SIGNS ARE STARTING TO FALL INTO PLACE

If gold closes positive today it will be moving higher at a 76% clip.

Today will mark the 14th day of the current daily cycle. We will soon enter the timing band for the next cycle low. The dollar is now deep into the timing band for a cycle low and could bottom sometime this week.

Sentiment is starting to get frothy. Traders are starting to find reasons for why gold and silver will just continue higher indefinitely. (JPM short squeeze)

All signs that an intermediate top is approaching. Trust me we will get a profit taking event. They come like clockwork about every 20-25 weeks.

I went over in the weekend report what to look for to spot a potential top.

Stay on your toes here folks!

329 thoughts on “SIGNS ARE STARTING TO FALL INTO PLACE

  1. Patrick

    What do you think the odds are the cycle low will manifest in a shallow and mostly sideways manner before giving us another leg in January prior to an IT correction?

  2. v

    Gary,

    We havent seen any more SOS days after the one at 1200 levels last week. Don’t you think we should see a few more SOS days in stocks.

    V

  3. Gary

    Pat,
    Profit taking events of an intermediate degree have to create enough fear to clean bullish sentiment. That doesn’t occur with a weak sideways move.

    V,
    We don’t have to see another SoS day. The one we got was large. I think it’s safe to say we’ve probably lost the big money support under this market. Once the emotional retail traders are all in we will probably see a sizable correction. Certainly well below the 1200 level, which is about where the big boys exited.

  4. sophia

    Gary,

    a last question: usually, Dec is a good month for stocks…but we are over extended on the cycle, so do you think in view of your experience that the market will continue to rally until January 1st, or could trouble show up earlier?

  5. Gary

    Sophia,
    I really have no idea. But I tend to think we will probably top sooner than that as the dollar is now very deep in the daily cycle.

  6. Mary

    Gary,
    Are you saying we might see a $200 plus drop in gold? That’s different than your original 11/28 weekend report. BTW, good to see you’re still alert and not suffering from margarita hangovers.

  7. Gary

    Mary,
    I doubt we would see a $200 pooint correction, but $100-$125 is probably likely.

    I’m suffering more from sunburn than alcohol at this point.

    How’s the temps in DC BTW?

  8. Gary

    Poly,
    50% is my core but it will be different for different people.

    It should be small enough that you can weather an intermediate correction without freaking out and selling at the bottom, but large enough that you won’t be pulling your hair out if gold just keeps running.

  9. v

    Gary,

    So the markets can sell off any time with any excuse. Is it ok to short equities at 1230-40 levels and just wait patiently till next month for covering at below 1200 level.

    V

  10. alex

    Doc wrote

    All signs that an intermediate top is approaching. Trust me we will get a profit taking event. They come like clockwork about every 20-25 weeks.

    arent we only on week 19 right now? I too believe the intermediate top will come , but even another day or two like this makes for huge gains. (NO LEVERAGE OF COURSE)-but i still have a large position and the account is daily % up is unreal. BUT NOW stocks are gettng too high above 20sma for it to last too. starting to peel off some profits

  11. Strellsy

    Gary,

    I have to say thanks for your calm and reasoned reports that I get daily. they are a real help in keeping me disciplined and focused on the long-term.

    It’s not easy sitting here with cash on the sidelines while things continue to rally, but it is made a lot easier by your rational explanation of where to find the next buying opportunity.

    I am about 80% invested at the moment and am starting to gradually scale out of some positions that are historically more volatile. I don’t want to be heavily in these when the top comes as they tend to crash hard.

    I am interested in how you will reduce your core position to 50%, will it be a reduction across all your holdings to maintain the balance. Or are there some instruments that you prefer for your core holdings.

    For example I am 50% in a senior gold producers ETF and 30% in junior companies. So I guess I am wondering whether to reduce evenly or to sell the juniors before the correction.

  12. Mary

    Ugh, you had to remind me about the temperature. While you’re running around nearly naked, we’ve got an Arctic blast from Canada that has me parked in front of a fireplace trying to defrost. I’m paying dearly for not attending! Thanks for asking though.

  13. Fung

    Gary,

    I am all in cash now. Exited too early last week! I guess I have to sit tight and wait for the next opportunity to get back in.

    F

  14. DG

    Wes: I agree. My stuff is showing a near-record level of stocks seriously extended, and I am playing the short side small—which is probably a good sign because emotionally it feels like they will never go down!

  15. Wes

    DG,

    I’ll not fight the rally. I have a tight stop on this, and it’s a cheap price (.23) to begin with, so the only way this can become real money is for us to collapse from here.

    A real lottery ticket.

  16. fubsy_cooter

    I sold partial positions at the open. My greed was hitting that level of gut buzz. At core now.

    45% invested in PMs. Will ride until an intermediate correction. What a ride since July!

  17. MLMT

    GDX massive reversal right at open – on very heavy volume. Looks like intermediate top is right here, just like Gary had spoken about it.

  18. fubsy_cooter

    @MLMT
    If this is the exact intermediate top then I’ll be a happy guy. I still think there’s a bit more froth coming. But was ready to get lighter. Up 50% on the year. Thanks Gary! Drink a Pina Colada for me. And get some sunscreen.

  19. Gary

    Open’s and intraday can be misleading. Wait till the close and see if the reversal holds.

    We are getting close though. So if close is good enugh for you, you could start trimming.

  20. Onlooker

    Well that shook some folks out and instilled a bit of fear, no doubt. Now what, that’s the key (at the risk of stating the obvious). If we can regain 30.5 & 1425 and hold there a bit, we’re off to the races again, for a short while, at least.

    Ought to get some of those who sold the panic to chase a bit. Still think we could see a real panic spike up before the int high is in, but that’s just a guess.

  21. TommyD

    Yesterday I read somewhere, maybe zero hedge, an uplifting statement on PMs I would like to share:

    There are thousands with billions waiting to get in.

  22. MLMT

    Looks like PMs are stabilizing.. and may gain back the lost ground for the day…. Gold needs to climb above 1418 level (from where we got that big spike) and GDX needs to take out early Nov highs.

  23. Leo

    It may indeed be the intermediate top but the markets are rarely so accommodating. It seems that everyone by now is expecting a serious whack in PMs which makes me wonder whether we are going to get one.

    I did sell another 5% into the open so now I am 85% invested but my reasoning for that was not timing, just discipline. Every time I have a 100% gain in 6 months I trim a bit. So I sold some EXK and NGD and AGQ but I doubt this is the intermediate top yet.

  24. TZ (7006)

    Significant number of conditions this morning that a top was made at the open.

    I’m in agreement with gary saying signs are close, but I guess I’m saying I think it actually has already happened and that would be my bet if I had leverage to sell.

    (I have no bet on it though. I have minimal core looking for INT low).

  25. Poly

    I got back into my core and happy about it, was an unbelievable run from the summer. Gold $1,432, well above the previous highs and already off some $20. That qualifies as close enough to a Gary top in my book.

  26. Nick

    Gary:

    Thanks for the updates while on vacation.

    One more strike against Bernanke – stretching cycles and messing up Gary’s vacation! πŸ™‚

    Does look like we have a top in.

  27. TZ (7006)

    I find gary’s thoughts to calmly wait to see the close valid and a full reversal back up after the volume gaps this morning would be more than interesting.

    Nobody is more clearly aware than me last few months that bull mkts surprise to the upside πŸ™‚

  28. pimaCanyon

    FWIW: GLD is not showing up (yet) on the BoW list. I would think that if today’s high is NOT the IT top, then would should see at least a little BoW at today’s low, especially considering that the low came in exactly on the lower rising channel line, a perfect place for a bounce higher. If today’s high is indeed the IT top, then after this bounce, we would expect prices to break thru the lower channel line.

    GDX, GDXJ, SIL, and SLV also not showing on BoW list. However, SLW –IS– on the list. We’ll see what the list looks like at EOD.

