I think that the Korean issue might just result in a greater flight to safety, as the fears of the world economic order melting down rise. I think silver might suffer on a relative basis since it does not have the same safe-haven cachet as Gold and industrial demand might take a hit.
Since I’m only 85% invested, I’ll stick with the original plan at $1330.
Besides, the dollar up/gold up relationship is telling us all we need. Perhaps more people are understanding the real flight to safety should be to gold?
An excellent intermediate term gold indicator is Bullish Percent. $BPGDM on stockcharts.com. It has flashed a sell signal by dropping from severe overbought, which already had me nervous about holding gold, and given the recent developments…
I certainly understand Gary’s rationale here, but this may be one of those times where it’s better to analyze the PMs on their own merits (cycle, etc.) rather than assume they will react in equal and opposite fashion to the dollar.
Certainly that’s been the case so far today. I’m holding my trigger finger here. Though I am debating taking off leverage, every time I go to do it I take another look at gold/silver and they are higher again!
Just be careful with leverage. Gold is deep enough into the intermediate cycle that it could begin an intermeidate decline and this could be the excuse it uses to initiate the move.
I’m not trying to second guess whether a war in south Korea will be good or bad for gold. I’m just looking at the intermeidate cycle and today’s news will potentially send the dollar higher for several weeks. Gold may resist that briefly but the deeper we get into the intermeidate cycle the more likely gold will be to roll over and drop down into its intermediate low.
So I am removing leverage and then I’m going to honor the stop at $1330 to return to a minimum core position.
Interesting discussion- Harvey Organ publishes a daily blog that looks at current/upcoming COMEX Gold/Silver deliveries…there will likely be many more contracts standing for delivery in December than in the past, which means the prices have to rise to enable delivery and the bullion banks (JPM, et al) will get crushed on their massive shorts. They will work to manipulate the price down, and it’s likely we’ll continue to see the exchange increase margin requirements, but at the end of the day, it looks like there will be a commercial delivery failure (of physical metal), which is extremely bullish for price. That said…it will be interesting. There are too many cross-currents to have great clarity.
My thoughts, fwiw: Ben needs a weak dollar to pay down our debt and thread the needle. China wants to bust the FED by forcing a strong dollar. Enter trade wars, and world instability. American people peoples financials are on the line throughout this mess. So, Let us count our blessings on this particular Thanksgiving day and hug your loved ones.
The miners are affected by the stock market. If stocks tank badly the miners will go down, because they are, after all, stocks. People need liquidity and sell what they own.
Caveat: I am a trader at heart and will have no problem buying gold back higher if need be. I also will have no problem buying a load when it looks frightening at an intermediate low. If you are not 100% confident you can do both of those things, don’t sell because you’ll miss a great ride. But…I am mostly out of PM’s. I faulted myself for not selling on the reversal day. I’ll be damned if I ever do that again. I feel like a heretic on this site, so perhaps this is True Confessions, but between the dollar and the $BPGDM, I am happy to let everyone else make some money for a while. Good luck everybody!
Careful here, this Korean incident could easily trip a frothy and edgy market, I’m getting an uneasy feeling as if the market is poised to turn. Spanish debt is selling sharply this morning and we know the market can not support a run on Spanish debt. Portugal looks like it will fall much faster that thought.
These two events could drive the dollar up very sharply in no time.
Poly- Are PM’s best seen as an alternate currency, or merely something shiny to buy with dollars? I think the more they’re considered the former, the more understandable it becomes that they can also rise with a rising dollar. Perhaps we’re beginning to see how they are increasingly being viewed.
Gary, I see gold up, and silver a slight bit lower. I don’t quite understand your rational for the USD rising via the EURO decline for the most part causing PM’s to fall. Is it due to cycles, and this being the excuse for the decline? Gold has decoupled from the dollar many times, and seems strong today. I guess it lends to the fact that this C-wave is being led by the USD decline, so if the USD is up(even if the USD we are referring to is an imaginary USD; but people believe in it), gold and pm’s can’t go up. This is not a critique of your analysis, more of a question in comprehension. At what point would you consider your current perception a head-fake to your previous understanding. Again I am not critiquing, I am really trying to understand how things changed so drastically!! I am sure you will post in tonight’s report, so I guess I will look forward to your insight then. Many thanks as always! And thanks for the portfolio update.
The fact that the other leading group of late, agriculture, is taking a beating b/c of the $USD was my motivation. It’s just a hunch, but I think we’ll at least be able to get back in at these levels on metals/miner and lower on the ags.
Staying put, I was looking at my stocks ( EXK , HL , GBG , ssri) on a daily chart (with red/green volume indicators) most sold off following the general mkt , then they got rebought with higher volume.
I’m selling all my lower performers and a percentage of my higher ones I guess. I hate being a novice at this. Feel like I’m always missing something obvious.
I’m staying put, right where I am, old turkey for me. Can’t say I am optimistic about my stance, first going against Doc’s advice and now Gary’s, but I am not willing to risk losing my position. Nap time, wake me up in the spring please.
all things concidered, its a tough call when you are trying to time ‘sentiment’ when N.Korea is trying to flex some muscle as their leader tries to insert his son in place as …”the new leader , and dont mess with him.”
Lot of external headwinds here which are all bullish for the dollar. Equities could drop if they break below 1,170 previous low support.
So the question becomes can massive gold buying hold it’s own against that tide? If not then we know PM’s could get crushed.
I brought in my heavy leverage at the open, happy to bank it all, preserve and at the ready.
The setup looked great a few days ago but have to acknowledge the risk here. Best case we buy bargains, worse case we miss a small run getting back in when the dust settles.
Daniel and I took some off, but I’ll be looking to add back once the stochastics are no longer overbought. That doesn’t mean I expect them to get oversold, just that I don’t feel I’ll miss too much immediate upside.
As much as the SoS traders couldn’t know about the coming Korea fiasco, the OEX traders did. The smart-money OEX traders bought one of the largest number of put options ever yesterday. They are having s fine day. They are often worth emulating.
I think I get what is Gary thinking. He saw USD bounce because of N.Korea, and it seems going to last from time to time. Gold can’t get to new high as USD rally. So, gold has high probablity going into intermediate correction. Gary, Do I correct?
Yep, Doc. Huge blowout reversals on gigantic volume are not to be dismissed lightly. I am grateful for the bounce we had after the initial drop, as I rediscovered I am a jackrabbit and I was trying to be a Turkey. I have learned my lesson. One needs to trade consistently given his own personality; a lesson that having been reinforced I am unlikely to forget again anytime soon. Nice call, by the way.
It is kind of playing out as I kind of thought it would. Gold bid but Silver not. Silver in unlikely to be the go to metal in times of stress where USD is strong. Further signs of silver producers hedging means that the smart money senses prices are high enough to do business. As always the little guy who chases will be left holding the bag. Silver from this point onwards is a trade. It needs to make a new base to launch from.
oa92000, I totally agree. News is just an excuse for the markets to do what they already wanted to do. The move higher in the buck was already in the charts. Apart from the cycle setup, the last few day’s action formed a trend line crawl on the DX, and crawls are continuation patterns.
If the dollar is going to rally for 3-4 weeks while the market sorts out the Korean implications then it’s probably untrealistic to expect gold to put in the huge parabolic move we were looking for. That kind of move will likely only happen with the dollar collapsing.
If stocks are dropping down into an intermediate low like I suspect they will be if the dollar continues to rally that will inevitably rub off on miners.
Intermediate cycle lows are scary affairs and there is alway margin selling. That has always affected miners to some extent no matter what happens to gold.
But don’t forget gold is on the 17th week of it’s intermediate cycle. Those don’t go up forever. The normal duration is 20 weeks. So at some point soon gold is going to be looking for an excuse to move down into that intermediate cycle trough anyway.
Despite todays action I’m afraid several weeks of dollar strength will eventually be used as an excuse for gold to drop into its intermediate cycle low.
Hate to say it, but I am starting to see the up coming short-term pain as well. Ah well, so be it…part of this gold bull game.
Good news for long-term gold….maybe relieve some tension from Ben’s plan to print the dollar to nothing….he may have the “see I told you QE doesn’t affect things(or whatever it is called these days)”. QE3 may get back on the table.
Doc, On that one I disagree. I think the dollar rally was nothing more than a dead cat bounce that would have rolled over.
The dollar was certainly not discounting something out of left field from N. Korea and certainly not after an intermediate cycle that lasted only 13 weeks.
I don’t believe for a second that anyone, anywhere, had any inkling of what was going to happen today.
While it is still way too early, Since the $$$ has started an intermediate Right Translated Cycle, it could be possible that we just saw the yearly and 3 year cycle low on the $$$?
I doubt it will be the three year cycle low. I still expect that will occur in the spring but it it takes several weeks for the korean situation to calm down we probably have the dollar’s yearly cycle low in place.
News does not move the market. News can accelerate or trigger a move, but the move must have already been inherent in the conditions. A match does not cause an explosion, but if the room is filled with dynamite something will eventually set it off. We were overbought, $BPGDM gave a sell, we had a huge reversal, and everyone hated the dollar. That’s the dynamite-filled room. Then Korea dropped a match. I posted a week or two ago that the most typical reaction after a high volume reversal is to rally into the reversal day’s range and then fail. If you exceed the high the pattern is ruined, but not until then. Silver bounced into the reversal range and look to fail. Korea did not cause any of that.
I have a question for anyone. I have been putting my kids money into miners instead of the bank. They have some really nice profits. since they are all teenagers and don’t need the money, would it be smart to book some profits, say sell half of all positions, or just forget about it and stay old turkey?
My two cents: No one ever went broke taking a profit, but lots of people have gone broke over time by taking small profits that are insufficient to offset their losses.
I am not suggesting the Korean news was factored into the markets but rather that the news doesn’t matter. The dollar and thus far, stocks, are doing exactly what the charts have been telling me they would do for the past two weeks. As always, this type of news is just used as an excuse to get on with it.
Besides, this skirmish is nothing new. NK sunk a sub a few weeks back, and we didn’t see a sharp move higher in the buck. I think if a significant conflict were about to break out, the reactions would be much more severe, so I can only conclude the markets are just taking the determined path.
Natan: There’s no real answer to that question. Is there a chance that you will panic at the bottom and sell because you worry about your kids accounts getting decimated? If so, sell now. Is there a chance that Gary has the whole picture wrong and the bull has ended? If that doubt will plague you during the decline, sell some now. Will you fail to get in lower out of fear? That would be a shame. These are the questions that, once answered, will answer your question. And only you can answer them. I believe lack of self-honesty dooms traders.
Actually many short term traders go broke taking profits. The reason being they are too nervous to let a winner ride so they book small profits but those small profits aren’t large enough to overcome the big losses.
But to respond to Nat there is no right or wrong answer to that one. I decided to take some profits and then let the rest of my position ride with the plan.
If gold does move down into an intermeidate trough it will take out the prior cycle low.
One thing I have noticed it that at intermediate tops it’s very tough for investor/traders to take the “safe” trade (book some profits) because greed has it’s hooks in them and all they can see is clear skies ahead.
If you think it’s hard to sell now wait till we get to the top of the C-wave or top of the secular bull 🙂
It is very counter-intuitive to go into the intermediate decline at the strongest part of the year. Having run upwards for so long though it is probably a good place to sell into some strength.
I think we do need a bull trap in this market right now, and we’re probably going to get it.
DG/Gary you guys read too much into the taking profits comment. I guess I should have said “no one ever went broke taking humongous profits”. Which is the same as basically trading sentiment.
If you’ve been riding since August I wouldn’t say taking profits is a poor decision right now.
That said, surprises do come to the upside (I still hold PM shares), and whatever anyone does do not short gold or silver.
The more I think about it, I’m going to try and put in some shorts in Tech at good entries (much safer than commodities which are most likely in a long-term bull).
ok..well I took some profits on the kids account. Sold about 40%, Let the rest go and look to add at intermediate low. anyway, they have their whole lives to make it up if I blow out their account..LOL..I don’t use margin so that shouldn’t happen.
Up day tomorrow with SoS, or later this week? Possibility.
Gary keeps saying Old Turkey, and Turkey day is approaching so I did move 50% of my portfolio to the following for this week (historically a very good week for this equity):
> I don’t believe for a second that anyone, > anywhere, had any inkling of what was > going to happen today.
I’d say the North Koreans wouldn’t start shelling an island with South Korean civilians actually living there -or pretty nearby- without first notifying the Chinese.
Dollar broke up out of the flag, daily trend from the highs earlier in the year convincingly broken, also the 60EMA has been good support and resistance and is now broken.
Pretty muted response by the metals in light of this, but it looks like a fairly convincing move by the DX
Wes: I agree. I am out of just about everything: PM’s, stocks. Have a huge wad of cash and will wait for a time to deploy it. An interesting wrinkle though. The AAII survey showed one of the largest one week drops in bulls ever. As it has only happened four other times so relying on the data is a little weak, but each time it happened the SPX was well higher three months later. Will this be number five?
I measure complacency by using a 4 or 5 week average of sentiment. That drop was from a very high level, last exceeded in January, 2007. The five week average, even after the drop, was the highest since 2005.
There can be no question about market complacency.
@DG re. OEX Options. Thank you. I was hoping for a more synthetic presentation. For those concerned, stockcharts.com/h-sc/ui?s=$CPCI&p=D&st=2010-02-01&en=%28today%29&id=p50415979065
Contul: Careful. I don;t think that’s OEX options. All option traders are dumb money except OEX traders. The overall PCR works, but the OEX PCR is much more sensitive.
It is a good sign that it is difficult to short stocks at the moment.
But, geez louise, Bernanke is spewing out $800 or so billion into the economy and the world is still going to seem like it is ending sentiment wise to the dumb money in a month or two. Go figure.
Gold’s last $1265 hit was on Sept. 13th. Silver that day was a little under $20. If gold were to decide to retreat that far, I doubt silver would also go back to $20, but stranger things have happened. Maybe $23 for silver? The gold/silver ratio at that time was all the way up at 63! I don’t see it going back above 57-58 to be honest, that would be around $22 max pain. We’ll see, this could be fun… the re-entries of course!
My dad works in Lockheed Martin and him and all his buddies have been arguing about the need to start another war. They have been showing diminishing returns now in Iraq and Iran. j/k on the father part, but not so sure about the other part. 😉
South Korea admits firing first shells in row with North Korea
South Korea has admitted it fired artillery shells that triggered an early morning clash with North Korea. However it says it was part of a military drill and denied it was directed at the North. Earlier Seoul blamed the North for what it called an unprovoked shelling of its island. Pyongyang claimed the South had violated its maritime border during the military drills. Seoul has since threatened its neighbour with what it called ‘enormous retaliation’.
If true, that South Korea provoked North Korea to retaliate (this is hard to deny after we have the fact that South Korea admitted running a military operation in that area, but I’m still not saying it’s true), it reminds me perfectly of Gordo Gekko’s specific Wall St. quote:
“You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it.”
There clearly isn’t enough information to lean either way in this one to be honest, being that North or South Korea fired first. I’m simply presenting the case that it is not completely cut and dry that North Korea suddenly attacked South Korea. The rest is speculation.
Question though, why would North Korea a clear inferior military power randomly attack a superior military power, South Korea? This makes no sense. You can call the North crazy but very few people are crazy enough to do something that results in their death.
But onto the markets, are we going to see dollar strength now with war “brewing”? Are Doc and Gary right about an intermediate decline beginning in stocks and gold? The writing on the wall is saying yes.
To put simply…those that follow short-term trading, we are in the WTF trading zone…enjoy! For those that don’t care, physical holdings will help. Welcome to old Turkey, or burn in the sight of PM’s bastard burn. Again gold is a shit investment….90% of people will not make money off of it after inflation…You can’t trade gold, it will kill you. Anyways I locked a good portion of my holdings in physical since I know what a coward I am! And I will be locking more in tomorrow! I know what type of weak link I am to my own investments. Gary is still a great coach BTW. Not my point. Just saying….the path to riches will be by the dumbest moron in the world who picks up a couple cheap gold coins at 1k and doesn’t realize their value until 5k. The rest of us only think we are being smart by trying to trade that intelligence; ummm myself included(in my own stupidity)…
N.Korea is a Chinese satellite. The Chinese have been trying to up the ante by stoking up conflicts with all their neighbors, Japan, India and Korea. The N.Koreans sunk a S.Korean boat with a torpedo a few months ago, so this is not out of the blue. There is also a power transition in N. Korea and every dictator has to prove his mettle.
The question to ask is why is China trying to raise the temperature. It might be just some internal power struggle within the CCP with the PLA being given more leeway to flex the muscles and test the adversary. However, why the CCP would like the PLA to do that is not clear. One school of thought is that things are not hunky-dory within China, and nothing beats a war in getting people under control.
There is another school of thought that the PLA wants to install China as the supreme power in Asia, and would like to strike a blow to India in the near future. India started her economic program about 15 years after China, and has started catching up. The PLA feels that right now the military gap between India and China is optimal for the PLA to make a decisive strike; the gap is going to narrow going forward. The Chinese have been using the Pakistanis as their proxy to keep India under check but things are very dynamic there. Hence the need for some direct action. As the first step, PLA troops have moved into the Pakistani part of Kashmir; they have cordoned off areas and built underground tunnels/bunkers where even the local are not allowed.
Every 18 months or so, N Korea throws a tantrum designed to get the West to provide the foreign aid it needs to continue operations. This is just another one of these episodes.
China mostly views N Korea as a nuisance — the idiot stepchild n the family. They certainly did not direct N Korea to take this action.
The incident will be forgotten shortly and the markets will move on to the next crisis.
