Comment cleaner

I really don’t have anything I want to post at the moment as I’m using everything for the premuim newsletter so I’ll just use this as a comment cleaner.

I’m going to include a picture of where I will be Saturday.

This one’s for you Mary πŸ˜‰

361 thoughts on “Comment cleaner

  1. Natanarchist

    Gary;

    Since you believe we have to finish this daily cycle and then another daily cycle before we hit the intermediate low in PM’s does that mean you won the burrito bet with Doc?

    I take it that you don’t plan on adding any new PM positions until an intermediate low?

  2. Gary

    The bet was that the dollar didn’t put in an intermediate low but it clearly did, so no I lost my damn burrito πŸ™‚

    I will not be adding leverage this deep into an intermediate cycle.

  3. SB

    Ah, the road to Hana. Bring your barf bag if you are not driving. I was OK because I drove the whole way. The rest of the car got sick. There are lots of twists and turns. Trust me on this. But, hey, it was beautiful!

  4. SB

    In fact, we all bought cheesy “I Survived the Road to Hana” t-shirts. On the other hand, the first time I made that trip we hired a tour guide. He drove reaaaaallllll slowwwwww. No one got sick. I understood during the second trip why it seemed that he stopped every few hundred yards and asked us to look at every faucet of a waterfall.

  5. Steven

    Gary,

    What day are we on for the daily cycle in gold?

    If I understood you correctly in tonight’s report then if we rally until day 11 we could expect a pullback around day 20. Then we would possibly test or make a marginal new high. Then we would be set-up for the intermediate decline which would presumably set us up for the next leg up in the finaly C wave and 3 year dollar low. Do I have this correct?

    Thanks

  6. Gary

    Steven,
    Pretty close. Remember though cycles are only useful for spotting bottoms not tops. We could get a top at any time.

    That’s why we have our stops in place to keep us from riding an intermediate correction with a full position.

    The normal timing band for a daily cycle bottom tends to fall around day 20 give or take a few days in either direction.

  7. Mary

    Chicken Burrito,
    Yes, I plan on adding in a.m. Figure if the head kahuna is out of town, we might as well have some fun with old turkey.

  8. TZ (7006)

    Rolled from the last thread. Gary got me again πŸ™‚
    =================================
    ROBERT,

    >Hence Wall St. quote “it’s a zero sum game pal. Somebody wins and somebody loses.”

    You’ve quoted this twice (combined with “money isn’t made or lost…simply transferred”)

    I’m a big fan of the movie, but you do realize this is incorrect, right?

    Yes…there *are* specific, limited environments such as the futures markets where the wealth payout is zero sum (actually negative due to commissions.) However those examples are manufactured and false.

    The truth is that wealth (which is commonly equated with ‘money’. The definitions are different, but we can run with it here) is NOT simply “transferred”. This is a VERY common belief and politicians use it prolifically to try to convince people that if (greedy person) X made money, then it was because they TOOK it from YOU!

    “Wealth” (value) can be (and IS) routinely both created and destroyed.

    On BALANCE, the wealth of the world throughout history has increased at roughly single digit percents yearly – puncutuated by slices of time like maybe the industrial revolution, or use of fire and such to accellerate.

    Wars, plagues, famine do the opposite, they cause wealth to be destroyed, consumed, or never created. So do oppressive laws and governments.

    Wealth is CREATED (raising the sum total of it in the world) by the application of time, effort, resources, intellect, etc…by one or more people. The end result (if properly done) of this application of resources is something of HIGHER **VALUE* (wealth) than what was started with as individual components.

    A person over time can cut down a tree (which itself was a form of ‘value creation’ by another living entity), saw it up, and work it into a chair….or house.

    The end result of their time, intellect, work, and materials resulted in the new existance of a single house (a wealth or value).

    That house didn’t exist previously. The total wealth of the world (and that person) has now increased.

    Burn the house down, it disappears.

    And, yes, you can of course TRANSFER the house. But the statement that wealth is neither created nor destroyed…JUST transferred is incorrect. The transferring is but a secondary action completely separated from the creation of wealth.

  9. David Kafrick

    Gary,

    Is there any chance that the low of 1330 on November 16 was an intermediate low? If gold takes off from here, and starts going up agressively for several more weeks, would you just say that the November 16 low was an intermediate low or would you say that the current intermediate cycle was just getting stretched?

    thanks

  10. TZ (7006)

    Of course it is great if you can get wealth by ‘transferring’ it from others (who worked hard to make it).

    The fiat system is the most perfect such system for this transfer in the history of man.

    It works slow, but consistently.
    It works pervasively throughout and entire society. It is almost impossible to prevent it from hitting you. And almost no victims know or understand what is happening to them.

    A marvelous invention in an unfortunate way.

  11. Gary

    David,
    The current cycle isn’t stretched. It’s just now entering the timing band for an intermediate top and no Nov. 16th was not an intermediate low. That lies ahead for both the stock market and gold.

  12. DG

    Nice call, Wes. I am probably going to give back a chunk of what I made on a very good day yesterday, as I didn’t buy enough FXE yesterday to offset my shorts. I thought we might bounce a little today, but that the pside was very limited. Oh well. My vacation money profit is back to lunch money (glad I didn’t book tickets yet.)

  13. Robert

    Today is Christmas come early for me. Of course I don’t plan to be in the shorts very long (With QE and the dollar 3-yr cycle it makes it harder and harder to stay overnight with shorts because you know there are those upward pressures).

    This is a suckers rally guaranteed.

  14. Gary

    Robert,
    There’s absolutely no guarantee this is a suckers rally.

    Don’t let the lure of the short side cause you to make emotional decisions that have no edge.

    Would you go all in with a pair of two’s in your hand and an ace showing on the table?

  15. Robert

    I feel like I have pocket QQs right now. What, did we just come off an intermediate cycle low in the S&P? No way. We’ve seen the SoS. The timing calls for a decline. The moving averages and BBs call for a decline. I don’t expect it to be more than 3% in the S&P, but I only see the upside after today’s open at maybe 1.5% max. I’m not going all in Gary, I’ve learned far better than that.

  16. Robert

    I’m conservative I’d be happy getting out at S&P500 1165, while others would try and wait until 1120-1130, etc.

    I don’t really distrust the combination of sentiment and SoS. I have no shorts right now. Shorted a few days ago and got out yesterday morning. I don’t envision much more strength after yesterday’s afternoon and today’s morning. It is money just sitting over there in the corner…

  17. Robert

    Entering sometime this morning most likely won’t be the perfect entry but not the worst either. I will cover if S&P goes above 1209.

  18. Gary

    The trade would be to short around 1200 or a little above with the expectation that the market will move back down into the trading range. If it doesn’t then get out quick.

  19. Robert

    My risk is about 5% (I see a 30%, max, chance I lose this), my reward 10-13% (I see a 60% chance of making this). 10% is a void I leave for potential news/events.

  20. Robert

    Futures at close to 1197. I will fade in, expecting 1200 to be breached today. The majority will be bought (shorted) over or at 1200. Depending on the entry I may move the stop to 1213.6.

  21. Robert

    I’m not worried at all Gary. I could do this on the beach in Hawaii and leave and go surfing for the day without even thinking about it. If I were long though, and in heavy right now, and out to surf I’d be more concerned.

  22. DG

    Gosh, Gary there’s never easy money laying around doing anything or everyone would be rich! Anyone who thinks this game is easy will soon be disappointed.

  23. Gary

    Don’t forget the dollar is due to dip into a cycle low at any time. If it’s started today then this trade will go against you for several days. Maybe even a week or more.

  24. Robert

    Whoever said it was easy? There are just easier times to enter than others. I find this to be one of them. It is still by no means easy.

  25. Robert

    The market went up or flat with the dollar going up, who’s to say it can’t go down when the dollar is going down? As you’ve pointed out, the dollar going up didn’t have to do with its fundamentals, just cycles and then the Korean event (most likely being the cause).

    I am fully aware of this. I do have stops that pertain to the dollar too. You are getting close to talking me out of this, but I’m fading in so not too worried.

  26. DG

    Seems like a good plan, Robert. As long as you know your risk parameters you’ve got to take the high-odds setups. My thought, though, is that the things you are looking at (SoS, intermediate bottom still ahead, sentiment) are not short-term timing tools. That said, your estimate of the likely success of the trade may be too high. What makes you think we will go down now as opposed to after the beginning month seasonality is over and from,say, 1215 or so? Why here and now? Those indicators are not short term ones.

  27. Gary

    DG,
    Ahh I disagree. There is always easy money laying around in a secular bull market.

    Trying to short agaisnt the long term, intermediate term and short term trend is exceedingly tough to do. If one didn’t time the entry and exit perfectly they will lose money.

    My guess is that 95% of the people that try to do what you do will consistently lose money.

    But my original point was the other day you said there was easy money to be had on the short side. I contend there’s never easy money on the short side…even in a confirmed bear market.

  28. DG

    If it is easy and everyone wants to have more money, why isn’t everyone rich? Because of human nature. Oh yes, if only that didn’t exist then it would be easy…but it does. Trading is also easier if you master your emotions. And if I said there was easy money to be made I was either kidding, exaggerating, or drunk (and I don’t drink!)

  29. v

    Gary,

    If we get a big SOS reading today can we make shorts in SnP 1200 for the intermediate decline.

    what could be the stop for such a trade?

    V

  30. Gary

    V,
    Remember the SoS numbers can come early. We could easily see the market rally to 1250 before rolling over. Would you be able to hold on thru that or would you panic and cover?

    If you panic and cover then you will most likely turn a winning trade into a loss because emotions caused you to make a mistake.

    So yes the SOS numbers and the cycle length say one could probably take a short trade. The question is would you have the discipline to let the trade work even if you had to weather some severe pain in the process.

    I can tell you the vast majority will not be able to use the SoS data to produce profits.

  31. Onlooker

    Wow, really? Asking Gary about shorting stocks after everything he has to say about it, even in this very post’s comments? LOL Sorry, it’s just too rich.

    There really is something destructively (for most) tempting about shorting, isn’t there? You’d think most would have learned after the last couple of years.

    The breadth this morning is quite impressive. I wouldn’t want to go short in the face of that. At least not until there’s some weakness apparent. Otherwise it looks a lot like a surge out of a cycle bottom of a sort, blowing shorts out of the water. Have at it; not for me.

  32. Wes

    I have taken profits on my long QLD trade and have reestablished my Dec QQQQ 53 put position that I sold yesterday.

    Lately, these gaps have had a way of fading after early excitement. I just don’t think positive sentiment and complacency have changed, yet.

    I am looking for more downside.

  33. DG

    Shorting when the Fed is pumping is dangerous, unless you use tight stops. If you play short enough-term you can win/ Marty Zweig, one of the best ever and a frantic in-and-out trader said his number one rule is “Don;t fight the Fed” and right now the Fed is on steroids. That said, I play both sides all the time, but if you do you better know what you are doing because, as Gary said, you’ll get chewed up otherwise. If you have to ask where to put the stops you better not take the trade.

  34. DG

    Yeah, Robert, I did that some (shorting stocks while long PM’s) before the top in PM’s hit.