    Caveat: Gary has said that the only stock/etf that gives reliable signals on the SoS/BoW lists is SPY, so use GLD and the other PM etf’s at your own discretion.

  29. pimaCanyon

    Volume in GLD and gold futures does not look larger than normal. I would expect to see climactic volume (larger than normal) if this were a normal IT top.

    However, we did get high volume around the 11/9 reversal, and MLMT has said that a retest of that high should come on low volume if that retest is going to fail. He said that high volume would indicate the market was going to punch thru that earlier high and make new highs. So far, we are on track for the retest and failure (that is, we go lower from here), but we’ll need to see what the remainder of the day brings.

  30. pimaCanyon

    GDX now showing up on BoW list, near the top. SLW still on the list, but dollar value has gone down. Still no GLD, SLV, GDXJ, or SIL on the list.

  31. MLMT

    You have BoW and SoS data available for past dates. See where GLD shows up on the day of or the day before the intermediate top was hit… I haven’t looked myself.. Just a suggestion.

  32. pimaCanyon

    MLMT,

    I’m thinking that if we do indeed have an IT top here, then we shouldn’t see much BoW action on gold, silver, or miners. We would expect to see that happen near or at the IT bottom which according to Gary would be at least a couple weeks out.

    If we start seeing GLD and other related etf’s on the BoW list, then that MIGHT be an indication that the top is not in because the big boys are still buying.

  33. DG

    I’ve been out doing my consulting thing (I actually have a job!). Not doing much trading. Am lightly short and out of PM’s waiting for the dip. Sorry to miss the last little run-up (I got out at about $1380) but will be back in size soon. Am also wanting to short more stocks but need to see a tape clue that “this is it” (Like Gary has wanted—and now seems to have—for gold).

  34. TZ (7006)

    PIMA,

    >Volume in GLD and gold futures does not look larger than normal. I would expect to see climactic volume (larger than normal) if this were a normal IT top.

    You are looking at DAILY numbers on a chart in the MIDDLE of the day and comparing the bar size to the previous days that show *entire* days.

    If you look intraday like I said at any major security in the sector you will see LARGE volume – well more than the last few weeks – occuring at the gap opens.

  35. TZ (7006)

    PIMA,

    Appology. You referenced GLD and I was using SLW,GDX,GDXJ, etc.

    Yes. GLD is not showing as much dramatic volume in comparison to last few weeks. There is more at the open than normal, but it isn’t blatent like the other stocks.

    I think the excitement was in the stocks and not so much GLD in the last few weeks. It’s sorta like seeing the real estate bubble and saying that property in Iowa doesn’t look that bad – without actually considering vegas, florida, and CA instead.

  36. pimaCanyon

    Starting to look like the real deal here, the IT top. GLD and gold futures have both busted thru their lower channel lines. Silver futures and SLV just now approaching their lower channel lines.

  37. pimaCanyon

    ‘course, there are channels within channels within channels. The first ones to go (the ones getting busted today) are the steeply uptrending ones that have been in place for only the last week or so. Next to go would be the ones in place since the July low. And the really big one is the one going back to the October 2008 low.

  38. ike

    Yes,
    Cashed out the rest of my AGQ’s

    Picked up some HL puts — nothing crazy — Just to have a little skin if this is the IT

  39. pimaCanyon

    This “core position” issue… If we only knew for sure that this was the IT top, we could sell everything and buy back in at lower prices! I hate hanging onto even a small position and watch it lose money every day for the next two or three weeks. But as sure as I sell that position, the market would turn around and head higher, leaving me without any position at all!

  40. MLMT

    The correction that follows a HIGHER HIGH is often more severe than the correction that follows a DOUBLE TOP or a LOWER HIGH. IMO, gold, silver and gdx will all quality for higher high.

    WRT core position – having a core position is the only way to keep the emotion out. It is as important as maintaining stops, taking partial profits or any other position management mantra.

  41. Goldzilla

    pima, the #1 reason I believe in the wisdom of a core position during a bull market is that, unless a huge correction is expected, and it isn’t right now, it’s too easy for a surprise on the upside to cause a panic. With a core position, one can be more patient and still capitalize on unexpected moves (usually to the upside during the bull). Without a core, one ends up being whipsawed and chasing and buying and then selling again at inopportune times. Discipline, is what it brings, to me (grasshopper).

  42. Bede

    MLMT,

    You said, “The correction that follows a HIGHER HIGH is often more severe than the correction that follows a DOUBLE TOP or a LOWER HIGH. IMO, gold, silver and gdx will all quality for higher high.”

    If I read you correctly, you are expecting a more severe correction here because gold, silver and gdx are all correcting from a HIGHER HIGH. Is that right?

  43. David

    The “impending JP Morgan silver short explosion” may be the perfect timing tool for market tops. I saw that care bear video and immediately sold out of all my AGQ.

    You can expect to hear the JPM story repeated by silver newbies every time silver blows off from now on.

    And when your brother-in-law and next-door neighbor start telling you about JP Morgan’s silver short position, you’ll know the PM bull market is finally over.

  44. MLMT

    Bede,

    The reason I point out higher high is… if someone is going to look at past intermediate corrections, then do take into account if those corrections came from a higher high or a lower high or a double top – that’s all.

    I am expecting 1315 to be taken out, but I expect 1260 to hold for now. And I think 1260 WILL hold – only time will tell the truth though.

    IMO, gold will open below 1388 by 9:30am and will not get back above that level for the rest of the intermediate correction.

    So far gold is just 2% from the highs. So little damage is done yet. But holding on in the hopes of selling at the highs is stupid IMO.

    Gary has been warning about intermediate top for a while now. It is finally here and we are correcting from a higher high.

    Also, there will be many fake bottoms that will lull retail into thinking that the bottom is in… If you are tempted to buy, then this ain’t the bottom. Very likely most will be shit scared to buy at the bottom…

  45. pimaCanyon

    MLMT and Godzilla,

    Thanks for your comments re core position.

    Okay, now how about some feedback regarding what to keep in the core? A cross section of GLD, SLV, and miners, or just the PM’s and no miners, or just the miners and no gold or silver?

    Thanks!

  46. Steven

    I know the PMs look like they will continue down from here but didn’t Gary mention that there would still be another bounce once we got this initial leg that could carry prices to even slight higher highs? Did I misunderstand him?

  47. TommyD

    To Our Success, I say,,,

    I’ve trimmed on Gary’s data and comments. I am down to a core position. I am up big since August 1st. I am happy with life like I’ve never felt in quite some time.

    My weight got away from me and even that is down. My marriage is under stress and now I have allowed myself the time, due to Gary, to administer or addressing issues that may remedy the problems life throws our way.

    I am blessed to share with some of you here on this board and I look forward to good times ahead, OR, good direction going forward, with all the issues life presents.

    Together we may help ourselves and grow to help our families and our community.

    God Bless Everyone.
    Tom

  48. Razvan

    TommyD
    like Donald Trump said: it is better to be rich and unhappy then poor and unhappy.
    Keep your head up and lets make some money

  49. Chicken Burrito

    TommyD-

    Nice comments. Great that you are taking the time to work on your marriage, I know first hang it’s tough to make a good marriage last and thrive. My wife and I just went through some excellent counseling and are back in a better place.

    I need the reminder that good gains in gold and silver are no as important as family.

    Blessings to you and everyone else here. Let’s prepare for the next intermediate bottom…2011 could be a spectacular year, but despite Gary’s poo-pooing of the conspiracy types—please stock up on some physical (at least a small amt), food, etc.

  50. LowTax

    Burrito, I believe so. There’s really no such thing as after-hours on gold, it’s a global market. Right now Asia is setting the price.

  51. Quality Stocks

    I do not post here often. But I would like to say kudos to Gary for his great analysis. I told him he was crazy to think GDX would hit new all time highs. I am here to man up and say I was way wrong. You have done a great job. Keep up the good work.