After booking some profits yesterday, I still cant get over the Korea situation altering the course of PM/equities and USD. I agree its gonna be almost impossible to sell at C wave top.
What will happen to oil if equities have started a move down?
Gold now at 1380. Safe haven in times of uncertainty? Could decouple from the dollar given the threat of instability, sovereign debt crisis leading to more printing of all Fiats etc… I think the large investors are into a big picture frame of mind here. What makes gold attractive? It is immune from the machinations of nervous central banks, except that hey will continue to be net buyers in the face of global strife.
V, Oil tends to follow the market and there is still time for oil to move down one more time before the oil cycle stretches past the normal timing band for a trough.
You mentioned in weekly report that oil could rally for 20 days or so with the stocks but with dollar changing trend we could see a extremely left cycle and can except another 10 days of down move in oil.
Oil made a lower low yesterday so obviously the cycle hasn’t bottomed yet, unless yesterday was the bottom.
Just a thought for traders. The dollar tagged 80 this morning. 79.992 to be exact. One could take long positions this morning under the hope that 80 is going to turn the dollar back, the stock market bottom will hold, and gold will continue higher. Then put a stop on all positions if 1173 in the S&P gets broken and if the dollar breaks through 80ish (give it a reasonable amount of leeway).
Risk is very low, about 8 points in the S&P to be exact.
An excellent intermediate term gold indicator is Bullish Percent. $BPGDM on stockcharts.com. It has flashed a sell signal by dropping from severe overbought, which already had me nervous about holding gold, and given the recent developments…”
DG,
When you say $BPGDM is overbought, which technical indicator are you looking at? I’m not familiar with $BPGDM, could you give a quick rundown on how it works versus its correlation to gold’s price?
Never mind, found this article explaining how the gold sector bullish percent index (BPGDM) works:
“A bullish percent index (BPI) measures the percentage of stocks trading with bullish “point and figure” charts. There’s no need to get too technical here. Suffice it to say, a sector is overbought when the BPI is above 80. And a sector is oversold when the BPI drops below 30.
For the gold sector, BPGDM generates buy signals when it drops below 30 and then turns higher. Sell signals occur when BPGDM pops above 80 and then turns lower.”
Jabalong: yep that’s it. That plus OEX traders plus dollar rally plus lack of stock mkt bears plus…and I am happy to stand aside until the dust settles. But people should NOT sell unless they are experienced traders and will not be afraid to buy back into gold and stocks when they look terrible. If you yourself are not nervous when you place a big order it’s probably wrong!
Gary – have you thought about the possibility that the US dollar and SP-500 both move higher into 2011/2012? Similar to what we saw from Nov 2009 to April 2010 when the US dollar rose the SP-500 rose from 1105 to 1220. If the Eurozone is about to implode wouldn’t it stand to reason that European funds would seek a safe shelter in the US despite all of our debt problems.
@DG re. OEX Options. The link I posted is for CBOE Options _Index_ Put/Call Ratio (CPCI). True, it is not OEX-specific. However, there exists a CBOE Options _Equity_ Put/Call Ratio, the difference (ratio) between CPCI-CPCE presumably capturing the “smart” versus “dumb” option activity. Therefore, CPCI, especially by contrast to CPCE, is a proxy to the same effect that the study of OEX options tries to capture. CPCE link: stockcharts.com/h-sc/ui?s=$CPCE&p=D&st=2010-02-01&en=%28today%29&id=p74207950336 CPCI:CPCE ratio link: http://stockcharts.com/h-sc/ui?s=$CPCI:$CPCE&p=D&st=2010-02-01&en=%28today%29&id=p84269891020
Contul. Sorry not to have better links for you, but as a subscriber to Jason’s sentimentrader.com (actually he comps me his service for the buy and sell signals I post here), I just use his data. He slices and dices is it several ways that improve accuracy. For example, Open to Buy orders as opposed to purchases to close positions, etc. No indicator is going to be better than about 80% over time, but watching the OEX guys when they get extreme is one of the best. He’s the best there is at this stuff, and has a little on gold as well.
Chrys, I doubt that we will see that happen in the current environment. If you will notice even during that time when the ddollar was rallying strongly the stock market was trading sideways or declining. The stock market only made real headway when the dollar was trading side4ways or correcting.
It’s been this way sine 2002 for the most part.
The last two cyclical bulls were driven by currency debasement not real productivity. Productivity is a required ingredient for the stock market and the dollar to rise together in a susutained manner.
David: China does not view N.Korea as a nuisance. N. Korea is like the US’ 51st state would be. According to a recent quip by a Chinese official, China and Pakistan are like China’s Israel.
@DG: I read good opinion about Sentiment Trader from sources I deem reliable. It is on my short “wish list”. Thanks for the comment & regards. BTW, Option Mark, for what it’s worth, has recently added OEX (optionmark.com). Corroborate that with a standard OEX chart, and one gets an idea as to where the price attractor lies.
Wes: I also like to eat lunch. I have an order in to short OIH at 129.90. Got 4 points in 4 days two weeks ago—just give me a little more rally. And I agree about a fade, but we won’t gap up Monday. I’d suggest shorting at the close friday. The Monday after T’giving if Wed and Fri up is usually lousy.
Alex: I don’t wait for it to get to 30 to buy! It doesn’t need to signal, but when it does it’s pretty good (it’s sufficient but not necessary). And, no, I wouldn’t rely on just that, but that coupled with the blowoff reversal, coupled with the rallying dollar, and coupled with the fact that stock bears have become an endangered species…now I am interested in the “plus 90” readings.
Look at this chart. Each one caught a tradable drop in gold:
I would be very leery about trying to short. There still hasn’t been any selling on strength days and the dollar tagged 80 this morning and turned tail.
Today is the 14th day of the dollar’s daily cycle. It’s not unreasonable to think that the daily cycle topped today with that tag.
If the dollar rolls over and the market can regain the 200 week moving average by Friday we could still see the stretched cycle I have been expecting.
Yes if the dollar turns and moves back below the Nov. low Doc would have to give back that burrito certificate 🙂
I’m not sure I would add back leverage at this point as we are getting very deep into not only the stock market cycle, but are also approaching the normal timing band for gold to make a move down.
In order to add leverage back I would have to be convinced we are going to see a streched gold cycle, which isn’t so hard to visualize.
I would also have to be convinced we will see an extremely stretched stock market cycle. That one I’m not confident in since we are now operating with a weekly swing high in place.
Gary: My stop is a point away. How leery can you be about risking a point on a $130 stock? My whole game is picking precise entries with better then usual odds of working and tight stops. I don’t need a SoS day to make 5-10 points on a stock. I made 12 points in 4 days on the AMZN short I posted last week.
DG, I’m not talking about you I’m talking about the average trader trying to copy you.
Most of the time they will miss the exit and just give back any gains they make and then whittle away at their account.
I’ve always thought it was pretty much a waste for people to post their entries. That doesn’t tell anything. The perfect entry is all for naught if you miss the exit.
Learning how to pick a good entry and not learning when to sell at the right time, is like learning to fly and not bothering to learn how to land the plane…
The dollar WILL turn lower and go below the Nov low… maybe even in the next daily cycle. However, considering the present cycle is forming as R-T, I don’t think a new intermediate cycle can be denied any longer. I mean, just look at the weekly chart and tell me with a straight face we didn’t just see an intermediate low. No sir, I’m keeping that burrito 😉
Yes, Gary. Fair enough. I have actually debated about whether to even post my short-term trades but a few people have expressed interest. For the others: Don’t try this at home! I was a very bad trader for a long time. If you want to learn to trade it takes study and practice like anything else. My entries are systematic and my exits are a combination of system (if the right variables line up) and feel (tape reading). That said, a good entry, cutting losses, and letting winners go a bit will result in consistent profits.
Poly: I almost shorted SLV at 27.00 as it showed up on one of my short screens at that price, but had I done that Gary probably would have mailed me an anthrax-laden turkey, so I passed on the trade. I think you’ll be happy (short-term) to be out of AGQ for a little while. Have a good T’giving
By the way, the AMZN cover was simple: It hit the lower BB and the rising 50-day line at the same time. Should have gone long it there with a tight stop a point below the 50!
For trading I use reversion to mean type stuff (overbought oversold), Hitting the lower BB is what Gary calls a crash trade, but they can go against you a fair bit, so you need a stop (or you guts it out and pray). The 50-day line often holds string stocks correcting a previous overbought status. The 50 is where funds tend to step in to buy, so it acts as support. Of course it doesn’t always work, but as I was not intermediate term bearish it seemed like a good spot to take the profit. My going long was based on my willingness to do almost anything with a tight enough stop, and those two item held up and AMZN has made a new high.
Gary: That’s why I use stops. Nothing has to work “every time.” You’re just looking for a 5-1 or better risk/reward. I can get stopped out on the next 5 “AMZN” trades that “don;t work” and still be ahead. 20% is not every time.
I have no way of knowing that in advance. What I do know is that 80 is a very significant resistance level. The dollar rallied to that point this morning and then turned tail.
The stock market has reversed almost all of yesterdays decline and is back above the 200 WMA. If the S&P hits 1201 it will start a pattern of higher highs and complete a 1-2-3 reversal.
So far the daily cycle low at 1173 is holding.
There has been no SoS days yet.
This is why I said traders should just continue to work stops below 1173. maybe it turns out to be a winning trade and maybe it doesn’t but as of today there is no reason to abandon the trade.
That bear flag on gold seems to be angled too high at this point (I’m no chart expert)…Others are pointing out the H&S pattern with a target down around 1260’s. (Doc pointed this out too).
On the other hand, it looks like silver is forming a cup and handle!
At what point do you discount the bearish patterns and switch back to full position? I had entered some new positions after our last sell off and sold them this week…However, it’s amazing how I feel uncomfortable not having a heftier position now…Itching to get back in so this could mean not the right time to buy.
Gary, when you say 75% its just not leveraged. Do you mean you are 75% of the 130% or 75% in with 25% cash. Just curious, I try to keep my portfolio consistent with yours.
I think I will have to see a failed daily cycle on the dollar index before I’m comfortable putting leverage back on this late in the intermediate cycle.
“If the S&P hits 1201 it will start a pattern of higher highs and complete a 1-2-3 reversal. ” they are going to do it, gary. From $nymo chart, bull going to run it..
this is great….i was betting on a rising stock market today so i entered my metals positions again last night only to make no gains while the stock went up 1.3%. I should have just bought one of the indices.
Not my usual trade, but I have bought 30 Dec QQQQ put contracts @ $.97.
I think Gary’s “continue on up” with the stock market overlooks a ton of psychology evidence beckoning to the downside.
We’ll see. At least the risk is clearly defined.
I have a tendency to not think of realized gains as really being my money until after the end of the year. My mental attitude about trading (once I’m ahead for the year) is that I’m just risking the other guy’s money. It’s really a liberating style.
I agree with Wes. I bet Friday is down because everyone “knows” it’ll be up which is why we are up so much today. My OIH, UNG, and SMH shorts are all in the black (slightly, but I’ll take it for now). I will probably do more at the close Friday if we are up then.
There is a large amount of talk here about the “dollar cycle” in utter disregard of the action of the euro. It could be that this “dollarcentric” vision is a side-effect of history & domicile. When the USD is discussed, one is not discussing the dollar per se, but the dollar _index_. And 56% of that index is contributed by the euro. Ergo, the “dollar” cannot go up or down unless the euro makes a move twice the magnitude in the opposite direction. A casual glance at the euro chart and a couple of unpretentious trend lines strongly suggest the alternative that the euro is headed for the 1.32 level which is due to be hit any time now (the thin markets during Thanksgiving being an ideal time for the slip). A 0.1 point of the euro amounts to aprox 0.5 move of the dollar index. Which would set the dollar at 80.5 – from where it can indeed begin to move down. To where? Without getting into details, there are strong reasons to reject the notion that the USD Index will go bellow the low of November (for additional considerations, see eventually here goldscents.blogspot.com/2010/11/im-not-buying-it.html and here http://thetsitrader.blogspot.com/2010/11/golds-7-parabolic-c-waves-projection.html#comment-form). Since last May, the ECB had become a source of liquidity just as much as the Fed is. The historical relations between the euro and the dollar, in place since 1999, are about to revert. The purchasing power parity, which drives exchange rates in the long term, indicate an overvaluation of the euro by 20% or more: which would set a long term target of 1.20-1.14 as a minimum (http://fx.sauder.ubc.ca/PPP.html). This will not happen tomorrow, but the PPP effect must be felt in the forexland in the form of an inflexion of the dominant trendlines. The notion that the dollar and the euro are in search of a new definitional trading range is quite compelling in order to not be disregarded.
[continuation] Where would this leave gold short-term? If the euro indeed reaches 1.32, the bounce from there will place the USD in the second, descending phase of the current daily cycle, allowing gold to advance into mid-end December to, perhaps, the technical target area of 1475. What would happen then, depends on how strong the bounce of the euro from the 1,32 will be (which determines where the descent of the USD will stop). Gold showed signs, these past two days, of uncoupling from the vagaries of the dollar-euro dynamics. It is not unconceivable that it will continue to move higher, in disregard (or by taking advantage) of the hesitation (and possible sideways action) in the forex market, in a decerebrated parabolic move characteristic for this stage (www.tradersnarrative.com/gold-goes-parabolic-again-again-again-3289.html). If this is the case, then the other technical target of 1620-1650 would be in effect for the first part of January, allowing it then to fall in the intermediate bottom towards the end of the month.
Enjoyed tonight’s report, Gary. Happy Thanksgiving to you too.
I took my foot off the gas and trimmed my holdings earlier this week on the morning of the Korea news. All I have is AGQ so I sold more than you.
It was hard to do since it’s been so good to me. The first I’ve sold since I bought in in August! I’ve got to say, I didn’t think Korea would amount to anything and so far it appears that will be the case.
I’m eager to put my foot back on the gas…but as you might say, that eagerness is probably a sign we’re close to an intermediate top!
LT, There really is no relation between energy and metals. One is in a secular bull market and one has impaired fundamentals. That being said it looks like oil has finally put in the cycle bottom.
While I’m all into the holiday cheer, I wish to point out that money never sleeps and neither do the guys who are running this show (they have assistants 🙂 and a lot of tireless computers).
Monday starts the delivery process for gold and silver (“first position date”). These are the largest contracts of they year and I would argue the most important since the bull market started.
The actions of the Fed have become more transparent (and more challenged). Gold and silver are getting recognition of true worth. And silver manipulation has come out of the dark some.
The US markets are on holiday schedule. The rest of the world IS NOT. And neither (for the most part) are the futures, which only close for limited time tomorrow. Otherwise they trade normal into the weekend.
*****NOTE THIS: last year on the friday after thanksgiving AT 3AM IN THE MORNING, they hit gold for a 5% drop and silver for a 6% drop!!!
The 3am raid carred into the 9:30 stock open resulting in gaps down for GLD/SLV, etc. But (the sucker raid gaps) were the lows of the day.
Those drops recovered mostly within about 24hrs, but they were still successful in taking advantage of lulled minds and low volume to pull off a raid that further reduced down the long side.
Enjoy the holiday, but stay on your toes. It is unknown whether there is a delivery squeeze that could be developing in silver or gold. The guys at the top probably have an *idea* but they may not be certain either. They will do their best to shake things before mon/tues. But there may also be revelations of just how big (or small) the delivery amounts are at that point. Surprises could happen BOTH ways. Note that those people expecting a squeeze and *not* getting one might find themselves on the wrong side of a dropping price – the price drop that doc/gary seem to be leaning towards.
Or, maybe the guys trying to push this down get overwhelmed this time. ???
Regardless this will be interesting.
I’ve reduced down to a medium core level and I have futures access should a buyable hit occur or a runaway develop. I’ll do my best to try and profit from it.
My hope is simply that we have int topped for now and will pullback for a few weeks so I can reset. I played the last wave poorly and would enjoy a fresh start, but I’m ready for anything here.
If gold drops here it will now LOOK like it is racing to complete the H&S pattern for a significant deline to about 1265.
As DOC has commented, it would be well within trick-pattern for gold to START moving to look like the H&S was going to complete and then reverse up to go higher (after getting a bunch of people to sell and/or go short on the pattern appearance.)
In fact, if *I* were the big boys in NY, I’d try to paint this chart so that H&S looked legit, which means a drop like that in the next day or two. That would help them greatly in weakening the longs.
The drop to make the H&S look like it was legit is, surprisingly, about the same % as the hit they were able to pull off at 3am last year too.
In other words, assuming the big boys have the power/money/control, they would be crazy to NOT try and push that H&S to completion BEFORE delivery – even if they can’t hold it and it turns to run higher. Just the approach to completion probably wins them thousands of more longs in the process.
TZ-very interesting. I don’t recall that last year, I must have been asleep from a tryptophan induced coma. Could happen, I have some burritos to put to work after selling my miners earlier in the week.
If you use ETFs or something US-time-only based you will miss much of the hit (although enough remained to cause a gap down open at 9:30). GDX, for example, opened down almost 5% that fri.
2009 is only an example. You will not find that same pattern each year. (Of course in years when gold wasn’t pushing new highs and when things weren’t very heated such a hit wasn’t really necessary.)
I would argue that this year warrants attempts however, in light of current events.
Thanks so much for all you do everyday Gary. From running this blog, to the nightly reports, your efforts are greatly appreciated! Have a wonderful Thanksgiving!
I’m not hurting because of difficulty during a 3-4 month period of a ten year gold rally. I understand you thinking that I’m somehow an eternal watcher or can’t win, but I’m really ok. Streaks come and go – both winning and losing. I’ve been off lately. It happens. But basing your opinion on it is incorrect.
