273 thoughts on “ARCHIVES

  1. catbird

    What I wouldn’t give to see a nice scary downdraft today and Monday down to about $1260.

    Gary’s stop got me out yesterday with negligible damage. I was in SLV for all of 90 minutes!

    Make my day, Blythe Masters!

  2. Gary

    I doubt gold would drop that fast. But $1260 sometime in the next two weeks would be an all out buy and move to Old Turkey signal.

  3. Shalom Bernanke

    thedocument shared a wise observation yesterday (or the day before), when he suggested miners might not get dragged down with weakness in the general market. So far that is the case today.

  4. Poly

    I’m still looking (OK hoping)for a sharp +1% and 90% down day today, maybe much more. Don’t know if miners get dragged with it.

  5. james r

    Right, I believe miners have already bottomed. The metals should bottom sometime late next week. I think we’ll see another bear flag forming in the coming days.

  6. Gary

    I think I would wait until the dollar rally unfolds before trying to pick another bottom.

    So far this is just a normal reflex bounce to a severe decline yesterday.

  7. Randy

    Watching Silver on the 5 minute chart. (I know most people here don’t look at that time frame) It looks like a rocket! Does it go to the moon or bust?

  8. Randy

    Watching Silver on the 5 minute chart. (I know most people here don’t look at that time frame) It looks like a rocket! Does it go to the moon or bust?

  9. pimaCanyon

    DG,

    You still in your short stocks and short Euro trades?

    Futia posted this on his site this morning:

    “the AAII survey of investor sentiment shows the most bearish sentiment since the November low.”

    If this is true, we’re unlikely to get a big move down in stocks, at least anytime soon, no?

    In terms of the short term wave structure in stocks (SPX), looks to me like, on the hourly chart, this morning’s high may have completed a 3rd wave up, counting from the low of 1/20 as the beginning of wave 1. If so, we would expect a move down now to around 1295 SPX, then another leg up to around 1314 SPX.

    Your thoughts?

  10. DG

    SB: To be fair, Gary may have “nailed” the top at 1300, but he has suggested several other tops on the way up like the rest of us (I was just looking at old reports).

  11. ddn3f

    Shalom,

    Based on the history after large price move ups in silver, silver usually retraces at least 50% of the move up. So the retracement of the move from ~$17 – $31, I am expecting silver to at least hit around the $24 level on the downside. That tiny gap at $24.35 fits in perfectly with what I am thinking.

    Also in terms of time, the decline should finish between the beginning of Feb and the 1st of March. Because the declines usually last from a little over 1 month to 1 month and 30 days.

  12. Poly

    Pima, the AA survey was from last week, when we got that sharp down day. Prior to that, it was running at high’s that eclipsed the April high’s of last year!

  13. DG

    David K: You asked yesterday about my target for the dollar. Gary talked about 79 as resistance, and I have been buying EUO for a short sharp move, so that’ll work for me. I will go flat there

  14. Onlooker

    Poly

    Those charts you showed yesterday…

    Wow, we’re getting a follow through so far. If we go into a nasty decline like May it’ll be just friggen crazy how this looks like last year.

  15. trond56

    Gold has been following the Usd almost constantly since beginning of November, therefore a rally in $ will drag gold along up this time.

  16. TZ(5288)

    I’m significantly long gold futures here with belief the last two days was a bottom.

    1) We got to 1309 which was within my target of $1305 +/- $5

    2) I never thought we would go to the number that others were thinking (i.e 1300 or 1265). This decline would stop before expectations based on the past.

    3) lots of volume blow out on GLD yesterday. The various mining stocks a few days before.

    4) Unfortunately I think Gary got whipsawed and would have nailed this except for the buy in then stop out a day ago. After the stop out, I now see reluctance to get back in and ‘waiting’ for more conservative entry. I think you will get in, but i think that extra caution might be causing you to miss the low one day later.

    My stop is lower down without too much risk if my long is wrong here. We will see.

  17. TZ(5288)

    5) Today the gold contract goes into delivery at the end of day, but if they couldn’t drive it below 1300 before 10am (the normal ‘hit’ time) then they prob can’t now that it has passed. They’ve probably squeezed out as many contracts as they can or need to.

    6) THe peak rallying time is after all options have expired and the contract has gone to delivery (as you would expect if big players were manipulating the market). We are now in that time (or will be this evening).

  18. Patrik

    Already wrote yesterday that Gary told us that the decline will begin when S&P500 touch 1300..

    How far will it go this time..Will it be a 3-5% takedown with a rising dollar..Or will it go further down..

    Nice call Gary…Again..

    Do you think the stockmarket will continue to fall on monday or will it be a weak takedown for a couple of days?

    Its going down fast now..Even in Sweden! Looks like traders want to get out fast!

    Have a nice weekend guys!

    /Patrik

  19. Shalom Bernanke

    trond56,

    Good point. In fact, I’ve been totally ignoring the USD as a predictor of metals prices since the usual inverse relationship has not help. I don’t see an edge in watching the USD, as one still has to guess it’s direction correctly, then assume the typical relationship is intact.

    When trading gold, I watch gold. USD is a coincidental indicator, not predictive.

  20. pimaCanyon

    well, so much for my “count”. SPX has dropped below what I was counting as the top of a wave 1, so that count is invalidated.

    Let’s see where this goes…

    What caused the fast drop?

  21. RA

    Gary,

    It looks like what happened yesterday was a run on stops in GLD.

    Does that happen as often with the miners?

  22. TZ(5288)

    GARY,

    >Missing on or two days in a 12-15 week rally is no big deal.

    With the size and stop levels I use it *is* a big deal. I can’t enter leveraged unless I pick entries and stops which limit risk. Thus it results in me usually having a number of false starts where I get stopped out before something hooks in.

    I believe I just might have gotten a hook.

    And at 5x leverage with LESS of a stop loss than the previous 1.3x trade had. (No offense, it was a very reasonable call that I came *very* close to joining).

    We will see. The trade could always fail (and I ALWAYS plan on that event.) The rest will take care of itself.

  23. TZ(5288)

    I will eventually be concentrating on silver (which will outperform gold greatly on this surge up), but the volatility of silver and the necessary stop levels means I could only get a few contracts vs gold if I was doing it this morning.