    Opening equity-only put call ratio shows tons of call buying by the public. A good for the bears that they are buying calls into this gap up. Wes, I hope you’re right because I am going to let my shorts from a few days ago go against me more than I usually do. I almost never risk more than 1% of my tradable assets, though, and am not close to that yet.

  35. Leilani

    Aloha Gary. Don’t know if Hana is in your itinerary, but if it is, there is a good family owned eating place along Hana Highway (eating places are limited in Hana) where the food good and cheap. They serve Lunch Plates including Hawaiian Tacos. Sorry Gary, they don’t serve chicken burritos πŸ™

    Have a great time in Maui!

    Thanks for your efforts and enjoy your well deserved vacation.

  36. Gary

    I will most definitly be making the trip to Hana on one of the days I’m there.

    I know the road sucks but the scenery is worth the drive.

  37. DG

    Poly: I don’t do options, so educate me if you have a minute. If you are getting out before the close and have a defined stop, why not just short SPY? Is it the extra capital required or is there some other advantage to puts? With a stop you have limited your risk either way.

  38. Gary

    No. A drop below the stop would indicate the correction is in progress. Trust me you will know it when gold is getting to the bottom of an intermediate correction. The deflationsits will be thick as thieves telling us how the gold bubble has popped.

    That will be the signal to pile back in.

    (I may consider reinstating Anonymous posting and put the troll meter back up)

  39. Redwine

    BAILING OUT THE IRISH – SIMPLE

    It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt and everybody lives on credit. On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers’ Co-op takes the €100 note and runs to pay his drinks bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money and leaves town. No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism. And that, ladies and gentlemen, is how the bailout package works.

    I don’t fully agree with this but it’s a good story anyway. Have fun on Maui and watch out for those Hana mushrooms!

  40. Poly

    DG, firstly I’m very far from an authority on anything trading related πŸ™‚

    For me it’s just about capital and not requiring such a large amount to be allocated for the same result.
    Most of my worth is in separate accounts, so the little I have made available for “speculation” I’m using leverage to “make it interesting”.

  41. DG

    Allow me to share my tale of woe: UUP should have showed up on my short screen yesterday! Every once in a while (rarely and I don’t know why) stockcharts.com has some sort of a data feed problem where something simply doesn’t show up on my screens. Well, if I had know yesterday that UUP would be down a fair bit today I’d have covered my shorts! (Might have even bought some PM’s for a trade) Damn! Oh well. Most of the time it doesn’t matter if they miss an ETF here and there due to a feed problem, but that one I will check by hand from now on since the dollar is calling the shots. Sigh. It’s very annoying to give back a week’s worth of profits. Gary, when you say surprises come on the upside, this surprise I never saw coming! expect.

  42. Robert

    Most shorts won’t be able to take this pain. If they shorted at SP 1175-1180 they’re not feeling too good nor patient I can assure you.

  43. Wes

    DG, Poly,

    I got the sense yesterday that a bunch of folks were expecting the S&P to go through 1173, take out the stops and then rally hard.

    I think what has happened is a sort of mirror image of that. The S&P has rallied hard and run the buy orders and stops above 1200.

    Now my indicators still show too much bullishness. No doubt today will only add to that total.

    I’m still of the opinion that this gets resolved to the downside. But, we probably have to first let the seasonal expectations work off over the next two days.

    Meanwhile, I think I have traded my way into a free put position. πŸ™‚

  44. DG

    Wes, I agree with your analysis, but it gets harder for me once I get out of whack. I am backing out and will take a fresh look after this dust settles. By the way, the OEX traders bought a truly massive amount of calls yesterday (those guys are good!), but not until the bell so it was only actionable in the after-market. Another reason to have covered yesterday. Oh well…sometimes you eat the bear…

  45. Wes

    Yeah, DG. I noticed that OEX data and added to my long QLD position in the aftermarket because of it. I posted at the time, remarking that they bought 5 calls for each put, so you should have seen it.

  46. Keys

    I may consider reinstating Anonymous posting and put the troll meter back up.

    Gary, I think that would be a good idea. All the blue on this page is easy to trace now…and the black will be mostly anon…And when it gets out of hand, simply shut it off. I think we are currently missing the GOLD BUG meter too…

  47. Gary

    I will post when we get that surge in activity that often accompanies tops. We usually see an exhaustion day soon at tht point also.

  48. catbird

    Gary wrote:
    Trust me you will know it when gold is getting to the bottom of an intermediate correction. The deflationsits will be thick as thieves telling us how the gold bubble has popped.
    […]

    (I may consider reinstating Anonymous posting and put the troll meter back up)

    =========
    LOL! Nice one, Gary. You know that old saying? “Good contrary indicators are hard to find.”

    Back to the matter at hand: I’m being a tad more cautious than you right now. My portfolio is at 50% and I swapped the AGQ for PSLV. That was hard…AGQ has been beautiful.

  49. DG

    Yeah, Wes, I did notice now that you mention it, but that by itself just had me trim a little. If I had also seen the $ was going to go down today I’d have covered a lot more. Man, you cannot fuzz out playing the game I play. Oh well, losing .5% of my account and a week’s worth of profits is no disaster. “I shall return!” as the man said. Frustrating, though.

  50. Josh

    Gary,

    I was in Maui yesterday. Had the most amazing fish sandwich in a little roadside deli just beyond Paia on the Hana Hwy at about mile marker 15. Check it out! Just don’t be in a hurry – 30 min to make a sandwich!

  51. Leo

    Somebody promised gold at 1400 in a few hours… Does not look like it is going to happen today. Meanwhile other commodities are going nuts. Cotton up 8%, wheat up 7%. DBA +2%

  52. coolkevs

    For DXY using Demark, we are on day 7 of a Daily Sell Setup. Just need tomorrow or Friday to be above today’s or yesterday’s highs to perfect – looks like 81.36 to me. If not perfected, this means exhaustion of trend has not run to completion, and will most likely revisit 81.36. Otherwise, look for a Monday-Thursday of next week DXY to the downside!

  53. Razvan

    gold has become hard to trade …take for example today stock market up other commodities up and gold flat. Dollar goes down , gold flat, dollar goes up gold flat…then one day it decides to go up $20, all correlations have broken down, the only remaining strategy is to chase price target which doesnt really bring me too much excitement.

  54. Leo

    Razvan, that’s why I no longer trade. Just sit on my positions and occasionally trim around the edges. Up 60% YTD, 95% invested. It is as much fun as watching slugs fuck but it is good for my financial health.

  55. Robert

    Grown men crying today with all their pain from shorting. Top is most likely in.

    This short was easy if all I’m going to experience is a .0039% draw-down.

  56. Gary

    Robert,
    You are starting to sound like one of the perma bears over at Tim’s site trying to call a top as the market rallies.

    I seriously doubt this is the top. Not with the dollar due to drop down into a cycle low anytime.

  57. Gary

    TZ,
    The longer you wait trying to time gold technically the later it will get in the daily cycle and the more likely you will be buying at or close to a top.

  58. Robert

    Gary I’m a bull. Just playing a draw-down. I’m not thinking I’m going to win, and not thinking I’m going to lose, I’m just taking it for what it is.

  59. Robert

    About to go downtown to the beautiful St. Paul, previous sanctuary to gangsters such as Al Capone as well as home of the 08′ RNC.

    I would be crazy to go there if the Wild weren’t playing tonight. Playing the Coyotes coming from the desert. If we lose in the State of Hockey, hell will brake loose.

    It’s safe to say though that dt St. Paul as winter has begun beats Maui ;). I have already slipped on this frickin’ ice a few times this year while intoxicated, as well as my parked car was hit. Eskimo season has returned.

  60. TZ (7006)

    GARY,

    I removed the post for an edit (sorry), but buying silver or gold here would only be a trade for a blowoff action before we turn down into INT low.

    I’m aware the high may already be in. And even if we go higher it isn’t likely to last long.

    All this would be based on my own work like the stuff DG and Robert are doing. I’m aware it isn’t ‘to plan’.

  61. Gary

    I uderstand that.

    What I’m saying is the longer you let the trade develop the greater the chance you will be buying at the top of the cycle.

    Instead of trying to time trades with technical chart patterns time them with cycles.

    One never wants to take a long trade once an asset gets into the timing band for a top. Case in point the dollar is now in the timing band for a cycle top.

    The technicals may be saying the dollar is going higher but the cycles say to beware.

  62. DG

    oa9200: FXE is no longer a buy. Doesn’t mean it’ll go down just that it is off the “extreme oversold—has to bounce” list.
    I can’t share my screens because I am in the middle of starting a hedge fund based on them and my partners require it to be proprietary.

  63. Razvan

    more and more bailouts please. We need to keep the bull humming strong πŸ™‚

    right now i am just mesmerized at the 24hr silver chart. It is just a thing of beauty ready to explode higher like a racehorse out of the starting block.

  64. Wes

    Right now it doesn’t look like we’ll fall back into the trading zone by the close. If not, then the next two days are also favorable seasonally.

    The indicators will be interesting, tonight. If small traders are buying puts and don’t believe the rally, then that will put a new face on things.

    But, if they embrace the rally with call buying, nothing much changes IMHO.

  65. Poly

    Typically big up/down 90% days end up reversing a little in the morning trade.

    I hear ECB has a press conference tomorrow morning, could be related to the U.S and IMF super fund rumors/talk. Potentially add more fuel to the rally.

  66. Natanarchist

    Elaine…speaking as a former man slut, older women, especially those who would still need contraception are infinitely superior to the girls in their early 20’s. Plus 50 is the new 20..ha ha…except they know what they want. Far more experienced that’s for sure….lets hear it for the older women…you rock!

  67. fubsy_cooter

    If we break today’s high during this cycle then we have a left translated cycle meaning the intermediate low won;t likely occur until the next daily cycle unfolds. If that plays out it will offer some nice opptys to trim and reload.

  68. Gary

    The dollar is due for a move down into it’s daily cycle low. I expect this to push everything higher for 4-7 days as that process unfolds.

    Then we should see the dollar rally again and that should drive stocks and gold down into their respective intermediate cycle lows.

  69. Avann

    Agree, very easy to follow this plan for selling on the high end but I hate to ask this … do we still maintain our current stops or can we now perhaps say that if we get a swing high we should sell?

  70. Wes

    Tomorrow’s sentiment indicators may be more instructive than today’s put/call ratios. Both smart and dumb money bought calls today, although the smart money slacked off from yesterday while the dumb money doubled down.

    Gary’s thought that new stock market highs may be in the offing is certainly interesting and cannot be dismissed out of hand, but I’m thinking more of sideways action, perhaps even in the dollar.

    We both seem to have an eye on an intermediate cycle low in the reasonably near future.

  71. Chicken Burrito

    Gary-

    Last year around this time, you were touting an epic C wave in the Spring. The metals rallied into November and then had a milder December while the overall market drifted higher until Jan. We then got our intermediate bottom in stocks sweeping the pms down hard with it. I’m a little concerned about this happening again. What do you see different this year? Are you sure the 3 year low has not been put in.

  72. Gary

    That is the difference this year. Of course that’s not to say that the three year cycle low couldn’t stretch and come in the fall instead of in March/April.

    It’s never easy is it?

  73. Chicken Burrito

    Thanks.