I actually still made some profit in the last few weeks but it was seriously limited by some stupid mistakes that I can only blame on myself.
I’m on to the next battle. There is always another trade.
(if you use firefox you can click the image and it will resize to fit your screen if necessary)
So you understand what you are looking at….
Gold and silver futures are trading late night tonight and CONTINUE to trade (like in 2009 on that chart) until about *1pm* on Thanksgiving day THURS.
(NOTE: that “Thursday” on that chart begins at the “24” to the LEFT of the word “Thursday”. The word is printed NOT at the midnight rollover, but where the main “day” session starts. Times are eastern.)
They close at that time then REOPEN at 6pm Tday evening (18:00) which then rolls into Friday morning. Gold/Silver futures then close for the weekend EARLY at about 1:45pm Friday.
Finally, the futures then open up again Sunday night at 6pm (18:00) and trade normally into the week.
The selloff low you see on the chart is a bit before 3am on Friday morning.
The times I’m describing on the chart from 2009 (and by analogy what times will trade in the next two days) are approximately right, but no guarantees. If you want exact info to be relied upon you need to get it yourself directly from the exchanges.
thanks for the info TZ…i wouldnt be surprised at all if a raid happened tonight but i dont think it will be able to take off 5% from gold.However one must be cautious and plan accordingly
TZ , one way to play this is to put a market order around 1330 or 1320 in order to catch the spike. If they do try this maneuver they will try to run stops and quickly buy back the position. I dont think its going to work on silver because they will hit a brick wall
first graph is a combination of yearly, intermediate and monthly cycles.
Looks like EUR is following it like a good dog 🙂
The second is the cycle indicator for the intermediate (62 days). Blue line is EUR/USD price, blue area is Cycle indicator, black thin line is cycle speed (first derivative of cycle indicator).
When the black thin line cross zero from the bottom, intermediate has started or is going to start very soon.
Other 2 lines are just normal averages, when the intermediate ends it must cross the 62 days SMA.
It is NOT 100% safe. But more than 50% for sure. That means, if you can do proper money management (cut losses and let the gains ride), you will win 🙂
Already ahead of you. I’ve estimated where I think such a possible hit will drop to (if it happens, of course.) I have buy orders (futures) ready with limiting stops as well.
It’s worth a trade if they try to knock it down. If they succeed and it keep going (completes H&S) then an acceptable loss.
If we ramp around and continue higher for one more cycle, then the trade pays handsomely. We will all know in less than 24hrs.
You guys sure don’t like giving direct links. The stories on the WSJ page, like most sites, rotate rather quickly. In a few hours Robert there will be no idea what you are talking about.
“Behind Gold’s New Glister: Miners’ Big Bet on a Fund”
TZ wrote “That WSJ story is a component. Read it close to see what is going on. The clues are there if you understand how to sway a reader.”
I see just a critical artical about GLD and it’s not the first one. I prefer them much over the bullish ones 🙂
Two aspects from the article I find interesting:
… gold-backed ETFs have probably added about $100 to $150 an ounce to the price of gold as a result of the incremental increase in demand.
So that would be about 10% of the Gold price. Not really impressive.
If GLD shareholders get spooked by drops in the gold price and sell en masse, the fund would have to dump metal to meet redemptions, possibly accelerating declines by prompting others to sell even more.
That’s a perfect script for the final blow-off in Gold we’ll see at some time in the future.
The usd just now surging past 80 to a top of 80.35! Everybody who very self-assuredly have been condemning Bernanke, what do they say now. 🙂 After all, he’s a doctorate in mathematical economics and specializing in the great depression.
Trond, The probem With Bernanke is that in the effort to avoid a deflationary depression he’s going to unleash an inflationary one.
When a credit bubble pops it always leads to a depression one way or the other. Now with a fiat monetary system we just have a choice as to which one we are going to expeience.
A move above 80 in no way suggests the bull is done. It just means the stock market and probably gold will now move down into their intermediate cycle corrections. But as technicians have discouvered to their chagrin time after time these always come to an end and then another leg up begins.
I think we could have a situation with Gold similar to what happened in July. If you look at the chart, you´ll see that Gold made a high of 1254 in May, then there was a fast correction to 1171, followed by another leg up which went to marginal new highs – 1268, and then another correction that went a little lower than the previous low of 1171, successfully running the stops at that level.
Fast foward to October, Gold made a high of 1388, followed by a fast correction to 1315, another leg up to marginal new highs – 1424, and now we could see another correction that drops below the previous low (1315) by a few points, successfully shaking out the weak hands and thus setting up the conditions for the next leg up. If gold drops to 1300 that should be a good place to buy.
If gold moves below $1330 then we will have a failed daily cycle. Instead of trying to guess where the bottom will be just wait for gold to get into the timing band for the next daily cycle low and then buy when a swing low is formed.
“After all, he’s a doctorate in mathematical economics and specializing in the great depression.”
LOL! He’s also a criminal counterfeiter like his predecessors. How do we factor that in?
I love when people pretend that “studying the Great Depression” takes years of in depth research, that only a genius like Bernanke could understand. That’s exactly what they need you to believe. 🙂
I just got a severance check (I have another job, waiting for this check for a couple weeks) for $25,000 that I am planning to invest in gold/silver funds. After the price action last night and the talk about a possible intermediate correction, the idea makes me feel a little sick. Often that can mean it is a good time to jump in. This is a decent sum of money for me to invest.. any opinions?
I wouldn’t put the money to work on the 17th week of the intermediate cycle. If this does turn out to be the beginning of the intermediate correction thn there should be about 15 to 20 days before we put in a bottom. Wait for that bottom.
Wes: Nice trade from Wednesday. I like it when you and I are both shorting at the same time. For other traders: I will now lower my stop (assuming we still open sharply lower) on UNG, SMH, and OIH to break even and let the decline take hold. That way I either win well or lose nothing. It’s all about entry points and tight stops. None of the three ETF’s went against me even .25% after shorting them Wednesday. Everyone “knew” we’d be up Friday, which is why we were up so much Wednesday, in prep for the Friday easy long trade.
Suzi, Don’t lose track of the big picture. If gold is ready to move down into an intermediate cycle low remember they happen like clockwork about every 20 weeks. They never signal the end of the bull market and they always represent the single best buying opportunity one ever gets to enter the bull market.
Understand that any position you ride down into the correction is going to come back and make new highs…huge new highs before the secular bull is done, and probably huge new highs even before this C-wave is done.
Remember Buffett’s quote. We simply attempt to be fearful when others are greedy and greedy only when others are fearful.
There will come a time in the next several weeks when others are fearful and they will be telling us how the technicals look terrible. That will be the time to step up to the plate and buy heavily.
I’ve watched it happen over and over as this bull has progressed and knowing human nature we will see it again.
As a matter of fact about the time Justin shows up to tell us the dollar is now going to soar will be the time it rolls over into the final plunge down into the 3 year cycle low and that’s when we want to be loading up on precious metals.
Jim Sinclair has the perfect name for this..its called MOPE. Management Of Perspective Economics
Basically for the layman it means the CB’s, Gov’ts, Big banks and their minions in the media are spinning a bunch of BS. I agree with TZ, these coordinated hits on the metals are very transparent to many of the traders and others who closely watch London/NY. For most people though, just going old turkey, as Gary has always said, will allow folks to catch the whole or most of the gold bulland protect or Increase their WEALTH.. These little wiggles on the long term graph are nothing and will continue to be nothing special over the whole gold bull market.
As for Bernanke being smart…well that is debatable. He knows who he works for and it is not the People. So yeah he is smart enough not to piss of his bosses. Make no mistake the policies the FED has chosen (Inflation through QE and assorted programs) are to benefit first and foremost those who get the money first..the Banks. The people, well they get the illusion of nominal wealth through inflation and the media will spin that to mean “Americans are better off today” meanwhile, their REAL WEALTH was transferred to the top. And this little ponzi scheme of theft and fraud will continue as long as A) the creditors keep buying/holding the US debt and/or B) the American Public wakes up to understand that they are being robbed. This is going to end badly for the majority of the population.
For us on the Gold Bull..this sort of says it all Enjoy.
“Can you hear them They talk about us Telling lies Well that’s no surprise
Can you see them See right through them They have no shield No secrets to reveal
It doesn’t matter what they say In the jealous games people play Our lips are sealed
Careless talk Through paper walls We can’t stop them Only laugh at them
Spreading rumors So far from true Dragged up from the underworld Just like some precious pearl
It doesn’t matter what they say In the jealous games people play Our lips are sealed Pay no mind to what they say It doesn’t matter anyway Our lips are sealed
There’s a weapon We must use In our defense Silence
When you look at them Look right through them That’s when they’ll disappear That’s when you’ll be feared
Hush, my darling Don’t you cry Quiet, angel Forget their lies”
If the Fed or government is trying to “take down” the price of gold why does it always happen right in the timing band for an intermediate cycle low?
If they are seriously trying to move price down to presumably fool everyone into thinking there is no inflation then why do they stop manipulting right as an intermediate cycle is due to bottom?
Wouldn’t it make more sense for the Fed, with in infinite supply of dollars to massively pile on the shorts at an intermediate cycle bottom and really crush gold and especially silver?
What’s the point of taking gold back down into an intermediate cycle low and then stopping?
If the Fed is manipulating gold then it appears they are fully aware of the cyclical nature of the metals and they are only taking price down so they can buy in lower. represented by the fact that they lift shorts as gold enters the timing band for a bottom.
If they are manipulating gold, which I find imppossible to believe, but if they are, they are doing us a huge favor. Every 20 weeks or so they are providing us with a beautiful buying opportunity.
I for one appreciate what they are doing. It made me a whole lot of money over the last 4 months.
I guess all I have to say is thanks and keep up the great work.
Gary, I’m curious about the strategy of holding 75% or even 50% of our position while you anticipate an intermediate decline. Do you have any long term studies that show it’s more profitable to maintain a “core” position during these periods rather then unloading most (all?) and then buying back … I realize you may be wrong which would result in perhaps a bit of a chase to get back in but from a strictly profit point … does maintaining a “core” position result in better returns over the long run?
Peter, Because in bull markets the surprises come on the upsdie I never want to be completely out except during a D-wave. So I don’t go to all cash.
One doesn’t have to stay at 50% though. That’s just my minimum core. Yours could be 25%. Whatever you can hold during an intermediate correction without freaking out, but enough that if gold reverses and heads higher you won’t be pulling your hair out because you missed it.
Remember we still have another leg up so does it really matter if you have to twiddle your thumbs with a few smaller positions for 2-3 weeks? By the time the C-wave is over they will be big time green again.
Just as an example you probably remember all the freaking out that went on in Feb. Do you think any of those people can even recall why they were so worried back then? No of course not, because the bull corrected their timing mistake and now all those positions are way above the Feb. lows with virtually no chance of ever going back below those levels for the duration of the bull.
Gary: While I agree that exits are very important, for my style entries are actually ore important because of the tight stops. If I can get into a “head I win tails i break even” position whether I cover with a 1%, 2% or 5% gain obviously matters (since talking smaller gains than you might doesn’t help offset the losers), but I have no exit rules. I posted that I covered AMZN when the BB and 50-day line were both hit, but that’s rare. I often cover when I get short-term bullish on the whole market as I don’t like to fight the tide. I will try to post the covers.
Gary says:”If the Fed is manipulating gold then it appears they are fully aware of the cyclical nature of the metals and they are only taking price down so they can buy in lower. represented by the fact that they lift shorts as gold enters the timing band for a bottom.”
BINGO!
The FED and its cohorts know they can’t control the long term price of gold. But they can manage the price during cycles to THEIR benefit. This has ALWAYS been the claim of most of the gold bugs. It isn’t that they will not allow gold to rise its that they do their best to manage the rise in price to their benefit. Sinclair has been all over this for years explaining exactly what you just said Gary. Sinclair has also always said those that we think are the enemies of Gold (big bank shorts) will make the most long gold over the bull. That’s why Sinclair, like you as well Gary, say buy and hold..ie old turkey.
Thanks Gary, I unloaded all once you and Doc were both in agreement, but from a purely comfort perspective it doesn’t feel right NOT having any position (sometimes that’s more nerve racking) … today looks like a good day to start accumulating again … but just enough to make me feel right.
I meant to add as well…that is the true value of SMT. The Cycle work on Gold. It allows us to know when the cycle lows are coming, so we can be prepared for the “hits” when they come.
But they can control the price if they wanted to. They have a printing press. They could meet every margin call from here to the moon if they wanted to step on gold.
If they really were trying to force gold lower it really makes no sense to stop once they really get it falling hard.
The only thing that makes sense to me is that gold is just going through the normal corrective moves that all bull markets go through. When it goes up long enough and far enough traders take profits, voila a correction.
Once it dops far enough the value investors step back into the market, viola a bottom.
Precious metals being a thin and emotional asset tends to have very sharp rallies and corrections. again nothing mysterious about that, it’s just the nature of the beast.
In my opinoin we are just seeing normal bull market behavior. Nothing sinister about it that I can see.
For traders re UNG: another shorting opportunity. If I am right it should not make a new high above Wed’s 6.20. I shorted at 6.17 Wed, and will do more at about 6.14 if it gets there. With a stop at 6.21 I am not risking much, and expect to make about .30/share or more, so a five-to-one risk reward.
Completely agree about A) Gold Bull market B) gold cycles C)thin market with the biggest money on the planet as players.
BUT..here is what we, 99.9% of the population can not know and if we ever do know, it is long after the fact, is what happens between CB’s, IMF, and the BIG bullion banks in the Gold Swaps market.
If you or I could “borrow” the amount of “paper gold” that these players have, we too could follow the script of the cycle to our benefit. On days when gold is dropping into a cycle low, pick a time on london or the crimex and pile on the selling with your paper gold, driving the price lower than it might go normally in a correction and then buy it back making a nice profit, while paying off your “paper gold” loan/swap.
As for the printing press to meet margin calls, there is a mechanism that prevents that scenario ffrom working for any length of time, if at all. Physical delivery. They can’t print Gold. and there are too many physical buyers out there who would crush and most likely will crush, the CB’s for this printing. History says so. Other governments and big money. Don’t forget they are greedy too and when push comes to shove will act for their own benefit.
I’m not sure why everyone focuses so much on “manipulation” and all the other esoterica. Maybe other people are doing things and maybe not. I have never found such analysis to be conclusive or helpful. I guess there is some emotional need top focus on “they” since people have been doing that for centuries. Seems to me our job as investors and traders is to buy at the right time given sentiment, charts, cycles, etc. and then sell when the ride is over. Whether “they’ are doing stuff or not doesn’t matter to me so long as I do my job well. Anyway, one man’s perspective.
thanks Gary, I was hoping for more of a red opening since i need to get back some of my positions. Only managed to get half a position in SVM at 11.40 and did not get any NG
I agree with Natanarchist. The evidence is in the numerous investigations and arrests of top hedge fund managers who resort to cheating in order to be profitable. I am sure that is just the tip of the iceberg with 90& of the crime going unpunished. The pullback today has little credibility given it comes after the holiday when there is little liquidity. We discussed the possibility of the raid last night and looking at the small extent of the damage I cant help but giggle to myself.
It is relative. Large buyers, institutions, hedge funds, etc., when they buy or sell frequently the amount is so large it will move the equity substantially up or down. Others will then come in after this trade and the momentum can feed on itself. This is not manipulation, just the mechanics of large transactions.
Unless you can mention the specifics, manipulation is a waste of breathe.
You say that it does not matter all that much at what price you buy gold, since your timing mistakes will be corrected. I agree with this statement in the situations where the timing mistakes are quickly corrected and without much drawdown. The reason I say that, is because you could say to someone who bought S&P contracts at 1500 in 2007, that his timing mistake will be corrected, and I´m sure it will. The timing mistakes of someone who bought stocks in 1929 were eventually corrected as well, but that doesn´t mean that he made a good investment by buying in 1929
Virtually all timing mistakes will be corrected when buying all asset classes, it´s just that some will take longer and produce bigger drawdowns.
So it´s not just a matter of timing mistakes being corrected, but how long will it take to be corrected and how big of a drawdown do you have to endure.
And even if you can name the specifics it’s a waste of breath. What good does it do you? There’s enough information overload as it is without inventing new things to focus on that don’t help book profits.
uhhh..Robert..I did define it and I gave you the specific way the CB’s, IMF, and Bullion banks use ‘paper gold swaps”. Since their books are not open until much later, if ever in the case of the FED, we can’t know the exact dollar/gold amounts.
But that these transaction take place between these players is fact.
Natan: Does knowing this help you make money, or is it a personal interest angle? As a citizen I am sickened by what the gov’t and crooked corporate types do, but I really would love to know if there is a concrete way to use the info that is better than using sentiment, cycles, charts, etc.
According to manipulation theory of gold/silver, gold and silver are always significantly suppressed in price- they are always way under value. So to play this theory you buy at any time, whenever, because the price over time is going to unsuppressed prices. What is the final unsuppressed price that is “not manipulated”?
If you play cycles you trade gold in very high-probability-win scenarios. There is a strategy for the end game, according to cycles.
Really, which one of these schools of thought do you think is more profitable? Or are you not after profits and would rather just have the market teach you life lessons?
Darn! I posted UNG was a short at 6.14, which was the high for the day…but there was stock ahead of me so it didn’t go off. Oh well, I’ll ride what I have (and post the exit price).
I think we or those of us who follow Gary and others are playing it the only way we can. Since the ‘hits’ to gold have proven not to last too long before the uptrend continues, outside of being massively leveraged, we’ll be good for the whole bull.