    So the approach is to start with gold which is much more controllable and then leg into silver a bit higher up with a profit cushion and better entries than almost a $1 straight up move in an hour.

  24. pimaCanyon

    David K, yes EW. I have tried to give it up, Gary’s cycle analysis has been one of the most potent antidotes, but it appears my case is very stubborn.

    I did look at the long term gold chart last night though and found an EW count that works well with Gary’s cycle analysis that suggests one more push up in this C wave. πŸ™‚

    You are right though, EW by itself is pretty much a roll of the dice because there are usually so many alternate counts.

  25. Romeo Bravo

    Poly:

    This will be interesting as I think the Egypt situation will be similar to the Greece situation last Spring. We haven’t really had any other geo-political event since then (counting events in all the PIGS countries really.) Will we get a similar reaction or is the printing press to strong?!

  26. jc

    gld showing up in the sos. Is the bounce part of money leaving the stock market and needing a place to go? And when selling gets extreme leaving metals also?

  27. sophia

    If you look at what Gary said several times, at the first selloff in stocks, Gold is going to push higher until the selling wave will get it as well…so be careful….

  28. pimaCanyon

    jc,

    GLD SoS is small number so far, but definitely something to keep an eye on. If that number grows substantially during the day, seems like it would raise the odds that we have not yet seen the low.

  29. james r

    Wow!

    The way gold is channeling up along with minor corrections to give it added strength, yesterday in fact may have been the bottom.

    If so a lot of investors/traders will be chasing it next week.

    Oh my!

  30. TommyD

    I do not mind resting on the sidelines as this reminds me of spring 2007 where I was whipsawed and had runs on my stops constantly.
    Having those Deja vo feelings today.

  31. daniele

    Hi sophia, yes but tonight he did say that there’s no time enough for an intermediate correction.Instead i was waiting for it.I’d like to see sp500 on his 75 week average (1140), but gary now speack about just only 3-5%.So picture is quite confused now, at least for me.Anyway on spx week chart nothing happened, when it will form a swing high will see how deep is this correction.

  32. T.J. Rand

    Silver and the miners (GDX) both put in swing lows on Tuesday which held, unlike Gold…wonder if Silver (and the miners) are decoupling/turning early vs. Gold. There has been a fair amount of commentary about the Silver market -Harvey Organ has been suggesting potential COMEX failure in February.

  33. sophia

    Daniele,

    I read the message of Gary last night…Hey, even 5% is good to grab…Well done Poly, you talked about 1280 in the S&P this morning..

  34. Romeo Bravo

    Poly, but if we start to see things get to similar to April, May of 2010, I imagine this would be noticed by many people and then talked about/planned for. Thus, it would not work out. It is nice to get a reset in market for better prices however!

  35. David Kafrick

    S&P cash needs to break the 1271 pivot before retracing as much as 10 points or so. If that happens, then the trend has definetely changed.

    Likewise, I think that if gold can take out the 1347 high before retracing as much as 10 points then the odds are pretty high the bottom is in.

  36. DG

    Wow. I am recovering the last three shorting attempts today so far. Nice move in the Q’s! It partially offsets the annoyance of not being in the PM’s. If memory serves Gary said he thought there’d be an impulse move up in the PM’s when the decline started, but that they’d get dragged down if the SPX got downside legs. Let’s hope.

  37. Poly

    Significant technical damage in the indexes. A move to the 50dma (coming week) is more than assured, IMO. Beyond that I have no clue, right now.

    $HUI real strong!!

    With this truck of puts a flash crash would be a very nice 6 figure pay day. Slap me please, oh how greed corrupts the mind πŸ™‚

  38. Steven

    Gary,

    Can you give us a clue as to the development in the silver chart for those of us still holding meaningful silver positions. Is it good or bad?

  39. Gary

    RA,
    I don’t know about miners but it seems like these intermediate cycle lows usually involve at least one fakeout rally and then a move to new lows. We haven’t really had a fakeout rally yet.So maybe this is it and then again maybe this is the bottom.

  40. Jennifer

    Bought a nice little position in miners at the open today hoping for a bounce from yesterday. Wish I had bought a bit more. Don’t know if I should hold it through the weekend though if we are expecting further downside…

  41. OptionsOnly

    Finally seeing a correction in this market!
    Been holding QID calls for a few weeks now, rocketing today. Bought some EXK yesterday. So far, so good. The Beanie divergence indicator looks like it will play out, give us 5 days please!

  42. TZ(5288)

    MISTAKE: no swing low on silver or gold possible today cause they made lows last night (which counts as ‘today’ for chart purposes).

    What we have in silver is an ‘outside’ day already, and possibly in gold too before close.

    Still strong signs.

  43. coolkevs

    Here is a chart of what I’ve been talking about recently. http://www.minyanville.com/dailyfeed/this-one-chart-explains-why/ The bounce here is probably temporary. And the bounce could qualify a WEEKLY break of Gold at 1343.7 (Up close next week, followed by a down close the following week, then a down open the next week). If that is qualified, the exhaustion down target is 1256.10. As a reminder, it already qualified a DAILY break of 1350 this week. So we are now looking for a 13 day sequential buy, which yesterday was the first 1 (notice the red 1 under the 9). But these 13 days don’t have to be consecutive, so we are looking at a minimum of 2 weeks before that buy records.

  44. Gary

    As I’ve mentioned before most intermediate declines have at least one major fakeout. We haven’t really had one yet.

    I think at this point I want to either see a move down to at least the 50% retracement level or I want to see the pattern of lower lows and lower highs broken before I take another swing.

  45. basil

    It seems after financial systemic crisis in 2009 and European sovereign debt crisis in 2010, a domino effect of political changes in North African and Middle East countries could become the theme in 2011. After Lebanon, Tunisia, now Egypt, who’s next? And how can big can this become? Egypt has been a rock solid pillar for the US in the region for generations now. Destabilization in the region could become the next price driver for PMs in 2011.

  46. TZ(5288)

    Silver at downtrend line of last month’s decline. Much higher and we have a nice break.

    Still thinking gold can rally more to also put in an ‘outside’ bar by breaking 1349.

  47. TZ(5288)

    Gary,

    >As I’ve mentioned before most intermediate declines have at least one major fakeout. We haven’t really had one yet.