  52. WalterW

    Gary,
    Excellent comments again tonight after today’s sell off.

    There’s one thing I don’t understand, though. If indeed the dollar is heading up right into a bull trap high, at which point it will reverse and start its long overdue big decline (i.e. ONE swing yet to come – a high), then how do you envisage gold first bouncing off a daily low, then making a swing high and going down, and only then to finally bounce off the intermediate low (i.e. THREE swings yet to come – low, high, low)?

    Assuming the single dollar high should line up with the final gold low, how could -prior to that- gold be making both a significant low and high all within the single ongoing dollar uptrend?

    Wouldn’t that argue that on this occasion, gold’s daily and intermediate lows will coincide (hence no gold low nor high prior to its big ultimate low), meaning gold will +not+ shortly bounce up significantly (and of course accordingly not reverse down from +that+ particular bounce-that-wasn’t)?

  53. WalterW

    Gary, Burrito, Lowtax

    B
    > So gold hit’s 1390 after hours and breaks
    > Gary’s swing high target of 1397. Does after
    > hours count for a swing high?

    L
    > Burrito, I believe so. There’s really no such
    > thing as after-hours on gold, it’s a global
    > market.

    G
    > I want to see it on the chart. in order for
    > that to happen it will have to stay below
    > $1397 in the morning.

    From Gary’s Dec 7th:
    > If gold forms a swing high tomorrow by
    > moving below $1397 […]

    Huh? So that means the after hours <$1397
    does not count? I tend to side with B and L
    that it does.

    Now that gold has moved below $1397,
    that +will+ show show up on the chart,
    won’t it? Or am I missing something here?
    Even if it wouldn’t close <$1397, it has
    still traded there anyway, which as far as
    I have understood it, constitutes a swing?

  54. WalterW

    Alex,
    Perhaps I’m doing something wrong, but at bigcharts.com the GCZ10 chart simply stops at Comex closing time. (Apparently Asia doesn’t exist to them…?). No <$1397 gold there, to my eyes.

    Anyway, I use this 24h live chart and <$1397 clearly shows up right there:
    http://www.fxstreet.com/rates-charts/live-charts/

    (Choose XAU/USD for gold or XAG/USD for silver,
    all the way at the bottom of in its popup menu.)

  55. alex

    Walter

    that’s strange..i just went there and tried again and got 1391 as a current reading and it was on the chart too.

    I did try your link and got it tho…thx

    not sure why your bigcharts chart doesn’t work…i get Gold overnight with GCZ10 and DXY for the dollar

  56. DG

    Gary: I have a question about allocation. Since, for example, SIL is a lot more volatile than GDX, it’s hard to know what your risk/exposure is. Do you have any numbers you use to measure as a guesstimate? For example: If GLD is 1, then GDXJ is a 2.5 (times as volatile)? Maybe SIL is 3 X GLD? SLW–? You get the idea. Or am I trying to be too calculating here?

  57. trond56

    If you look at the 4 hour chart, gold has very good support at the 1392 level. It might form a cup and handle on this chart.. Also on the seasonal chart for gold, at 7th of december exactly, it has a sharp drop, but only for 1-2 days, then it continues up. + the euro could be forming the handle of a cup-handle towards the usd.

    Looking at the euro/usd chart instead of the dx have some advantages, since it is the euro everything is about now. The dx index has other ‘noise-interferences’.

    (But maybe wishful thinking, since i’m long..)

  58. WalterW

    Alex – Perhaps it has something to do with bigcharts being part of marketwatch.com. When I enter http://www.bigcharts.com in my browser I automatically get redirected to bigcharts.marketwatch.com. Bigcharts.com as separate website doesn’t seem to exist any more, at least not from where I sit (Europe).

  59. WalterW

    Trond,
    I hadn’t noticed the cup+handle, but once you do I’d say it shows equally well on the daily chart. Not sure if it qualifies though, as symmetrically it looks somewhat out of whack.

    On the other hand, if it is a c+h I’d say the 1392 level (=38.2% Fib) will not hold but instead expect a sharp spike down to 1380 at some point, which is the 50% Fib between the 1329.80 low and 1431.20 high.

    At least that is what happened with the larger Dec 2009 – Jul 2010 c+h, which also ultimately spiked down to 1157, its 50% Fib between 1045 and 1266. Of course right from that spike down the current rally started and never really look back so far…

  60. Gary

    Walter,
    Gold will have a bounce out of its cycle low whether the dollar drops or not. We’ve already seen gold trade in tandem with the dollar. It even dropped down into an intermediate cycle low in July as the dollar was dropping.

    At this point gold is trading on it’s own cycle, with the C-wave being exacerbated by a collapsing dollar.

    Regarding the swing. Whether or not gold has formed a swing in the after market is irrelevant. It will form a swing in the New York market if this is an intermediate correction. When it does it will be my signal to trim.

    DG,
    I’m not sure why you care what the relative volatility is unless you are going to try to trade the bottom with stops.

    I’m not going to stop out of positions. If I’m early then I will just let the bull correct my timing mistake.

    But I think you’ve probably got the ratios pretty close although I think GDXJ is probably closer to 1.7 than 2.5.

  61. WalterW

    Gary,
    Ok, I understand, the swing should be made in NY trading time. I find it a bit peculiar that apparently neither Asian nor European trading qualify for valid swings, but never mind.

    Of course you’re right that if this is an intermediate correction, the swing will ultimately assert itself in all markets. However, I’d personally consider the whole point of a swing to be to serve as both an as-early-as-possible and yet as-reliable-as-possible warning/confirmation, and as such I’d argue it doesn’t really matter when or where it takes place.

    Nevertheless, the question was when/what +you+ considered a swing and your answer is absolutely clear. Thanks!

  62. MLMT

    It is interesting to note that there are so many comments about a higher high coming, this can’t be IT, worst case downside is 138x or 135x. This is what major tops are made of – belief that we can’t dump big.

    The sentiment at bottom (127x IMO) will be like – oh shit we are headed to triple digits or we are headed to 104x or 115x. There will be lot more talk of much lower targets – which will be an indication that the bottom is near/in.

  63. John

    MLMT [elementary??]
    These x figures – I assume they are sentiment levels.
    Can you indicate where I might access them please?
    Thanks

  64. DG

    Thanks, Gary. It wasn’t for stop purposes, but if I think I am long about $300,000 worth of PM’s and it’s all in SLW vs. in GLD (not that I buy GLD), that’s quite a difference in actual exposure. I am not planning on tight stops, which I only use for certain kinds of trading.

  65. Gary

    Onlooker,
    That is how it usually works πŸ™‚

    However it’s too late in the intermediate cycle to press hard on the long side anymore.

    The easy gains have already been made.

  66. Onlooker

    The dollar just might come back down and test the 79.80 area (80.20 on the futures) and give us a bit of bounce here in the PMs. That’s what I’m hoping for to trim some more.

  67. Onlooker

    Looks like that bounce isn’t coming just yet. I sold the rest that I planned to sell when that last little bounce failed at about 1392. Of course, as it turned out, I would have been better off making all my sells at the open. Just figures.

    I’m at about 50% now.

    NOW we can get that big bounce. πŸ™‚

  68. MLMT

    My read says that Friday or possibly though much less likely Thursday is when commodities and equities get taken to the cleaners. Lets see, SPX needs to bounce off 1206 area and close near opening levels for the perfect set up day. China rate hike may provide the trigger Thursday night.

  69. Natanarchist

    Well, unless we get a surprise to the upside, I think I am done for the year. Took profits and now down to core. I feel real good. I want to thank Gary for being a great coach and keeping me focused. guess its twiddle the thumbs time and looking forward to enjoying the Holiday season…damm I wish I was in Maui…

  70. MLMT

    Gold will backtest 1388 in RH (RH = regular hours; NY hours) most likely tomorrow to suck in more buyers and shake out those (if any) who shorted the breach of 1388 level. That will likely be the last chance for longs to unload before we get a 50-60 pt down day on Gold.