As for my interest, it is two fold. Yes, I despise, like you, the Government and the criminal corporatist/bankers. If I also know how the cycles are playing out, through SMT, and know when the highest probability that anti human dirt bags “paper gold selling” beyond the normal might occur, through a multitude of sources who trade the comex and london and post this info, I can take profits (like i just did last week) and enter at a lower price.
Don’t get me wrong, at the end of the day, or this bull run, Gold is going to be much, much higher. The anti human dirt bags know this too.
Robert…no, that manipulation theory you mention, of continuous price suppression, is one of a number of theories. If you read my post, I do not claim that. I argued short term price manipulation. And there is lots of evidence of that, unless you believe your government loves you, Central bankers love you, Bullion and Investment banks love you, George Soro’s and assorted billionaires’ love you and have your best interest at heart. Good luck in that bizarro world.
The only way one could possibly know what the “true” price of gold should be is if all transactions were cash for physical.
Regardless, Golds going higher and the CB’s, IMF, Bullion Banks, assorted dirt bag corporatists and billionaires know this.
I’ll be interested to hear what Gary says in response to your question about the bull correcting timing mistakes.
What I can say is that the examples you gave of buying stocks in 1929 and 2007 are examples of buying at the END of a bull market. If you buy as the bull is ending and morphing into a bear, your timing mistake will not be corrected for a long time, if ever.
I believe Gary is talking about buying in the middle of bull market. If you had bought stocks pretty much any time between 2003 and early 2007, your timing mistakes would have been corrected by the bull. The big question, of course, is when to sell, when is the bull market no longer a bull. When will gold top once and for all and move into a 10 year or 20 year bear market again? Obviously, we gold bulls need to get off the bus before that change-over takes place.
With Gary’s permission, I’m posting this friendly reminder that the one-year subscription offer to SMT readers for TheDOCument.com will disappear after Sunday. While Gary and I are both cycle-centric in our analysis, we do have varying tools for interpretations. So if you want both sides of the story on the burrito bets, here’s the link 😉
David, The S&P is not in a secular bull market. You can’t depend on timing mistakes to be corrected if you buy the stock market.
Gold on the other hand is in a secular bull market. Timing mistakes will get corrected. Even now if gold is about to enter an intermediate decline one shouldn’t have to wait much longer than a month before the bull gets busy again.
If you can’t wait a month then you have no business being an investor. You will need to go the trader route. Of course that opens up a whole nother can of worms and your chances of profiting huge from the bull will be drastically reduced.
What I was trying to say, is that it is not about timing mistakes being corrected, but about how long they will take to correct. This is what really matters, because in investing timing is everything.
This is why when someone makes the following statement – I´ve made a 50% return on my investment – It tells you nothing, because what really matters is in what timeframe he made that return. It´s one thing to make 50% in a year, but another thing to make 50%in a decade.
Even in a bull market, it can take 1 year for your timing mistakes to be corrected, which means that you would have made 0% return in one year, while suffering a drawdown in the meantime.
IJR has just popped up on my short screen. Buying TZA will also work. Stop on IJR is very close at new high. I just bought TZA this was supposed to be lunch money and it’s turning into vacation money, but if they keep showing up with tight sensible tight stops, I’ll keep pushing it. I may cut back at day’s end if we close about here instead of down 150.
I’ve just added 10 more QQQQ Dec 53 puts, bringing my total to 40.
I’m surprised that traders with Jason’s service aren’t talking more about how bad the psychology indexes are looking.
As an aside, I’ve just been looking at the 55 DMA of the Arms Index. It’s a crude timing tool, but it looks useful for figuring out when we’re in the ballpark of a high or low. I noticed that Dick Arms was using it.
haha..your funny Robert..haven’t lost anything today or at anytime over the last number of years I have been a subscriber.
Clearly you object to my pointed and direct insults towards those that seek to steal, lie and cheat people, the anti human dirt bags..that’s cool…and if you had been a follower of SMT for the last 3-4 years you would have already known this..its no secret.
Karma’s a bitch. It will catch up to them one way or another, those who cheat. Otherwise they’re living in a living hell being a narcissist anyways.
Clearly “manipulation” “cheating” goes on on a daily basis in the markets somewhere, I’m not denying that.
But what, are you a whistle-blower that Gary’s cycle theory is too good? If there is manipulation and Gary is and has been forecasting it accurately for many years, and you have admitted to following him, then are you complaining about making too much money? You don’t make any frickin sense Nat.
What the hell do you WANT? Go protest against the bankers in France or Iceland or Greece if you feel pent up enough. Go pass out flyers around your neighborhood to do a local bank run. Or you could just come on here and push your gold conspiracy theories- that will take you a long ways over time.
Here is an alternate scenario that isn’t considered too readily here.
With the dollar measured primarily against the Euro, as the EU blows up, the dollar rallies, and the three year low occurs in a series of right translated cycles that sets a pattern of higher lows and highs.
Now, I believe in the secular bull, but I am not ruling out this scenario for the next six months. I also believe the dollar is on its way to much lower prices, but I am unsure of how it will get there. The gold bull would be best served by knocking the froth out of those who have become complacent riders on its back.
Fortunately, I think Gary has a good plan for dealing with this type of situation. Anwyay, I’m not saying it is to be, but that it wouldn’t suprise me to see dollar strength for awhile.
It would be hard to imagine IMO the dollar being stronger for more than the next month or so. This does of course time well with the intermediate dollar rally.
What if the dollar starts to weaken in a month or so after the Euro QE news is done with? Then we go into the 3 year cycle low into the Spring. Next we’d get more Euro QE from Italy and/or the UK and it would shoot the dollar out of the 3yr cycle low and propel gold’s D-wave.
The dollar is liking to make its moves based on Euro news so that is my current best guess scenario.
QE is a nice trading tool when you know most Western countries are going to unleash it over the short-term.
I am more with Gary on this. There is maybe short term manipulation like we saw at 1160 gold. Gold (or any) market should not be thought about so much in terms of up and downs in price. It is more about swings in human emotions. Manipulation is only manipulation in that it creates waves of fear or greed that cause smaller players to jump in and move the price in one way or the other. I don’t really see that as manipulation in the sense of doing anything against the rules. There is no easy way to create a rule against “manipulating emotions”. Along with that idea, the market price may not be a good indicator of golds real price potential due to too much paper gold, resulting in multiple claims on the same gold, etc.That is not manipulation if it doesn’t break the rules, it’s just a faulty system. As long as it doesn’t get too stressed, it keeps the price lower than maybe what it would otherwise be. If there are suddenly too many calls for delivery we could see a sudden price spike, but even that would be followed by a huge swing in emotion the other way.
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I think that the Korean issue might just result in a greater flight to safety, as the fears of the world economic order melting down rise. I think silver might suffer on a relative basis since it does not have the same safe-haven cachet as Gold and industrial demand might take a hit.
Just my thoughts
On NOV 17 almost a week ahead, posted this one:
http://img716.imageshack.us/img716/6122/bplaneuro.jpg
I hate to say “told ya”, but ehi, told ya 🙂
For the first time, though, i disagree with Gary.
If gold can manage to stand the ground against a falling Euro, when the new intermediate will start we should see it skyrocketing.
Gary,
According to the bounce Dollar Index is doing, didn´t you expect more fall in Gold today ? Even Silver seems to bounce a little from today´s low.
Doesn´t it show some “strengh” from MP´s ?
Gary – what about silver? Sell or hold?
Do not be alarmed, everything is OK! 🙂
The change in the dollar is just one aspect affecting price. Gold is being bid up now on pure buying, offsetting loses due to the appreciating dollar.
and gold just turned green!
I think Korean incident is Chinese version of Kabuki theater. Message sent and received. Now mkts. can go back to “normal.”
Just be careful with leverage here. If this does turn into an intermediate correction then this is how gold traps the dip buyers.
Comex expiration today on gold and silver. Always interesting.
http://jessescrossroadscafe.blogspot.com/2010/11/gold-and-silver-option-expiration-in.html
Silver and gold just shot straight up.
Since I’m only 85% invested, I’ll stick with the original plan at $1330.
Besides, the dollar up/gold up relationship is telling us all we need. Perhaps more people are understanding the real flight to safety should be to gold?
Gary,
I know it is a little scary being an old turkey couple days before thanksgiving, but are you sure you want to do that? 🙂
Jesse,
I still have a core position so I’m not really sure what you are talking about.
An excellent intermediate term gold indicator is Bullish Percent. $BPGDM on stockcharts.com. It has flashed a sell signal by dropping from severe overbought, which already had me nervous about holding gold, and given the recent developments…
Gold/Silver holding should give us cover to unwind this leverage at least.
Sorry, just being a smart ass. I know you are holding a core, but even going below 100% seems risky to me, taking off leverage, maybe a good idea.
It does seem to me that events like Korea are gold positive in the past, but it is hard to tell this time for sure. And for silver, who knows?
Another option would be to wait for a break of the bear flag on gold. (1350ish)
i dont see what the big deal is…this happens everyday in other places of the world and these 2 are always going at each other
I certainly understand Gary’s rationale here, but this may be one of those times where it’s better to analyze the PMs on their own merits (cycle, etc.) rather than assume they will react in equal and opposite fashion to the dollar.
Certainly that’s been the case so far today. I’m holding my trigger finger here. Though I am debating taking off leverage, every time I go to do it I take another look at gold/silver and they are higher again!
Nothing like this has happened since 1953.
I agree with Aviat. I think this is a case in which the dollar, treasuries and Gold/Silver could go higher. In times of war, doesn’t Gold outperform?
Gold is outperforming the doll-hair so far today.
Just be careful with leverage. Gold is deep enough into the intermediate cycle that it could begin an intermeidate decline and this could be the excuse it uses to initiate the move.
Gary
Most of the time, wars always drive gold price. Could Korea be an excuse to drive gold?
I don’t see how China benefits by war in the Koreas. Therefore, I don’t see it happening.
I’ve put on a “lunch money” (200 QLD) trade in deference to seasonal strength, but I’m hoping it’s a loser.
The intermediate cycle low continues to lie ahead, according to my psychology indicators.
I’m not trying to second guess whether a war in south Korea will be good or bad for gold. I’m just looking at the intermeidate cycle and today’s news will potentially send the dollar higher for several weeks. Gold may resist that briefly but the deeper we get into the intermeidate cycle the more likely gold will be to roll over and drop down into its intermediate low.
So I am removing leverage and then I’m going to honor the stop at $1330 to return to a minimum core position.
Bought SDS on 11/19. We’ll see.
Silver is totally underperform gold today
Interesting discussion- Harvey Organ publishes a daily blog that looks at current/upcoming COMEX Gold/Silver deliveries…there will likely be many more contracts standing for delivery in December than in the past, which means the prices have to rise to enable delivery and the bullion banks (JPM, et al) will get crushed on their massive shorts. They will work to manipulate the price down, and it’s likely we’ll continue to see the exchange increase margin requirements, but at the end of the day, it looks like there will be a commercial delivery failure (of physical metal), which is extremely bullish for price. That said…it will be interesting. There are too many cross-currents to have great clarity.
here is the link to Harvey’s blog:
http://harveyorgan.blogspot.com/
gold and usd rally at the same time.
Gold Price Change due to Strengthening of US Dollar -11.25
Gold Price Change due to Predominant Buying +18.85
Gold Price: Total Change +7.60
Damn it looks like North Korea is going to cost me a burrito 🙂
Damn…. Sister $Silver got shy today. Doesn´t whant to follow his sister $Gold …
My thoughts, fwiw: Ben needs a weak dollar to pay down our debt and thread the needle. China wants to bust the FED by forcing a strong dollar. Enter trade wars, and world instability. American people peoples financials are on the line throughout this mess. So, Let us count our blessings on this particular Thanksgiving day and hug your loved ones.
Peace to all
Tom
Gary,
How often have you seen an intermediate decline missing SoS?
The JPY is up against the USD. I think the Ireland saga is contributing more toward the USD strength than Korea.
Anyway, strong gold and strong USD in parallel is fine with me. And GDX is green.
I’d feel much more comfortable shorting stocks, in the short term, had we seen SoS lately. I’m abstaining for the moment.
with gold and silver both up, why are all the miners down?
The miners are affected by the stock market. If stocks tank badly the miners will go down, because they are, after all, stocks. People need liquidity and sell what they own.
So now we have a weekly swing low in place on gold. How does this affect the intermediate cycle at this time? Is it behind us possibly?
Caveat: I am a trader at heart and will have no problem buying gold back higher if need be. I also will have no problem buying a load when it looks frightening at an intermediate low. If you are not 100% confident you can do both of those things, don’t sell because you’ll miss a great ride. But…I am mostly out of PM’s. I faulted myself for not selling on the reversal day. I’ll be damned if I ever do that again. I feel like a heretic on this site, so perhaps this is True Confessions, but between the dollar and the $BPGDM, I am happy to let everyone else make some money for a while. Good luck everybody!
Careful here, this Korean incident could easily trip a frothy and edgy market, I’m getting an uneasy feeling as if the market is poised to turn.
Spanish debt is selling sharply this morning and we know the market can not support a run on Spanish debt. Portugal looks like it will fall much faster that thought.
These two events could drive the dollar up very sharply in no time.
Korea??…today is he day to buy…
Gary,
How will the Korean situation effect equities. IF 1173 is broken, Mild correction/panic and then back to bullish December or down.
V
Poly-
Are PM’s best seen as an alternate currency, or merely something shiny to buy with dollars? I think the more they’re considered the former, the more understandable it becomes that they can also rise with a rising dollar. Perhaps we’re beginning to see how they are increasingly being viewed.
OK, Who is reducing positions today and who is staying put?
That’s it, I can’t take anymore! Selling half my miners here. SVM, I hate to lose you!
I’ll add back one the stochastics take a breather.
good fills here. I only took portfolio down to 50%, instead of taking it below that.
Good sleeping point for me, but I really hate letting go of any. Well, I’l be only half-right and half wrong going forward. 🙂
Gary,
I see gold up, and silver a slight bit lower. I don’t quite understand your rational for the USD rising via the EURO decline for the most part causing PM’s to fall. Is it due to cycles, and this being the excuse for the decline? Gold has decoupled from the dollar many times, and seems strong today. I guess it lends to the fact that this C-wave is being led by the USD decline, so if the USD is up(even if the USD we are referring to is an imaginary USD; but people believe in it), gold and pm’s can’t go up.
This is not a critique of your analysis, more of a question in comprehension. At what point would you consider your current perception a head-fake to your previous understanding. Again I am not critiquing, I am really trying to understand how things changed so drastically!! I am sure you will post in tonight’s report, so I guess I will look forward to your insight then.
Many thanks as always! And thanks for the portfolio update.
The fact that the other leading group of late, agriculture, is taking a beating b/c of the $USD was my motivation. It’s just a hunch, but I think we’ll at least be able to get back in at these levels on metals/miner and lower on the ags.
PSEUDO…
Staying put, I was looking at my stocks ( EXK , HL , GBG , ssri) on a daily chart (with red/green volume indicators) most sold off following the general mkt , then they got rebought with higher volume.
So far I see much more green volume than red
SSRI = UP .40
GBG and PZG up today too. Not following the mkt
staying put
I am with Shalom– Went to Basic Core! Sleep at night position– (and happy with profits)
PSEUDO
that should say a 1 day/3 minute chart
looking at todays action alone , and also 3 day 5 minute
I see no reason to sell here (as of yet anyways)
staying put
i am really upset that silver don’t rise with gold 🙁
gary,
do you see bull flag for NG?
I don’t waste time with individual stocks other than SLW. And I really doubt you will ever get any kind of edge trading patterns in individual miners.
I’m selling all my lower performers and a percentage of my higher ones I guess. I hate being a novice at this. Feel like I’m always missing something obvious.
Robert,
As far as I can remember there has only been one other intermediate decline that began without the SoS day.
But then I doubt that N. Korea broadcast their military plans to anyone so there was no way for the market to “see this one coming”.
I’m staying put, right where I am, old turkey for me. Can’t say I am optimistic about my stance, first going against Doc’s advice and now Gary’s, but I am not willing to risk losing my position. Nap time, wake me up in the spring please.
If I’m not mistaken, cotton was the best performer on the upside, and it continues to get trounced even after a substantial pullback.
I thought this was supposed to be a quiet week! 🙂
all things concidered, its a tough call when you are trying to time ‘sentiment’ when N.Korea is trying to flex some muscle as their leader tries to insert his son in place as …”the new leader , and dont mess with him.”
Lot of external headwinds here which are all bullish for the dollar. Equities could drop if they break below 1,170 previous low support.
So the question becomes can massive gold buying hold it’s own against that tide? If not then we know PM’s could get crushed.
I brought in my heavy leverage at the open, happy to bank it all, preserve and at the ready.
The setup looked great a few days ago but have to acknowledge the risk here. Best case we buy bargains, worse case we miss a small run getting back in when the dust settles.
Daniel and I took some off, but I’ll be looking to add back once the stochastics are no longer overbought. That doesn’t mean I expect them to get oversold, just that I don’t feel I’ll miss too much immediate upside.
As much as the SoS traders couldn’t know about the coming Korea fiasco, the OEX traders did. The smart-money OEX traders bought one of the largest number of put options ever yesterday. They are having s fine day. They are often worth emulating.
I think I get what is Gary thinking. He saw USD bounce because of N.Korea, and it seems going to last from time to time. Gold can’t get to new high as USD rally. So, gold has high probablity going into intermediate correction. Gary, Do I correct?
