While I don’t think gold is likely to head back down and make a lower low I’m going to lay out a simple strategy to protect against getting caught in case it does.

It appears likely that we may see our first reaction against the new uptrend. This is the #2 test of the lows in a 1-2-3 reversal.

If gold then reverses and breaks through the pivot it will complete the 1-2-3 reversal and it will have begun a pattern of higher highs and higher lows.

That would be the signal that the down trend has been broken and one could add in full positions or leverage (don’t get carried away) as they see fit.

The downside is of course one will lose some profit potential waiting for confirmation and if gold reverses the early morning weakness you will just have to immediately buy back.

The action would be to lock in some profits this morning and then wait for the pattern of higher highs and higher lows to complete before putting positions back on.

638 thoughts on “1-2-3 REVERSAL

  1. Shalom Bernanke

    Good morning. I didn’t see where lightening up was the plan.

    I’m not selling anything, and only looking for opportunities to add into these declines. Trying to get to fully invested before the next up leg, and have 40% of funds (then margin) to use.

  2. T.J. Rand

    Money never sleeps…and apparently you don’t either, Gary. Thanks for the early morning guidance.

    All of the fundamentals – from QE2, to increasing physical shortages, to the Bernacks denial of inflation, to China’s inflation vs. the Chinese propensity to hold gold, to even the Wynter Benton intrigue – still lined up for Silver/Gold to scream higher over the next few weeks. But the calls for lower prices and fear of losing $ are tap dancing on my emotions.

    I’ll probably lighten up on AGQ – I’m not certain what will happen to derivatives-based ETFs (I assume AGQ is this – I have not dived into the prospectus) as physical and paper PMs decouple. My assumption is that premiums will simply increase, but I have not yet worked through the implications if the COMEX were to default in the coming months.

  3. Shalom Bernanke


    No, it’s early and I didn’t word that too well. I’m referring to how how Gary is going to trade it. I don’t think he’ll take any off, just that is one option. I’m sticking with mine as I absolutely hate selling strong groups into weakness unless they hit stops which are always very wide.

    If I booked profits, then I’ll just buy back the same size I exited. It feels good to book profits, but then I won’t get 100% like I want into a decline, instead maybe only back to 60%, thus limiting my upside whenever the bull continues.

  4. Fergie

    Yup, that’s about right and we’re almost there. I’m still sitting on a very green position and have no interest in giving up a strong hand. I’ll leave that to those of you that are over leveraged scalpers.

  5. Avann

    I was already at 100% and since I don’t use leverage I’m taking this opportunity to try to play the 10 dma re-entry. For those who are not at 100% probably easy enough to just wait and add more.

  6. ALEX


    I agree with Shalom and Fergie-

    I went over some ‘charts’ and ‘thoughts’ last night , and now I really feel the downside is minimal on GDX…($55.50ish)could even be an intra day reversal.

    Last August off the bottom , the GDX pullbacks never closed below the 20sma, but often bounced off of it.I would imagine that This leg up should be stronger-and hold up better. Last FEB low , the leg up was sloppy and looked less convincing…The Aug low was tight and strong…I imagine this one will be stronger-more buying the dips/ I.M.H.O.

    Since I think THE bottom has been put in place ,I will watch the 20sma on GDX for now.


    Close below the 20sma/trendline= MAY change my opinion

  7. aaronpalang

    You lost me at ‘reversal’. We are coming out of an intermediate low, and you expect a reversal already? and you think the top to the daily cycle is in too? You dont think that its too soon? Thats more bearish than Teddy!
    I shall disagree with that call, since you are moving the goal posts from the 10DMA (which I agreed with), to a test of 1340!
    I think we blow through 1370 before we test 1340(if ever).

  8. mamaloshen

    FWIW (and don’t know whether anyone else agrees) I see parallels with the gold action from early Feb. last year, a solid low at $1045 followed by a strong move up of $100. But then there was sideways to down action until late March.