    Yeah…i’m sure glad nobody got faked out into buying this week
    πŸ™‚

    (In all honesty, I had the same order to buy that you had. I had it live on my screen FOUR times and canceled it FOUR times – ultimately not taking it. So I’m really not sure we haven’t already seen the fakeout. Time will tell.)

  48. TZ(5288)

    True.

    But the market likes to screw with previous patterns. And everything seems to be accellerating in speed.

    The act of a fakeout *regardless* of time is to get people to buy (or sell) then smash them down the other direction so they stop or panic out.

    The last 2-3 days on the metals and the stocks WERE a fakeout by my definition. But, no, they didn’t last too long.

  49. TZ(5288)

    Steven,

    Daily silver chart. Just draw a downtrend on the tops for the last month. Not really a complex observation. Let me know if this is hard to see.

  50. TZ(5288)

    GARY,

    I have my stops if we go lower and obviously I dont know the future.

    Today just looks good to me and I’m swinging big. It fits with what I was expecting for the last few weeks (and I too almost bought on wed like I said). Luckily I didn’t (which gave me a bit more objectivity today – emotional capital) and today turns out to fit my expectation every better than wed.

    So all in all I like it.

  51. pimaCanyon

    TZ, seems we’re in the land of fakeouts. Yes, yesterday’s drop could have been a fakeout. But today’s rally could be the same. The market might even go up for a few days as Gary has suggested and THEN slam down into the IT low, bottoming below 1300 and maybe down around 1265.

    Breaking above the downsloping TL’s from their recent highs on gold and silver would be the first in a series of confirmations that today’s rally was the real deal. If this turns out to be an extended correction, PM’s could head back to their recent tops and then drop once again. Could turn into whipsaw city that could go on for weeks… Pretty much anything is possible in these markets

  52. Greg

    It looks like the HUI did a three day 123 trend reversal to me. I tend to look more at that index for mining stocks instead of the S&P500 or just looking at gold and silver – which I still believe are manipulated πŸ™‚

  53. DG

    Just to put things in perspective: Having lightened up or gotten out around $1400, Gold is still way below there. It is harder to sneak your way back into positions once a rally has started, but I suspect we will all find a way well before $1600, even if this was the bottom and we go up from here. At the least, there will be another daily cycle low some day before the blow off. Or this is a fake out and we tank next week again. Choppy much?

  54. Jerred

    DG,

    With futures you do not have gap risk. 24 hour trading.

    If you are long stocks, etfs then you can hedge with the futures if you want.

    Futures are great products but you have to respect the leverage

  55. Patrik

    The market is falling sharply in US. Never thought this in the beginnig of the day. The BNP numbers came out and the market was litle shaky but not much. Then the S&P 500 touch 1300 and people are running out..:-)

    Gary wrote that it was to late for an intermediate cycle decline.

    Why? Everything is stretching in the market now..so there must be any a chance that the market will fall further than MA50? People will be afraid to buy in this market now and will for sure cash in some profit..

    ” It’s now getting too late in the daily cycle to have any realistic chance of an intermediate cycle decline developing”

    If you look at the charts in Russel 2000 and in DJIA there are som nasty damage in there..S&P500 have support at 1250..Will it hold? Maybe….But we will for sure try it next week..

  56. Nick

    How about down week till Umployment Friday?

    1 year anniversary from last year when Gold and Market bottomed? Dollar simultaneously puts in its top?

  57. Greg

    Dang Jayhawk…MDW… 10m shares traded when there is only like 115m out there? I have several Canadian mining stocks and they have really been lagards. I look for them to perform later in the mining boom.

  58. vuvvy

    FWIW,my mechanical system missed hitting a buy today so far by a few bucks, and looking back historically almost every int term correction will have at least a buy,sell,buy before it’s over. The one exception is last summer’s as it gave it’s buy but then it collapsed quickly to new lows but the algo did not flip to a sell and it then recovered very quickly. The candles just don’t look like a bottom has been reached either. JMO of course as I will be long when my system triggers.It’s a helluva lot smarter than I am:)

  59. pimaCanyon

    speaking of futures, is there enough volume in the mini gold and silver contracts to get good fills, i.e. tight bid/ask?

    And, are the choices just the big gold and silver versus the mini’s? any other choices for futures?

  60. Gary

    There’s little doubt the market has rolled over into at least a daily cycle correction. Unless we are going to see a cycle that stretches to 70-80 days then it should only be a daily cycle correction.

    Although I guess if we experienced another crash type event that dropped 10% or more we could consider it an intermediate low.

    The February 07 mini-crash was clearly an intermediate low even though it only lasted two weeks.

  61. TommyD

    Look at volume in OIL, via USO.

    Zero hedge has an article about
    “Suez closure concerns go viral”

    Gary, U see the buying in OIL?

  62. Poly

    Gary,

    I don’t see why it needs to be anywhere near 70-80 days, when you consider the height we are coming from reversing course will be easy to swallow.
    I bet you 130 points could be lost in 3-4 weeks without any type of crash.

    In any event, the trend is still with the bulls and I’m thinking a 5-7% drop and a tag/dip of the 50dma is a safe way to play this.
    Although I said it yesterday the setup and resemblance to April-10 is unreal.

  63. basil

    The people in Egypt take ‘yes we can’ to the streets; and opposite what is happening here, they can actually do something that brings about real change. Even though you could argue that public unrest in Egypt has causes that differ from what just happened in Tunisia and Lebanon, I think it is no coincidence that this is all happening within a very short period of time. I think Egypt is what might cut the correction short in Gold, if this settles over the weekend or even if it settles in a week, the correction could very well continue.
    I don’t think that gold has hit the right marks yet for the correction to be over, but Egypt is the wild card right now.

  64. Gary

    3-4 weeks would extend the current daily cycle to 70-75 days. That’s incredibly long even considering that the Fed policy has probably elongated the normal cycle length to 45-60 days.

  65. Poly

    Gary, I’m sure you can “make it fit” πŸ™‚

    No seriously, what about last Thursday as a candidate for a new daily cycle and this would make it a new ELT cycle? That fits no?

  66. Gary

    Nothing has happened yet that looks anything like a daily cycle low.

    If I can’t pull up a daily chart, stand on the other side of the room, and clearly make out the correction then it isn’t a correction.

  67. Beanie

    I think we go higher on monday. Any positive gap up monday morning is confirmation.