New daily cycle high for the DX on Day 13 gives us a virtual lock on a right-translated cycle and confirmation of a new intermediate cycle.
I love the smell of burritos in the morning 🙂
Yep, Doc. Huge blowout reversals on gigantic volume are not to be dismissed lightly. I am grateful for the bounce we had after the initial drop, as I rediscovered I am a jackrabbit and I was trying to be a Turkey. I have learned my lesson. One needs to trade consistently given his own personality; a lesson that having been reinforced I am unlikely to forget again anytime soon. Nice call, by the way.
@DG: What source are you using for OEX options, please? Thank you by anticipation.
watching $usd to drop from here…
Current OEX readings are at http://www.cboe.com/data/IntraDayVol.aspx
End-of-day and historical readings are at
http://www.cboe.com/data/mktstat.aspx
Go to page 2.
It takes a little while to analyze them properly, though. Web reserach (or subscribing to sentimentrader.com) is required.
silver has formed a swing high
wow…was that an earthquake?? this volatility is better than 6 flags 🙂
From $nymo chart, Korean is just an excuse for this drop..
It is kind of playing out as I kind of thought it would. Gold bid but Silver not. Silver in unlikely to be the go to metal in times of stress where USD is strong. Further signs of silver producers hedging means that the smart money senses prices are high enough to do business. As always the little guy who chases will be left holding the bag. Silver from this point onwards is a trade. It needs to make a new base to launch from.
i reduced my leveraged with great pains. Now i need a drink
oa92000, I totally agree. News is just an excuse for the markets to do what they already wanted to do. The move higher in the buck was already in the charts. Apart from the cycle setup, the last few day’s action formed a trend line crawl on the DX, and crawls are continuation patterns.
If the dollar is going to rally for 3-4 weeks while the market sorts out the Korean implications then it’s probably untrealistic to expect gold to put in the huge parabolic move we were looking for. That kind of move will likely only happen with the dollar collapsing.
If stocks are dropping down into an intermediate low like I suspect they will be if the dollar continues to rally that will inevitably rub off on miners.
Intermediate cycle lows are scary affairs and there is alway margin selling. That has always affected miners to some extent no matter what happens to gold.
But don’t forget gold is on the 17th week of it’s intermediate cycle. Those don’t go up forever. The normal duration is 20 weeks. So at some point soon gold is going to be looking for an excuse to move down into that intermediate cycle trough anyway.
Despite todays action I’m afraid several weeks of dollar strength will eventually be used as an excuse for gold to drop into its intermediate cycle low.
Hate to say it, but I am starting to see the up coming short-term pain as well. Ah well, so be it…part of this gold bull game.
Good news for long-term gold….maybe relieve some tension from Ben’s plan to print the dollar to nothing….he may have the “see I told you QE doesn’t affect things(or whatever it is called these days)”. QE3 may get back on the table.
Doc,
On that one I disagree. I think the dollar rally was nothing more than a dead cat bounce that would have rolled over.
The dollar was certainly not discounting something out of left field from N. Korea and certainly not after an intermediate cycle that lasted only 13 weeks.
I don’t believe for a second that anyone, anywhere, had any inkling of what was going to happen today.
Except for perhaps the North Korean army…
Gary,is this the yearly cycle low in the dollar?
Joseph Smith Jr. told me in my sleep last night about today’s Korean incident. It pays to be Mormon 😉
Yeah Gary,
While it is still way too early, Since the $$$ has started an intermediate Right Translated Cycle, it could be possible that we just saw the yearly and 3 year cycle low on the $$$?
Guys,
If we take today´s action of SLV:$xeu, we have the continuation of the uptrend.
In gld:$xeu, we have a gap up.
Because of the “war-currencies”, can we possibly have a uptrend on USD and MP´s in paralel ?
I doubt it will be the three year cycle low. I still expect that will occur in the spring but it it takes several weeks for the korean situation to calm down we probably have the dollar’s yearly cycle low in place.
does news matter or not??
It may already be baked into this cake , but the FED minutes are being released at 2 p.m. today.
They may reveal concern for the economy not expressed when the 600 billion bail was announced.
Could it roll the dollar???
If the S&P moves below 1173 then we potentially have a daily cycle that topped in only 3 days. That’s pretty bearish.
Well, I guess, thanks (or no thanks) to N. Korea, Gary has to stay indoors today! 🙁 or 🙂
News does not move the market. News can accelerate or trigger a move, but the move must have already been inherent in the conditions. A match does not cause an explosion, but if the room is filled with dynamite something will eventually set it off. We were overbought, $BPGDM gave a sell, we had a huge reversal, and everyone hated the dollar. That’s the dynamite-filled room. Then Korea dropped a match. I posted a week or two ago that the most typical reaction after a high volume reversal is to rally into the reversal day’s range and then fail. If you exceed the high the pattern is ruined, but not until then. Silver bounced into the reversal range and look to fail. Korea did not cause any of that.
Ok took some profits today.
I have a question for anyone.
I have been putting my kids money into miners instead of the bank. They have some really nice profits. since they are all teenagers and don’t need the money, would it be smart to book some profits, say sell half of all positions, or just forget about it and stay old turkey?
No one ever went broke taking profits.
My two cents: No one ever went broke taking a profit, but lots of people have gone broke over time by taking small profits that are insufficient to offset their losses.
Gary,
I am not suggesting the Korean news was factored into the markets but rather that the news doesn’t matter. The dollar and thus far, stocks, are doing exactly what the charts have been telling me they would do for the past two weeks. As always, this type of news is just used as an excuse to get on with it.
Besides, this skirmish is nothing new. NK sunk a sub a few weeks back, and we didn’t see a sharp move higher in the buck. I think if a significant conflict were about to break out, the reactions would be much more severe, so I can only conclude the markets are just taking the determined path.
Spanish 10yr yield’s exploding!
“No one ever went broke taking profits.”
Only if you’re much more diligent taking loses.
Natan: There’s no real answer to that question. Is there a chance that you will panic at the bottom and sell because you worry about your kids accounts getting decimated? If so, sell now. Is there a chance that Gary has the whole picture wrong and the bull has ended? If that doubt will plague you during the decline, sell some now. Will you fail to get in lower out of fear? That would be a shame. These are the questions that, once answered, will answer your question. And only you can answer them. I believe lack of self-honesty dooms traders.
Actually many short term traders go broke taking profits. The reason being they are too nervous to let a winner ride so they book small profits but those small profits aren’t large enough to overcome the big losses.
But to respond to Nat there is no right or wrong answer to that one. I decided to take some profits and then let the rest of my position ride with the plan.
If gold does move down into an intermeidate trough it will take out the prior cycle low.
One thing I have noticed it that at intermediate tops it’s very tough for investor/traders to take the “safe” trade (book some profits) because greed has it’s hooks in them and all they can see is clear skies ahead.
If you think it’s hard to sell now wait till we get to the top of the C-wave or top of the secular bull 🙂
Where’s TZ. We need his opinions 😉
It is very counter-intuitive to go into the intermediate decline at the strongest part of the year. Having run upwards for so long though it is probably a good place to sell into some strength.
I think we do need a bull trap in this market right now, and we’re probably going to get it.
DG/Gary you guys read too much into the taking profits comment. I guess I should have said “no one ever went broke taking humongous profits”. Which is the same as basically trading sentiment.
If you’ve been riding since August I wouldn’t say taking profits is a poor decision right now.
That said, surprises do come to the upside (I still hold PM shares), and whatever anyone does do not short gold or silver.
The more I think about it, I’m going to try and put in some shorts in Tech at good entries (much safer than commodities which are most likely in a long-term bull).
ok..well I took some profits on the kids account. Sold about 40%, Let the rest go and look to add at intermediate low. anyway, they have their whole lives to make it up if I blow out their account..LOL..I don’t use margin so that shouldn’t happen.
robert..most of the positions are from last February. core holdings (CEF) are from dec ’08/jan’09.
MVG EXK HL SVM FRG went or about green
so if you were going to sell the open and didnt…now is even better
or is it??
Korea is supportive of gold. Miners will follow if it moves to new highs.
Hey, even JAG is green today. That’s my latest value-investment experiment in miners.
where is coolkevs?
give us an update on $USD, please??
Up day tomorrow with SoS, or later this week? Possibility.
Gary keeps saying Old Turkey, and Turkey day is approaching so I did move 50% of my portfolio to the following for this week (historically a very good week for this equity):
http://www.google.com/finance?client=ob&q=NYSE:TUR
fed minutes being released in 3….2….1…
now
Gary,
> I don’t believe for a second that anyone,
> anywhere, had any inkling of what was
> going to happen today.
I’d say the North Koreans wouldn’t start shelling an island with South Korean civilians actually living there -or pretty nearby- without first notifying the Chinese.
i still think $USD is topping here..
i still think $USD is topping here.. reson: 200DMA, 50DMA all downtrend.
200DMA is 81.75 for dollar. Is that an objective, Gary?
Dollar broke up out of the flag, daily trend from the highs earlier in the year convincingly broken, also the 60EMA has been good support and resistance and is now broken.
Pretty muted response by the metals in light of this, but it looks like a fairly convincing move by the DX
?DX
You’re right Jay, no doubt in that one.
Sentiment in the stock market has been too complacent for some while, and a little saber rattling by North Korea probably won’t turn it.
So far, there is no sign of any fear in stocks.
I think this will take awhile before the downside ends.
I will say that considering the news today, the market has been rather composed. You could have expected a bloodbath today. Down only 1.3% on:
Korean attack.
Ireland $113B bailout.
Spanish Debt collapsing.
Sharp FED revisions to 2011/12 outlook.
Stronger dollar.
gary …does this now mean a different target for $USD (80) ?
Wes: I agree. I am out of just about everything: PM’s, stocks. Have a huge wad of cash and will wait for a time to deploy it. An interesting wrinkle though. The AAII survey showed one of the largest one week drops in bulls ever. As it has only happened four other times so relying on the data is a little weak, but each time it happened the SPX was well higher three months later. Will this be number five?
DG,
I measure complacency by using a 4 or 5 week average of sentiment. That drop was from a very high level, last exceeded in January, 2007. The five week average, even after the drop, was the highest since 2005.
There can be no question about market complacency.
As to after the correction, my indicators are looking for full speed ahead.
As you know, the 1994 congress was the last previous to see such a big change from D to R.
Take a look at what happened to the stock market in November, 1994.
@DG re. OEX Options. Thank you. I was hoping for a more synthetic presentation. For those concerned, stockcharts.com/h-sc/ui?s=$CPCI&p=D&st=2010-02-01&en=%28today%29&id=p50415979065
Contul: Careful. I don;t think that’s OEX options. All option traders are dumb money except OEX traders. The overall PCR works, but the OEX PCR is much more sensitive.
There’s still plenty of bulls out there that is for sure. The markets went up for so long they sure did get complacent.
I think they’re going to get reamed over the next few weeks.
Intermediate decline, you there?
It is a good sign that it is difficult to short stocks at the moment.
But, geez louise, Bernanke is spewing out $800 or so billion into the economy and the world is still going to seem like it is ending sentiment wise to the dumb money in a month or two. Go figure.
Gold and silver beginning to turn around at the moment…
Gold’s last $1265 hit was on Sept. 13th. Silver that day was a little under $20. If gold were to decide to retreat that far, I doubt silver would also go back to $20, but stranger things have happened. Maybe $23 for silver? The gold/silver ratio at that time was all the way up at 63! I don’t see it going back above 57-58 to be honest, that would be around $22 max pain. We’ll see, this could be fun… the re-entries of course!
FYI.
Russia Today is reporting that South Korea admitted firing first today saying “it was part of a military drill.”
http://www.youtube.com/watch?v=O33sfN00oDk
80% of news is reporting the exact opposite of course.
My dad works in Lockheed Martin and him and all his buddies have been arguing about the need to start another war. They have been showing diminishing returns now in Iraq and Iran. j/k on the father part, but not so sure about the other part. 😉
Tuesday, November 23, 2010
South Korea admits firing first shells in row with North Korea
South Korea has admitted it fired artillery shells that triggered an early morning clash with North Korea. However it says it was part of a military drill and denied it was directed at the North. Earlier Seoul blamed the North for what it called an unprovoked shelling of its island. Pyongyang claimed the South had violated its maritime border during the military drills. Seoul has since threatened its neighbour with what it called ‘enormous retaliation’.
http://geraldcelentechannel.blogspot.com/2010/11/south-korea-admits-firing-first-shells.html
Another link:
http://macedoniaonline.eu/content/view/16923/53/
If true, that South Korea provoked North Korea to retaliate (this is hard to deny after we have the fact that South Korea admitted running a military operation in that area, but I’m still not saying it’s true), it reminds me perfectly of Gordo Gekko’s specific Wall St. quote:
“You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it.”
There clearly isn’t enough information to lean either way in this one to be honest, being that North or South Korea fired first. I’m simply presenting the case that it is not completely cut and dry that North Korea suddenly attacked South Korea. The rest is speculation.
Question though, why would North Korea a clear inferior military power randomly attack a superior military power, South Korea? This makes no sense. You can call the North crazy but very few people are crazy enough to do something that results in their death.
But onto the markets, are we going to see dollar strength now with war “brewing”? Are Doc and Gary right about an intermediate decline beginning in stocks and gold? The writing on the wall is saying yes.
Tonight’s report is up now.
Anyone have a thought about the pms in the futures markets tonight. I’m seeing a reading of 1374 on Gold. Pretty impressive. Silver at 27.61.
The dollar is a bit lower overnight. That’s probably supporting the metals altough I’m showing gold still down slightly.
To put simply…those that follow short-term trading, we are in the WTF trading zone…enjoy! For those that don’t care, physical holdings will help. Welcome to old Turkey, or burn in the sight of PM’s bastard burn. Again gold is a shit investment….90% of people will not make money off of it after inflation…You can’t trade gold, it will kill you. Anyways I locked a good portion of my holdings in physical since I know what a coward I am! And I will be locking more in tomorrow! I know what type of weak link I am to my own investments. Gary is still a great coach BTW. Not my point. Just saying….the path to riches will be by the dumbest moron in the world who picks up a couple cheap gold coins at 1k and doesn’t realize their value until 5k. The rest of us only think we are being smart by trying to trade that intelligence; ummm myself included(in my own stupidity)…
Robert:
N.Korea is a Chinese satellite. The Chinese have been trying to up the ante by stoking up conflicts with all their neighbors, Japan, India and Korea. The N.Koreans sunk a S.Korean boat with a torpedo a few months ago, so this is not out of the blue. There is also a power transition in N. Korea and every dictator has to prove his mettle.
The question to ask is why is China trying to raise the temperature. It might be just some internal power struggle within the CCP with the PLA being given more leeway to flex the muscles and test the adversary. However, why the CCP would like the PLA to do that is not clear. One school of thought is that things are not hunky-dory within China, and nothing beats a war in getting people under control.
There is another school of thought that the PLA wants to install China as the supreme power in Asia, and would like to strike a blow to India in the near future. India started her economic program about 15 years after China, and has started catching up. The PLA feels that right now the military gap between India and China is optimal for the PLA to make a decisive strike; the gap is going to narrow going forward. The Chinese have been using the Pakistanis as their proxy to keep India under check but things are very dynamic there. Hence the need for some direct action. As the first step, PLA troops have moved into the Pakistani part of Kashmir; they have cordoned off areas and built underground tunnels/bunkers where even the local are not allowed.
We are living in very interesting times.
Every 18 months or so, N Korea throws a tantrum designed to get the West to provide the foreign aid it needs to continue operations. This is just another one of these episodes.
China mostly views N Korea as a nuisance — the idiot stepchild n the family. They certainly did not direct N Korea to take this action.
The incident will be forgotten shortly and the markets will move on to the next crisis.
Gary,
After booking some profits yesterday, I still cant get over the Korea situation altering the course of PM/equities and USD. I agree its gonna be almost impossible to sell at C wave top.
What will happen to oil if equities have started a move down?
V
Gold now at 1380. Safe haven in times of uncertainty? Could decouple from the dollar given the threat of instability, sovereign debt crisis leading to more printing of all Fiats etc… I think the large investors are into a big picture frame of mind here. What makes gold attractive? It is immune from the machinations of nervous central banks, except that hey will continue to be net buyers in the face of global strife.
V,
Oil tends to follow the market and there is still time for oil to move down one more time before the oil cycle stretches past the normal timing band for a trough.
gary,
You mentioned in weekly report that oil could rally for 20 days or so with the stocks but with dollar changing trend we could see a extremely left cycle and can except another 10 days of down move in oil.
Price wise what levels should oil hold?
V
Oil made a lower low yesterday so obviously the cycle hasn’t bottomed yet, unless yesterday was the bottom.
Just a thought for traders. The dollar tagged 80 this morning. 79.992 to be exact. One could take long positions this morning under the hope that 80 is going to turn the dollar back, the stock market bottom will hold, and gold will continue higher. Then put a stop on all positions if 1173 in the S&P gets broken and if the dollar breaks through 80ish (give it a reasonable amount of leeway).
Risk is very low, about 8 points in the S&P to be exact.
“DG said…
An excellent intermediate term gold indicator is Bullish Percent. $BPGDM on stockcharts.com. It has flashed a sell signal by dropping from severe overbought, which already had me nervous about holding gold, and given the recent developments…”
DG,
When you say $BPGDM is overbought, which technical indicator are you looking at? I’m not familiar with $BPGDM, could you give a quick rundown on how it works versus its correlation to gold’s price?
Thanks!