    If it follows the same pattern (of course it won’t exactly), we could see a move to just over $1400 to bring in a lot of retail buyers, then a sharp move down to the mid-$1300’s. Then it could be off to the races until mid-June. So I wonder if two A-B-C corrections could be a possibility like last year, not just one as Gary suggests.

    Looking at gold in euros, it looks like a solid bottom was put in place recently; also gold vs crude oil, a chart Gary showed the other day. If gold gets to 17x a barrel of crude, with crude at $90, gold “ought” to be $1530 or so (maybe that will be a selling point sometime this spring coinciding with the dollar low Gary has mentioned).

    Also, don’t forget the $BPGDM which is rallying from oversold levels and on a buy signal.

    All in all, I think sitting on one’s positions and doing nothing until June is the best policy; otherwise, there’s a big risk of getting whipsawed. When I trade, I either come in too late on the buy side and miss the initial move, or sell too late, so I’m happy to just to sit with what I have (this includes AGQ, CEF, ANV, AZK, HL, PAAS, PAL, SIL, SLW, UXG and two stinkers–GSS and JAG).

    Fortunately, my juniors picked up in 2005 have done well, so there’s merit in being in Old Turkey mode. These include GPR.TO, FR.TO, EXK and SBB.TO.

    Thanks for reading and wondering if anyone else see it the way I do. Plus any advice on GSS or JAG appreciated; I am really getting fed up with these, but that might be a good reason to do nothing!

  9. Gary

    I’ve given everyone a simple plan to protect profits on the small chance that gold does have another leg down (and the stock market is finally ready to correct).

    The upside is you won’t ride that correction if it happens. The downside is you will miss a small amount of profit potential waiting for the confirmation. (looks like about .70 if silver where to open here.)

    If silver is going to $50 like I think it will, does .70 really make all that much difference? No of course not.

    If you are confident this will only be a #2 test and the #3 confirmation will happen then use the pullback to add to positions.

  10. Gary

    Those lines are in no way a target. You should know by now I rarely post targets. I’m just drawing in the general trajectory of a 1-2-3 reversal pattern.

    A 1-2-3 reversal is a reversal of the down trend BTW not the fledgling uptrend.

    Pay attention to what I write people.

  11. james r

    Thinking out loud

    I was thinking if the gold market is going to reach our target say 1600-1800 do you think it would make sense for the market to correct well below 1300 (say 1260-1240) to shake off the loose hands and any bullish sentiment?

    I believe this type of correction would give us the added strength to reach our goal as oppose to a weaker correction above 1300.

    If you look at other bull runs like the nasdaq in 1998 it had a deep correction before it may its final run to the top in 2000. I’m sure there are other examples.

    Just trying to make some sense on the direction and timing of the market…

  12. mamaloshen

    I should have mentioned the first correction commenced 10 trading days after the Feb. 5, 2010 low of $1044.80at $1130.90; the the next bottom was 3days later at $1088.70.

    After that, we had a top of $1144.80 on 3 March and a final low of $1085.50on March 24, so two corrections in Feb. and March.

    We could be nearing the end of the first correction by this Friday from somewhat lower levels.

  13. Gary

    It’s probably getting too late for another big move down. That would probably decrease the odds of a move to 1800 at this point.

    I expect we will just see a normal 1-2-3 reversal play out and then it will be off to the races.

  14. ALEX

    When I first read Garys plan option..I viewed it as a good ‘option’ for those that are nervous. It gives them piece of mind if this goes down ( and probably answers 100 questions that would have shown up here today ,if we start down.


    I ,at first ,compared last Feb low to this Feb low…Last Feb’s a bit sloppier and less impressive to me than Aug low…

    but I would imagine (maybe not) that this leg up should be the blast upward to a peak…stronger basically, so I compare to Aug low (but keep in mind Feb low)

    As for gss and Jag. Jag has problems , and my money is safer in EXK or AXU at that price. Jag does occasionally rocket up…and SHOULD close the gap at $6, because downside volume looks exhausted..it can now bounce ..but I.M.O..SAFER in EXK or AXU.