    I had a mediocre year. Did the pathetic math today, the woulda shoulda coulda if I just stayed old turkey with my positions in the Spring. I had a major position in SLW, GDXJ, SVM and others. I would have had an epic year, but now am looking at peanuts vs. what you all did. I really hope 2011 I will trust myself more. Would love to hear from other subs who blew 2010.

  74. fubsy_cooter

    Gary,

    Would you consider providing more detail for strategies pertaining to selling into new highs in the report tomorrow night? For example, what to look for at or near a top? I like to hold for large volume days that spike, but am wondering if you have any signs that such a day is coming. Do you recommend just selling with a stop limit right above the old high and not getting cute? It seems like that would likely negate a substantial move as retail investors flood in.
    Thanks!

  75. Chrys

    If we don’t get that exhaustion move and gold just rolls over now, there is a beautiful H&S pattern on the 60 minute chart. Feb contract would project to 1250 or thereabouts.

  76. Gary

    You’re probably wasting your time with chart patterns on the daily charts but intraday is certainly nothing but noise.

  77. Otis

    Gary,

    New subscriber here and really appreciate your work. It’s interesting how many people who use cycle analysis often call for “turning points” with their cycle work, pointing to past highs or lows near turn dates. Your cycle work seems to be more in line with expecting bottoms and looking at failed cycles to look for trend changes. What is it that draws you to your particular cycle analysis?

  78. Gary

    Otis,
    Cycles are worthless for spotting tops most of the time. I think to many cycles analysts try to use them for that and it’s just not going to happen.

    I use cycles in conjunction with sentiment and money flows to tell me when to step on the gas and when to easy off. We are now entering a period when we need to start easing off on PM and the stock market.

  79. Gary

    Poly,
    The dollar still hasn’t moved down into a cycle low yet. Until it does I wouldn’t look for any top.

    The market is just getting a head start on the dollar drop is all.

  80. Onlooker

    The “turning point” business is a joke. These people trot out multiples of these things and then ignore the ones that don’t “work” and crow about the ones that end up coinciding with a top/bottom (whatever their bias is). It’s absurd, really.

    Of course I know that there are some who swear by it and will defend it to the death (and tell me that I just haven’t studied it enough to appreciate the value, blah, blah, blah), but I’m not interested.

    Probably no better than a coin toss, and maybe worse.

  81. Gary

    I would be more interested in a swing low on the dollar than a swing high on gold.

    For gold I will be looking for the signs I listed in last nights report.

  82. Brian

    Gary, With all the short sellers being MIA today, do you ever ponder the psychology of folks that do that despite your jumping up and down with good reasons not to take that chance?

  83. Gary

    I do my best to “enlighten” people about the short side. Most just have to get burned over and over before they learn their lesson. (Some never learn)

    Usually nothing I say will shorten the learning process.

    I suspect most people also ignored my 03 bull market story too. Proceeded to try and trade the gold bull and masssively underperformed a simple buy and hold strategy.

    I try my best to help peole avoid the mistakes I’ve made but most of the time human nature just can’t learn until the penalty has been enforced upon us.

  84. TZ (7006)

    Triangle breakout; Long gold futures for a trade only. Small stop which is only slightly below breakeven.

    Let’s see if we can break 1400 and the previous high.

  85. n1tro

    Where’s Robert? He should be knocked out already if he followed through on his own stops of 1210 for S&P. if he didn’t put a stop loss in, it would be a good example for your story.

  86. Onlooker

    If it makes you feel any better Gary, you got through to me some time back and I’ve prospered well for it. It wasn’t entirely you, but you surely helped open my eyes to the gold secular bull and the perils of shorting. Much obliged.

  87. Onlooker

    And to the whole cycles methodology (along with Tim Wood) too. Can’t forget that, as it is key to my new-found success as well. That along with sentiment is truly the goods.

  88. TZ (7006)

    GARY,

    As per your previous comments I thank you for continuing to urge me to incorporate cycles. I’ve said before there is an adjustment process when merging that with my style. Cycles-wise I’m mostly down to ‘core’ and will be jumping in like everybody else this time at that low.

    I’m aware a long gold trade entered here today is against ‘plan’, but the metals don’t feel like they have topped yet and if we run above those highs there is a bit more money to be made.

    I’m ok with the trade. I’m only risking 0.3% of net worth on it and it is already profitable.

  89. DG

    You guys are really cute. I’ve been trading for 35 years and have always been happy to short “bull markets.” This past week I got “killed” by shorting, immediately getting in the black, and then essentially covering at break even when it didn’t work. Wow. I lost .5%! I have no doubt that you all would fail at using stops, establishing good entry points, and using proper sizing and risk management, but this constant pounding the drum that it’s “impossible” just establishes that you are ignorant (uneducated and unknowing) about how to do it. It’s certainly impossible for you, and you are wise not to try something that takes skill that you don’t have. Do you actually think that Gary’s way is the only way to invest/trade? Read Market Wizards for crying out loud and learn something before you newbies pontificate.

    Sorry for the rant but, geez, give it a rest. From what I have seen Robert, Wes, and a few others know more about trading than you probably ever will. I can’t wait to see all the whining that happens once gold starts down into its intermediate low.

  90. Gary

    I don’t believe gold has made a top either. That’s why I’m sticking with a 75% position.

    I outlined what I’m going to be looking for before I go back down to a minimum core position in last nights report.

    We certainly haven’t met any of those conditions yet or hit our stop so for now I have to let my positions work.

  91. Gary

    DG,
    The fact is that only a very few people will ever make, and more importantly, keep money with counter trend strategies especially the toughest counter trend strategy of all… shorting bull markets.

    Now maybe you are that 5% that can do it successfully but unless one is convinced they are in that very elite catagory why do something that has such low odds of ever making consistent money?

    I’m not talking about a successful trade here or there. I’m talking making money over a long (10 year + period).

    The vast majority will do just exactly what you did recently. They will make money on one trade and then give it back on the next becaue the bull did something unexpected.

    Only the vast majority will make money on one trade and then lose on the next two.

    So by the time 10 years goes by they will look back and say to themselves what the hell was I thinking?

  92. TZ (7006)

    I’m trading gold over silver because the volatility of silver prevents me from getting anything of any sort of size and still maintain that 0.3% risk.

    I can go higher leverage with gold and actually still make as much or more than by using silver due to gold trading much more sanely.

  93. DG

    Gary–last point: You have said you respect Jason and sentimentrader. He goes both short and long in bull and bear markets. Is he also a fool? I agree the best money is made holding during a secular bull, but using some part of your capital to do other things makes you a fool? I am NEVER going to put my whole net worth in to one thing or strategy.

    And a question: If all timing mistakes are corrected why sell down from 110% to 75%? You must think you can do better by timing the intermediate low. Why 75% then and not 50%? 25?% Your own behavior amounts to timing (at least to some extent) during a bull market. You say, “this way if it keeps going I still have 75%.” Yes, but you will underperform buy and hold. Shame on you!

  94. DG

    There is a difference between “it is impossible” and “only 5% can do it” (it may be less than that). I keep meticulous records and have done well trading for the past ten years, after getting out entirely in 2000. I really do agree that on your blog you need to keep people from fantasizing they are the next great trader, and you are surely right that if they get out they will be afraid to get back in, but this “it’s impossible” stuff gets old for me. Sorry for popping off.

    I am out of PM’s and very content. I will be back in size again at the next bottom, and no I won’t chicken out down there.

  95. Gary

    DG,
    I never said it was impossible.

    I’m not sure where you got that idea. All I said was that unless you are a very elite trader you aren’t going to make any money shorting bull markets over the long haul.

    BTW I’ve watched Jason miss quite a few counter trend trades. One has to wonder if he really does make money with this strategy.

  96. Gary

    I think I’ve given up on using any technical strategies with currencies. The forces unleashed in the currency markets by global central banks are so massive that no logical technical levels have any meaning anymore.

    I’ll just stick with the cycles and continue to look for a move down into a 3 year low sometime next spring or summer.

  97. DG

    Yes, Gary, this last year or so has been harder form him I believe (and me). This Fed pumping is making some indicators that have been reliable for years less successful. It is why I sought out someone who could ride a gold bull, and feel fortunate to have found you! Now I do both trading and riding gold. Thanks. I have also learned quite a lot from your site and am still working on melding our two approaches.

  98. TZ (7006)

    SHORTING is **FACTUALLY** loaded against anybody who tries it. That isn’t an opinion, it is a FACT that any rational mind should abide.

    A good number of those FACTS are actually DESIGNED into the system by wall street because they want securities and paper to always go UP (or flat) and not down. Just like they want fiat to go up and not down (that’s how they SELL this stuff guys).

    What are those facts?

    1) Any asset going down will do so at least twice as fast as it goes up. Your window to be right and make money is FACTUALLY less all other things equal.

    1a) Going up is usually a slow process with plenty of time to get in and get profitable. Going down is often a violent event triggered by someone who has INSIDE INFO who knows it is coming (bad financials, downgrade, competitor news, etc.) You are at another disadvantage cause the people who know this usually will not be YOU. However knowing something is in a bull and climbing slowly over time is easy. FACT against you shorting again.

    2) ALL assets are measured in fiat currencies. Those currencies relentless drop in value at ALL times in ALL countries, through ALL of human history except for the smallest of meaningless examples (including now.) So anything you short in a fiat currency has a continuing and PERMANENT losing bias as it floats upwards. FACT.

    3) If you go long a stock, it’s yours. If you SHORT a stock, it is borrowed and the people running the system can and DO rip it away from you to squeeze you and cause you losses. This is an ENGINEERED part of the system. It doesn’t have to be designed this way, BUT IT IS – on purpose. FACT. (Doesn’t apply to futures or ETF’s)

    4) To even make a short in a stock you have to be able to borrow it. Frequently that is not possible at the exact times the people at the top know something will drop (cause they are about to HIT it with downgrades or news). So once again you are screwed by the design of the system. You don’t control the borrowing mechanism. THEY do. You lose again. FACT.

    5) All other disadvantages aside, the MATH of shorting allow MUCH MUCH less of a gain compared to going long. Few securities will ever go zero. A good short (over a small time frame) might be 50% or so. The stuff many here are trying to do on this board is only drops of a few single percent. The amount that securities can and do easily move in the *opposite* direction is LAUGHABLY LARGE by comparison (and much easier to obtain). Playing shorts against the monsterously large moves that happen the other way is simply ignoring 2+2=4 and arguing it’s 5. The MATH of the situation is against you. Good luck arguing against math.

    6) Finally, there is the simply philosophical observation/argument. Shorting is trying to make a GAIN of the DESTRUCTION of value. Going long is making a PART of a LARGER INCREASE in value/wealth. Do you see the difference? A short is like trying to heat up water in a freezer. You are trying to make money on the LOSS of money. Obviously this is harder.

    The whole process of shorting is simply a suckers game.

  99. TZ (7006)

    Two more DESIGNED FACTS against shorting:

    1) Only can short on downticks, not upticks (doesn’t apply to some securities; rule has been on and off throughout history.) DESIGNED into the system. FACT.

    2) The guys running the system don’t ever cancel the ability to be long. But they HAVE cancelled the ability to be short. (Usually at the exact time they are taking the position opposite you and about to enjoy your lunch.) A DESIGNED FACT in the system against the shorts.