    The much lower probability play is a huge gap down on monday. The bears are positioning themselves for that. I think they’ll get disappointed.

  68. Poly

    Gary, something has to give between your daily and intermediate cycle right?

    I mean either you really stretch this current daily out and get your intermediate in together or you get this daily done next week (?) and go one more cycle down into the intermediate.

    But to hold the idea that the intermediate won’t happen until late March/April simply violates your previous argument (of course in relation to intermediate rules and not daily) “That’s incredibly long even considering that the Fed policy has probably elongated the normal cycle length”, does it not?

  69. Poly

    Sorry Beanie, the blood is on the street and we have at least a drop to the 50dma on the cards, no way out of that.
    We should close higher on Monday after today, it was a brutal day for the market. You have to put this day in context with the past 4 months to appreciate it.

  70. DG

    Two thoughts: Last time the N Korea attack spiked gold and it looked like a bottom had been put in and it wasn’t. This time it’s Egypt?

    The other is that SIL sold off on heavy volume yesterday and today bounced on lighter volume and didn’t clear even yesterday’s high. Both GDX and GDXJ cleared the high for a moment and then fell back below it. Usually after a big correction, the item rallies above the last few days’ price range on day one. I am not convinced at all that a bottom is in. This may just be on-the-news buying and there is more selling to come. (I hope). Once the dust settles the dollar’s continued rally may yet take its toll.

  71. Gary

    Yes one or the other has to stretch. Actually both are already stretched.

    I will say this the dollar is clearly rolling over into the three year cycle low.

    Market participants are protecting themselves against that by buying either stocks or commodities.

    The next dollar cycle should roll over quickly. When it does I have to wonder if the market will all of a sudden decide it doesn’t need protection from the three year cycle low.

    If it does then this should only be a daily cycle correction that will bottom when the dollar starts back down.

  72. Jerred

    Josh,

    Sorry for the delay, had to step out for a minute.

    The best books I have read are

    Mind over Markets

    Markets in Profile

    Al Brooks – price action

    Brett Steinbarger – The Daily Trading Coach

    Hope you enjoy them as much as I did.

    I would focus on the mental aspect and how the market auctions.

    entries and exits should be your last aspect to study

    You can do a search on Market Profiling as well (Market Delta)

    Investor RT is a great software

  73. JReality

    Beanie,

    I think a bounce on Monday would not be the least bit surprising. In fact, I do expect it. However, it also wouldn’t be surprising if that bounce turned out to be a nice selling opportunity.

  74. Poly

    DG,

    Gold up 1.66% and Silver up 4% and the $HUI, of deeply oversold territory manages a measly 1.17% gain! Not encouraging.

    Either the support/backing for the PM’s is not there yet or the drop in equities was a significant drag.

  75. Onlooker

    DG

    FWIW if you look at an intraday 10 min chart of SIL you’ll see that a huge part of that volume yesterday was at the open when it went up a bit. Then the volume was much lower during the sell off. Then today the largest part of the volume was on up candles.

    And there was very large volume today in GDXJ and a lot of the miners. Overall I’d say the picture is maybe mixed but there’s been a lot of volume since they bottomed day before yesterday starting with some very big volume on the very bottom on an intraday chart.

    And CEF’s premium got pumped up today almost 2 percentage pts, from 5.59% to 7.4% (my calcs as the CEF website is not accurate). Shows some eagerness and buying pressure, especially as it has been falling, having peaked around 9.7% and gotten down to under 5%.

    Time will tell.

  76. DG

    Onlooker: May be so about the volume, but usually the spike out of a deep correction does eclipse the past few days worth of decline—or at least the previous one day’s! Smells like a possible “N. Korea” fake out. I wish these damn things didn’t happen near possible fulcrum points. Must be a conspiracy by JPM!

  77. Josh

    Thanks, Jerred. I’ve seen some of Dr. Brett’s stuff before and like it, and I definitely want to learn more about market profiling.

  78. TZ(5288)

    You guys keep talking and acting like gold’s rise today is caused by the mideast. I completely disagree.

    We have already been selling off for almost 2 MONTHS. We had large capitulation in GLD yesterday and many of the mining stocks earlier in week (using volume and subjective analysis.)

    When gold was driven below the last significant low at 1315 there was LITTLE to no volume that got taken out. Breaking that low was a few K contracts at best.

    Surprising. And indicating that gold was “sold out”. Nobody else was stepping up to sell.

    Now, yes, maybe lower to 1300 would have brought up even more sellers, but then you have to consider that:
    A) everybody is looking to buy 1300 or a bit above/below it (all that 150dma talk) so we prob won’t get there, and
    B) the COT for gold is **VERY** much reduced. Heck…LOOK:

    http://snalaska.net/cot/current/charts/GC.png

    That’s DARN low!

    So gold breaks the last major low, nobody sells, the COT is low, it can’t get to 1300 cause people are already buying, and we pass the option/delivery window when you have the most downward pressure.
    (Trust me, *IF* the guys running the show could have driven things below 1300 overnight or in the morning THEY WOULD HAVE. It was too juicy of a target. They didn’t or couldn’t. That tells you what you need to know.)

    You even had the WSJ story about the gold guy who blew his fund up from too much leverage – scaring the mkt down earlier in the week, but now looking only like some bozo with no risk control. So people who exited on that now want in too.

    Yes, the mideast might have helped some, but I’m saying I see enough reasons that we might have bottomed here that I’m taking a large swing.

    Enjoy the weekend. We will pick it up on sun night (or mon morning for you ETF guys) and resume playing. Regardless, It appears the slow, patient market has now snapped and we are back into the action.

  79. TZ(5288)

    I’m not trying to cheer anybody into buying or change their plan – whatever that might be.

    I’m just telling you my reasons for jumping in big today (over 5x) and why I think the bottom is in.

    I have stops if wrong and I will lose 1-2% net worth (depending) if things go wrong. (DG: I’m only in gold and silver futures which trade almost 24hrs, so the ‘gap’ risk is minimal unlike the ETFs).

  80. TZ(5288)

    FYI: gold and silver futures trade till 5:15pm (another 5min) and then reopen at 6pm sunday night.