Never mind, found this article explaining how the gold sector bullish percent index (BPGDM) works:
“A bullish percent index (BPI) measures the percentage of stocks trading with bullish “point and figure” charts. There’s no need to get too technical here. Suffice it to say, a sector is overbought when the BPI is above 80. And a sector is oversold when the BPI drops below 30.
For the gold sector, BPGDM generates buy signals when it drops below 30 and then turns higher. Sell signals occur when BPGDM pops above 80 and then turns lower.”
http://www.stockhouse.com/Columnists/2010/Nov/24/Your-last-chance-to-buy-gold
And found the chart here if anyone else wants to see it:
http://stockcharts.com/h-sc/ui?s=$BPGDM
Jabalong: yep that’s it. That plus OEX traders plus dollar rally plus lack of stock mkt bears plus…and I am happy to stand aside until the dust settles. But people should NOT sell unless they are experienced traders and will not be afraid to buy back into gold and stocks when they look terrible. If you yourself are not nervous when you place a big order it’s probably wrong!
Gary – have you thought about the possibility that the US dollar and SP-500 both move higher into 2011/2012? Similar to what we saw from Nov 2009 to April 2010 when the US dollar rose the SP-500 rose from 1105 to 1220. If the Eurozone is about to implode wouldn’t it stand to reason that European funds would seek a safe shelter in the US despite all of our debt problems.
@DG re. OEX Options. The link I posted is for CBOE Options _Index_ Put/Call Ratio (CPCI). True, it is not OEX-specific. However, there exists a CBOE Options _Equity_ Put/Call Ratio, the difference (ratio) between CPCI-CPCE presumably capturing the “smart” versus “dumb” option activity. Therefore, CPCI, especially by contrast to CPCE, is a proxy to the same effect that the study of OEX options tries to capture.
CPCE link: stockcharts.com/h-sc/ui?s=$CPCE&p=D&st=2010-02-01&en=%28today%29&id=p74207950336
CPCI:CPCE ratio link: http://stockcharts.com/h-sc/ui?s=$CPCI:$CPCE&p=D&st=2010-02-01&en=%28today%29&id=p84269891020
The only graphical sources I could find for OEX-only options activity are here: http://www.crimsonmind.com/optionsR/QuoteOptionsAll.aspx?s=oex&goButton=Go
and here:
http://schaeffersresearch.com/streetools/sentiment_brief.aspx [type symbol OEX]
But they are not “live” and finely grained. I was hoping you found something better. Thnks for your input.
Contul. Sorry not to have better links for you, but as a subscriber to Jason’s sentimentrader.com (actually he comps me his service for the buy and sell signals I post here), I just use his data. He slices and dices is it several ways that improve accuracy. For example, Open to Buy orders as opposed to purchases to close positions, etc. No indicator is going to be better than about 80% over time, but watching the OEX guys when they get extreme is one of the best. He’s the best there is at this stuff, and has a little on gold as well.
Chrys,
I doubt that we will see that happen in the current environment. If you will notice even during that time when the ddollar was rallying strongly the stock market was trading sideways or declining. The stock market only made real headway when the dollar was trading side4ways or correcting.
It’s been this way sine 2002 for the most part.
The last two cyclical bulls were driven by currency debasement not real productivity. Productivity is a required ingredient for the stock market and the dollar to rise together in a susutained manner.
David:
China does not view N.Korea as a nuisance. N. Korea is like the US’ 51st state would be. According to a recent quip by a Chinese official, China and Pakistan are like China’s Israel.
China Spurns Obama
Right now they perceive the US as weak and are trying to probe and see how far we will go to defend our interests.
On the Drudge… China and Russia quit the dollar and use their own currencies for bilateral trade.
@DG: I read good opinion about Sentiment Trader from sources I deem reliable. It is on my short “wish list”. Thanks for the comment & regards.
BTW, Option Mark, for what it’s worth, has recently added OEX (optionmark.com). Corroborate that with a standard OEX chart, and one gets an idea as to where the price attractor lies.
Elaine–
That report on Drudge is big news. BIG NEWS!!
Intteresting. Dollar down, mkt up over 100 points, and PM’s flat. Hmmm…
What are you thinking DG ?
I’ve closed my lunch money stock market trade for lunch money.
Even though I don’t short bull markets, this set up sure is tempting. If we have a gap up on Monday, I think I’ll put on a small fade.
Wes: I also like to eat lunch. I have an order in to short OIH at 129.90. Got 4 points in 4 days two weeks ago—just give me a little more rally. And I agree about a fade, but we won’t gap up Monday. I’d suggest shorting at the close friday. The Monday after T’giving if Wed and Fri up is usually lousy.
Interesting that China/Russia story hits the wire right before the holiday.
DG
Was looking at the $BPGDM , and saw that last March it flashed a sell signal , with no buy signal until june…
that means that nice move in april to may would have been missed
PAAS $22 to $28.41 April -May
SLW $15ish to $21+ April – May
also, buying in June to July would’ve sucked a bit too.
I definitely wouldnt rely solely on that indicator ( I am sure you dont)
gary,
from $nymo,do you think bull going to run couple days?
Alex: I don’t wait for it to get to 30 to buy! It doesn’t need to signal, but when it does it’s pretty good (it’s sufficient but not necessary). And, no, I wouldn’t rely on just that, but that coupled with the blowoff reversal, coupled with the rallying dollar, and coupled with the fact that stock bears have become an endangered species…now I am interested in the “plus 90” readings.
Look at this chart. Each one caught a tradable drop in gold:
http://img251.imageshack.us/img251/765/bpgdm.jpg
DG
I did notice that…it catches a drop. I definitely wouldnt wait for that buy signal below 30 and turn up tho either 🙂
I use a variety of ‘indicators’ and signals too. I still didnt sell this one yet though.
sidenote:
AMOK..breaking out with volume again AMOK.OB for some charts
DG
and that link (chart) was way different than the $bpgdm I was looking at 🙂
thx
Juerg Kiener on Gold–
http://www.cnbc.com/id/15840232?video=1661019956&play=1
Much Ado About Nothing: China, Russia Drop Dollar In Bilateral Trade
http://tinyurl.com/3ajrvva
Shorted a little more OIH at 130.30. That’s enough. This is supposed to be a lunch money trade not a dinner money trade.
I would be very leery about trying to short. There still hasn’t been any selling on strength days and the dollar tagged 80 this morning and turned tail.
Today is the 14th day of the dollar’s daily cycle. It’s not unreasonable to think that the daily cycle topped today with that tag.
If the dollar rolls over and the market can regain the 200 week moving average by Friday we could still see the stretched cycle I have been expecting.
Gary
and if the dollar tagged 80 and turns as you origionally had been calling for…
same move upward for gold as expected?
(and still a burrito on YOUR plate??) 🙂
Gary-
If that happens, would that lead you to another portfolio change?
Yes if the dollar turns and moves back below the Nov. low Doc would have to give back that burrito certificate 🙂
I’m not sure I would add back leverage at this point as we are getting very deep into not only the stock market cycle, but are also approaching the normal timing band for gold to make a move down.
In order to add leverage back I would have to be convinced we are going to see a streched gold cycle, which isn’t so hard to visualize.
I would also have to be convinced we will see an extremely stretched stock market cycle. That one I’m not confident in since we are now operating with a weekly swing high in place.
A move above 1200 would form a 1-2-3 reversal and a short term pattern of higher highs BTW.
Gary: My stop is a point away. How leery can you be about risking a point on a $130 stock? My whole game is picking precise entries with better then usual odds of working and tight stops. I don’t need a SoS day to make 5-10 points on a stock. I made 12 points in 4 days on the AMZN short I posted last week.
DG,
I’m not talking about you I’m talking about the average trader trying to copy you.
Most of the time they will miss the exit and just give back any gains they make and then whittle away at their account.
I’ve always thought it was pretty much a waste for people to post their entries. That doesn’t tell anything. The perfect entry is all for naught if you miss the exit.
Case in point that AMZN short is getting destroyed today unless one was lucky enough to make a perfect exit.
Learning how to pick a good entry and not learning when to sell at the right time, is like learning to fly and not bothering to learn how to land the plane…
William O’ Neil
look at 15 min chart, UUP ready to drop..
i hope we see a stretched cycle so we can finish the year with a bang. 🙂
Also I dont see anything wrong with shorting as long as it is a short term trade (intraday) which can have low risk in a strong move down.
The dollar WILL turn lower and go below the Nov low… maybe even in the next daily cycle. However, considering the present cycle is forming as R-T, I don’t think a new intermediate cycle can be denied any longer. I mean, just look at the weekly chart and tell me with a straight face we didn’t just see an intermediate low. No sir, I’m keeping that burrito 😉
Yes, Gary. Fair enough. I have actually debated about whether to even post my short-term trades but a few people have expressed interest. For the others: Don’t try this at home! I was a very bad trader for a long time. If you want to learn to trade it takes study and practice like anything else. My entries are systematic and my exits are a combination of system (if the right variables line up) and feel (tape reading). That said, a good entry, cutting losses, and letting winners go a bit will result in consistent profits.
Doc,
If this current daily cycle rolls over and makes new lows you are going to have to cough up that burrito.
No, I don’t give great odds for that happening but just in case… stranger things have happened.
Wow! I haven’t even looked at AMZN since I covered it. I guess the cover at 159.78 worked out.
Going to be a carefree thank-giving with this wad of cash, just can’t get too excited about any real trades right now.
Feel kind of naked not having a decent AGQ stake, that baby was so kind to us all.
Yes, granted if this cycle somehow dives to a new low, I’ll hand the burrito back. But I’ve already taken two bites out of it 😉
Poly: I almost shorted SLV at 27.00 as it showed up on one of my short screens at that price, but had I done that Gary probably would have mailed me an anthrax-laden turkey, so I passed on the trade. I think you’ll be happy (short-term) to be out of AGQ for a little while. Have a good T’giving
is the market open tomorrow?
By the way, the AMZN cover was simple: It hit the lower BB and the rising 50-day line at the same time. Should have gone long it there with a tight stop a point below the 50!
Just shorted some UNG at 6.17
Amazon $176 a share, who’d a thunk it? DG, can you explain why those indicators mark that it would go up?
Stockmarket is closed Thursday (Thanksgiving Day)and only open until 1 PM Eastern Time on Friday.
Elaine,
They don’t mean it will go up. If the market had started down into an intermediate decline those levels would have been blown right through.
There is no holy grail. What works one time may not work the next. And the only thing that works everytime is looking in the rear view mirror 🙂
Well Said Gary!!
For trading I use reversion to mean type stuff (overbought oversold), Hitting the lower BB is what Gary calls a crash trade, but they can go against you a fair bit, so you need a stop (or you guts it out and pray). The 50-day line often holds string stocks correcting a previous overbought status. The 50 is where funds tend to step in to buy, so it acts as support. Of course it doesn’t always work, but as I was not intermediate term bearish it seemed like a good spot to take the profit. My going long was based on my willingness to do almost anything with a tight enough stop, and those two item held up and AMZN has made a new high.
oops—meant “strong” stocks not “string stocks”
So, Gary, are you saying that the odds are that the dollar has topped out at 80?
Gary: That’s why I use stops. Nothing has to work “every time.” You’re just looking for a 5-1 or better risk/reward. I can get stopped out on the next 5 “AMZN” trades that “don;t work” and still be ahead. 20% is not every time.
Gary and DG,
Thank you. I have a lot to learn. I appreciate your help.
I have no way of knowing that in advance. What I do know is that 80 is a very significant resistance level. The dollar rallied to that point this morning and then turned tail.
The stock market has reversed almost all of yesterdays decline and is back above the 200 WMA. If the S&P hits 1201 it will start a pattern of higher highs and complete a 1-2-3 reversal.
So far the daily cycle low at 1173 is holding.
There has been no SoS days yet.
This is why I said traders should just continue to work stops below 1173. maybe it turns out to be a winning trade and maybe it doesn’t but as of today there is no reason to abandon the trade.
Gary,
If we hit 1201. Do we add our positions back in?
I’m confortable with what I have for now. 75% is still a large position it’s just not leveraged.
Gary-
That bear flag on gold seems to be angled too high at this point (I’m no chart expert)…Others are pointing out the H&S pattern with a target down around 1260’s. (Doc pointed this out too).
On the other hand, it looks like silver is forming a cup and handle!
At what point do you discount the bearish patterns and switch back to full position? I had entered some new positions after our last sell off and sold them this week…However, it’s amazing how I feel uncomfortable not having a heftier position now…Itching to get back in so this could mean not the right time to buy.
Gary, when you say 75% its just not leveraged. Do you mean you are 75% of the 130% or 75% in with 25% cash.
Just curious, I try to keep my portfolio consistent with yours.
I think I will have to see a failed daily cycle on the dollar index before I’m comfortable putting leverage back on this late in the intermediate cycle.
25% in cash
Great. Thanks for answering my questions, Gary. Have a great Thanksgiving.
Flat bullion and the miners want no part of this big move….
“If the S&P hits 1201 it will start a pattern of higher highs and complete a 1-2-3 reversal. ” they are going to do it, gary. From $nymo chart, bull going to run it..
I’m not convinced the S&P can go higher without strong pullback towards the 200.
this is great….i was betting on a rising stock market today so i entered my metals positions again last night only to make no gains while the stock went up 1.3%. I should have just bought one of the indices.
Gary,
Is the SPX forming a coil between 1180 and 1200?
Maybe a possible move down to 1150 or so next week, before year end rally?
Happy Thanksgiving everyone!
Not my usual trade, but I have bought 30 Dec QQQQ put contracts @ $.97.
I think Gary’s “continue on up” with the stock market overlooks a ton of psychology evidence beckoning to the downside.
We’ll see. At least the risk is clearly defined.
I have a tendency to not think of realized gains as really being my money until after the end of the year. My mental attitude about trading (once I’m ahead for the year) is that I’m just risking the other guy’s money. It’s really a liberating style.
Here’s something freaky I found out today…666 Trading Days from the March,6th,2009 Low ..is 01,01,11 or Jan 1st ,2011,,,
Market is Vibrating Off of 666,and Increments of, like 66.6 ( or 67 days ) and so on….
Possible high??? One guru I follow says 1250 to 1300.
go up then go down jan- march, 2010..
Wes, why not wait until Friday? Should be an up day and a couple less days of time premium.
Poly,
There is quite a bit of international news risk over the next two evenings. Besides, I’m prepared to press the bet on Friday.
In addition, there is always those pesky psychology indicators, which have a way of not mattering until they do, and then mattering in a big way.
Gary,
Has XLK completed 1-2-3 reversal?
Well the traders are all happy to go into the holidays with a load of stock. I guess that’s part of your sentiment tracking.
I agree with Wes. I bet Friday is down because everyone “knows” it’ll be up which is why we are up so much today. My OIH, UNG, and SMH shorts are all in the black (slightly, but I’ll take it for now). I will probably do more at the close Friday if we are up then.
NOt sure if anyone here watches the Uranium stocks, but well worth buying the pullbacks (so far)
URRE , URG , URZ , DNN
also I called a breakout 2 wks ago on AMOK from $1.00 to $1.30…
pulled back to its 20 ma , and broke out today on good volume
supposed buyout target , owns property touching GG’s property
Filled 15 Dec SP Puts @$2.22, almost the low of the day.
Wow. -349 million just popped up completely out of nowhere on the XLE SPDR.
Correction. -343.9.
We’ll see if it stays there EOD.
http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html?mod=topnav_2_3000
XLE is meaningless.
Trimmed a few positions today, just too hard to go against the advice of Gary and Doc. Guess I’m not such a turkey after all. 🙂
Have a great thanksgiving everyone!
Happy Thanks-Giving to all, see you on the other side.
There is a large amount of talk here about the “dollar cycle” in utter disregard of the action of the euro. It could be that this “dollarcentric” vision is a side-effect of history & domicile. When the USD is discussed, one is not discussing the dollar per se, but the dollar _index_. And 56% of that index is contributed by the euro. Ergo, the “dollar” cannot go up or down unless the euro makes a move twice the magnitude in the opposite direction. A casual glance at the euro chart and a couple of unpretentious trend lines strongly suggest the alternative that the euro is headed for the 1.32 level which is due to be hit any time now (the thin markets during Thanksgiving being an ideal time for the slip). A 0.1 point of the euro amounts to aprox 0.5 move of the dollar index. Which would set the dollar at 80.5 – from where it can indeed begin to move down.
To where? Without getting into details, there are strong reasons to reject the notion that the USD Index will go bellow the low of November (for additional considerations, see eventually here goldscents.blogspot.com/2010/11/im-not-buying-it.html and here http://thetsitrader.blogspot.com/2010/11/golds-7-parabolic-c-waves-projection.html#comment-form). Since last May, the ECB had become a source of liquidity just as much as the Fed is. The historical relations between the euro and the dollar, in place since 1999, are about to revert. The purchasing power parity, which drives exchange rates in the long term, indicate an overvaluation of the euro by 20% or more: which would set a long term target of 1.20-1.14 as a minimum (http://fx.sauder.ubc.ca/PPP.html). This will not happen tomorrow, but the PPP effect must be felt in the forexland in the form of an inflexion of the dominant trendlines. The notion that the dollar and the euro are in search of a new definitional trading range is quite compelling in order to not be disregarded.
[continuation]
Where would this leave gold short-term? If the euro indeed reaches 1.32, the bounce from there will place the USD in the second, descending phase of the current daily cycle, allowing gold to advance into mid-end December to, perhaps, the technical target area of 1475. What would happen then, depends on how strong the bounce of the euro from the 1,32 will be (which determines where the descent of the USD will stop). Gold showed signs, these past two days, of uncoupling from the vagaries of the dollar-euro dynamics. It is not unconceivable that it will continue to move higher, in disregard (or by taking advantage) of the hesitation (and possible sideways action) in the forex market, in a decerebrated parabolic move characteristic for this stage (www.tradersnarrative.com/gold-goes-parabolic-again-again-again-3289.html). If this is the case, then the other technical target of 1620-1650 would be in effect for the first part of January, allowing it then to fall in the intermediate bottom towards the end of the month.