  100. Brian

    Gary has made the point before, but technical shorting is nearly impossible. People who make money short are the ones that fully investigate a company and find bull in their numbers. Technical shorts get blown out constantly.

  101. TZ (7006)

    MORE:

    Any info on wall street that gives an advantage is usually delayed or adjusted so the guys running the system can use it first. COT is an example. So is short interest.

    Short Interest numbers are PURPOSELY released only once every two weeks on a delay. BY DESIGN. Cause they give useful information on who to hit and who is getting in ahead of you.

    HOWEVER, the big firms already *know* this info in real time cause they can monitor their accounts and the firm’s records. Since they are the FIRM, *THEY* already know how much stuff is short and by whom in REAL TIME.

    If you think this doesn’t give them an advantage I can only smile.

  102. David Kafrick

    DG,

    I agree with you completely. I believe that when Gary talks about technical analysis and how it doesn´t work, he is really talking about common knowledge or textbook technical analysis (things like indicators, obvious patterns like H&S and other famous concepts). These do not work, simply because they are common knowledge. But technical analysis is any kind of analysis that is based on a chart, even cycles is a form of technical analysis. Gary has talked about how technical analysis doesn´t work because you will usually see gold break an important support level before starting a leg up. Well, that is the proof that common knowledge technical analysis doesn´t work (when price breaks support it is heading down), but waiting for price to break support and then buying it is also iteself a form of technical analysis.

    I also believe there is some misunderstanding about the terms trader and investor. Gary is definitely a trader, even though he might not admit it :), he is not a buy and hold investor, if he were, he wouldn´t be making as much money as he is.

    I also think that trading is far superior to investing in terms of achieving higher results, the problem is that it is much harder, therefore, it isn´t for everyone. But if you are one of the talented few, you will make much more money than a investor could ever dream of.

  103. TZ (7006)

    EVEN MORE:

    If you short a security, it means selling it and receiving the proceeds. However wall street doesn’t give the interest earned on these proceeds to retail investors. They keep it. (Granted, that isn’t much now, but current rates are an abberation. Normally the values are not insignificant).

    Of course, if the security you shorted has a yield, you are still responsible for paying that yield out as the divs occur πŸ™‚

  104. Gary

    In the sense that I try to avoid D-waves altogether and trim in front on intermediate corrections then yes I’m a trader to some extent.

    But in the strict sense that trading is where one is trying to time moves and controling risk with stops and position size one will never even vaguely approach the kind of returns that an investor will make by holding a secular bull market.

    The reason is of course a traders position size will limit his gains.

    An investor can make massively larger gains because he isn’t trying to control drawdowns. He accepts the risk that the bull may be false or end and puts much larger portions of capital to work trusting the bull to “fix” timing errors instead of stops.

    A trader can’t do that, his stops will end up destroying his account if his position size is too large because when you add another variable into the equation (timing) besides just direction it becomes much harder to win.

  105. Brian

    David K, Not to pick on DG because I like his comments, but it seems he posted his return YTD recently. I can assure you he didn’t exceed the buy and hold given the number I saw.

    Check with Fleckenstein or Einhorn, et al. They do fundamental shorts, and make money. Technical shorting is a tough game for small returns. too many people watch the same thing and just wait to squeeze you out. I understand the stop losses etc., it just seems lots of work for little return as opposed to lots of return for little work.

  106. DG

    Gary, please explain to me: I have shown many times in my posts, getting an exact entry point. When I have conviction in a trade I can do quite a lot, stops or no. I bought (a small amount—no strong conviction) of FXE at 129.50 with a stop at 129.00 What would have prevented me from doing a lot, adding on the way up, placing a break even stop, and winding up with a large position in it? I’d break even, lose a tiny bit, or have a huge gain if it keeps going (I don’t happen to think it will which is why I did small size). I did this at the bottom in 2003 and, even with very tight stops, made 30% on my net worth that year and 2004. I bought SIL at 14.75 and sold near 24, and was never in the hole, so how would the tight stop have hurt me? Almost no risk and a large gain by buying right.

  107. TZ (7006)

    >”There is only one side to the market, and it’s not the bull side or the bear side… It’s the right side.”

    Cliche/meaningless statement because there is no definition or clear way to determing the ‘right’ side. It sounds cute in a zen sort of way. But it’s meaningless.

    Thus, you must then start evaluating the market from scratch to see the playing field, the rules, and the pros/cons.

    Upon doing that, it is clear that shorting is a loaded game using rational analysis.

    What are the lists of people in the world who are rich based on shorting?

    How many, instead, got rich from being long assets?

    The ratio is beyond huge.
    (I can only think of maybe LESS THAN TEN who are wealthy by shorting.)

    Upon recognizing that ratio and the odds against you (inflation being one of the most insidious), a rational person then decides they are going to make it by SHORTING? Really?
    Even though they can just as easily choose approach the game by going long?

    That’s a broken logical unit in action.

  108. TZ (7006)

    PS: A common retort of the feeble mind in arguments is “But it is POSSIBLE” or “It can be DONE”.

    Yes…almost anything can be done.

    But the *rational* person looks at what it will TAKE to get something done. How LONG and DIFFICULT it will be for the reward. And as compared to ALTERNATE WAYS to get the same thing “done”. (And if if it is worth doing in the first place.)

    Shorting is not about shorting and “it’s possible” or “it can be done”. It is about making money. Thus, a rational observation of MAKING MONEY should including the best, shortest, and easiest ways to accomplish that goal.

    Suddenly deciding that that goal can ONLY be accomplished by shorting and then focusing one’s life in a fierce attempt to battle it out for every nickel against better odds elsewhere is daft.

    DG: I’m arguing shorting, Not you or your skills. I’m aware there is a sub-thread between you and others on the topic i think. I’m not trying to jump into that. My comments aren’t aimed at you.

  109. David Kafrick

    Gary,

    The thing is, if you are an excellent trader, you will catch a lot of swings on the way up, whereas an investor can only catch the primary swing. Since no asset goes straight up, buying and holding is never the best strategy. Also, an excellent trader has pretty tight stops, therefore he can afford to leverage and still maintain a 2% maximum loss per trade.

    If you look at the returns of the best traders around, they are far superior to the returns of the best investors.

    No investor could ever have the kind of returns that people like Larry Hite, Paul Tudor Jones, Ed Seykota, Jim Simmons, Marty Schwartz and other had.

  110. Robert

    I’m not doing this, but if TZ is indication, I think it is the time to short πŸ˜‰

    According to history countering TZ’s comments have proven to be successful a significant amount of the time.

    TZ is going to want to shoot me, but this is just an observation. Thanks though for sharing TZ πŸ™‚

  111. Leo

    David K,

    Your logic is impeccable. Now, how does this pertain to 98% of the people who just want to make money?

    By definition only 2% of the traders can be the 2% whose returns are superior to the best of investors. And even the best of investors are a rare breed.

    I think the beauty of Gary’s approach is that it produces good results for just about anyone who is willing to simply follow his moves without sweating all day long over the keyboard.

    BTW, what’s YOUR YTD return? (Not that I care but it helps the credibility of your argument πŸ™‚ )

  112. Gary

    David,
    You couldn’t be more wrong. The best investors are billionaires like Buffett, Soros, Rogers (not sure if he’s a billionaire yet).

    The people you named are hedge fund managers that make a big cut off other peoples money.

    No trader no matter how good he is is going to average much better than 20% over the long term. An investor riding a secular bull will crush those kind of numbers.

  113. TZ (7006)

    ROBERT,

    I’m out the gold long with small loss. And recognized previously that the long trade had issues (that’s why my risk parameter was so small).

    I actually hope we go down from here and that I *WAS* a contrary indicator. That’s my preferred direction to buy more.

  114. Gary

    DG,
    I’m trying to get out the door to go climbing so I’ll make it quick.

    In theory want you say sounds great. However theory and reality are tow different things. If you add on the way up you effective raise your entry price. Once your size becomes too latrge you can no longer honor your stop.to do so would cause you to take a much larger loss than you can afford.

    So when you add to a position there quickly comes a point where you have to trial stops. Thos always get hit and knock you out before the trade can really develop into a huge winner.

    Case in point when you entered in July your positions size was large enough that you couldn’t jsut sit still with the position and let your stop work. You exited for a small gain. If however you had just let the stop work you would have held that position through this entire intermediate rally. possibly exiting on the SoS data the other day. Your gain would have been huge.

    It’s the difference between theory and reality. In real time it never is as easy as it sounds in theory. If only the workd did work that way (sigh).

    Off to the cliffs for me.

  115. TZ (7006)

    ROBERT,

    Although despite what you say, I’m believe you will actually NOT short gold or silver despite making it LOOK like going against my trade was the smart/cute thing to do.

    If you are going to short it DEFINITIVELY then please say so so I can book the loss against your ego if you are wrong.

  116. sophia

    Dear Gary,

    You were very good in the summer to get the turning point in the S&P when everybody was bearish.
    Now, it seems that you think that the market could head down in the near future. If I read well, you are expecting something to change in the next 4-7 days. Do you think that it will be a major correction, or just going back to 1150?

  117. Robert

    TZ,

    Your points are well taken, don’t get me wrong. You are exactly right, shorting is a quick unleash, and going long is long and slow. Timing shorting is virtually impossible, and I’m sure you’re right too about insiders having that advantage. Mathematically you are also correct and as Gary has pointed out, shorting a stock from $2 down to $1 will give you a 50% increase, and shoring from $20 to $10 will be doing the same thing. Shorting is, for lack of a better word, very dangerous. It is a losing trade as you’ve pointed out for the vast vast majority of the crowd. If you’re not a masochist there is no intelligent reason not to follow Gary’s plan. If you are bored doing that, than, become an alcoholic πŸ˜‰ (it would probably pay off).

    That said, I do deviate from Gary’s plan, rarely drink, and will be shorting in the short-term πŸ˜‰

  118. catbird

    Question:

    Can someone offer an explanation as to why PSLV has far outperformed AGQ today, even when silver was at its frothiest an hour ago?

    I’m not complaining, as PSLV is my only holding now…just weird that the ultra would be lagging like that.

  119. David Kafrick

    Gary,

    Paul Tudor Jones returns are way better than Buffett (who has a lot of money not only because he is an investor but also because he owns an enormous and successful insurance business). Soros is a trader, specially when he managed less money. Rogers is an investor, but he is far from being in the top most wealthy traders/investors. Jim Simmons returns (medallion fund) are a thing of beauty (80% a year since the mid 80´s). Bruce Kovner is also a trader, and probably has more than 10 billion under his name.

  120. DG

    Gary, that is patently false. There are traders in Market Wizards and New market Wizards who have made much better than 20% a year for DECADES! (I started looking them up but hoped you know who mean. You have read it, no?) I, unfortunately, happen not to be one of them, however, but then this is just a part-time hobby that I love.

  121. Robert

    I have a feeling most stocks today are being heavily shorted behind the scenes. This is of course only a feeling (there is some data to back this up, but as DG said, that is proprietary πŸ˜‰ ).

    Is there any other feelings/data out there to back this up or to the contrary?

