayed by 10 min… Anybody with Level 2 future quotes would let us into the detailed market internals of this particular move? (For those interested, level 2 quotes for GLD, GDX, GDXJ here http://www.level2stockquotes.com).
    @TZ (7006): Thanks for intervening.

  79. TZ (7006)

    Shalom,

    None of my posts or comments have anything to do with a particular segment or class of society if that is what you are implying. The Fed is a business with a goal like any other. The goal just happens to be taking money from people.

  80. TZ (7006)

    Actually, most businesses have the same goal – to take your money, but they usually give you something BACK in exchange which you desire. A coffee, a burger, some electricity.

    The Fed’s goal is to take your money and NOT have you realize it is happening or how. (If you do realize, then they don’t want you to be able to do much about it.)

  81. DG

    “Jewish Mafia?” Are you kidding? I always figured that your insistence on using “Shalom” was a way of emphasizing that Bernanke was Jewish. Now you have outed yourself. Why is it that so many gold traders are bigots rednecks, or Fundamentalists? Sigh. It’s a shame, SB, as I have enjoyed dialoguing with you in the past, and you do seem intelligent and insightful, but being racist is not a great quality to add to that mix. Just another great quality to add to the mix of why we are in such dire straits right now (along with greed and power-lust).

  82. TZ (7006)

    S,

    You are getting a bit radical on me with your last few posts. I’m not talking about guns or people rising up either.

    This ia a business/finance discussion and the system is pretty much working the same way it has throughout history. The dollar isn’t the first go-around for this game.

  83. alex

    hey…we need some good news here, maybe something a LITTLE positive…so

    Have you seen GSS today dispite the sell off? How about AMOK ( or amok.ob) GBG??

    what I do before I panic is take a stock like PAL , or paas, ssri, exk…since AUGUST they have hardly ever , if ever broken their 20 sma in this whole run!! IF one does, it doesnt break below the 34 SMA…none touch their 50 sma…so I’m not worried until some of these break ( and close really ) below their 20sma.

    and when you think of it, thats a pretty strong stock not going below its 20sma in months πŸ™‚

  84. Shalom Bernanke

    Rosabarba,
    Actually, I don’t give a crap, but seems like everybody else here is pretty sensitive about it, including yourself.

    It’s not like people don’t know. Perhaps you should ask his mother why she gave him such a ridiculous name, then ask yourself what you’re trying to hide.

  85. Rosabarba

    Just trying to be clear, SB, your denials notwithstanding.

    If Jew-baiting is to be your thing, you might as well be up-front about it. I mean, if all Jews aren’t bankers, and all bankers aren’t Jews, and banking isn’t intrinsically evil, these little insistences and implications on your part seem to belong to a well-worn tradition. Hardly seem relevant to what Gary is trying to accomplish here.

  86. DG

    What is the “Jewish mafia” you refer to? Is Bernanke a member? Is it some secret cabal that meets in back rooms when they are not eating Christian babies? Good god, man. Welcome back to the Stone Age. Gary has said human nature never changes which is why cycles work. Well, I guess distrust and suspicion of other races hasn’t changed either. Unfortunately. Might as well blame everything you don’t like in the world on some group of “other” people who are plotting to make you miserable. Sure has worked well throughout history.

    My apologies to the other bloggers, but having grown up with a very strong ant-bigot attitude, it’s hard for me to let this kind of crap pass by unchallenged. Too many people not speaking up is truly part of the problem. Enough. I’m done (I hope).

  87. Shalom Bernanke

    ” but having grown up with a very strong ant-bigot attitude, it’s hard for me to let this kind of crap pass by “- DG

    LOL! Sure, DG. I suppose you think it’s not bigoted to blow up people all over the Middle East because they’re Muslim?

    There are plenty of sites to have these discussions, so I suggest we get back to trading if you feel the same?

  88. DG

    The fact that some people are idiots and bombing Muslims does not take you off the hook. And what is the “fact” about a jewish mafia? Evidence, please. Why not select a group of people born on Tuesdays? You obviously think that race is an important factor here.

    And I like how you get in a last dig and then say “Now, back to gold investing…” Nice try.

  89. DG

    If you just drop it I will. You’ve outed yourself and discussions with such people are usually a waste of time.

  90. DG

    Great. Now we’re at the “Your mother wears combat boots” phase. And you say I”M not too bright! I’ll drop it if you will. Why not give the other bloggers a break and drop it?

  91. Shalom Bernanke

    I have, why must you (or Rosie) get the last word?

    And suggesting a large number of gold traders are “rednecks” doesn’t help with you “anti-bigot” image if you know what I mean?

  92. pimaCanyon

    SB,

    I don’t know Jewish traditions, so can’t comment on the name Shalom as being ridiculous or not.

    But other cultures name their kids names that you probably would think are ridiculous.