Gary, any thoughts on oil’s big pop today and how it might relate to metals/miners?
Enjoyed tonight’s report, Gary. Happy Thanksgiving to you too.
I took my foot off the gas and trimmed my holdings earlier this week on the morning of the Korea news. All I have is AGQ so I sold more than you.
It was hard to do since it’s been so good to me. The first I’ve sold since I bought in in August! I’ve got to say, I didn’t think Korea would amount to anything and so far it appears that will be the case.
I’m eager to put my foot back on the gas…but as you might say, that eagerness is probably a sign we’re close to an intermediate top!
LT,
There really is no relation between energy and metals. One is in a secular bull market and one has impaired fundamentals. That being said it looks like oil has finally put in the cycle bottom.
Happy Thanksgiving my fellow old turkey burritos!
I’m very thankful for Gary and his patient coaching and the wonderful interaction on this blog. Best wishes to everyone.
While I’m all into the holiday cheer, I wish to point out that money never sleeps and neither do the guys who are running this show (they have assistants 🙂 and a lot of tireless computers).
Monday starts the delivery process for gold and silver (“first position date”). These are the largest contracts of they year and I would argue the most important since the bull market started.
The actions of the Fed have become more transparent (and more challenged). Gold and silver are getting recognition of true worth. And silver manipulation has come out of the dark some.
The US markets are on holiday schedule. The rest of the world IS NOT. And neither (for the most part) are the futures, which only close for limited time tomorrow. Otherwise they trade normal into the weekend.
*****NOTE THIS: last year on the friday after thanksgiving AT 3AM IN THE MORNING, they hit gold for a 5% drop and silver for a 6% drop!!!
The 3am raid carred into the 9:30 stock open resulting in gaps down for GLD/SLV, etc. But (the sucker raid gaps) were the lows of the day.
Those drops recovered mostly within about 24hrs, but they were still successful in taking advantage of lulled minds and low volume to pull off a raid that further reduced down the long side.
Enjoy the holiday, but stay on your toes. It is unknown whether there is a delivery squeeze that could be developing in silver or gold. The guys at the top probably have an *idea* but they may not be certain either. They will do their best to shake things before mon/tues. But there may also be revelations of just how big (or small) the delivery amounts are at that point. Surprises could happen BOTH ways. Note that those people expecting a squeeze and *not* getting one might find themselves on the wrong side of a dropping price – the price drop that doc/gary seem to be leaning towards.
Or, maybe the guys trying to push this down get overwhelmed this time. ???
Regardless this will be interesting.
I’ve reduced down to a medium core level and I have futures access should a buyable hit occur or a runaway develop. I’ll do my best to try and profit from it.
My hope is simply that we have int topped for now and will pullback for a few weeks so I can reset. I played the last wave poorly and would enjoy a fresh start, but I’m ready for anything here.
If gold drops here it will now LOOK like it is racing to complete the H&S pattern for a significant deline to about 1265.
As DOC has commented, it would be well within trick-pattern for gold to START moving to look like the H&S was going to complete and then reverse up to go higher (after getting a bunch of people to sell and/or go short on the pattern appearance.)
In fact, if *I* were the big boys in NY, I’d try to paint this chart so that H&S looked legit, which means a drop like that in the next day or two. That would help them greatly in weakening the longs.
The drop to make the H&S look like it was legit is, surprisingly, about the same % as the hit they were able to pull off at 3am last year too.
So stay frosty.
In other words, assuming the big boys have the power/money/control, they would be crazy to NOT try and push that H&S to completion BEFORE delivery – even if they can’t hold it and it turns to run higher. Just the approach to completion probably wins them thousands of more longs in the process.
Just my ponderings.
TZ-very interesting. I don’t recall that last year, I must have been asleep from a tryptophan induced coma. Could happen, I have some burritos to put to work after selling my miners earlier in the week.
Where is the neckline on the H&S?
You have to use a chart or security which includes after hours data to see the silver/gold takedown on that fri morn 2009.
example you can see here
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=1&mn=1&dy=0&id=p50074511425
(that red spike down just before dec to the left of the chart)
GLD same time showed less of an effect which was easy to miss:
http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=1&mn=1&dy=0&id=p51034401483
If you use ETFs or something US-time-only based you will miss much of the hit (although enough remained to cause a gap down open at 9:30). GDX, for example, opened down almost 5% that fri.
Two days later (by that tues in 2009) the metals and most of the securities were at new highs.
2009 is only an example. You will not find that same pattern each year. (Of course in years when gold wasn’t pushing new highs and when things weren’t very heated such a hit wasn’t really necessary.)
I would argue that this year warrants attempts however, in light of current events.
TZ, You always have good analysis. You just never seem to profit from it. Just grab the horns and give it up…….
Echo from Jayhawk,
Thanks so much for all you do everyday Gary. From running this blog, to the nightly reports, your efforts are greatly appreciated! Have a wonderful Thanksgiving!
TZ, And then of course you delete your comments! Let it flow brother, it will be all right!
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Brian,
I’m not hurting because of difficulty during a 3-4 month period of a ten year gold rally. I understand you thinking that I’m somehow an eternal watcher or can’t win, but I’m really ok. Streaks come and go – both winning and losing. I’ve been off lately. It happens. But basing your opinion on it is incorrect.
I actually still made some profit in the last few weeks but it was seriously limited by some stupid mistakes that I can only blame on myself.
I’m on to the next battle. There is always another trade.
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For those who don’t have intraday, here is the gold ‘turkey day massacre’ of 2009.
http://img18.imageshack.us/img18/5607/turkeyhit2009.gif
(if you use firefox you can click the image and it will resize to fit your screen if necessary)
So you understand what you are looking at….
Gold and silver futures are trading late night tonight and CONTINUE to trade (like in 2009 on that chart) until about *1pm* on Thanksgiving day THURS.
(NOTE: that “Thursday” on that chart begins at the “24” to the LEFT of the word “Thursday”. The word is printed NOT at the midnight rollover, but where the main “day” session starts. Times are eastern.)
They close at that time then REOPEN at 6pm Tday evening (18:00) which then rolls into Friday morning. Gold/Silver futures then close for the weekend EARLY at about 1:45pm Friday.
Finally, the futures then open up again Sunday night at 6pm (18:00) and trade normally into the week.
The selloff low you see on the chart is a bit before 3am on Friday morning.
The times I’m describing on the chart from 2009 (and by analogy what times will trade in the next two days) are approximately right, but no guarantees. If you want exact info to be relied upon you need to get it yourself directly from the exchanges.
happy thanksgiving to all the smart money turkeys!
thanks for the info TZ…i wouldnt be surprised at all if a raid happened tonight but i dont think it will be able to take off 5% from gold.However one must be cautious and plan accordingly
IMHO, Euro is ready to show a rocket jump. That means USD plunge…
http://img528.imageshack.us/img528/8643/intermediate.jpg
http://img338.imageshack.us/img338/3108/eurocycles.jpg
TZ ,
one way to play this is to put a market order around 1330 or 1320 in order to catch the spike. If they do try this maneuver they will try to run stops and quickly buy back the position. I dont think its going to work on silver because they will hit a brick wall
GGUY
can you explain your charts? i cant make out anything on there. The eur will at least bounce if not reverse soon.
@Ratzvan:
first graph is a combination of yearly, intermediate and monthly cycles.
Looks like EUR is following it like a good dog 🙂
The second is the cycle indicator for the intermediate (62 days). Blue line is EUR/USD price, blue area is Cycle indicator, black thin line is cycle speed (first derivative of cycle indicator).
When the black thin line cross zero from the bottom, intermediate has started or is going to start very soon.
Other 2 lines are just normal averages, when the intermediate ends it must cross the 62 days SMA.
It is NOT 100% safe. But more than 50% for sure. That means, if you can do proper money management (cut losses and let the gains ride), you will win 🙂
Things (miners) are pretty flat up in Canada today……
RAZVAN,
Already ahead of you. I’ve estimated where I think such a possible hit will drop to (if it happens, of course.) I have buy orders (futures) ready with limiting stops as well.
It’s worth a trade if they try to knock it down. If they succeed and it keep going (completes H&S) then an acceptable loss.
If we ramp around and continue higher for one more cycle, then the trade pays handsomely. We will all know in less than 24hrs.
home prices measured against gold (i.e. constant value)
http://4.bp.blogspot.com/_m5i6pLhlNWU/TO5nplghpjI/AAAAAAAADh4/Ao19IVQp7uo/s1600/MHPGOLDR.JPG
Front page WSJ, main article, looks like chances are beginning to increase (media, and timing), for a gold/silver intermediate top:
http://online.wsj.com/home-page
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You guys sure don’t like giving direct links. The stories on the WSJ page, like most sites, rotate rather quickly. In a few hours Robert there will be no idea what you are talking about.
“Behind Gold’s New Glister: Miners’ Big Bet on a Fund”
http://online.wsj.com/article/SB10001424052748703628204575618602535514506.html
(link ends in .html blogger sometimes cuts it off)
Gary,
If gold moves below the 1348.80. Do you suggested moving positions from 75% to 50%?
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The hit is starting.
That WSJ story is a component. Read it close to see what is going on. The clues are there if you understand how to sway a reader.
Notice also the timing (leading into half-day fri after thanksgiving) and placement (WSJ home page.)
I’ll explain more later.
DXY got to 80 and holding.
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BLOOMBERG 9pm earlier tonight. Another gold story floats up:
“Gold May Drop, Trim Weekly Advance, on Concern Europe Debt Woes May Spread”
http://www.bloomberg.com/news/2010-11-26/gold-may-drop-trim-weekly-advance-on-concern-europe-debt-woes-to-spread.html
Coincidence? Sure.
And that’s air you are breathing
🙂
TZ wrote “That WSJ story is a component. Read it close to see what is going on. The clues are there if you understand how to sway a reader.”
I see just a critical artical about GLD and it’s not the first one. I prefer them much over the bullish ones 🙂
Two aspects from the article I find interesting:
… gold-backed ETFs have probably added about $100 to $150 an ounce to the price of gold as a result of the incremental increase in demand.
So that would be about 10% of the Gold price. Not really impressive.
If GLD shareholders get spooked by drops in the gold price and sell en masse, the fund would have to dump metal to meet redemptions, possibly accelerating declines by prompting others to sell even more.
That’s a perfect script for the final blow-off in Gold we’ll see at some time in the future.
And about the Bloomberg article:
The argument goes: EU debt problems -> weaker EUR -> less money for gold. Hmmmm…
In the text N/S-Korea is mentioned as support for the gold price.
The rest are just numbers. You could have written a table instead of a flow text without leaving any relevant information out.
IMHO it’s just the common reporting style to fill up the boring numbers with some “stuff”.
TZ, your view is obviously biased by your opinion as it would have been much easier to find some bullish articles about gold 🙂
The usd just now surging past 80 to a top of 80.35! Everybody who very self-assuredly have been condemning Bernanke, what do they say now. 🙂 After all, he’s a doctorate in mathematical economics and specializing in the great depression.
Trond,
The probem With Bernanke is that in the effort to avoid a deflationary depression he’s going to unleash an inflationary one.
When a credit bubble pops it always leads to a depression one way or the other. Now with a fiat monetary system we just have a choice as to which one we are going to expeience.
A move above 80 in no way suggests the bull is done. It just means the stock market and probably gold will now move down into their intermediate cycle corrections. But as technicians have discouvered to their chagrin time after time these always come to an end and then another leg up begins.
I think we could have a situation with Gold similar to what happened in July. If you look at the chart, you´ll see that Gold made a high of 1254 in May, then there was a fast correction to 1171, followed by another leg up which went to marginal new highs – 1268, and then another correction that went a little lower than the previous low of 1171, successfully running the stops at that level.
Fast foward to October, Gold made a high of 1388, followed by a fast correction to 1315, another leg up to marginal new highs – 1424, and now we could see another correction that drops below the previous low (1315) by a few points, successfully shaking out the weak hands and thus setting up the conditions for the next leg up. If gold drops to 1300 that should be a good place to buy.
Todd,
If it moves below that level next week then we would have a weekly swing high. If it does it today it would just put in a lower intraweek low.
This week $1330 is the number to watch. Next week that will move to this week’s low.
If gold moves below $1330 then we will have a failed daily cycle. Instead of trying to guess where the bottom will be just wait for gold to get into the timing band for the next daily cycle low and then buy when a swing low is formed.
Gary,
Are you changing your portfolio again today ?
“After all, he’s a doctorate in mathematical economics and specializing in the great depression.”
LOL! He’s also a criminal counterfeiter like his predecessors. How do we factor that in?
I love when people pretend that “studying the Great Depression” takes years of in depth research, that only a genius like Bernanke could understand. That’s exactly what they need you to believe. 🙂
I’m following the plan. The plan for this week is to move back to 50% if the daily cycle low is violated at $1330.
I just got a severance check (I have another job, waiting for this check for a couple weeks) for $25,000 that I am planning to invest in gold/silver funds. After the price action last night and the talk about a possible intermediate correction, the idea makes me feel a little sick. Often that can mean it is a good time to jump in. This is a decent sum of money for me to invest.. any opinions?
I wouldn’t put the money to work on the 17th week of the intermediate cycle. If this does turn out to be the beginning of the intermediate correction thn there should be about 15 to 20 days before we put in a bottom. Wait for that bottom.
Wes: Nice trade from Wednesday. I like it when you and I are both shorting at the same time. For other traders: I will now lower my stop (assuming we still open sharply lower) on UNG, SMH, and OIH to break even and let the decline take hold. That way I either win well or lose nothing. It’s all about entry points and tight stops. None of the three ETF’s went against me even .25% after shorting them Wednesday. Everyone “knew” we’d be up Friday, which is why we were up so much Wednesday, in prep for the Friday easy long trade.
though day today for pm
Yes thanks WES, you influenced me to take that trade a day earlier than planned, might work out very well.
Good call DG.
If the traders here would do a favor and post exits in real time it would probably help the novice traders. Exits are where the money is made or lost.
Suzi,
Don’t lose track of the big picture. If gold is ready to move down into an intermediate cycle low remember they happen like clockwork about every 20 weeks. They never signal the end of the bull market and they always represent the single best buying opportunity one ever gets to enter the bull market.
Understand that any position you ride down into the correction is going to come back and make new highs…huge new highs before the secular bull is done, and probably huge new highs even before this C-wave is done.
Remember Buffett’s quote. We simply attempt to be fearful when others are greedy and greedy only when others are fearful.
There will come a time in the next several weeks when others are fearful and they will be telling us how the technicals look terrible. That will be the time to step up to the plate and buy heavily.
I’ve watched it happen over and over as this bull has progressed and knowing human nature we will see it again.
As a matter of fact about the time Justin shows up to tell us the dollar is now going to soar will be the time it rolls over into the final plunge down into the 3 year cycle low and that’s when we want to be loading up on precious metals.
TZ, others re: the WSJ/Bloomberg articles;
Jim Sinclair has the perfect name for this..its called MOPE.
Management Of Perspective Economics
Basically for the layman it means the CB’s, Gov’ts, Big banks and their minions in the media are spinning a bunch of BS. I agree with TZ, these coordinated hits on the metals are very transparent to many of the traders and others who closely watch London/NY. For most people though, just going old turkey, as Gary has always said, will allow folks to catch the whole or most of the gold bulland protect or Increase their WEALTH.. These little wiggles on the long term graph are nothing and will continue to be nothing special over the whole gold bull market.
As for Bernanke being smart…well that is debatable. He knows who he works for and it is not the People. So yeah he is smart enough not to piss of his bosses. Make no mistake the policies the FED has chosen (Inflation through QE and assorted programs) are to benefit first and foremost those who get the money first..the Banks. The people, well they get the illusion of nominal wealth through inflation and the media will spin that to mean “Americans are better off today” meanwhile, their REAL WEALTH was transferred to the top. And this little ponzi scheme of theft and fraud will continue as long as A) the creditors keep buying/holding the US debt and/or B) the American Public wakes up to understand that they are being robbed. This is going to end badly for the majority of the population.
For us on the Gold Bull..this sort of says it all
Enjoy.
“Can you hear them
They talk about us
Telling lies
Well that’s no surprise
Can you see them
See right through them
They have no shield
No secrets to reveal
It doesn’t matter what they say
In the jealous games people play
Our lips are sealed
Careless talk
Through paper walls
We can’t stop them
Only laugh at them
Spreading rumors
So far from true
Dragged up from the underworld
Just like some precious pearl
It doesn’t matter what they say
In the jealous games people play
Our lips are sealed
Pay no mind to what they say
It doesn’t matter anyway
Our lips are sealed
There’s a weapon
We must use
In our defense
Silence
When you look at them
Look right through them
That’s when they’ll disappear
That’s when you’ll be feared
Hush, my darling
Don’t you cry
Quiet, angel
Forget their lies”
http://www.youtube.com/watch?v=QrYM2Gt9sMw
or
http://www.youtube.com/watch?v=rqQT3oKA3v8
Gary,
You mentioned 1348.80 as a place to move stops to, but this morning you’re suggesting 1330.
Would you recommend lightening up positions if gold drops below 1348.80, and then at 1330 reducing positions further?
Also, are these stops hard or “mental”? That is, if the stops are hit, do we exit positions there, or do we wait for a bounce?