  71. MLMT

    IMO don’t even think of buying here… We haven’t yet seen the 5% gold down, 10% gdx down day yet – I am sure it is just around the corner…

  72. DG

    Gary: After two trips to about $1420, you stated you think that we need a third (a second test of that area) out of the coming daily cycle low. How likely is that? I wouldn’t expect it given how stocks trade, but you know a hell of a lot more about gold trading than I. A bounce, yes, but all the way back to $1420 again? Can you expand a bit? (Here or in tonight’s letter). Thanks.

  73. DG

    Just shorted some AAPL at 318. Once everyone thinks a stock is perfect, it easy for it to tank during a mkt decline. Yesterday’s reversal and then breaking yesterday’s low this morning isbearish. But it IS a great company so I am nervous ( a good sign). I posted a few days ago that emotionally I felt like gold was never going to go down again…right at the top. Our own emotions are a great guide as to what the next move is. “”Shorting AAPL—are you nuts?”

  74. Poly

    AGQ dropped from $145 to $110 last month and that wasn’t part of any intermediate decline. I would think $25 silver and below is easily in the cards. That would be AGQ approaching $100.

  75. DG

    oa92000: Don;t trade randomly. The chance of AGQ stopping there for more than a bounce is very small. You’ve been following Gary this long—why buy at the beginning of an intermediate decline? We topped out just yesterday! There will be lots of points on charts that could conceivably mark a stopping point, but they will all fail as gold tanks. Patience and discipline. Go take a walk!

  76. David

    Agq can go to 90 on an intermediate decline, if not lower.

    Think in terms of time, not price. Do not buy agq until January, when Gary gives the word.

  77. Onlooker

    No doubt, silver (and therefore AGQ) is more likely to knife right through the 20 DMA, and possibly the 50. It’s way too early to be buying the dip.

  78. Poly

    The 20DMA of AGQ offered some great points to buy this past few months. But of course that was “the past few” months πŸ™‚

  79. Gary

    We probably have 5-6 weeks before it will be time to buy again. Now is a good time to go on vacation for a while folks.

    DG,
    After the kind of run we’ve had the market is going to try to buy the dip when gold puts in the daily cycle low. I expect gold will at least come close to the highs during that move and it may even make marginal new highs.

    It’s way too deep into the intermediate cycle to get suckered into that trade though.

    So other than maybe playing the 2b reversal for traders there isn’t going to be anything to do for a while.

  80. pimaCanyon

    BC,

    Toby is Gary. He has two sites. The Toby site is a joint venture with a marketing guy which Gary has said has brought him additional customers.

  81. coolkevs

    Prof Depew on Minyanville today shows that, in Demark Theory, a Monthly Sell Setup on Silver has occurred, so 1-4 bars implies January through April probably won’t be much fun for silver traders. Also, next year, a YEARLY Sell setup will record, meaning 2012-2015 will probably be very rough for silver. Depew is bullish silver long-term, but he sees better opportunities elsewhere and does not believe it will outperform stocks as he thinks it will have less to do with currencies and more with industrial uses. He is therefore getting rid of his silver in 2011 that he’s held for 9 years…

  82. Gary

    Ck,
    That’s no the way intermediate cycles work. They dip for one daily cycle usually. Then we should get the final move down into the three year cycle low in the dollar index. That should drive the final leg up in this C-wave.

    Anyone waiting till April will mostly likely miss the largest part of this C-wave. Not the best strategy in my opinion.

  83. Gary

    Steven,
    We will just look for a swing low next week as the most likely bottom.

    I wouldn’t recommend trying to catch that bounce though as it could roll over quickly.

    Which is to say there’s no guarantee gold will test the highs.

    At this point there isn’t going to be anything to do for at least a month.

    Be prepared to be bored for a while.

  84. alex

    Gary

    in previous reports you stated that you feel this C-Wave would have 3 up-legs instead of 2 ( no quote intended). to avoid a d-wave down now to your core position, you must be correct i would imagine…

    I am wondering why you think 3 waves.? is that based solely on the fact that you expect the dollar 3 yr low?

  85. BC

    Thanks for clearing that up. Being a newbie to all this I have enjoyed the great information from everyone and have learned much from Gary on how to navigate this market.

  86. TZ (7006)

    GARY/ALL,

    Stockcharts $GOLD **INCLUDES** 24hr data (based on my examination of the chart compared to other data sources and the FAQ comments at stockcharts.), so it will always end up showing what happened last night “on the chart”, but MUCH MUCH LATER.

    You are making a major mistake thinking/talking like this and using that data.

    The FLAW here is that that chart is updated EOD (end of day) *only* (see “EOD” on chart title) due to stockcharts systems.

    So you are actually making a mistake in a number of ways.

    The lows of last night ARE real and WILL show up on that chart, but only *after* the CLOSE today. Over 12 HOURS later. Welcome to the fast response crew.

    So you have a DOUBLE delay in the feed you are using. The idea of waiting for it to ‘show up’ whenever stockcharts systems kick in is only delaying your response via cheap data and being misinformed about what you are looking at.

    (You could likely get even more info about the nature of the $gold quote by calling them. I haven’t).

  87. TZ (7006)

    If $GOLD did *not* include 24hr data (or close to it) then the chart would have a bunch of gaps and look like GLD which is only US hours. It doesn’t.

    Go compare the charts yourself and also notice the “EOD” on the gold chart.

    The talk of how everybody is executing on the $1397 is messed up.

  88. Onlooker

    DG

    To add to what Gary said (and to reiterate what he has said before, I believe), the fact that this gold daily cycle is shaping up to be right translated makes it quite possible (if not probable) that it will make a new high before the interm cycle fails.

    Of course it’s not a 100% thing, so there’s the risk. And the likelihood of lower prices than present is quite high as we work into an interm low. So the higher odds play is to sell here rather than hope for the big bounce. At least that’s my take on it, and how I’ve played it.

    Although I may attempt to play a bounce out of the daily cycle for a trade (if a good entry is apparent), with a quick sell trigger on the bounce. The downside is that I get stuck with the position that I didn’t plan to carry into the interm low, that the longer term bull will bail me out of.

  89. P. Bateman

    Gary, with all due respect

    Fuck your bullshit cycles

    PM’s are about to BTFO and I am buying the dip

    You should know in parabolic moves cycles get twisted

    L8er

  90. TZ (7006)

    The clear question to pose to stockcharts if anybody cares (which you SHOULD cause this is real money) is to find out:

    1) if $gold is 24hr data or what subset of time thereof (i’m telling you it is by examination, but you should NEVER trust others when your money is at stake. You guys are acting like a bunch of sheep on this whole ‘overnight data’ thing instead of getting the correct answers like your MONEY DEPENDED ON IT…which it does.)

    2) If 24hr data, then where is the CUTOFF between days. It might be midnight; it might be LBMA market, it might be US market.

    Do things right when you need to depend on data. Dont’ argue in the dark.

  91. Gary

    TZ,
    All I care about is seeing a swing on the chart. It will occur if an intermediate decline has started so worrying about the Asian market is kind of a waste of time.

  92. Gary

    P B,
    Wouldn’t it be more civil to just say you were buying here and leave out the rude comment.

    Manners really aren’t that tough.

    BTW cycles absolutely do not get twisted in a parabolic run. We’ve had many C-wave tops and the cycles worked just fine at everyone of them.

  93. TZ (7006)

    DG,

    Kitco shows 24hr data on most of their charts/readings.

    As for whatever “day” high/low you are looking at, *again*, you should CONFIRM and not guess from them how they define a “day”.

    The cutoff could be any of a number of different options. The “day” might be 24hr, US only, LBMA-to-LBMA, etc.