    That is the interval where there could be a gap risk, but the gap risk for precious metals is much more skewed to the upside than that downside. Think about it. Almost any other security in the world, if it ‘gaps’ will gap DOWN on some ‘event’. Precious metals gap UP more often than not on those same events.

    Consider what it would take to gap DOWN precious metals. It is hard to come up with something vs the gap UP scenarios. (Exchange controls would do it though).

  81. EricH

    I’m just not seeing the type of fear that would drive everyone back to gold. Take a look at the dollar index today. Up .5% for the day only?
    This bounce by gold looks like an oversold bounce.

  82. TZ(5288)

    DAVID,

    Yes. If I was worth $100,000 then i’m holding $500,000 worth of gold and silver futures.

    Those positions were bought in morning mostly and are all profitable.

    The stops are comfortably below closing prices and if those stops are hit, I would lose the equivalent of $1000-2000 (barring some calamity gap or opening straight down).

  83. thedocument

    Anyone remember this chart I posted 15 days ago?

    Gold Chart

    What we just witnessed this week was textbook intermediate low. The stops got run on high volume below an important pivot, followed by a vicious reversal. Today’s reversal is, in fact, what I term a “lock-out day” in my letter… wannabe longs just got locked out and are now forced to chase.

    I am now loaded up to ride what I believe is a new intermediate cycle which will last as long as it takes for the dollar to find it’s 3-year low. Furthermore, money will be fleeing the stock market as it usually does in crisis and looking for a safe haven. The dollar cannot serve that purpose when it is the cause of the crisis. Money will instead flow into PMs. Gold and silver are thin markets. I can’t wait to see how high billions of panicked dollars can take them…

  84. David Kafrick

    TZ,

    So your stop is only 0.2 to 0.4% below your entry level in silver? For example, if you bought silver at 26.80, your stop would have to be 6-10 cents below for the math to work out. That’s a pretty tight stop.

  85. Gary

    Doc,
    A weekly swing next week would be the first confirmation. Then if the miners can break the pattern of lower lows and lower highs that would just about do it I think, especially if they can do it against a rising dollar.

  86. JReality

    From Beanie’s blog comments section:
    _____________________
    Beanie said…
    Next stop at SPX 1600

    January 27, 2011 9:11 AM
    _________________________

  87. Gary

    I’ll follow you if gold makes a swing low on Monday. I’ll save the leverage in case we see a move down to $1290 or if the HUI breaks 548.

  88. Brian

    I too bought some miners yesterday when it hit the 150 dma. I intended this to be only a quick trade while I waited for the bottom. Since I didn’t hold a core position, I think I will make this my core position after reading some comments. Thanks all.

  89. Razvan

    TZ
    “Now, yes, maybe lower to 1300 would have brought up even more sellers, but then you have to consider that:
    A) everybody is looking to buy 1300 or a bit above/below it (all that 150dma talk) so we prob won’t get there, and”

    Gold did bounce of the 150sma last night. It went about 50 cent under the sma. The low was 1308.18 and the sma was at 1308.71. See the attached file.Dark Blue line is the 150 sma

    gold chart 150sma

  90. Gary

    With everyone watching the 150 DMA a bounce at that point was surely a self fulfilling prophesy. Whether or not it ends up marking the final low remains to be seen.

  91. Thomas

    Yes one thing I noticed is that no one looked at the 150 MA before doc mentioned it after the last intermediate cycle… once everyone starts to use something it just might not work the next time

  92. ike

    doc,

    In regards to the dollar, it looks like the dollar formed a swing low and is now beginning a new daily cycle.
    The intermediate cycle for the dollar is at week 12. Do you
    1) anticipate a (very) brief dollar rally?
    2) Subsequent to the daily cycle rally would you expect an extended decline into the intermediate cycle low coinciding with the 3 year cycle low of the dollar?

  93. Brian

    It’s interesting having to work on a day like today and then read the real time thoughts.

    The history I am familiar with is that every time a bottom happened, I didn’t believe it for many of the reasons stated here. Candles, vol, etc…Then it rocketed higher….

    And of course there was the fake bottom this time last year. Bottom line is we all have opinions and have to work our own book…..

  94. Greg

    TK has a post saying Silver goes down next week. I say NO. Time will tell…I guess some here are hoping he is right..Good luck with that πŸ™‚

  95. thedocument

    Ike,

    That’s more or less it, yes. Left-translated dollar cycles tend to peak within a week. I suspect this new cycle will perform a quick back-test of the DX 79 pivot and then head sharply lower. If gold has marked an intermediate low, as I suspect, it should mostly ignore this minor bounce in the dollar.

  96. William

    Gary, a belated congrats to you on your lifting performance. Well done. I wasn’t sure you’d do well as you spent so much testosterone on this blog just before your meet. πŸ˜‰

    thedocument, nice comments on $GOLD. The 150d EMA certainly is compelling, esp. w/so much precedence, incl. Friday. What bothers me here/now is the tail on Friday’s candle. Note that on Wed and Thurs that gold finished at it’s highs and lows, resp. But on Friday, price rose up, but then backed off.

    I’m still 100% in cash. A break of gold above Fri’s tale at 1350 or so would cause me to go long 10%, and then add to that daily as prices rise.

  97. William

    Gary, Friday’s $SILVER candle did break above the Wed/Thurs high – making a higher low (Thurs MOC) and a higher high (Fri MOC). Maybe this is what you’re noticing?

  98. Golden

    Mark my word, we havn’t reached the bottom in miners before blood is on the streets.. so far I can’r smell any… more like the other way round…

  99. Poly

    “Protester back on the streets”

    “About 1,000 Egyptians try to storm interior ministry in Cairo. “

    “Regional ruling party headquarters is torched amid renewed protests, as death toll from unrest crosses 90. “

  100. ALEX

    Just one comment/reminder here-

    Blogger Golden said…

    Mark my word, we haven’t reached the bottom in miners before blood is on the streets..

    Everyone seems to be looking , waiting’ for a ‘blood in the streets bottom”.Remember we are IN A C-WAVE , looking for an IT bottom, NOT a D-WAVE Bloodbath bottom.

    If you want to see the difference, just look at the IT bottom of 2010 July on say the GDX. Compare the volume down with recent volume down…ESP on a WKLY Chart…which looks bloodier to you…July low or NOW??

    http://www.screencast.com/t/rVlgrk1L5

    (click chart to zoom)

    ALSO, notice the POSSIBLE ‘bounce – retest” feared at this point is still lower than you will buy later.