    GSS puzzles me, I expected more. I dumped mine in Oct and started looking at CGR , CDY , CXZ for potential Junior rockets.


  15. sophia

    I think that the stock market is finally ripe for a small correction…The Jobless Claims numbers were great and last week, it would have triggered a large move up, but today, NSQ feels pretty heavy….

  16. Gary

    Yes I will. .70 is a small price to pay for confirmation that the pattern of lower lows and lower highs has been broken.

    Once we have that confirmation I will then re-enter with my full margin position for the full ride up.

  17. ALEX

    James R

    I like your comparisons and way of thinking things through…but what about this?

    I think it can make 1600 -1800 ..(lets say 30% from here )easily from here too.

    as for the Nasdaq comparison…I agree and look at those things, but I dont think we are where Nasdaq was in 1998…yet.

    But This blow off kind of C-wave top could be more like Aug 07 to march 08


    or 2005 to 2006 , look at that minor Jan to Feb correction sideways, then a blast off up 30%.

    we are looking for 30% too , and it only went sideways that yr.

    $1350 + 30% = $1755

  18. mylifemytrade

    Gold should go down some as Gary is saying and then go back up…

    Rubber meets the road next week when gold is in 1390+ area… One day, we will have a big gap from 1390 area… 30 point or so (not on futures.. but on NYSE hours-only charts)…. it could be to 1420+ or sub-1360… So far charts are telling me it will be to the downside…. But I will keep watching Ms Market to see what she unfolds…

  19. Pseudopersona

    Not snark, just a little confused. This seems contrary to your own advice from 2 days ago.:

    “If you are lucky enough to get in close to an intermediate bottom (and I think we probably did), stay in. “

  20. mamaloshen

    Hi Alex,

    Thanks very much for your comments.

    Yes, the parallel with last August’s low is possible. If so, gold should move up soon with hardly any correction at all until April.

    Some talk of the principle of alternation, i.e. markets follow patterns not of the immediate previous move, but the one before that, but who knows?

    I have one worry, though. Is it possible gold is sniffing out an end to QE2, hence the corrective action? Maybe Gary might chime in on this. It is a possibility, especially if the (largely fudged) unemployment numbers come down in future.

    Thanks also for your comments on GSS and JAG. Will probably sell these next time the RSI gets to 70 (seems to happen once or twice a year).

    AXU looks good; CXZ seems to be coming out of a long sleep judging by the weekly chart. One to keep an eye on.

  21. Keys

    If the stock market corrects here and takes gold for a ride, as well as taking the dollar up in the face of QE2…wow…
    I think we would need to push this C-wave out to next fall….but what do I know?!? (Like really) And I have stopped caring…you get wiped around enough, you learn to simply take a stand and ignore the wiggles and the big wiggles too. Some Gaps are being filled so to speak…SLW for one should fill.
    Anyways having cereal this morning and going out for the day…I figure the blog will be filled with panic in’s or outs…

    And if Gary is early about the C-wave, I will expect a lot more “entertainment” and a bunch of interesting comments. Then we get the never $1400 again crowd in….sounds about right for a gold bull. All I can say is that the mountain top, despite being far away, keeps getting prettier the more Ben speaks. T.J listed some key observations already.

    QE will not end, Ben knows he needs to keep it going…He has pretty much said so…but I am reading betweent the lines here(no guarantees!!) Actually, hate to say it, but having the USD rise now and into say April is the perfect set-up for Ben to say QE will continue. Alot easier for Ben to say QE has no effect when the buck is going up….Anyways, I don’t like how the markets are acting…I am keeping to my guns, and riding this bull.

    The ideal situation for BEN would be for the market to stabilize or continue up, and for the dollar to rise.