    Don’t guess. Ask THEM. (or don’t use the source if you cant’ determine answer as trustworthy).

    I’m amazed how many people want to make a million, but won’t either actually CALL somebody to answer a critical question or PAY a small amount to get correct data. (Not jabbing at your DG. Just trying to let people understand that people don’t get successful in life by bumping around into walls or cheating from ‘the guy taking the test next to you’ who is probably dumber than they are.)

  94. pimaCanyon

    Don’t know about stockcharts, but TOS charts show daily candles beginning when the stock market closes for the day. The trading that occurs after 16:30 Eastern appears in the next day’s daily candle. That candle shows on the chart after 16:30 on the current day.

    You can also monitor AH trading in both futures and equities when you’re looking at smaller timeframes than the daily.

    So there’s no way you’ll miss the AH action on TOS charts.

  95. TZ (7006)

    GARY,

    The fact is you use $gold on stockcharts for your call and to write your newsletter.

    I’m telling you that the break below $1397 occurred HOURS ago and will magically ‘appear’ on that chart about 4 hours from now for your comments tonight.

    If you intend to take actions based on that chart, then you will be 12hrs behind people who know how the chart is constructed and whether or not the asian data is going to appear on it after 4pm.

    I’m simply highlighting based on my examinination that it includes that data and will show the break you suggest. Having to wait for that long a period of time due to poor data might result in large losses in the future.

  96. TZ (7006)

    Remember,

    I’m using a DIFFERENT source for data (esignal), so I don’t care as much.

    I also count overnight data in all numbers and calls so the $1397 break is already a done deal for me.

    Also, Gary, your technique isn’t as fast in-and-out of the market. More methodical and controlled, so the $GOLD delay/issue may not be of concern.

    It is still important for people to KNOW about it however – even if they then *dismiss* it.

    Anybody who wanted to take some action on $1397 at $GOLD from stockcharts is (I am *suggesting only*; reader beware as always) already hours late and will see it this evening when the chart updates.

  97. TZ (7006)

    PIMA,

    Technically, for NYMEX/COMEX/GLOBEX, a “day” in gold starts at:

    6pm SUNDAY NIGHT till
    5:15pm MONDAY EVE (eastern)

    at 6pm Monday night you start
    the TUESDAY session (till 5:15pm Tuesday).

    Friday’s session ends 5:15pm.

    Most paid chart services will follow this convention cause it mirrors the main US exchange (from my experience).

  98. alex

    Gary

    in previous reports you stated that you feel this C-Wave would have 3 up-legs instead of 2 ( no quote intended). to avoid a d-wave down now— to your core position, you must be correct i would imagine…

    I am wondering why you think 3 waves.? is that based solely on the fact that you expect the dollar 3 yr low?

  99. Quality Stocks

    I do not post here often. But I would like to say kudos to Gary for his great analysis. I told him he was crazy to think GDX would hit new all time highs. I am here to man up and say I was way wrong. You have done a great job. Keep up the good work.

  100. MLMT

    If gold makes its way back to 1388 today in RH, holding longs may be a bad idea.

    The bottom that gold put in is decent. Look at the 5 min chart of /GC –> you will see that the bottom got retested on low volume – this is what you want to see for a reasonable bottom. If gold closes near 1388, I will expect gold to gap under today’s low by the time NY markets open.

  101. Gary

    Alex,
    yes I think we have more more leg up. Part of the reason is that the three year cycle low is due in the spring but also because what we just saw was no C-wave top.

    We will see miners stretched 40-60% above the 200 DMA at a final C-wave top. The gold:silver ratio will drop to 40-45.

    The Gold:XAU ratio will be below 5.

    None of those things have happened yet. Until they do I think the odds are very small we’ve seen the end of this C-wave.

  102. Silverman

    Gary,
    I have to agree with TZ. At the time of your Dec. 7 report, Gold was very close to if not below $1397 (re:Kitco.com). Would be good to get that context.
    To this point (i.e. gold already below your target sell stop), do you wait for the market open or do you try to sell in the pre-market?

    Thanks!

    PS class reply to the rude dude.

    BTW did you swim in the Seven Sacred Pools? Was there on my honeymoon and loved it.

  103. Gary

    I usually don’t trade in the premarket because of limited liquidity.

    I think you fellas must be more worried about a half percent than I am. I don’t care if I miss the moment the swing is formed or not. And actually we can’t officially have a swing until the close because we could trade high enough to form an outside day.

    A few hours certainly isn’t going to erase 4 months of gains so catching the exact moment the swing occurs isn’t a major issue for me.

    We did see the seven pools on Monday although I didn’t swim in them. (forgot the swim suit)

  104. pimaCanyon

    Gary,

    None of your C-wave-top criteria were met with the following exceptions:

    1) GDXJ exceeded its 200 day MA by 47 percent
    2) SLW exceeded its 200 day MA by 91 percent!!

    SLW is out there!

  105. alex

    P.C.

    actually-

    NG was 100% over its 200sma ,
    and HL and EXK ,etc were about 90% over too…

    what a run , hope it wasnt a top πŸ˜‰

  106. MLMT

    @Daniel,

    Leveraged ETF releases by Direxion have marked a MAJOR top/bottom… And so have the reverse-splits. Something to keep in mind….

  107. pimaCanyon

    Alex,

    thanks. Yeah, I should have mentioned that the only individual miner I looked at was SLW. I also checked GDX (less than 40 percent stretched, 20 something if I recall), GDXJ (met Gary’s criteria), and SIL. SIL does not have 200 days of data, so there’s no 200 DMA yet on Prophet charts. However, I just checked TOS and they calculate a 200 MA! They must be using what’s available (approx. 120 days). Using that MA, SIL was stretched 97 percent.

    So it does look like the junior gold miners met Gary’s criteria for a C wave top. The silver miners that we looked are way beyond Gary’s criteria. However, the other ratios that Gary mentioned are not within the range he’s expecting, so hopefully, this C wave is not done yet!

  108. Jayhawk91

    GDX barely outperformed GLD over the past year. There are those who think the components of the HUI, XAU & GDX are targets of naked shorting.

    GDXJ is up 63% over the past year, ps…SLV is up almost 60%.

  109. Poly

    That blows, I want 3x ETF’s πŸ™‚

    Interesting they have a bear miners ETF. Cool stock symbols too, DUST and NUGT.

    But why play a leveraged gold miner ETF like NUGT when the junior miners ETF GDXJ appreciated more than 2x this underlying NUGT index!

  110. Jayhawk91

    “SLW down 12% in 2 days. amazing…”

    SLW is up 1136% since it launched back in 2005, 614% over the past 5 years, 158% over the past year, etc. YTD 154 vs 53% for SLV.

    Let’s get some perspective.

  111. TZ (7006)

    Since the high on $GOLD at stockcharts of $1404.10 for today’s bar happened *yesterday* early evening at 7pm or so, it is quite clear that they include 24hr data.

    And also that any activity occurring after 4pm eastern will not be visible using this chart/source until almost 24hrs later after the main market has closed the following day.

    Use it or don’t use it as you see fit, but be sure of the issues involved before you lay your money down.

  112. TZ (7006)

    >it is quite clear that they include 24hr data.

    Or something like that give or take. Remember, these are only my comments based on my own observation – maybe wrong. The phone number and email of stockcharts offices is easily available to anybody who wants to be sure of the EXACT answer.

  113. Daniel

    Poly– (e-mail from Direxion)

    Good afternoon Daniel.

    You are correct it is 2x GDX. We get all of our exposure via swap on GDX. We do not use GDXJ.

    If you have any other questions please feel free to contact me.