    “Jesus” is a common name in Mexico and Latin America.

    Various names of God are commonly used as names in India, like Lakshmi, Vishnu, Krishna, Shiva, etc.

    Just because you’re not familiar with a particular culture does not make their traditions ridiculous.

  93. Rosabarba

    Sorry you feel ganged-up on, old boy. I hope you won’t ascribe it to a nefarious conspiracy. And by all means, have the last word … I think you’ve established all there is to establish.

  94. TommyD

    Gold is inching down and getting into position to do 1 of 2 things.

    This is the real deal ay? I better get a cup of java before the announcement and before all heck breaks loose.
    I always use mental stops so best get my gingers ready to react.

    GL to all.

  95. pimaCanyon

    As traders we are familiar with the adage “Don’t fight the Fed”. So we better lay off SB, okay, ’cause we should know by now he will have the last word.

  96. David

    SB makes no effort to hide his anti-semitism, unless you confront him directly about it. Then he gets all wormy and evasive about it. These guys aren’t very brave.

    Unfortunately gold has always attracted these types. I expect that if the global economic situation gets worse you’ll see more of them come out of the woodwork. See under: 1933.

    What is disappointing to me is that Gary has never felt the need to set the record straight on SB’s posts. If it were my blog (and it isn’t) I’d either ban him or make clear that this blog is no place for bigots. The fact that he does neither suggests that he sympathizes with SB’s views and makes me uncomfortable with supporting him by subscribing.

  97. n1tro

    I think you guys are blowing the comments way out of proportion. Replace “jewish mafia” with “italian mafia”, would you have the same reaction? Not defending his comments, but read in its context, implies the feds are a bunch of connected crooks(?). Also, I thought being Jewish is a religion not a race, unless you talk to hardcore Jewish people who think only Israeli jews are true jews. just my 2 cents.

  98. DG

    I think it would be a good idea to drop this. The blog has been great about gold and Gary has done a fabulous job. Let’s assume that there are lots of people who write in about gold who we would loathe if we met them. If we delve into finding out what everyone believes on other topics, this may just go on forever. Maybe let’s all agree not to make comments that are likely to stir up a hornet’s nest? Or, Gary, maybe you can set up a separate blog for social issues? (just kidding)

  99. Gary

    Most trading platforms allow one to set up trade triggers that will activate if a certain condition is met.

    In our case you could set a trigger to sell positions if GLD trades down to $128.50 as that would equate to gold breaking below $1315.

  100. David Kafrick

    Just a thought:

    Everybody is expecting something to happen after FED´s announcement. Either sell the news which will take stocks, PMs and Euro down for a few weeks, or the reverse psychology, which is buy the news since a lot of people seem to think that sell the news is the way to go. What if none of these scenarios happen and instead we just continue to get stuck in no man´s land for a few more weeks, so that most of the traders can keep getting whipsawed to death?

  101. TommyD

    I will study up on triggers for later… For now I am content reacting to the show πŸ™‚
    Been down and bailed too many times before.

  102. alex

    GSS also up with decent volume…

    f.y.i…..I have seen the FED speak and the mkt tanks the first 10 – 15 minutes, then buyers come in and it goes higher from 3 oclock on…then closes higher. Its probably going to be a tug o war until the end of day or tomorrow

  103. fubsy_cooter

    Its anyone’s guess how we close. The selling could be people in the know, or just profit protection prior to the announcement. The tell will be in the closing numbers today, and even that could be reversed tomorrow. The only certainty right now is uncertainty in the short term. Over the next few days/weeks things will become more clear. Hold onto core, and add when the story gets easier to read.

    I must admit, i’m tempted to cherry pick some AGQ with a stop below the day’s low, but I’m practicing patience and only trading conviction. This is my lesson after my fopah last week.

  104. Shalom Bernanke

    From ZH:

    “Here is why an open-ended QE2 may be a very moot point: Slate reports that Ron Paul, Ben Bernanke’s greatest nemesis, will chair the all important monetary policy subcommittee. In other words, Bernanke v Paul theater will soon be a weekly feature.”

    I’m not trading on events, but I wonder if this might be the excuse the markets use to take a breather?

  105. fubsy_cooter

    Ok, I just implemented a strategy to get me in the AGQ game given that the fracas continues….did we have any doubt?

    I bought a tiny position in AGQ, and set equal limit buys at intervals down to 80.00. THis way, if we drop I leg my way in, and enjoy the ride back up after a correction. If we rise, I at least have a starter position in AGQ and can add from there.

  106. TrollBoyAnon1

    SB is obviously the old anon guy I used to call “g-string”

    He seems to be the one that picks all the fights, then everyone else gets blamed for it.

    And he used to call me last word?

    HA!

    And last word SB says……

  107. Frank

    For a while there, NGD was pushing toward 8 and SLW toward 30.