  122. n1tro

    I’ve made more than 20% this year trading but I dont consider myself exceptional in any way. I understand Gary’s point. I would have made more sitting on my hands with gold at the beginning of the year but like most, I didn’t have 100K lying around at the beginning of the year to go “old turkey”.

  123. Josh

    Hey guys you don’t have to convince Gary you’re right to take your trades. Just go do it and we’ll see who buys who the chicken burrito.

  124. TZ (7006)

    ROBERT,

    I deviate from gary’s plan ALSO because my approach has paid my bills for over ten years.

    Adusting to incorporate more of his (clearly beneficial) approach is simply taking time, but I feel prett ready for the next INT low. So if we are starting down now I will actually be happy.

  125. DG

    Robert, I’m with you. I am learning how to blend Gary”s approach with my own. I did very well buying heavily at the July PM low and hope to do better at this next one. Good luck to us all!

    And just to be clear—I completely agree that “buy and hold during a bull” is much better for virtually everyone. I just get tired of the “it can’t be done” stuff and “no one makes more than 20% over time.” That is easily shown to be false. And how many Buffetts are there anyway? Comparing the very best buy-and-hold guy to an average trader is just apples and oranges. The very best traders beat the pants off him EVERY year.

  126. Natanarchist

    DG wrote:

    “Sorry for the rant but, geez, give it a rest. From what I have seen Robert, Wes, and a few others know more about trading than you probably ever will. I can’t wait to see all the whining that happens once gold starts down into its intermediate low”

    perhaps not all the comments are showing up, but who are/is the “you” that you refer to in the post? I don’t see anyone dissing you for your trades. I don’t see anyone dissing Wes either. The only comment I see is one where someone hoped Robert had a stop on his short he posted yesterday. If you or him find that insulting or critical then I would say you guys are little sensitive. I think that would speak more to the changes in society than anything to do with trading. People are so frikking sensitive these days. If you or anyone else is confident in what you are doing then who gives a crap what someone else thinks.

    I think it is interesting when you guys post your trades. personally, I do not have the time or desire to be a day trader and most likely would be broke now if I tried to without putting in the requisite research.

    I don’t see how you think subs here at SMT will be whining when gold dips into its intermediate low as most of us are looking for it. In fact I bet most if not all subs will have booked some profits and wait for the low, and then load up again. Everyone has their own style, risk, signals or whatever.

    Obviously you have been making money or you wouldn’t have been in the game for 30+ years. Good luck to everyone, trader, investor or anything in between.

  127. Robert

    TZ,

    I own no miners at the moment either, my only fear is that some of them I previous owned (I owned around 9 major/junior silver miners) may potentially have an offer price presented to them over the course of the next few months. The odds aren’t that high, but I am able to live with this notion.

    That said, I do trust cycles, and do trust that the int. low will come like clock-work in the next few months. I will reload then also. I basically rode all the miners up to about 8-9% of their current prices. It was a good run, and yes I have the slightly bitter feeling of missed gains (that assumes I’d have the balls to sell today).

    I have been fortunate to make around 85% since I started trading again (late July). That said, 97% of that 85% came from long silver.

    GLTA

  128. Robert

    TZ I’ll never ever ever ever ever, did I say EVER, short silver (well maybe when it’s at $200-$500, but even it if ever hit those numbers there would be much better shorts around, if there is a bear market though, that is the number one requirement).

    Gary also told me he’d disallow my access to subscriptions, and he’d outlaw all subscriptions to MN residents if I were to publicly announce shorting silver. Just kidding of course, but you can see where I’m going. I love silver to death, it is the most attractive investment I’ve ever seen since researching since 2008. I knew of gold’s prospects from 2003-2008 (never invested), but then really was turned on learning about silver. Hi Frickin’ Ho Silver!

  129. alex

    Mark Minervini was a junior high drop out that averaged 220% trading /yr from 1998 – 2002.

    Mark Cook 563% and #220 % in National trading contests

    etc etc

    I also trade using charts and certain ‘indicators’ that reliably get me into and out of trades with minimal drawdown. NOT exact tops or EXACT bottoms…but the key is ‘cut your losses , ride gainers (and add to positions when the trend is favorable).

    I am new to cycles – (Thanks to Gary) it definitely helps with Bottoms,and being comfortable riding trades for certain lengths of time despite the bumps… It gave me confidence to NOT BAIL OUT too early…so it has improved my gains this yr…

    BUT I DO advocate trading with a toolbox of techniques that work.

  130. Robert

    I gg out for awhile, and going out of town tomorrow, but I’m with all of you,

    LET’S GET THIS CORRECTION OVER FAST AND SWEET,

    So we can reload heavy!

    Peace.

    PS. TZA at 18.20 will pay off over the next two weeks. It wasn’t a heavy trade, was 5 digits though, and I look to make 4 digits on it, lunch money. I’m expecting a steep correction off the bat here soon and if it’s overly steep (I have my numbers) I’ll cover, if it’s mildly steep I’ll wait a little (I have my timing). cya.

  131. DG

    Natan: Re the “Geez” comment perhaps I was a too sensitive, but the this “can’t be done” stuff has been going on for a long time, not just today. If other posters stop relishing when a trader has a bad trade (I lose more than 50% of the time), I promise not to fire back. I guess I’m also still a little ticked at having screwed up yesterday’s exit by stupidly missing two important indicators. Sorry. Good post.

    And I suspect there will be fear from the PM longs when we get to the intermediate low. There always has been (unless it’s very shallow). I just won’t rub it in.

  132. Power Corrupts

    Jesse Livermore, the author of the “right side” quote is reported to have made $100 million shorting stocks in the 1929 crash. More recently, John Paulson made over $2 billion in 2008 betting against the housing market. There’s a time and a place for evrything…

  133. Robert

    Forgot, being long silver was misstated. I rode silver from $18-$28. Sold. Re-bought at 25, sold again 28. Yes I know I’m the best. Just kidding. That was a very good (lucky?) trade from 28-25-28. I don’t expect I can do that again in the future and on the final c-wave up I’m hoping to follow Gary’s plan to a T (I know I can’t possibly do this, lol, but it should be pretty close).

    TZA cover if I hit 17.53 (a lot of room for this one).

  134. alex

    DG

    You are correct.

    Willian O’Neil stated that even if you had the batting average of a baseball player ( a Good one bats around .300…you can make good money. So 50% wrong isnt bad AT ALL.

    again the key is cut your losses ( He says NO MORE than 8%..) & keep your gains and cash in on them when its right.

    EX
    1st trade loses 8% ,
    2nd trade gains 24% ,
    3rd trade loses 8%

    only right 1 out of 3 times, but gained because didnt allow it to become..

    1st trade lose 15%
    2nd trade gain 24%
    3rd trade loses 12%

    Good traders with discipline MAKE GOOD MONEY πŸ˜‰

  135. DG

    BTW Alex, O’Neil says 8% not as a money management technique (I believe) but because when his signature cup-with-handle formation drops more than 8% his studies show that the pattern is ruined (though not bad as money management as well…just that that’s not why he picked 8%)

  136. alex

    DG

    Actually, I have his book here , and he is refering to anytime a stock breaks above a “proper base” and you buy, you never allow your losses to be more than 6-8%…he says no exceptions, no emotions. at one point he is actually talking about a flat “base on base” formation.

    But…we all see how the pro’s have done it..and adjust to our own circumstances…I will allow more than 8% if its a bull market and the stock rose with good volume and is pulling back with lighter.

  137. alex

    oh, aditionally just to be clear…

    He is advocating buying stocks with ‘proper base’ at the “proper buy point’ according to his methods , and says that it shouldnt fall below that ‘proper buy point’ by more than 8%

    I dont always wait for those ‘proper buy points’ according to his methods. He only purchases an origional buyin stocks breaking out to new highs, and yes, mostly Cup/Handle bases.

  138. LowTax

    Steven, it’s called profit taking. People are selling into the $1400 resistance. Contrary-wise, I take this to mean that Gary’s projection of slightly higher highs will come to pass – we will make one more push in the next few days as the dollar continues to break lower.

  139. TZ (7006)

    There is no seeming default or squeeze occurring with either gold or silver on the comex.

    http://www.cmegroup.com/trading/metals/precious/gold_quotes_settlements_futures.html

    The open interest on the DEC contract two days ago (when it started delivery) is about 5000. That’ 500,000 oz if everybody holds to delivery (the longs can close out anytime for the next month). The comex inventory available for delivery is over 3,000,000.

    For silver:
    OI about 2000
    http://www.cmegroup.com/trading/metals/precious/silver_quotes_settlements_futures.html
    which is 10,000,000 ozs.

    There are about 50,000,000 ozs available in warehouse stocks.

    http://www.cmegroup.com/trading/energy/nymex-daily-reports.html
    (stocks bottom of page)

    Looks ok to me. We can go up or down, but shortages at the warehouses wouldn’t appear to be a reason now that the delivery numbers are in.

  140. Natanarchist

    DG..I hear ya and no problem..as I said, I follow your trades but just for interest/fun. I don’t have the ability to do what you do daily. I have a regular job so I am comfortable with going old turkey and moving in and out of positions over a longer time frame, than daily or weekly.

  141. Gary

    Geez I’ll say it again. I’ve never said one can’t make money trading, even trading counter trend strategies.

    I’ve said that only an elite group of traders will do so.

    Then you come back and give me a very small list of elite traders that make money trading, thus making my point.

    These are huge hedge funds with research depts and the kind of inside info that just isn’t available to us normal folk. They have an edge we are never going to have.

    So I’m going to say it again. For the vast majority, and I would be willing to bet that includes every single person who reads this blog, you are never going to even come close to outperforming an Old Turkey strategy of riding the secular gold bull by trading.

    Now if you are incapable of handling drawdowns then by all means trade away.

    If you can do what it takes to ride the bull then your returns will vastly outperform every single trader here and likely outperform all of them put together and you won’t have to be one of the very elite to do so.

    If you are an average guy then those are your choices.

    If you are a multi billion dollar hedge fund with all the odds on your side then you might be able to keep up with us Old Turkeys but you are going to have to work very hard to do so.

  142. Nike Boy2008

    Hi gary,

    I have another trader friend who also believes (like you) that Gold is the only bull market left..

    However, he believes that the intermediate low put in at 1320 a few weeks back…is that possible? What would need to happen to prove that theory?

    I’m asking because he’s been really great at picking tops and bottoms when it comes to gold. And this is one of the few times when you two disagree.

  143. Gary

    Nike,
    I doubt that was an intermediate low. It was too early and only lasted 6 days.

    Intermediate cycle lows usually run an entire daily cycle of 3-4 weeks minimum.

    They have to last long enough to correct extreme sentiment. 6 days just isn’t long enough.

  144. Nick

    Gary / DJ / Wes and others:

    Fasinating discussion on trading / investing / timing.

    Quick question to everyone: Do you guys consider after tax returns?

    Gary,

    Will a person just holding for the next several years in general not make better after tax returns than you? Of course, weathering a D wave will be scary, but say with a $10K odd account, will not an after tax % return be comparable or better than your timings? (Which have been fantastic lately, and hopefully will continue well into the future!!

    Have a wonderful time in Maui to all those making the trip!

  145. Gary

    Avoiding a D-wave should still hugely outperform even after the increased tax liabilities.