    Thanks,

    Michael R. Eschmann
    Business Development, ETFs
    DirexionShares
    P: 646-572-3643
    C: 516-492-5285

  114. Razvan

    I took some pictures of everyone from the trip in Maui. As you can imagine there was lots of fun in the sun. If you want to see all good times we had check out this little montage

  115. Bede

    Razvan,

    Your picture montage was blocked in the US. Here’s the message:

    “This video contains content from UMG, who has blocked it in your country on copyright grounds.”

    Is there some other way you can let us see the montage?

  116. Poly

    Daniel,

    Not that it matters too much πŸ™‚ but I’m sure this chap is mistaken. Their prospectus, which has gone through a fair deal of compliance, clearly states:

    “The Daily Gold Miners Bull 2X shares seeks daily investment results, before fees and
    expenses, of 200% of the price performance of the NYSE Arca Gold Miners Index.”

    GDX is a competing ETF, modeling a leveraged ETF off a competitor would not be a very smart idea.

  117. Daniel

    Poly-
    So while they are definitely competitive products their representation comes from the same spot. (NYSE Arca Gold Miners Index) You are right that they do not use the GDX.
    However, irrespective of daily tracking errors the new leveraged etf’s should be 2X bull and bear of GDX.
    That chap was probably simplifying things. (You are right on that too)

  118. Poly

    I see what he was trying to say, rather very sloppy of him to state that in a corporate email. The underlying ETF index are the same but to say this fund seeks 2x GDX is very far from the truth, irrespective of the fact that the results may show that.

    Thanks for sharing the ETF though. After reading the prospectus, I still like GDXJ.

  119. MLMT

    pimaCanyon,

    Thanks for your generous comment about my feel for the market.

    Honestly I don’t have a clue about USD etc etc… Yeah I do know where USD is… Its all in the charts. Often you don’t need to know what the chart is about to read whats going on in the chart. In fact, knowing what the chart is about will only bias you one way or the other.

    The same principles that I have spoken about: (a) low volume retests, (b) backtest of prior support, (c) higher high leading to more severe correction, (d) sentiment going from giddy at top to death-talk at the bottom – it applies to ALL charts because it is the same “us” humans who trade them. There is absolutely nothing different about the PM markets or charts.

  120. Silverman

    MLMT, thanks for sharing your insights. I find them very helpful. I know very little about most of the concepts you mention – but I’m learning.

  121. Gary

    PC,
    SLW isn’t the same as the HUI. The HUI is an index of major miners. If that index gets stretched 40-60% then we need to look for a final top.

    Any single stock can get extremely stretched.

  122. DG

    Gary: I of course agree that there will always be cycles because human nature never changes. It just moves from fear to greed and back again. But why would it be that a cycle can;t just abruptly change? That is, it normally takes 20-25 weeks from trough to trough (fear to fear) for gold to bottom, intermediate wise, but that is of course not written in stone. It might suddenly take 35 weeks or 15 weeks or any other random number (not too short because it takes time for fear to build). I believe in cycles, but cannot answer my own question. Can you—or am I missing something? If this is too philosophical to answer from Hawaii (due to Margarita impairment or sunburn) that’s fine, but maybe when you get back if you have an answer. One one level the fact that they are regular speaks for itself, but a sudden significant change would certainly throw a curve ball.
    (Hope you’re having a GREAT time, BTW)

  123. Gary

    DG,
    They do stretch or shorten form time to time, usually because of meddling by the FED. The stretched cycle last year was caused IMO by the massive QE1 program.

    The gold cycle has been stretching long recently, again because of QE. It used to average 20 weeks now it seems to stretch to 25 most of the time.

  124. Steven

    Thanks Brian. DG basically asked the same question of Gary that I have been pondering. Why is 20-25 weeks written in stone, especially if we now have another QE program announced. More importantly, if we are on week 19 then we would “normally” expect gold to top sometime in the next 1-6 weeks, correct?

  125. Steven

    I’m sure everyone sees the carnage in the bond market recently. It will be interesting to see how this affects PMs. On the one hand higher yields decrease the desire for PMs. On the other hand the higher yields right now are due to concernes about bigger deficits and there are studies that show a country’s debt/GDP ratio is perhaps the single biggest cause for increase in PMs. Of course the dollar will be pivotal here. Not sure why it held up so well today but my hunch is that there were “powers that be” that propped it up while the bond market was getting crushed. I assume a lower dollar while the bond market is getting hit would have just caused even more concern and hastened the damage to the bonds.

  126. DG

    I know they stretch or shorten, but that’s just an oscillation around the core 20-25 weeks. Why can;t the “core” change to 40 weeks? That is, why does it take 20-25 weeks for fear to return in gold, but a different number of weeks in other asset classes? Is this just “it works this way until it doesn’t any more” and next gold bull the distances between troughs could be some entirely different number of weeks?

  127. DG

    Steven: The cycles work from trough to trough and are not designed to catch tops (except if you know a trough is coming you can guess a top must be near)

  128. Robert

    Since we’re on the topic of cycle accuracy,

    Gary, or others,

    For how long have the stock, dollar, and gold cycles been accurate? Did they originate with the beginning of the stock market (that would be nuts)? If not, what has changed since then? What is your prediction for the longevity of you cycle analysis?

  129. aviat72

    Steven:

    Rising yields are dollar friendly. Ashraf Laidi has written quite a bit about it.

    ES has taken out the old highs after hours. On Tuesday that gap was sold; let us see what happens today.

  130. trond56

    Copper has broken up through multi year resistance yesterday and today. ‘Dr copper’ has very often been an imminent indicator of the stock markets and economic activity. And it also seems that the spx has already broken up the last days, through strong resistance, from the consolidation formation it has carved out since April. If copper now starts to rally and the spx also, woun’t silver follow, after all it is partly a basemetal like copper?

  131. Steven

    Interesting comment on copper. Zero Hedge believes that JPM bought 1/2 of the coppe on the LMBA to possibly hedge their silver position. Not sure if this means they won’t lean on silver or not but it seems likely the regulators are not paying as much attention to this part of their game as the silver portion which is under scrutiny right now.

  132. Gary

    DG,
    A cycle could rephase but I wouldn’t expect it to be an overnight process. I would expect it to start with the cycles stretching over a long period of time. Perhaps the gold market is going through that now as the last several cycles have run long at 25 weeks.

  133. Steven

    Gary,

    Do you mean that the average cycle on gold may becoming longer as a general rule?

    And could this lead to the possibility that this cycle will also be a stretched one?

    What has the average been lately?

    Thanks.

  134. Gary

    The average for a long time was about 20. But over the last couple of years it has been stretching to 25 most of the time.

  135. sophia

    good morning Gary,

    Just to check because you couldn’t send your fantastic report last night… Do you still believe that we are close to a top on both gold and stocks? thanks for your input…

  136. Gary

    I think we already have the top for gold and stocks are getting close if not already there. Sentiment is now extrememly bullish. We will run out of buyers soon.

  137. Brian

    If Gary said he was going to do something at X, why do people continually ask if he did that at X? If you don’t believe what he says, why subscribe?

  138. Avann

    Hey Brian, I’m sure you’re referring to me … since there was no report last night and I do not feel like reading thru 250 blog messages to see if anything significant happened I thought I would ask. I can’t remember if Gary was going to 50% on this cycle or the next.
    My apologies for wasting your time.

  139. sophia

    Avann,Brian

    I was just kidding… quite joyful today…
    Avann, if I remember well, Gary said that if Gold was going thru 1397, he was going to go to 50%….

  140. MLMT

    Gary said that if gold sees lower than 1387 or lower in regular NY trading hours, then ASSUME HE REDUCED to 50%. He mentioned that he will not post explicitly that he did so.

  141. DG

    Avann: It’s not Brian’s time that gets wasted; it’s Gary’s. Gary has said he is getting overwhelmed with email and blog questions that are easily answered. The request here is just to keep track of what has already been said several times so you don’t need to scroll through blogs and/or bother Gary with questions that have already been clearly answered.