    We are on the verge of another housing crash, and a new round of despair, so the market needs to stay up in order for the curtain to not be pulled.

    Good luck!

  22. Gary

    Everyone will have to decide for themselves what they want to do. If we get a reaction here and the low holds and then make a higher high. that would be confirmation of a pattern reversal to higher highs and higher lows.

    If gold continues higher and rises at least 12 days that would signal a right translated cycle and the odds would go up considerably that 1307 was the intermediate low and would not be violated.

    If stocks decide to finally correct and gold decides to follow then taking profits and re-entering at the next cycle low would be the right plan.

    Unfortunately I can’t see the future so I’m going to make a judgment call that the swing high today in gold is going to mark a #2 reaction that should hold above the lows and once I have confirmation of the pattern reversal I will enter with my full margin position.

    I’m willing to sacrifice a little profit potential in return for confirmation the trend has reversed. I will make up for that little bit of missed profit by using a bit of leverage.

    Until we at least had a swing high it didn’t make sense to sell positions yesterday or the day before. There was no sign at the time gold had even begun a reactive move. So there was no logical reason to sell anything at that point.

    I am still holding my core position BTW.

  23. Onlooker

    I don’t know Gary, you can do what you want but this seems very “un-Gary”-like to me. It just seems like an opportunity to sell into expected weakness and loose profit potential. This is “trader thinking”, IMHO.

    Right now all we’ve got going is an EXPECTED test of the 10 DMA. So why sell now?

    I understand you laying out this plan for the nervous nellies, but I’m surprised you’re taking this option yourself.

    I suppose you’ve already made enough money that you’ve got the “luxury” of taking this insurance plan. That makes sense, I suppose. It’s just so counter to all your normal guidance and strategy (including just yesterday; i.e. test of 10 DMA) that I had to check again to see if this was the same blog. πŸ˜‰

    And anybody who takes this option shouldn’t come back later and whine about missed profits. Of course those of us who don’t sell any positions here shouldn’t rub it in if it goes our way either.

    Good luck to all.

  24. Pseudopersona

    I was just waiting for a pullback day to add in (only about 50% now) which sounded smart until this morning where we are getting a pullback day and everyone is saying sell sell instead.

  25. Poly

    Sophia, I think you’re right. With fear of sounding like a broken record, it’s taken a slaughter to flush out all short interest, but the tape now appears to want to ignore any news and print some red.

    If it drops from these levels, it will be a say day, but I at least kept about 30% of that put trade, thanks to suggestions DG made to somebody else.

    Looks like the dollar still wants to rally a little after all and maybe tag 79 or 50dma. For us Gold bulls, it should server a s a wonderful shakeout after this explosive move off the bottom.

  26. Onlooker

    The dollar is perched at a key pivot point right now; at about 79.50

    What it does here will be very telling for the short-intermediate term. Of course it could pull back a little from here (as it has started to do) before blasting up through it. So the verdict may be out for a day or so.

  27. Shalom Bernanke

    Even if I thought something had changed (I don’t), I would not sell weakness in a bull market. If anything, I’d ride lower and sell into the next bounce. Surely it’ll bounce to where we are now, maybe more, and I have the benefit of extra time to reassess.

  28. Gary

    I want to add in at least 130 to 150%. I can’t do that until I have confirmation of a trend change so I’m willing to lose a little profit potential while i wait for that confirmation.

    Like I said if silver goes to $50 and I can get leveraged 130-150% what difference does .70 make?

    But if one is confident the reaction will be brief and doesn’t want to miss that .70 then use the pullback to the 10 DMA to add to positions.

  29. ALEX


    I always play out the ‘what ifs…’ too.I hate looking at GLD on a 5 yr wkly , because when I look at the trendlines from May 06 to March 08 to know…theres a strong channel that looks like we topped…and are headed to 120 GLD.