    D-waves are nasty critters that we want to avoid if at all possible.

  146. Razvan

    its too early to be discussing returns for the year since we still have a few weeks left. Once the year is over then we can come back to compare our results.

  147. RA

    Gary,

    You suggested stop levels triggered at swing high for gold. But since cycles are better for spottiing bottoms than tops, should we not use a swing low in the dollar to trigger the stops? If so, could we then use a swing low in UUP to trigger the stops?

  148. Gary

    First off one would use a swing in the dollar not UUP. That is an ETF designed to track the dollar.

    Second using a swing low in the dollar assumes that gold will top exactly the same time the dollar bottoms. Not an assumption I’m willing to make.

    The stop on gold isn’t there to spot a bottom, just to protect against riding an intermediate correction.

  149. RA

    Gary,

    Yes I did make the assumption that dollar bottom = gold top. So I was looking for dollar bottom. But I hear you.

    Also, GLD is an ETF that tracks gold and yet we can use it to trigger stops. Are you saying that GLD tracks gold better than UUP tracks the dollar?

  150. Gary

    Yep that’s what I’m saying. We can figure out what price on GLD represents $1348 pretty close by where it was when gold hit $1348 last week.

    However a swing low in UUP doesn’t necessarily mean a swing low in the dollar.

  151. alysomji

    ‘Sometime in the next 2-8 days we should get a swing low in the dollar’

    Gary, can you please tell me how you come up with 2-8 days? Isn’t the dollar daily cycle normally 20-23 days?

    Today we’re on day 7, and the last daily cycle ran short.

    Thanks.

  152. John

    The notion of being in cash does have some appeal….

    The VIX is now back within it’s support band [… could go a bit lower – or even penetrate support], and so is gold:silver.

    China could be entering the area where either hyperinflation or tightening monetary flow is required. (A large portion of the chinese population is starting to feel the pinch of inflation.)
    The latter would effect industrial metals and have a knock-on effect in the global market.

    So sometime soon there might be a sharpish correction

    My gut feeling FWIW is that it won’t happen yet.

    Gold in euro’s has v recently broken out to the upside – which, one would expect, to produce a higher gold price all round.

    (Usually when this happens, gold in USD also rallies.)

  153. pimaCanyon

    Gary,

    Do you have a price target, either in the dollar or in gold, where you will start reducing your position size down to core in order to ride out the intermediate correction? Or will you just look for climactic volume in both and/or SoS/BoW in both?

    Thanks!

  154. John

    Interesting commentary here from someone in the know:

    “yesterday around noon when FEB gold was close to kissing $1400 a modest seller of 1000 just out- of-the-money calls (30 Delta) showed up in the pits. The locals bought the contract and sold ~300 futures against it to hedge…this languid positioning pushed the FEB price down 2 bucks, triggered stops, and suddenly gold is down $7 from the day high on minimal volume and everyone thinks the sellers are still in control. Well, I have news for you buster, they’re not. Where are we then? The most pertinent observation is that open interest as of the close Wednesday at ~594,000 actually came in 1% on a day of decent volume with some robust price spikes. This is not longs selling and in fact gold really would have to be whacked here to trigger concern at some of the obvious chart support. So the conclusion is short covering by some clever clowns who know how to fade a round number event. Today: After ticking the boxes for Friday squaring and hysterical 0830 NFP trading remind yourself that Tricky Trichet and Bambi Bernanke are so pleased you are all in attendance for their perpetual Christmas Party and lining up for the bottomless punch bowl that keeps on giving…stay long and the options remain very cheap volatility-wise.”
    (from biiwii’s blog)

  155. Robert

    A little belated Black Friday?

    9.8% unemployment probably equates to 25% in reality. We’ll see what John Williams comes up with from shadowstats.com.

    We’ll it’s not like it affects many here, if anything we were all betting on this type of scenario being long gold/silver. Now I’m preaching to the choir.

    I actually doubled down TZA at 18.00 from 18.20, and picked up 2x, meaning my average is 18.07 or thereabouts. We’ll see how this one plays out. I don’t see us doing a triple top on the SP if we close red today, which I think odds highly favor.

    GL all. And for those going to Hawaii, good move. It is 12 degrees as I wake up this morning.

  156. Wes

    Even though I had traded into a free put position in the market, I’ve closed it this morning.

    I anticipated the Wednesday rally correctly, but the follow on rally yesterday has me confused. Gary is right when he says the dark side is difficult.

  157. DG

    I believe we are very close. Just shorted SMH and OIL again. Will wait to do more until I see how the day plays out. I do not want to miss this coming drop. Broke even last time. This time…?

  158. Poly

    Gary is calling this cycle perfectly to date and see no reason to risk trying to feel a top.
    The tape feels strong in the face of that horror jobs report and looks like it still wants to stretch its legs.

    If we’re getting ready for an intermediate drop before setting up another big Christmas/winter rally, I would think we still need to pierce through the cyclical bull (Mar-09-Current) S&P high of 1,227 high (maybe 1,030-1035 is enough?)

  159. DG

    Could be, Poly. I always have stops and often have to probe small a few times before catching it. I may be out by the close—we’ll see.

  160. Wes

    DG,

    I’m confused, not bullish. Unless you’re absolutely sure about everything, we’re not on opposite sides. πŸ™‚

  161. alex

    Guys,

    I know its not big to talk charts/tech analysis here, but just an F.Y.I.

    Looking at the 1 yr weekly of SPY or DJIA etc…you can see a large cup/handle. 4 wk handle… volume shows strength to the upside and overbought conditions undone during consolidation(handle phase). MACD is positive and turning up on daily and weekly/ Daily it bounced off the 50sma

    I would wait on shorts…this looks very bullish from tech analysis..I dont know cycles like you, but even DOC said spx looked bullish and he closed his short.

  162. Gary

    FWIW as long as the dollar remains weak it’s going to counter the bad employment report, but we will get an intermediate cycle low. They always come eventually.

    The fact that we got the large SoS numbers at the 1200 level makes the odds very high that the market will go significantly below that level when the correction comes.

    So …a trader could take a short here and probably have a winning trade. However because traders have to use stops those stops can and often do kick one out of a winning trade. Not because you had the wrong direction but because you didn’t get the timing right.

    This is why it’s so much harder to make money trading. You have to get two things right not just one. Direction and timing.

    Those very same stops that keep traders from having to deal with large drawdowns also cause them to lose money even when they are betting in the right direction.

    So all this nonsense about how traders can match or exceed the simple strategy of holding a secular bull market is pure nonsense.

    There will only be a very very few traders that will be able to keep up with Old Turkey in a secular bull and I guarantee you those few are going to have inside information that isn’t available to us normal folk.

  163. TommyD

    Gary,
    The wife wants me to go cut down a Christmas tree today. Is today a no-action, let it run type of day? Or, should I babysit this market???
    Tom

  164. Gary

    I doubt we will get the exhaustion day today in gold. It’s probably going to take a few days for the poor employment numbers to wear off. Until they do the dollar will continue down into the cycle low.

    Then we should see the whole European debt situation come roaring back forcing the dollar to rally hard out of the daily cycle low. that coupled with the bad jobs number should roll the market over into the now due intermediate cycle low.

    we probably don’t need to look to trim until gold makes new highs for the reasons I outlined in the last two reports.

  165. TommyD

    Got it!!!
    Averyone,
    Have a great weekend. People traveling, be safe.

    Don’t get sun burned on that-there beach.

    Peace to all…
    Tom

  166. coolkevs

    Demark – imperfected Dollar Sell setup on the DAILY, needed to exceed Tuesday’s high, but that ain’t gonna happen. Indicates dollar exhaustion not over, so could see a move back up to those highs next week. Also, Dollar is emerging from that WEEKLY Buy window, which muddies things up a bit.
    SPX now recording a DAILY sell signal – good for 12 days – so, the next 2 1/2 weeks. We are already in a WEEKLY sell signal, so we will probably see some turbulence, unless with the bad employment numbers people think QE3 is coming πŸ™‚
    Depew on Minyanville points out, though, that other indices are not on DAILY sells like SPX, and other markets like the German DAX and Nikkei he is very bullish on. Dispersion is good for the bullish case…

  167. OptionsOnly

    Just closed out my Dec. 25 and 29calls on SLV. Nice profit as I got in on 11/17 and 12/2. Thank you, Gary! I’ve been using cycle analysis for a few years now, it works very well. Been a subscriber for about 2 months. Gary’s analysis of the market ranks very high in my toolbox for entering/exiting a position.

  168. DG

    Gary: You really are cute. Now the entirety of the 5% of traders who can beat buy-and-hold are those with inside information (this is demonstrably false). And lightening up as you have done is not trading. And selling everything for a D-wave correction during a secular bull market is not trading. Trading (lightening up, dodging a decline,) is not trading. Timing is what OTHER people do. When you sell winners and buy back cheaper is something else. O.K. I get it. This is the last post from me on this topic. It’s your blog after all. Sorry if I belabored the point.

  169. Nick

    Gary:

    Given that Dec is bullish how about the intermediate drop occuring in 1st or 2nd week in Jan?

    Till then we just go sideways to up in both SPX and Gold and drift lower in $$$?

    Will not an intermediate drop now scare everyone since by definition, intermediate lows are scary? Hence causing spending for Holidays to freeze up?

  170. Gary

    DG,
    I said yesterday that to the extent that I trim into intermediate corrections and try to avoid D-waves I’m a trader.

    But I guarantee that someone with a 1-2% risk control, using stops and attempting to time both up and down swings in every market environment (that’s my definition of a trader. Basically what the average retail person tries to do. What you do as a matter of fact) will not be able to outperform an investor who takes a large position in a bull market and just holds on.

    Let’s just take the hui as an example. Let’s say one managed to get in at the very begining of the bull with the HUI priced at $40. Let’s say that person just bought and forgot. Which means he rode the crash all the way down in 08. That person is now up 13 fold in 10 years. That averages out to 130% per year.

    Tell me do you know anyone at all that is up 1300% by trading using the accepted safe principles required when trading.

    I’m not saying some one couldn’t take a huge levered bet and beat those numbers. That would just be gambling and not pertinent to our discussion.

    But using sound money management and position sizing controls so as not to destroy their account I’d be willing to bet you can’t name one person who can even vaguely come close to those numbers.

    BTW Paulsons huge leveraged short bet on real estate dosen’t count as sound trading principles, neither does Boone Pickens massive pyramiding in energy.

  171. Gary

    Nick,
    You are assuming an intermediate correction happens overnight. They usually take several weeks to unfold. For the first week or two most of the time the top isn’t even obvious.

    We could even have seen the top four weeks ago as the market still hasn’t surpassed the 1227 high. The bottom when it comes will probably be in January or maybe even eraly feb. like it was last year.

  172. greg

    I would like to know if any “traders” can match my buy and hold returns. In the last quarter of 2008 I had 167k in a self managed IRA. Today that total went over 502k. I bought 23 junior mining stocks including, gold, silver and platinum mining shares. ANy traders out there do better than that?

  173. Wes

    Gary,

    I have to side with DG on this matter of trading exceeding results of buy and hold.

    First of all, you do not buy and hold. You buy and sell. That’s actually called trading in some circles.