  142. Onlooker

    The ISEE call/put data is through the roof, especially the Equity Only. It has hit 539 on the latest reading, which is way above anything I’ve seen there intraday. I believe we hit the mid-400s or so back in April (intraday). Retail investors are falling all over themselves to buy this market.

  143. Avann

    Thanks DG and everyone else … I realize Gary does not have time which is why I do not bother him with emails.
    I post the question here in the hopes that someone else will answer.

    Thank you.

  144. DG

    Onlooker: I track the CBOE equity-only PCR as well. It’s down to .34. Yeah, the dumb money is buying a lot of calls. ISEE at 539—wow!

    Wes: You shorting into this? I am lightly short but tempted to add.

  145. DG

    Onlooker: The ISEE has dropped a lot since early readings are on small volume and thus volatile. Dow to 300. I see you use the “equity only” while I have always tracked “all securities.” Do you find “equity only”better?

  146. MLMT

    They screwed shorts by gapping over 1388. The more pain they give to the shorts, the more severe the downside. I am sure lot of bulls were sucked in too. Today’s close should be interesting w.r.t. 1388 level.

  147. Robert

    Gary guaranteed it wasn’t going to be an easy short. He was right, but I still think it is going to pay off handsomely if you have the fortitude to weather this storm.

    He also mentioned the difficulties of spotting a bottom which makes shorting even less certain.

  148. Brian

    AvAnn & Sophie, I was just making the point that this happens quite a lot. Subscribers don’t have to roam through blog messages because he puts the plans in the nightly report. I suspect that is why he doesn’t answer on here. He is trying to keep some things for subscribers only. Why pay otherwise?

  149. Robert

    My odd hypothesis was, as complacency is building and the longs and call buyers get very comfortable, as they’ve made it through this week fine, tomorrow, they’ll go out after they check the morning market readings for some shopping. They’ll come home and be wide-eyed to see the blood in the markets in the midday/afternoon. Then over the weekend they’ll be MOPEd about the prospectus for Christmas, EOY, and 2011 stocks.

    It could happen today too, complacency is very high.

    I was just trying to think about timing…

  150. Robert

    Sophia, typically a market sell-off will be fast and furious and then have a nice healthy bounce. Finally then it will resume downwards exceeding the initial decline.

    I plan to get out with the SP500 at around 1130-1150. This is of course a medium-term short, not daily or weakly and will not be easy and it is certainly not advised.

  151. Steven

    Gold Bull Sentiment Slumps!

    Gold bull sentiment uncharacteristically slumped yesterday just 2 days off an all-time high, which is precisely the sort of healthy skepticism and general disbelief that makes for a likely quick recovery and a continued rise in prices in the short term.

    MarketVane’s Bullish Consensus tumbled 4 points to 77%, while the HGNSI slid 6.7 points to 46.9%.

  152. Robert

    It is estimated that at bottom won’t come until mid-late January and that is only a guess. Many smart people are just waiting in cash for the gold/silver IT low. This way their cash is assured to buy the greatest bull market in history for its most powerful upcoming wave, C. If you short you are risking capital that could go towards very cheap prices for mining shares.

  153. Wes

    DG,

    I don’t usually short bull markets.

    I have two very small put plays, one of 50 Dec53’s (a real lottery ticket) and one of 10 Jan 53’s.

    This is very minor stuff, just something to do, mostly, while I wait for the intermediate low. That’s where I plan to buy in size.

  154. Onlooker

    Steven

    Interesting, but not what we want to see! πŸ™‚

    We’re positioned for an interm decline so we’d really like to see it go down a significant amount before buying back in. Most of us here anyway.

    For those who are just holding their positions you probably want to see a decent correction too, IMO. If we get one we’re more likely to get a fast and furious leg up to higher highs than if we just grind up from these levels.

    That said, it’s going to do what it’s going to do, regardless of our wishes, eh?

  155. Steven

    Understood. But I would think that even if PMs ramp higher from here there will still be an interim decline. You make more on the core and still get the IT tinkled the C wave throughout the Spring. Doesn’t this make sense?

  156. Steven

    Another point on the 4 day corollary for the dollar is I’m not sure what to use? DXY from when to when? For example it’s even for the day.

  157. Chrys

    Not sure how this affects gold but SPX looks like it is in an ascending triangle since Tuesday. It has completed waves A, B, C. D and E are left. It projects to 1250. And then a huge decline to 1130-1150.

  158. Gary

    The four day corollary only applies after a long intermediate move. It’s a sign of extreme sentiment.

    We already got the intermediate bottom in the dollar a month ago.

  159. MLMT

    @Steven

    Contrary to popular belief, close “RIGHT” ABOVE a key level like 1400 is usually uber-bearish and close RIGHT BELOW a key level like 1400 is uber-bullish.

    Think why: close above 1400 would force most shorts to close shop and would entice new longs to add (thinking gap up coming tomorrow).

  160. DG

    blammo: What does “looking to breakout out” mean? Is there an indication that a new high is coming and that the breakout will be successful? You could alternately say, “XLF nearing resistance. Be careful.” What makes you think it will successfully break out?

  161. MLMT

    Its nothing but SUCKTOR rotation going on with banks. Compared to April highs, banks are the ones which “appear” most undervalued. So, ramp them up and Joe6Pack will pile into them too.

  162. DG

    I just shorted ten minutes ago XLF so was amused to see that the breakout will be successful. I’ll stop myself out should it breakout and hold, but it is super overdone and I bet it either doesn’t BO or runs the stops and then fails.

  163. Onlooker

    Steven

    Well obviously it depends upon exactly how it would transpire, but generally I’m going to make more money by being in my max/leveraged position while the PM market’s going up, and in my core position when it’s going down.

    For instance, I built a simple spreadsheet out of curiosity, and to demonstrate (and validate) my assertion.

    Assuming:

    I went to a core of 50% at 1400
    We retrace 50% of the move from 1156 to 1432, which yields 1294.
    I leverage up to 130% at 1294
    We go to 1600

    Or:
    I went to core of 50% at 1400
    We continue on up to 1500
    Then retrace 50% of move from 1156 to 1500, which yields 1328.
    I leverage up to 130% at 1328
    We go to 1600

    I’d be up about 1.35% in scenario 1 over scenario 2.
    $2057 on a portfolio worth $100K ($50K core) at 1400 gold.

    That’s assuming you’re just in gold. Other positions like miners and silver will yield more, of course.

    And the higher we go before a retracement, the larger the performance differential; assuming an equal retracement percentage. For instance using 1600 and 1800, you’d be up about $5511.

    Of course if we go higher from here and then retrace more than 50%, to the same spot as we might with a retracement from here (i.e. 1294), it’s a wash.

    It’s probably not much in the big scheme of things, but all things being equal I’d prefer the correction right here and now vs. continuing on up to a higher interm top. And a couple thousand dollars (more in a bigger portfolio) is nothing to sneeze at, for me.

    You can download the spreadsheet here if you want to take a look. If I screwed it up, please let me know.
    spreadsheet

  164. blammo

    I’m not invested either way but I could see them propping up the bank stocks for a few more points, forcing shorts to cover and selling stock to the retail investors who reportedly are getting back into the market.

  165. MLMT

    Till yesterday Cramer was saying he does not buy the bank rally. Today he gave an all clear and issued a buy AFTER banks are up more than 10% in a week πŸ™‚

  166. alex

    onlooker (anyone)

    at the risk of sounding dumb here,i will ask anyways πŸ™‚

    In your scenario you say that you will leverage up 130%

    I know according to Gary the only really safe time to add leverage is at he low of an int.low…so I know WHY you say you’ll levge up to 130% ,

    but my question is…exactly what is ‘leveraging up 130% at that time. what is the exact trade?

    ex: buying calls? of AGQ?

    thx guys

  167. David

    That means buying stocks using an additional 30% margin borrowed from your broker.