Thanks!
If the Fed or government is trying to “take down” the price of gold why does it always happen right in the timing band for an intermediate cycle low?
If they are seriously trying to move price down to presumably fool everyone into thinking there is no inflation then why do they stop manipulting right as an intermediate cycle is due to bottom?
Wouldn’t it make more sense for the Fed, with in infinite supply of dollars to massively pile on the shorts at an intermediate cycle bottom and really crush gold and especially silver?
What’s the point of taking gold back down into an intermediate cycle low and then stopping?
If the Fed is manipulating gold then it appears they are fully aware of the cyclical nature of the metals and they are only taking price down so they can buy in lower. represented by the fact that they lift shorts as gold enters the timing band for a bottom.
If they are manipulating gold, which I find imppossible to believe, but if they are, they are doing us a huge favor. Every 20 weeks or so they are providing us with a beautiful buying opportunity.
I for one appreciate what they are doing. It made me a whole lot of money over the last 4 months.
I guess all I have to say is thanks and keep up the great work.
PC,
$1348 would signal a weekly swing high. But it can’t signal until next week because we are still operating within the context of the present week.
As long as gold holds above $1348 today then we can use $1348 next week as a hard stop to reduce back to a minimum core position.
For today $1330 is a hard stop.
Gary, I’m curious about the strategy of holding 75% or even 50% of our position while you anticipate an intermediate decline. Do you have any long term studies that show it’s more profitable to maintain a “core” position during these periods rather then unloading most (all?) and then buying back … I realize you may be wrong which would result in perhaps a bit of a chase to get back in but from a strictly profit point … does maintaining a “core” position result in better returns over the long run?
Peter,
Because in bull markets the surprises come on the upsdie I never want to be completely out except during a D-wave. So I don’t go to all cash.
One doesn’t have to stay at 50% though. That’s just my minimum core. Yours could be 25%. Whatever you can hold during an intermediate correction without freaking out, but enough that if gold reverses and heads higher you won’t be pulling your hair out because you missed it.
Remember we still have another leg up so does it really matter if you have to twiddle your thumbs with a few smaller positions for 2-3 weeks? By the time the C-wave is over they will be big time green again.
Just as an example you probably remember all the freaking out that went on in Feb. Do you think any of those people can even recall why they were so worried back then? No of course not, because the bull corrected their timing mistake and now all those positions are way above the Feb. lows with virtually no chance of ever going back below those levels for the duration of the bull.
Gary: While I agree that exits are very important, for my style entries are actually ore important because of the tight stops. If I can get into a “head I win tails i break even” position whether I cover with a 1%, 2% or 5% gain obviously matters (since talking smaller gains than you might doesn’t help offset the losers), but I have no exit rules. I posted that I covered AMZN when the BB and 50-day line were both hit, but that’s rare. I often cover when I get short-term bullish on the whole market as I don’t like to fight the tide. I will try to post the covers.
Gary says:”If the Fed is manipulating gold then it appears they are fully aware of the cyclical nature of the metals and they are only taking price down so they can buy in lower. represented by the fact that they lift shorts as gold enters the timing band for a bottom.”
BINGO!
The FED and its cohorts know they can’t control the long term price of gold. But they can manage the price during cycles to THEIR benefit. This has ALWAYS been the claim of most of the gold bugs. It isn’t that they will not allow gold to rise its that they do their best to manage the rise in price to their benefit. Sinclair has been all over this for years explaining exactly what you just said Gary. Sinclair has also always said those that we think are the enemies of Gold (big bank shorts) will make the most long gold over the bull. That’s why Sinclair, like you as well Gary, say buy and hold..ie old turkey.
Thanks Gary, I unloaded all once you and Doc were both in agreement, but from a purely comfort perspective it doesn’t feel right NOT having any position (sometimes that’s more nerve racking) … today looks like a good day to start accumulating again … but just enough to make me feel right.
I meant to add as well…that is the true value of SMT. The Cycle work on Gold. It allows us to know when the cycle lows are coming, so we can be prepared for the “hits” when they come.
But they can control the price if they wanted to. They have a printing press. They could meet every margin call from here to the moon if they wanted to step on gold.
If they really were trying to force gold lower it really makes no sense to stop once they really get it falling hard.
The only thing that makes sense to me is that gold is just going through the normal corrective moves that all bull markets go through. When it goes up long enough and far enough traders take profits, voila a correction.
Once it dops far enough the value investors step back into the market, viola a bottom.
Precious metals being a thin and emotional asset tends to have very sharp rallies and corrections. again nothing mysterious about that, it’s just the nature of the beast.
In my opinoin we are just seeing normal bull market behavior. Nothing sinister about it that I can see.
For traders re UNG: another shorting opportunity. If I am right it should not make a new high above Wed’s 6.20. I shorted at 6.17 Wed, and will do more at about 6.14 if it gets there. With a stop at 6.21 I am not risking much, and expect to make about .30/share or more, so a five-to-one risk reward.
Completely agree about
A) Gold Bull market
B) gold cycles
C)thin market with the biggest money on the planet as players.
BUT..here is what we, 99.9% of the population can not know and if we ever do know, it is long after the fact, is what happens between CB’s, IMF, and the BIG bullion banks in the Gold Swaps market.
If you or I could “borrow” the amount of “paper gold” that these players have, we too could follow the script of the cycle to our benefit. On days when gold is dropping into a cycle low, pick a time on london or the crimex and pile on the selling with your paper gold, driving the price lower than it might go normally in a correction and then buy it back making a nice profit, while paying off your “paper gold” loan/swap.
As for the printing press to meet margin calls, there is a mechanism that prevents that scenario ffrom working for any length of time, if at all. Physical delivery. They can’t print Gold. and there are too many physical buyers out there who would crush and most likely will crush, the CB’s for this printing. History says so. Other governments and big money. Don’t forget they are greedy too and when push comes to shove will act for their own benefit.
And that is the script.
I’m not sure why everyone focuses so much on “manipulation” and all the other esoterica. Maybe other people are doing things and maybe not. I have never found such analysis to be conclusive or helpful. I guess there is some emotional need top focus on “they” since people have been doing that for centuries. Seems to me our job as investors and traders is to buy at the right time given sentiment, charts, cycles, etc. and then sell when the ride is over. Whether “they’ are doing stuff or not doesn’t matter to me so long as I do my job well. Anyway, one man’s perspective.
thanks Gary,
I was hoping for more of a red opening since i need to get back some of my positions. Only managed to get half a position in SVM at 11.40 and did not get any NG
I agree with Natanarchist. The evidence is in the numerous investigations and arrests of top hedge fund managers who resort to cheating in order to be profitable. I am sure that is just the tip of the iceberg with 90& of the crime going unpunished.
The pullback today has little credibility given it comes after the holiday when there is little liquidity. We discussed the possibility of the raid last night and looking at the small extent of the damage I cant help but giggle to myself.
Define manipulation.?
It is relative. Large buyers, institutions, hedge funds, etc., when they buy or sell frequently the amount is so large it will move the equity substantially up or down. Others will then come in after this trade and the momentum can feed on itself. This is not manipulation, just the mechanics of large transactions.
Unless you can mention the specifics, manipulation is a waste of breathe.
Gary,
You say that it does not matter all that much at what price you buy gold, since your timing mistakes will be corrected. I agree with this statement in the situations where the timing mistakes are quickly corrected and without much drawdown.
The reason I say that, is because you could say to someone who bought S&P contracts at 1500 in 2007, that his timing mistake will be corrected, and I´m sure it will. The timing mistakes of someone who bought stocks in 1929 were eventually corrected as well, but that doesn´t mean that he made a good investment by buying in 1929
Virtually all timing mistakes will be corrected when buying all asset classes, it´s just that some will take longer and produce bigger drawdowns.
So it´s not just a matter of timing mistakes being corrected, but how long will it take to be corrected and how big of a drawdown do you have to endure.
And even if you can name the specifics it’s a waste of breath. What good does it do you? There’s enough information overload as it is without inventing new things to focus on that don’t help book profits.
uhhh..Robert..I did define it and I gave you the specific way the CB’s, IMF, and Bullion banks use ‘paper gold swaps”. Since their books are not open until much later, if ever in the case of the FED, we can’t know the exact dollar/gold amounts.
But that these transaction take place between these players is fact.
See here:
http://www.imf.org/external/np/sta/bop/pdf/fu111.pdf
then just google IMF gold swap (s)
you’ll get a number of viewpoints..then use your own common sense to decide.
Natan: Does knowing this help you make money, or is it a personal interest angle? As a citizen I am sickened by what the gov’t and crooked corporate types do, but I really would love to know if there is a concrete way to use the info that is better than using sentiment, cycles, charts, etc.
According to manipulation theory of gold/silver, gold and silver are always significantly suppressed in price- they are always way under value. So to play this theory you buy at any time, whenever, because the price over time is going to unsuppressed prices. What is the final unsuppressed price that is “not manipulated”?
If you play cycles you trade gold in very high-probability-win scenarios. There is a strategy for the end game, according to cycles.
Really, which one of these schools of thought do you think is more profitable? Or are you not after profits and would rather just have the market teach you life lessons?
It’s funny how many times people have thrown the manipulation-ball (me included) at Gary.
It brings no advantage to trading gold so it is never followed. Simple as that.
Interesting. Chart shows euro breaking down importantly. Implies a higher dollar and therefore lower (or at least struggling) gold and stocks.
http://img23.imageshack.us/img23/7003/fxe.png
Gary,
what kind of timeframe do you have for a dollar top?
Darn! I posted UNG was a short at 6.14, which was the high for the day…but there was stock ahead of me so it didn’t go off. Oh well, I’ll ride what I have (and post the exit price).
DG:
I think we or those of us who follow Gary and others are playing it the only way we can. Since the ‘hits’ to gold have proven not to last too long before the uptrend continues, outside of being massively leveraged, we’ll be good for the whole bull.
As for my interest, it is two fold. Yes, I despise, like you, the Government and the criminal corporatist/bankers. If I also know how the cycles are playing out, through SMT, and know when the highest probability that anti human dirt bags “paper gold selling” beyond the normal might occur, through a multitude of sources who trade the comex and london and post this info, I can take profits (like i just did last week) and enter at a lower price.
Don’t get me wrong, at the end of the day, or this bull run, Gold is going to be much, much higher. The anti human dirt bags know this too.
Robert…no, that manipulation theory you mention, of continuous price suppression, is one of a number of theories. If you read my post, I do not claim that. I argued short term price manipulation. And there is lots of evidence of that, unless you believe your government loves you, Central bankers love you, Bullion and Investment banks love you, George Soro’s and assorted billionaires’ love you and have your best interest at heart. Good luck in that bizarro world.
The only way one could possibly know what the “true” price of gold should be is if all transactions were cash for physical.
Regardless, Golds going higher and the CB’s, IMF, Bullion Banks, assorted dirt bag corporatists and billionaires know this.
So do we.
David K,
I’ll be interested to hear what Gary says in response to your question about the bull correcting timing mistakes.
What I can say is that the examples you gave of buying stocks in 1929 and 2007 are examples of buying at the END of a bull market. If you buy as the bull is ending and morphing into a bear, your timing mistake will not be corrected for a long time, if ever.
I believe Gary is talking about buying in the middle of bull market. If you had bought stocks pretty much any time between 2003 and early 2007, your timing mistakes would have been corrected by the bull. The big question, of course, is when to sell, when is the bull market no longer a bull. When will gold top once and for all and move into a 10 year or 20 year bear market again? Obviously, we gold bulls need to get off the bus before that change-over takes place.
Gary, i know you always watch dollar, but what is your read on $NYMO chart?
With Gary’s permission, I’m posting this friendly reminder that the one-year subscription offer to SMT readers for TheDOCument.com will disappear after Sunday. While Gary and I are both cycle-centric in our analysis, we do have varying tools for interpretations. So if you want both sides of the story on the burrito bets, here’s the link 😉
http://www.thedocument.com/members/smt.cfm
David,
The S&P is not in a secular bull market. You can’t depend on timing mistakes to be corrected if you buy the stock market.
Gold on the other hand is in a secular bull market. Timing mistakes will get corrected. Even now if gold is about to enter an intermediate decline one shouldn’t have to wait much longer than a month before the bull gets busy again.
If you can’t wait a month then you have no business being an investor. You will need to go the trader route. Of course that opens up a whole nother can of worms and your chances of profiting huge from the bull will be drastically reduced.
92000,
The Nymo is only worth watching for divergences at intermediate tops and bottoms. It’s a very poor timing device.
primaCanyon,
What I was trying to say, is that it is not about timing mistakes being corrected, but about how long they will take to correct. This is what really matters, because in investing timing is everything.
This is why when someone makes the following statement – I´ve made a 50% return on my investment – It tells you nothing, because what really matters is in what timeframe he made that return. It´s one thing to make 50% in a year, but another thing to make 50%in a decade.
Even in a bull market, it can take 1 year for your timing mistakes to be corrected, which means that you would have made 0% return in one year, while suffering a drawdown in the meantime.
Suzi,
We don’t need to spot the dollar top just the stock and gold market bottom.
We can use cycles to spot bottoms pretty close but spotting tops is almost hopeless.
IJR has just popped up on my short screen. Buying TZA will also work. Stop on IJR is very close at new high. I just bought TZA this was supposed to be lunch money and it’s turning into vacation money, but if they keep showing up with tight sensible tight stops, I’ll keep pushing it. I may cut back at day’s end if we close about here instead of down 150.
Gary,
How do you define a Secular Bull Market, or Secular Bear Market?
Is it based on charts, technical indicators, or based on your fundamental and macro analysis?
Thanks
David,
All the above.
I’ve just added 10 more QQQQ Dec 53 puts, bringing my total to 40.
I’m surprised that traders with Jason’s service aren’t talking more about how bad the psychology indexes are looking.
As an aside, I’ve just been looking at the 55 DMA of the Arms Index. It’s a crude timing tool, but it looks useful for figuring out when we’re in the ballpark of a high or low. I noticed that Dick Arms was using it.
Nat, how much money did you lose today?
Stick a fork it in you bitter hag.
A better place for you would be the JPM, GS, or HL yahoo message boards. Go entertain yourself you sorry POS.
haha..your funny Robert..haven’t lost anything today or at anytime over the last number of years I have been a subscriber.
Clearly you object to my pointed and direct insults towards those that seek to steal, lie and cheat people, the anti human dirt bags..that’s cool…and if you had been a follower of SMT for the last 3-4 years you would have already known this..its no secret.
Karma’s a bitch. It will catch up to them one way or another, those who cheat. Otherwise they’re living in a living hell being a narcissist anyways.
Clearly “manipulation” “cheating” goes on on a daily basis in the markets somewhere, I’m not denying that.
But what, are you a whistle-blower that Gary’s cycle theory is too good? If there is manipulation and Gary is and has been forecasting it accurately for many years, and you have admitted to following him, then are you complaining about making too much money? You don’t make any frickin sense Nat.
What the hell do you WANT? Go protest against the bankers in France or Iceland or Greece if you feel pent up enough. Go pass out flyers around your neighborhood to do a local bank run. Or you could just come on here and push your gold conspiracy theories- that will take you a long ways over time.
Missed profits (getting out entirely instead of a percentage) can be MORE painful than LOSSES to novice or immature investors.
I suggest you take a look at Market Wizards, Doc’s # 1 requested read:
http://www.beursplaza.com/ebook7.pdf
*note that this is the new one. I haven’t read the old one so I can’t compare. Note that it is a download, a .pdf file, but don’t worry it is clean.
Go bite on a burrito. They seem to do wonders 🙂
Here is an alternate scenario that isn’t considered too readily here.
With the dollar measured primarily against the Euro, as the EU blows up, the dollar rallies, and the three year low occurs in a series of right translated cycles that sets a pattern of higher lows and highs.
Now, I believe in the secular bull, but I am not ruling out this scenario for the next six months. I also believe the dollar is on its way to much lower prices, but I am unsure of how it will get there. The gold bull would be best served by knocking the froth out of those who have become complacent riders on its back.
Fortunately, I think Gary has a good plan for dealing with this type of situation. Anwyay, I’m not saying it is to be, but that it wouldn’t suprise me to see dollar strength for awhile.
Fusby,
It would be hard to imagine IMO the dollar being stronger for more than the next month or so. This does of course time well with the intermediate dollar rally.
What if the dollar starts to weaken in a month or so after the Euro QE news is done with? Then we go into the 3 year cycle low into the Spring. Next we’d get more Euro QE from Italy and/or the UK and it would shoot the dollar out of the 3yr cycle low and propel gold’s D-wave.
The dollar is liking to make its moves based on Euro news so that is my current best guess scenario.
QE is a nice trading tool when you know most Western countries are going to unleash it over the short-term.
Manipulation.
I am more with Gary on this. There is maybe short term manipulation like we saw at 1160 gold. Gold (or any) market should not be thought about so much in terms of up and downs in price. It is more about swings in human emotions. Manipulation is only manipulation in that it creates waves of fear or greed that cause smaller players to jump in and move the price in one way or the other. I don’t really see that as manipulation in the sense of doing anything against the rules. There is no easy way to create a rule against “manipulating emotions”. Along with that idea, the market price may not be a good indicator of golds real price potential due to too much paper gold, resulting in multiple claims on the same gold, etc.That is not manipulation if it doesn’t break the rules, it’s just a faulty system. As long as it doesn’t get too stressed, it keeps the price lower than maybe what it would otherwise be. If there are suddenly too many calls for delivery we could see a sudden price spike, but even that would be followed by a huge swing in emotion the other way.