    Second, you use great leverage. Gold and silver producers are, as you know, highly leveraged to the price of gold. So is AGQ, etc.

    But, beating the “Old Turkey” buy and hold strategy with a true gold instrument like GLD is trivial for a trader.

  174. Gary

    Wes,
    Gold is up almost 500% in the last 10 years. Have you been able to increase your net worth over 500% in the last 10 years?

    I guarantee less than 5% of all traders have been able to even come close to that. So you have to be joking when you say it’s easy to beat a secular bull market by trading.

    It’s not what you know that gets you in trouble, it’s what you think you know that just ain’t so.

  175. Nick

    Cool…Thanks Gary.

    Wes / DG,

    Maybe we all (and even Gary) can agree he is

    – Trader Gary as far as timing goes with cycles.

    – Investor Gary as far as wiggles, chart patterns go!

  176. Gary

    Nick,
    I think you hit the nail on the head. I do try to time the large intermediate swings to some extent. This is definitely trader behavior.

    What I don’t do is avoid risk. I welcome it, because I believe the bull will correct my timing errors. So I don’t take small losses just because the market didn’t do what I wanted it to do, WHEN I wanted it to do it.

  177. Wes

    Gary,

    There was no bull market in gold to buy 10 years ago. It didn’t exist. It’s simply unrealistic to take the lowest price something has traded for in the past, compare it to today’s price and claim everybody missed the bull market.

    There was no bull market at that low price.

    If trading didn’t beat buy and hold, then you wouldn’t trade.

    I rest my case.

  178. David Kafrick

    Gary,

    You are so wrong.

    Saying that guys like Paul Tudor Jones, Ed Seykota, Larry Hite, George Soros, Bruce Kovner, Jim Simmons have astounding long term results simply because they have inside information is simply absurd. First of all, all these guys made much more money (percentage wise) when they were managing smaller amounts of money than when they became huge and powerful hedge fund managers. And while we are on the topic of inside information, do you think that Buffett (one of your examples about how investing is better than trading) doesn´t have access to inside information? He has more access to inside information than any of the other traders I mentioned. So I don´t really know how the inside information argument can be an argument at all.

    Warren Buffett, who is considered the greatest investor of all time, has a record of returning approximately 30% a year since he started. That is not even close to what the top traders make, not even close.

    And honestly, what you and others are trying to do here (riding the gold bull market) is a form of trading called trend trading. Traders like Michael Marcus, Ed Seykota and Bill Eckhardt made a fortune doing the same thing during the 70´s commodities bull market. So I don´t know why you keep attacking trading when you are trading. It´s just that you are a position trader and not a swing trader.

    Anyway, I will not argue about this anymore, as this is not the point of your blog.

  179. Onlooker

    LOL, I’ll second that Poly!

    This debate seems to have reached the point where the sides just won’t change each other’s minds.

    Why don’t we debate inflation/deflation instead.

    Or religion. πŸ˜‰

  180. Avann

    Trader or Investor? I’m neither … I think we’re all just gamblers … some like to place large money on a sure thing while other like to place small money on the long shot but …

    Can someone enlighten me … how long does a trader, on average, hold any single trade?

  181. Natanarchist

    I agree completely that we all buy and sell, therefore trade. So yes, we are all traders. Some folks trade the daily wiggles. Others, and I am in this group, who do a more old turkey approach trade the larger waves on the chart if you will.

    I have to side with Gary on the following point. For the average joe/jane, who doesn’t have the time or desire, or other interest in the daily wiggles, in whatever they trade, the old turkey approach is probably superior. and the reason is, these folks are not professionals. Dg, Wes, and others who trade regularly I would classify as Professionals. And I don’t mean professional because you have some license from the Central Screwtinizer, but based on the years of experience you have been in the game on a DAILY basis. That is a huge difference.

    I think Gary is making the point that folks like me, can’t just jump into a daily game against professionals and expect to win.

    I don’t think that diminishes the daily trader or professional, like Dg and Wes.

    I took off my leveraged silver couple weeks back (so I was 100% invested) and today I took another 25% off. These were from summer at 18.15 My wife is very happy but she still won’t let me jump on a flight to Hawaii. I will have to wait until next year. Enjoy the beach you lucky smt’s.

  182. Gary

    Wes,
    The gold bull started at the end of 2000.

    But let’s just say it took you a couple of years to spot it. I saw it in 03. Since then gold is up 250%.

    Have you increased your net worth 250% in the last 7 years?

    I would be willing to again bet that less than 5% of all traders using standard trading practices have even come close to matching that return.

    My point, that I continue to stress, isn’t that one can or can’t make money trading. My point is that for the vast majority of people they will underperform a simple Old Turkey approach by trying to trade. (most will lose money trading)

    This especially applies as we move deep into the second phase of the gold bull and when we get to the third and final bubble phase lookout above.

    The traders seem to think that they can outperform us investors and it simply isn’t true. A strict trader is never going to outperform an investor riding a secular bull. A gambler might, but a true trader won’t even come close.

    I think I’ve learned enough over the years about the gold market that I can blend a bit of a trader approach to the Old turkey system and avoid at least part of the major drawdowns and improve returns a bit over a strict Old turkey strategy.

    That is the extent of my trading practices.

    But to insist that traders will crush an investor is just not true. A very very few might be able to match but the vast majority will underperform or lose money trying to trade.

  183. MLMT

    Here comes Gary’s IT top in Gold. Bloodbath right around the corner… USD dipped below 80 and should be back above 80 by Monday’s open… Nice fake out for dollar bears.

  184. alex

    Leo

    That was the buy signal ,wasnt it? Dollar must be going to 78 , and gold to break above 1424 ahah , that was funny (but true).

  185. Robert

    Sounds like a lot of people here are jealous of Gary’s ability to just sit patiently and ride this bull. Many here got out 100% recently and we’re still pushing higher trying to argue why our methodology was better than Gary’s although his is proving to have the better results.

    Aren’t we all riding the same ship here?

    Group hug?

    lol.

    Chill out until the next intermediate gold low and then we can all get together again and sing Kumbaya.

    Gotta run, going up north to go snowmobiling in all this fresh powder we’ve gotten recently. And no I am not a hick. Cya. PS. I’m long short here (I didn’t get stopped out, and yes I have big balls to pull through with this trade).

  186. alex

    Guys,

    I love the trader/investor debate , but I will say this…

    When gold goes parabolic ( the way OIL did on it path to $140.00 , fair to say NO TRADER will beat buy and hold. When the bul runs that parabolic arc , you get out ( or worse , go short) and it never lets you back on.

  187. MLMT

    Leo dude

    I have been here twice – once when gold was around 1400. I said now is not the time to buy. You all made fun of me. Guess what happened 2 days later.

    I forget what I said the next time around. Since you are the one who is keeping track of my wrong calls – why dont YOU tell me.

    Go ahead and buy buy buy buy… Lets talk on Tuesday.

  188. alex

    so with my last post in mind…maybe the trader beat buy and hold 2002 to 2005 , then buy and hold catches up…

    but in 2008…buy and hold in HUI went from 508 to 150!!! YIKES

    but as parabolic arc comes about….he will win in the end

  189. DG

    David Kafrick: Yep. Exactly. Good knowledgeable post.

    Alex: No way I am selling any gold once the run gets started. Only a fool trades because he gets itchy. I will move from tons to a-little-less-than- tons. That’s it.

    Avann: I have no set holding time. It depends on conditions. I bought QQQQ at the bottom in 2003 and held for over a year. Was never in the hole and just rode it until I got bearish. depends on lots of factors. I assume this is true for anyone but a skimmer (who is in for a few minutes to make a few cents on 100,000 shares)

  190. David Kafrick

    Who said that a trader cannot buy and hold something? People, you are confusing trading with daytrading or extremely short term trading. Somehow most of you seem to think that trading is about selling whenever you have a small profit. Maybe this whole discussion has more to do with semantics that anything else. Also, trading has nothing to do with stop loss. Maybe the most important difference between trading and investing is that a trader is more of a market timer who makes decision based on charts, prices, and other technical things. An investor is someone who depends on fundamental analysis to come up with his decisions.

  191. Gary

    I think what we have is two different defintions of a trader.

    I consider a trader someone who jumps in and out of positions. Wes your trades in and out of QLD qualify as what I’m talking about.

    I don’t think anyone using that kind of strategy will even come close to Old Turkey.

    A trend follower like Seykota isn’t my defintion of a trader. That in my opinion is more of an Old turkey approach and as you have probably noticed all the returns you’ve quoted were made during the last secular bull market. So I would call those guys more Old Turkeys than traders.

    Steve Cohen was an exception in that he used a very short term trading system but if I recall he junked that system several years ago.

  192. alex

    D.K.
    I agree with that statement , since I consider myself a trader, but in a lesser degree. I usually hold my trades for 2,3 , even 6 weeks or more, unless I am wrong , and it turns on me.

    I also rarely short the market-and honestly, have been doing very well , mostly with equities in gold/silver/coal,steel, etc

    Its timing and I dont catch al the bottoms and tops, but I get a lot of the meat of a move,avoid drawdown , and I just dont short ( ocassional sds or dxd , etc.

  193. DG

    David: Gary has his own way of using the language He calls “charts” “technicals” even though cycles and sentiment are technical and no one else used the word “technical” the way he does. I am seeing that he also has his own definition of “trader” as well. You definition is what is commonly used, but is not the one he uses. Thanks for clarifying.

  194. Steven

    Gary,

    How severe do you expect this intermediate decline to be? Any projections / predictions based on past experience or current thoughts? Many thanks.

    Steven

  195. Wes

    Gary,

    I’m only half kidding when I ask how sure you are that we didn’t see the intermediate cycle low in the stock market (and maybe even gold) on 11/16 ?

  196. greg

    Thanks RQ! I have been trading/investing for whole adult life..I am 52. I used to day trade in the 90s and probably averaged 20-30%. But I felt the panic in 2008 provided a once in a lifetime change to buy cheap and just hang on for a killer profit. So far it looks like I was right :)…I have a meeting with a money manager that manages over 400M today. He may want me to manage a piece of it. I’d love to do it for a living.

  197. Gary

    I think Greg defined cheap as miners irrationally being sold for pennies on the dollar when the product they produce is still selling at over $700/$800 dollars.

  198. alex

    you can almost see this playing out txtbook…

    gold retest of highs monday, dollar sinks to 78 (retest downtrendline that it broke up from), everyone bearish on dollar , everyone wants gold…tuesday…dollar rally , gold corection begins.

    gld volume today / gdx volume retesting that flash high on half the volume…thats where I sell.

  199. greg

    oa92000,
    When I say cheap, I was only talking about jr. mining shares that were pounded into the ground in 2008. There was REAL blood in the streets. Hell, I remember wondering if our financial system was even going to survive. Here is a link to some posts I did awhile back with some charts of jr. mining stocks and what I thought they would do. I think they’re still playing out for the most part… http://fundomax.typepad.com/fundomax/

  200. alex

    hmmm , TRUE

    the spx and djia looks like it wants to break upward to me (with volume increasing) , but I figured the dollar would land 78 and find support.

    Quite possible it takes a few days to make the swing and bounce around down there.

  201. Poly

    Greg. Congrats, sincerely.