    I guess TBT was telling us that $600 billion was not enough to keep the scheme going to the moon.

    BTW, about Shalom Bernanke being clever or not…. He bought a house in mid-2004 (when things were very bubbly in DC, peaking in mid 2005). In late 2009 he admitted in a Time article that he bought it with an ARM and 10% down and they refinanced to a fixed mortgage. (So he picked up a dodgy ARM that his buddy Greenspan was preaching about exactly during that time!! And he was probably paying a lot in 2008 when LIBOR was through the roof.)

    http://blogs.wsj.com/economics/2009/12/18/looking-a-little-deeper-at-bernankes-floating-rate-mortgage/

    I am sure that they could have gotten 1% lower mortgage if they waited another 9 months to refinance as a result of his stupid QE. I also wonder if he actually had any equity with 10% down when he refinanced? I am sure that he would have had to inject money to get a 20% down fixed rate loan. I guess that he received a decent salary post 2005 as Fed Chairman in order to accumulate the cash to do that.

    These actions are shocking given his insider knowledge or is this all for show….? It’s a pretty modest home too. 2000 sq ft. worth around 700k-800k. (He paid 839k.) And the couple apparently only own one car: a Ford Focus. So if you see bearded guy tooling around in a Focus in DC…… wave and exclaim “Shalom!”. (Yes, I realize that he catches a limo to work.)

    But seriously, his personal actions reflect the cluelessness of his policy actions. His behavior is like any Joe buying heavily leveraged RE during the bubble. (Does this influence his statements that everything is rosy and subprime contained in 2007?) He is a classic out of touch academic. I think old Greenspan would be a bit more savvy in his dealings.

  108. Poly

    Argue all you like boys and while you do, who else thinks today’s announcement ensures this market continues higher? Looking at the statement it’s essentially an open ended $900b QE2 and should at least provide the fuel required to feed Gary’s C-Monster. Thoughts?

  109. EricH

    Gary,

    The Market is breaking out from the coil. Do you think the sideways trading over the last 2 weeks was it and UP we go?

  110. TZ (7006)

    GARY,

    Instead of the two leverage re-entry conditions you set out in the letter tonight (dollar/silver), I have question:

    1) If we know or assume we are not progressing into an intermediate low and
    2) If we accept that 1315 is our exit for being wrong in this case, then…

    Why not simply re-enter leverage NOW/HERE and get a better price, then exit on a stop if wrong and 1315 fails?

    Wouldn’t it be reasonable to assume that the damage done today to gold and silver were about the best they could do in the current environment? about $24 for silver (the uptrend line) and about $1328 for gold (the H&S point I brought up earlier). Both rallied back up pretty sharply as well.

    Thus, to rephrase in a way, why do you want to sit out until one of those two conditions is hit (and get worse prices) when you have already said those conditions are fairly certain and metals are going higher?

    Are you actually saying those conditions could be certain, BUT you could see the metals falling to lower lows than today first?

  111. TZ (7006)

    GARY,

    I’ll rephrase once more:

    I’m thinking of just re-leveraging NOW/HERE before either of your triggers and using the lows of today as stops.

    If that was the best they could do with full firepower on Fed day, then it’s good enough for me to consider as an exit point.

  112. TZ (7006)

    Trading silver and using gold as the stop is a bit unwieldy. Would your stop be close to the low around 22.80 or the low today at about 24?

    Or would you NOT use ANY price of silver as a stop and key off of gold?

  113. Gary

    I only key off of gold. The silver market is too thin for any move to have any significance.

    Gold is the driver of the precious metals sector. If gold violates the daily cycle low then everything else will follow.

  114. aviat72

    Today was my first day trading GC live. My first and only trade lasted all of 7 seconds. Stop got hit before I even realized I had a fill. Thank God for stops.

    I do not know what happened but GC cut through the ENTIRE value area built over the past few weeks in half an hour. Found support at the naked POC from 10/28 to the tick in the AM. http://yfrog.com/206knp This was about the area we bottomed on Oct 7 and Oct 8.

    Viewing the action from early October, today’s failure in the 1360s seem to have formed the top of the right shoulder of a multi-week H&S pattern. There is an H&S itself in the Right Shoulder, and the top of the LS/RS is around 1350. No wonder we have a lot of sellers at 1149. Have absorbed more than 200 lots at that price since 6:00PM.

    Intraday have a nice double bottom in place at 1325ish and also forming an Inverse Head and Shoulder

  115. Natanarchist

    If we get that swing in silver, I am putting on the rest of my position with a little leverage till the next stop higher. 30.00?..$35.00? how about 40.00? Its cool..we can count Silver in 5’s, instead of 1’s and 2’s.

    To infinity (insanity) and beyond!

    Gotta love Buzz Lightyear..er…Bernanke..

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