    Nice report DOC!

  101. Jayhawk91

    Exactly Alex–last summers intermediate was extremely mild. This has been pretty severe with the HUI & GDX coming all the way back to the 62% retracement zone.

    Gary’s chart from last summer–the massive HUI triangle chart–he said at the time “we may never go bellow 500 for the rest of this bull market” or something to that effect. I’d love to go back and find the original post. So far this pullback has held that level so I think it’s wise to start building a position.

  102. jeanluvx

    82 million in Egypt the most patient people have had enough. Like the Berlin wall is coming down after 30 years of hard control over them. The curfew is being ignored again. The tanks are being lined up.

  103. Jayhawk91

    The position I added on Gary’s plan Thursday is back to break even, FYI. Did everyone take the stop loss or are others hanging on? This for me was a smaller position and I’m thinking Monday I will be bumping it up a bit.

  104. Gary

    Actually there are problems with this bottom. It isn’t following the normal intermediate bottoming process. It very much looks like Friday was more about Egypt than an intermediate bottom.

    I’ll have the weekend report done in a few minutes.

  105. ALEX

    Gary

    I dont disagree , and I feel this bottom MAY get retested and GOLD most definitely could dive below $1300, but for many reasons (technically and fundamentally) I see the GDX as just about done to the downside.

    If I were to sell Monday what I bought last Tuesday…I know I will be buying higher later (Unless this sells like 2008..not likely at all).

    This GDX (gold stocks)is near done if the Gold bull is still in a C-wave.

    (and anytime I post to you..I post with full respect for your work and knowledge)

  106. Gary

    Yes the miners are probably just about done. And relative strength in miners is one sign that an intermediate bottom is forming. So we might see another test of 490 but I doubt we will see any significant move below that.

  107. ALEX

    GAry

    agree , and it will NOT be easy to buy there if Gold is down $40 or so, right? So then you may get the real bottom.

    Also, the “rocket’ off of the bottom is usually HUGE , so i can picture the HUI diving down to trip the Oct lows @ 490ish…down $20 ( no one will buy that here) and then it rockets up to end up $20 and it’ll be at $529 (higher than now).

    This looks like the buy area , and if one can buy any future smash down , = great potential gains.

  108. ALEX

    Jayhawks

    I had to play catch up with the blog yesterday…was away. Enjoyed your charts , again I think we look at things similarly. thanks

  109. ALEX

    Looking back..yeah -charts show that to be true

    I guess no one buys that bottom because they are waiting for their own version of confirmation ( that those sell offs are over. It still leads to buying a lot higher than in the middle/bottom of the wash out

  110. Gary

    It takes increasing bullishness for a rally to develop. The technical break that usually happens at intermediate bottoms is not easily forgotten. That’s why the rally out of an intermediate low is usually very tentative.

  111. ALEX

    Gary

    what you just said is SO evident in blogs! The thinking goes from ‘so nervous’, panicky at the bottom, to crazy ‘I’m missing the move up’ in just a week or two. Your blog reveals sentiment well.

    I tend to be more contrarian now for that reason. And like you’ve said…if you dont overdo leverage, you can afford to but above bottoms and later you’re still way ahead.

  112. daniele

    hi gary from a minute ago, it is impossible toenter on web site.This is the message that appear “PHP has encountered an Access Violation at 024C00AD” if can help.

    thanks

  113. Rod

    I bought a lot of miners this last Tuesday when they hit their lows. Currently I’m sitting in them really good. Even in Thursday’s sell off they didn’t drop much. But even if we were to go lower, and as they drop, what would be wrong with just adding to them instead of dumping them in hopes of getting a lower price?

    Am I missing something here?

  114. ALEX

    Rod ,

    Hey , no one answered you yet (Gary may be fixing his site thats down)so I’ll add something here.

    I bought last Tuesday too. I plan on holding most or all at this point (unless my reasons for buying change drastically) .

    I have bought like this in the past , seen a ‘shake out’ and still, If I sold at that point and got back in at a comfortable moment in time- it was at higher prices. Did you see my chart posted above?

    HOWEVER_ I wouldnt be surprised to hear nxt wk…on a 6 month chart ..
    ” Hui is forming a head & shoulders?? , Gold is getting slammed below 1300??”, etc etc

    So it may not be easy if we DO retest those lows and even break a bit below to shake people out, then again, we could just keep moving higher. FWIW, I think you re in a good position if things work out as they look like they may to me now-even IF we had a shake-out.

  115. Gary

    At this point I don’t think I would stop out of positions anymore. Gold has either put in a bottom or it’s close enough that it probably isn’t worth stopping out because the odds of catching a lower low aren’t good.

  116. Gary

    I can’t tell you how many times I’ve tried to get Tim to take his foot of the pedal at intermediate cycle lows. The odds are just not good to continue shorting with the sector trading right at the 200 DMA.

    The only reason to continue pushing the short side once an asset has reached the 200 DMA is if you think it’s about to enter a bear market.

    The only way that is going to happen is if the fundamentals for gold have changed. I think we all can agree that they have not changed, they have in fact improved.

    Tim would be better off shorting the overextended stock market and going long gold.

  117. Keys

    Clear to me that this chaos will continue in places where food prices account for a high percentage of spending. Most people don’t realize that it is due to QE policies, but when the world prints prices go up. As bad as things are in the US, areas that spend 50%-60% on food will be the first to go nuts. If not Egypt, then somewhere else….People get hungry and people get mean….

    If you believe gold will respond upwards to an increase in world chaos, now may not be a good time to sell. In fact, in my mind, now would be a good time to buy some physical. World unrest can do some strange things….Albeit, I don’t expect the worst, but if the riots turn into something that will affect oil supply, I can almost guarantee that the US and other nations will be jumping in. The only question in my mind is what will happen with the dollar?

    Higher demand for it during chaos is a normal reaction…two reasons, safe haven, and as a source of trade during war times. Also if oil supply is crunched, what will happen to the miners? Too expensive to mine….just thoughts…but I may be making some percentage changes, with a higher allocation to actual metals(which is already pretty high)…will wait however to see how things go.