    If you were able to sink in 6 figures into Junior miners at the VERY bottom of that financial crisis, then you either must have a fair few million to play with all solid brass balls the size of the golf balls.

  202. greg

    Poly, (lol)
    No I didn’t have a few million or even one. I went all in with everything I had because I saw the money made in precious metals in the late 70s gold rush and was pretty sure it was going to happen again. Besides, if the financial system was going to implode what good was my money going to be worth anyway? πŸ™‚

  203. alysomji

    For those looking for targets: I think it’s safe to say that once a top is made in the next several days, the weekly cycle decline will take gold under $1300 but not below $1250.

    Hard to get more specific than that.

    This is based on looking at past weekly cycle declines.

  204. Jayhawk91

    Gary-

    Daily and the weekly close on gold is all time high. (The 1424 was printed intraday and reversed)

    Same deal with the HUI. All time weekly highs.

  205. Leo

    NikeBoy,

    Enough Cramer bashing. The guy is an entertainer and prone to histrionics but he is not stupid. He made me a lot of money in 2003-7. And he has been pushing miners for a while now. Specifically, he recommended AEM and NG and both did splendidly.

  206. Gary

    Yes Cramer has been bullish on Gold for a long time. He’s not by any means a contrary indicator and if you tried to fade him you would have lost a huge sum of money.

  207. Leo

    Gary,

    If I am not mistaken, S&P is on the 12th day of the daily cycle. Unless you anticipate an extremely left translated cycle, this baby should have at least another 2 weeks to go before topping out, right?

  208. Poly

    Gary,

    Do you see this all unfolding similar to the Aug 2007 through to March/April 2008 run?

    The similarity to date are rather eerie!

  209. Gary

    Poly,
    No this C-wave has been completely different. That one unfolded as a two leg T-1 pattern. This is probably going to be a three leg pattern.

  210. driver1

    Just a point on Cramer’s hedge fund: He got into some serious trouble with his performance and his wife, nicknamed the trading queen, saved him.

  211. Gary

    Leo,
    I do expect this to be a left translated cycle. I expect it to top just as soon as the dollar bottoms, which could be any day now as today marked the 21st day of the dollar cycle.

  212. Leo

    Driver1,

    If I had a doughnut for every time Cramer acknowledges his debt to his wife AKA “the goddess of trading” I would explode.

    But do you know a trader who NEVER had a bad spell?

  213. Bede

    Hey Gary,

    Any chance you could make the page change at the TOP of the page live?

    «Oldest ‹Older 1 – 200 of 330 Newer› Newest»

  214. James

    DG, I was surprised at your comment that the blog is live for you. I have always had to go through a manual refresh process, then scroll down to the bottom of the blog for the latest post(s). Is there some way to make it refresh automatically, with the newest post at the top of the page?

  215. Bede

    DG,

    I have to scroll to the page change at the bottom of the list to move to the next page. I thought perhaps the Gary had intended to make it easy to move to the next page from the top, but it’s not live on my computer.

  216. DG

    Bede:For me there’s a place at the top to click that says “newer-newest.” That does need to be clicked but it is live. I don’t need to go down to the bottom of the page to click on the “newer-newest” link down there. I use Safari on a Mac (I live in the Silicon valley, after all, so home town loyalty!)

    James: I do what you do; that is scroll down to see the newest post. I believe Bede was asking a different question.

  217. Bede

    DG:

    This seems odd to me. Why should it be live/not live depending on OS or locale?

    I use Firefox on a PC (I live in the South Dakota, so no home town loyalty for me!)

  218. John

    Are you referring just to the ‘newer/newest’ function, DG, or the RSS facility?

    I had a look at RSS but couldn’t really get my head around it.

    What I was looking for was a way to get the page to automatically update itself whenever someone posts a comment.

    Safari/Mac

  219. Onlooker

    I just subscribe (i.e. check the box for: Email follow-up comments…) and read the comments in the emails. It works great and you don’t have to keep checking back to the blog post, etc.

  220. Redwine

    Interesting fact:

    You can legally board a commercial airliner in the U.S., for international travel, with 199 1 oz. American Gold Eagle coins without having to declare more than $10,000. The coins are legal tender with a face value of $50 each.

  221. DG

    I am only saying the link at the top works (is “live”). You seemed to imply that the top link didn’t work and that you had to scroll to the bottom to click “newer/newest” there. I do not use RSS and the blog does not update itself.

  222. driver1

    I don’t want to mess w/ email so I just leave the comment section up all the time and refresh it.

    What I’d like to see is something like the Disqus format where you can choose for the new comments to load at the top of the screen instead of having to scroll down to the bottom each time to check for new comments.

  223. Otis

    As far as updating comments on the blog, I find that if I am reading the last comment at the bottom and hit the refresh button in Safari, the page reloads with new comments and I am still at the same spot in the comment section (no need to scroll down). Give it a try rather than hitting “Newer Newest”.

  224. fubsy_cooter

    Well, we haven’t hit new highs yet, but we are at new closing highs on GLD, SLV, GDX, GDXJ, SIL and SLW, and probably more.

    Should be an interesting week. Gary is right, its going to be hard to sell into strength. But I’ve got my strategy laid out, and I will be at 45% invested after selling for the intermediate bottom. So, even if the metals keep going up, which I see as a possibility due to the heavy short interest and covering that may occur, I’ll still be riding.

    Thanks for the practical guidance Gary.

  225. Natanarchist

    “Blogger Redwine said…

    Interesting fact:

    You can legally board a commercial airliner in the U.S., for international travel, with 199 1 oz. American Gold Eagle coins without having to declare more than $10,000. The coins are legal tender with a face value of $50 each.”

    That may be true, that you can board a commercial plane in the US for international travel with the above mentioned coins. What you don’t know is what happens at the other end. I guarantee that if you land in Canada and they see those coins you will not be allowed to enter. They will not value the coins at face value. I suspect that may be true for many other countries. And it is true in the reverse. If you were to fly into the US with gold coins produced in another country, say maple Leafs or Krugs, that at face value are under 10K, customs will not let you enter with them. They will not be recognized as legal tender, therefore treated as a commodity/collectible and market value. I would be very careful trying this strategy.

  226. driver1

    Arun,

    I’ve been using that on my charts pages but decided I didn’t want to use it on this blog as it might keep my computer too “busy.” I just note the time that the last post shows and then refresh so then I can go back to the last post I’ve read.

  227. Steven

    Gary (or anyone else with cycle theory knowledge as Gary may be sitting with his Mai Tai right now),

    I understand we are in the normal timing band for an intermediate decline in gold. However, we are also in a very bullish time-frame for PMs. How can we tell if perhaps this will be a stretched cycle. Some folks (Sinclair, Ben Davies and others) are calling for a year-end rally in gold that could be $1600-$1800 (and double that percentage for silver). Very tough call here. I tend to side with Gary because, well, he has been beyond accurate on his medium-term calls such as the July bottom. But can’t he be right that we go into an intermediate decline but it happens in 3-4 weeks after gold goes much higher. What should one look for to determine if this will be a stretched cycle and does anyone think this is a likely event? Lots riding on this call here. Thanks in advance

  228. Razvan

    I think about that scenario also but i have made enough money for this year that i want to protect in case we have another spike like the one a few weeks ago. I closed my positions a bit early on Friday but I will get back in today to try to grab a little more profit before the rally tops.

  229. John

    This I found puzzling:
    I have held some covered warrants in gold [$1300 exp June 2011 for some months now], and on Friday when gold was up they fell by 53%.

    What on earth could be going on there??!
    Good time to buy more, at least.

    It did occur to me that someone big sold them knowing that Friday was a top…. πŸ™

  230. alex

    Stephen,

    I had the same thought and have not sold out of my gold/silver positions (YET).
    If NOV 16 represented a cycle low..we are only on day 12 i think..and recent surges in price as the dollar pulls back and tries to find its low made me feel that Gold could run up another $100+ or so in a week (day 17), then move down.
    Also drawing a trenline from feb ’09 high to nov ’09 highs…leads to a high of around 1500 and would fit nicely with the idea of a stretched cycle…

    I also read Jim Sinclair and James Turk saying if you lose your position now, you could miss huge gains in a parabolic move.

    I have seen charts morph , and cycles stretch..and will stay in until I’m kicked out πŸ™‚ (no leverage), and so far my account is up quite a bit from the last 2 days alone.

    Gary is old turkey and you have to respect how much ACCUMULATION he has attained riding this from Aug with surprises definitely being to the upside thus far!

  231. alex

    by the way… DISCLAIMER..I am limited in my cycle knowledge!! I use different methods-recently finding out about cycles from reading Garys articles.

  232. Steven

    Thanks Alex for the response. It is a very confusing time right now. We could see a significant decline or a significant run-up so the stakes are high on both sides. I appreciate your response and would also love to hear what Doc thinks. Ben Davies has also called the move in silver very accurately and his price and time predictions have been uncanny. He thinks we can run-up to 1600-1800 by year end in gold and cubed for silver. Here is his recent comments on the King World blog:

    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/12/3_Ben_Davies_-_Massive_Short_Squeeze_at_Hand_in_Gold_Market.html

  233. alex

    Steven (sorry I called you Stephen)

    I read that link and I respect those guys ,so that s why I havent gotten out of my gold stocks at this point.I agree with you that we are right in the middle of a decent move, but up ..or ..down??

    just as an added sidepoint for when the decline comes…I’ve noticed if you put gold on a 2 yr chart…each major decline goes right to the 150sma…(check it out)..so if we start the intermediate down…I will watch and when gold hits near there, I will begin buying.

    funny thing is…the 150sma is a little over $100.00 down , the predicted move up could be a little over $100+…so its as you said, could go significant either way.

    this blog has a lot of thinking minds and various ideas…so along with Garys resolve and cycle knowledge, I weigh everybodys thoughts into’where we are in time” and draw my conclusions from that.

    but thank you Gary for this blog too.

  234. fubsy_cooter

    Anyone seen this from Zero Hedge?
    I know most of us are aware of JPM’s short interest in PM’s, and the potential fallout/stratospheric rise in Silver/Gold when they get squeezed.

    This video, as well as KWN guests are presenting the move as imminent. The video also claims the SLV uses JPM as its clearinghouse. That sounds like a potential for counter party risk when the silver short blows up in JPM’s face. They may not be able to meet their obligations. What happens to entities that are cleared through JPM if this occurs?

    Interesting times. I’m sensing a triple digit up day in gold. I also think it will be followed by triple digit down days. I’d love to hear opinions regarding the risk of JPM’s imbalances in the PM markets.

    http://www.zerohedge.com/article/goldman-sack-blows-whistle-jp-morgue-silver-manipulation-scheme

    Mitch

    December 5, 2010 3:15 PM

  235. Steven

    Interesting times in silver and the video posted on Zero Hedge. What are people’s thoughts on SLV if somehow there is a default. More specifically, I would assume the paper price could collapse but the physical price skyrocket or maybe both go up. And more specifically, what would happen to AGQ in this scenario?

  236. Steven

    John,

    Gold volatility has been falling and quite low recently. Very odd behavior imo and this is another reason I think it is likely we see a big move in one direction. The big question is what direction??? πŸ™‚

Comments are closed.