    AGQ is a leveraged ETF, but it’s treated as an ordinary stock in this scenario.

  168. Jerred

    Alex,

    you margin your account when dealing with stock.

    I dont think you can get margin on options.

    Futures contracts are on margin with risk parameters based on draw downs

  169. Brian

    Last time I leveraged with calls on ANV, CDE, HL, EXK, SLW, SVM. ANV’s were far and away the most profitable. It was a perfect storm though and it would have to be again for me to take that risk. I have lost on options before and won’t let it happen again. Not sure about his spreadsheet program.

  170. Onlooker

    I just buy more GDXJ SIL on margin. I don’t want to mess with call options for the most part. Only if the timing is just right.

    Brian
    What’s the matter with the spreadsheet? Do you see an error of some kind, or faulty assumptions, etc.? Just wondering. It’s pretty basic and I crosschecked it with some mental estimates to try to avoid some big error.

  171. Brian

    No Onlooker, I just meant I had not checked it out yet. Sorry for the confusion.

    At the time I did the call options, I was closely watching the cycles line up and Gary had not mentioned the AGQ play yet. So I just stuck with the options and did not do the AGQ. With my perfect hindsight, I would have done AGQ. Much easier IMO.

  172. Steven

    Thanks for the spreadsheet. Checking it out now. I guess the only issue with it is if we do not correct 50% which I suppose is is line with an IT but does not have to occur so that could change things. But overall I get the basic idea and it seems to make sense. Of course one wants to be fully invested for the big move. I suppose the question is what if we don’t get a BIG correction and only small ones and then continue higher. Perhaps something like a runaway move or a even a parabolic move. THen again, I suppose that is what “core” is for anyway. All in all an intelligent plan.

  173. alex

    Steven

    darn, I have that thought every time I lighten up…and I lightened up a bit more today. It always feels good right when you sell , then you feel like a parabolic move will rocket up since its only wk 19 of ABOUT 25 wks!! # wks of STRAIGHT UP hahaha.

    its funny , then a slam down of about $40 overnight relieves that feeling that you got out at the start of a parabolic move.

    today I saw PZG and NAK ( part of my core) breakout with volume , and I said…CRAP!! πŸ™‚

    time will tell

  174. Onlooker

    OK, thanks Brian.

    Steven

    Certainly a runaway move would be a whole other deal. But at this point in the intermediate cycle it’s not likely at all to turn into that.

    And you can play with different retracements with the updated version of the spreadsheet.
    spreadsheet

    It doesn’t really matter, as you just have to follow your plan and let the chips fall where they may. But it’s interesting to noodle around with the “what ifs.”

  175. Steven

    For some reason every time I lighten I regret it (usually the minute the sale happens!). I went all in during the last IT so I respect the validity of the IT and the power it can do to an account if one goes in at that point and holds. As for holding, I did a fair amount of day trading when we were really moving at points during this last IT. I would always be up big and then bam one day would wipe it out (I’m not great with stops and find them hard to use with some of the more volatile vehicles like AGQ which can stop anyone out very quickly). But most of my trading was swing type of trading, mostly holding for a week or more. In the end I may have done little better than breaking even. Then I consider that BECAUSE of Gary I bought AGQ at $60 in August and still have it today. Gary is right and the Old Turkey is the way to go. I still haven’t come to the point of adding & reducing leverage at daily cycles, etc. but maybe in time. Right now I’m still holding my position (albeit nervously and with my finger on the trigger).

  176. Steven

    Alex,

    You’re writing to the person who sold NG (after holding it FOREVER) at $6-$7 this summer!!!!). I cleared out my entire portfolio of about 30 mining stocks and only kept GDXJ (80%), EGO (15%) and NG (%5) – approx values. Then one day I said the hell with it and sold both EGO and NG. But I was really uncertain about the NG sale mostly because of the all-star cast of investors in that one (Soros, Paulson, etc). EGO hasn’t done anything since. The real saving grace is that I moved much of the GDXJ money into silver and over time really just kept going with the silver investment theme. Although I have no complaints with GDXJ and very grateful as I bought it on the first day around $25ish and sold it around $40ish in one year and get LT CG treatment so thank you for that one.

  177. alex

    i do a little trading during the lighten up phase, but I tend to wait till selling dries up a bit…

    overnight surprises to the downside are BIG..so I keep it small and look for very oversold indicators before I will trade for a small bounce ( Like stochastic , MACD , breaking swing points on the way down on light volume, etc).

    right now I am finally down to my core position–believing also that the decline has arrived πŸ™‚

    Patience and best wishes guys!!

  178. alex

    Steven

    been there ,done that…live and learn I guess.

    i sold my NG on the way up @ $13+ because I saw the gap up at $12 area and was going to get back in there ( haha maybe on this pullback πŸ™‚

    …but when it kept going up , i put all my NG $$ on Exk and did well.Sold Monday.

    Now I want the EXK pullback, it is a good silver producer with increasing earnings and I honestly feel it will do exactly what you just saw NG do…near $5~$6 up to the teens.

    hoping for a pullback to $5+ area , and I will reload ,not caring if I’m early πŸ™‚

    dinner time on the East coast…later guys

  179. Steven

    Hah! I had EKX in the 2s last year! Made a little money and then sold. I also know someone who bought (in size) SLW in the mid single digits during the craziness in the fall of 2008. He sold it shortly thereafter and made a nice gain but nothing like 7X-8X. Dinner time over here too.

  180. Phil

    “Here’s an idea, how about taking the kids down to the local rescue center and saving the life of a needy canine or feline. I’m sure the kids will love you for it and who knows you may find your best buddy ”
    Gary , thanks for mentioning the lonely unwanted animals in this cruel world . I have 5 rescues myself.
    Jake

  181. Elaine

    Phil –

    Agreed, we have a wonderful Wheaton that was kept in a crate for 7 months. When we got him he barely knew how to walk. Our patio has a 1 brick step and he had absolutely no depth perception and could not figure out how to “get down” to the next step. Sweetest dog in the whole world.

  182. trond56

    Maybe there could be a Reason why many are bullish right now. For the immediate future, of course, not longer ahead. Easing of monetary policy is often more important for the stockmarket than the underlying factors. For instance China’s market fell constantly during last winter and spring even with a dynamic growth and GDP increase of 10% a year because of interest hikes and constrictions, while the Usa market hiked during the same period till April due to QE1, even with dismal economic figures.
    -Watch ‘dr copper’..

  183. Gary

    Copper is another one of those things traders take as gospel but when you actually look at the historical record you find that new highs in copper don’t neccessarily predict higher stock prices.

    Often new highs in copper precede significant corrections in stocks.

    Instead of watching copper one will probably be much better off monitoring cycles, sentiment and money flows…all of which are now in the danger zone.

    This is not the place to be pressing the long side.

  184. Steven

    Wouldn’t the fact that the Europeans are not willing to put more money into bailing out other countries potentially strengthen the Euro as it would mean less monetization on their behalf? I would think the dollar would weaken as the DXY is so heavily Euro dominated. Of course PMs could go either way in such a situation. Thoughts?

  185. alex

    steve

    some have told me that their bigcharts shows delayed and that the chart doesn’t show overnight activity, but it does to me.

    my DXY and GCZ10 are real time and I do not subscribe to anything on there, so I’m not sure why others do not get real-time. (if you re outside the U.S. , maybe that explains it??)

  186. Poly

    Well Gary, your subscription value is going to be put to the test this coming month. Anybody can suggest being fully invested in a bull market, but getting people out of a coming significant decline and back in towards the bottom will be worth significantly more money than your subscription fee!

  187. Onlooker

    I’ll second that, Poly. So far he’s been playing it like a fiddle. Knowing Gary, I’m sure this level of success has him quite nervous, as getting things this right over a long period of time is quite difficult. And you have to be worried about a little reversion to the mean. But so far, so good, no doubt.

Comments are closed.