    If Ben causes WW3, unlikely but plausible, I wonder if those of us criticizing Ben for being an idiot or a criminal will change their minds. Ben is an artful thief, and is already stealing the purchasing power of nations. Very clever however, without going to physical war, Ben has been able to pillage other countries.

  118. basil

    Driver,
    if you or I would have traded the Attila’s many, many calls for an imminent large drop in the stock market in the past two years, we would both be living under a bridge in downtown LA and share a piece of bread. They guy is a weapon of mass destruction (of wealth that is). I admire his cojones for one reason only, and that is that he still dares to show up on that site to state his opinion about the market.

    Gary,
    after looking over the facts I agree with you that we are at a bottom. I had hoped for some more downside, but I think I’ll go back in positions early in the week.

  119. basil

    Gary,

    I meant to say: I agree with you that we are at OR close to a bottom. Not that I misread your statement again πŸ˜‰

    I just hope we bounce around here for a few days to get a good entry, as I don’t feel like chasing.

  120. Glen

    Rod,

    I also bought miners, except it was near the open on Thursday, so I paid quite a bit more than you did. I didn’t sell on the stop-out, and plan to hold this as my 35% core, since I didn’t have a core before.

  121. ALEX

    Gary

    last comment then going out..

    I had subscribed to your service (Aug onward for a few months) and I thought it was great really– insightful and even a confidence booster if someone was a little panicky ,inexperienced,and ‘unsure’ of their trade.

    That said , I also think it’s brilliant to open up the ARCHIVES as you have , so anyone who has read this blog can NOW SEE your chart work and commentary for themselves. In doing so, I believe some who have wondered if its worth it , will see that it is deeper and more extensive than just reading this blog.

    I allowed my sub to expired when I had travel plans and so on and got busy , but I.M.O.—It is a service WELL WORTH THE ASKING PRICE…(c’mon people…$25/ month??..a definite value) πŸ™‚

    I subscribed under another email (yahoo) and I was the guy that kept asking for a 6 month special, (because I was going to be too busy to renew a 1 month). You shot me down – haha

    Take care

  122. Razvan

    after the price action of the last few months i am definitely not eager to go full position right now. I am happy with my entry so far and will not add until we get solid confirmation of a bottom. Besides, the c wave top should get us passed 1600 on gold so there is no rush to gas it just yet.

  123. Driver

    Alex, the SPX.

    Basil, I’m not sure about Atilla’s record as I have my own system which I follow. I do thoroughly enjoy reading his posts.

  124. Onlooker

    basil

    Re: Attila, on that we can certainly agree, though I admit I haven’t looked upon that trainwreck in many months. But it sounds like he’s the same old broken record.

    If he ever got bullish, or at least not uber-bearish, for any period of time when it was appropriate, then I take part of that back. But really, he lost credibility LONG ago.

  125. Jayhawk91

    Nice, clean gold charts from superstar trader Brinkley from Blue Chip Bulldog. (She thinks the metals are showing some signs of firming up, but not quite bullish in her comments now. She’s not a bottom picker, she will patiently wait for the chart to prove itself and scale in.)

    Weekly Backtest-

    http://4.bp.blogspot.com/_oqKj7JIlUso/TULiT4QC6QI/AAAAAAAABLI/TcR9dLx0hT8/s1600/2011-01-28_GLD.png

    Weekly trendline–could have gold tag under 1300 and would achieve Gary’s scenario of a one more final stops blow out.

    http://www.screencast.com/users/brinkley/folders/Jing/media/bdafe32e-2aa9-4a35-befe-9d3008e2da45

    Great report Gary. I like your new strategy.

  126. Beanie

    My analysis of the charts:

    The market (SPX) still appears very strong. In fact, it is significantly stronger than gold (GLD). Both are still bullish.

    If there is going to be any breakdown, it is very likely gold will be the one to go down.

  127. blammo

    Bob Loves Hawaii is bkudla, aaahh. I see we all read the same blogs…

    Haven’t read Atilla or TK for years. Jake Gint on iBankCoin is great and I’d forgotten about Blue Chip who left TK’s site to start his own. I will start reading that one again.

    Alex, great charts, keep it up!

  128. Gary

    Beanie,
    Why would you want to buy into stocks that are stretched about as far as they ever stretch above the mean. Haven’t you ever heard of regression to the mean? Not to mention stocks are still in a secular long term bear market. Sentiment has reached bullish extremes rarely seen and commercial traders have one of the largest short positions since the April top.

    Gold on the other hand is trading very near it’s 200 DMA. It’s still in a bull market. Sentiment has reached bearish extremes. Commercial traders are the most bullish they’ve been in over a year and a half.

    Seriously, can’t you tell when it’s time to exit a trend that has extended too far on the upside and enter one that has pushed too far on the downside?

  129. William

    Gary, I agree w/gold/HUI bottoming here due to the 200d EMA and COT. But, didn’t you sell your leveraged gold position a day or 2 ago? Why? Because this looks more like trading than investing. No one’s perfect – not me either – just want to know how you see it retrospect is all.

    FYI I just noticed …

    – $USD up (Fri), $SPX down – normal
    – $USD up, $GOLD up – OK, it happens
    – $USD up, $WTIC up – rare – meaning?
    – $USD up, $COPPER up – unheard of – meaning?

  130. Gary

    My stop did trigger on Thursday. I was expecting at least a week long bounce out of a daily cycle low and even if it turned out to be a fakeout I thought I would be able to recognize it and get out even or maybe with a small profit. The immediate selloff caught me and triggered my stop.

    The jump in oil and most commodities is driven by what is happening in Egypt. Certainly oil is from fear the Suez canal may close.

  131. james r

    Silver has put in a bullish engulfing candle last Friday. The pattern will be confirmed if silver opens higher and continued the reversal.

  132. William

    james r, I noticed that too. But does $SILVER lead $GOLD? Both $GOLD and the $HUI had candle wicks … looks like hesitation … either way you’re right we need confirmation on Monday.

  133. Haggerty

    Gary,

    The first two parts of this Cwave seem to have lasted 2-3 months. Do you see the same time interval for the last part of this Cwave when it does start?

  134. Gary

    James,
    Two days is kind of meaningless don’t you think?

    I’m looking at the last month and copper has made a lower low and a lower high.

  135. james r

    Hi William,

    I am looking at evidence to suggest that the downtrend may have changed such as volume, candlesticks, macd, stoch.etc

    And hopefully we will continue to see more evidence this coming week.

    James

  136. William

    Yup, me, too. I see a bottom forming. $HUI at the 200d EMA, COT, and seasonality suggest higher prices ahead thru March.

    However, part of me thinks Gary’s cycles magic might be correct. The $SPX seems about to tip over, and if it does, the $HUI will have a hard time climbing.

    I’m still 100% in cash, waiting for a trend to identify itself, so I can follow.

  137. basil

    Gary,

    Whether the bottom is at 1310 or 1300 or 1290 or 1260 to me is meaningless, it’s practically the same bottom as the percentage difference is marginal.

    I like to believe that somewhere here is the bottom and put my money where my mouth is.

    However, if we’d assume it goes down to 1050, just hypothetically and to pick a number; how would you explain what went wrong? Or, put differently, what would need to happen here to change your mind about the expiration date of this C wave?

    Thanks

  138. Gary

    Basil,
    The odds of a move to $1050 this late in the intermediate cycle are virtually 0. For a move down of that magnitude to develop we would need to see a left translated intermediate cycle.

    On top of that, a move that drives gold that far below the 200 DMA would only occur at an 8 year cycle low. The last one occurred in 2008. The next one isn’t due till 2016.

    D-waves materialize from extreme overbought/parabolic conditions. They are an extreme form of regression to the mean.

    We haven’t seen anything that resembles a true C-wave top yet. Not to mention we still haven’t put in the three year cycle low in the dollar.

    Until those two things happen it’s next to impossible to have a D-wave begin.

    As to the first part of your comment, yes we are close enough to a bottom that the upside potential is now huge even if one doesn’t time the perfect entry.

  139. james r

    William,

    I am not entirely convinced that if the general market goes down it will also take the mining sector down this time (like what happened last year).

    I think maybe, just maybe money will start to rotate from the general market to the commodity sector pushing HUI to an accelerated rate. As you would expect in the final phase of a massive C wave.

    I think what we are witnessing now is a fundamental change in perception. Investors are no longer moving to the dollar after selling their equities but to commodities.

    You can thank QE2 for that!

    Just some personal thoughts

  140. james r

    People,

    We should be jumping for joy if 1300 doesn’t get hit.

    What that tells me is there is a great demand for metals beyond expectations.

    Now that is bullish!

  141. William

    james r, thanks for that. Makes good sense. You are probably right.

    So, for me, if the $HUI breaks and closes above the Wed/Thurs/Fri pivot high of 520, then I’d be a buyer at MOC (market close).

  142. Gary

    I would prefer sub 1300 for two reasons. First we would make more money.

    Second one could get in and go Old Turkey. Even if that didn’t mark the final bottom it would be “close enough”.

  143. basil

    Gary,

    so you are ruling out the following scenario because you are still expecting the 3 year cycle low for the dollar and because you think the C wave cannot be complete under any circumstances, right?…

    – Key reversal in stocks. Break to the downside with July lows as first target.
    – Dollar rally, providing the proper back drop for the fall in stocks.
    – PMs (and other commodities) fall further in concert with stocks (but not quite as much) and echoing a dollar rally.

    Just playing devil’s advocate here.

    Thanks.

  144. Beanie

    Regression to the mean on the SPX? The bears have said the same thing about SPX regressing to the mean for nearly two years now. If there is one thing that needs to regress, it’s probably gold.

    I’ve actually bought more stocks on Friday.

  145. Rob

    Gary,

    If the situation in the Middle East intensifies on Sunday and gold opens high and climbs even higher during the day on Monday, should I buy the mining stocks as I had planned, or would you wait for a possible pullback?

  146. DG

    Gary: Why do you pick 548 for $HUI as a “higher high.” 528.34 seems just as good to me. Doo you choose 548 because it came off the previous daily cycle low? Thanks.

  147. William

    Basil, I think James R’s thoughts are correct that money roatating out of the $SPX would go to the PM sector.

    The relationship between the $USD and $GOLD seems unreliable and maybe broken. Fundamentally, if the $USD is not backed by gold (and it isn’t) then it isn’t technically money anymore. Just a paper IOU.

    Gary, I have no core position. Stupid, I know. Remember I’m a powerlifter, not a weightlifter – we have smaller brains and longer arms. Back to gold, if you had no core position, would you “Old Turkey” a 30% position? Use Kindergarden level English so that my Neanderthal brain can understand it please. πŸ˜‰

  148. Gary

    The key to all those scenarios would demand that the dollar put in the three year cycle low back in Nov. a full 5 months early.

    It would have to have bottomed without producing the normal panic seen at almost all three year cycle lows. (Sentiment was only mildly bearish at the time.)

    Considering that the rally out of the Nov. bottom has been unable to regain the 200 DMA and is again making lower lows and lower highs I would say the odds of that happening are very small.

  149. Gary

    DG,
    528 isn’t a major pivot in my book. It’s just a very minor two day blip in a down trending market. 548 is a clear pivot point.

    William,
    One could take a full position right here and go Old turkey with it and make a killing even if they didn’t time a perfect entry. On average the move just back to the old highs is about 20-30% for most miners and AGQ.

  150. Gary

    Beanie,
    The S&P regressed to the mean last Feb. and again in May. The move in May was many times more intense than what happened in Feb. Want to guess why? Because the upside stretch was more extreme in April than it was in Jan.

    The law of action and reaction. The further you stretch the rubber band the harder it snaps back in the other direction.

    We’ve now stretched the rubber band further this time than just about any other time in the last 20 years thanks to the Fed’s meddling.

    Ben first round of QE created the conditions in April that led to the May crash. Greenspan and Bernanke’s meddling from 02-07 created the conditions that led to 08/09.

  151. Gary

    Beanie,
    Do yourself a favor and pull up a 10 year chart of the SPX and NDX with the 200 day moving average on both.

    Look at how far they are stretched above the mean and then compare that to what happened other times the market got stretched like this. Then ask yourself if you really feel comfortable buying now.

  152. Rob

    Gary,

    I know you’re specialty is timing, but do you have a ball-park price for the price of gold when this move ends in April? I read a few cycle analyst blogs and get the impression that they are salivating at the potential appreciation over the next 2-3 months….LOL

Comments are closed.