    Even the 2 yr channel shows a pattern A-B-C from top

    A) 139ish down to
    B) 129ishup to
    C) 134ish down to
    D) 124ish next

    but sshhh, we’re not going to mention that here πŸ™‚

  30. Shalom Bernanke

    “until this morning where we are getting a pullback day and everyone is saying sell sell instead.”- pseudopersona

    Not everybody is saying sell.


    I suppose it depends on how far back we want to look. I might also say I would be selling into strength if we looked at very long term charts where we have huge unrealized profits. What I meant is I’d only sell into a strong day (unless stopped out- that’s different), thus giving me the added benefit of seeing just how strong it is, too. Strong enough, and I might even decide to stay in. πŸ™‚

  31. Gary

    My core position.

    Remember you don’t have to copy what I’m doing. If you think this will bottom and reverse quickly and you don’t want to give up that .70 cents then use the weakness to add to positions when the 10 DMA is tested.

  32. TZ(5288)

    I didn’t add any silver this morning. It dropped to my first tentative buy point, but I have enough all ready and don’t want to lose my existing position by overdoing things at high levels and causing significant profit loss if we go lower.

    This simply isn’t a drop that I would consider a ‘deal’ at this point base on how far we have rallied.

  33. james r

    If we get a red candle today we may have an ‘evening doji star’ on silver and gold.

    That’s a confirmation of a sell signal. Buy back until the trend reverses.

  34. Poly

    Gary, sorry, you’re ALL over the place this morning, I can’t follow what you moved to.

    If you made a portfolio change, could you please post a twitter/blog update with exact movements?

  35. Sandy


    What is the core position that you are going back to. Are you doing it right now or will do it later in the day.

    I assume you see fair downside if gold makes a low at this point in time, since you are going against your prophecy of Old Turkey and trying to trade around it. Can you share what kind of lows do you think can happen at this stage.


  36. Gary

    Everybody’s core is different depending on their risk tolerance. DG had no core during the correction, I held 35%. Some didn’t reduce at all.

    I’m trying to enter a leveraged (130-150% position) but before I do that I want confirmation the trend has reversed. I’m willing to lose a little profit potential while I wait for that confirmation.

    If by some small chance the stock market does correct and takes gold back down to new lows then I will look to re-enter full margin positions at the next daily cycle low.

    I doubt that will happen but if it does I will be ready to take advantage.

  37. Onlooker


    That’s exactly the way I see this too. I’ve worked hard to get my psychology to this point – moving away from the stereotypical “retail investor” thought process – and I’m not going to back track now.

    I understand, in a way, what Gary is doing here; given the angst displayed and the reaction to MLMT’s prognostications. He wanted to give some salve to those who might just sell out here in fear, with no re-entry plan.

    I’m just surprised he’s taking the option himself. He’s also set up a bit of confusion since it’s quite contrary to prior guidance and also has a trader mentality to it. Although I suppose that’s prudent for the leverage part of a portfolio. Time will tell!

  38. DG

    I’d appreciate a comment from someone: My stockcharts has the MA filled in a 10 days and shows different numbers from what people have said here.

    GLD: 131.53
    SLV: 28.40
    $GOLD: $1343.82

  39. Shalom Bernanke


    I agree entirely, and also see why Gary is making the move to get off margin. I’m in a different position as he was fully invested+margin, while I am still looking to get 100% invested. On the way up, my strategy would not perform as well, and on the way lower, I’m more comfortable. We can’t have it both ways! πŸ™‚

    The most important idea we can all come away with is that this is a secular bull and we should be long. The specifics of how to trade it will be up to the individual.

  40. DG

    TJ Rand. I show the 10 DMA on GDXJ at 36>40. Where do you show it? Seems like we show the same spot. I hate that we have different numbers floating around. Can anyone answer my previous post?

  41. Gary

    I’m just making a judgment call. Gold formed a swing high and the HUI has lost the 530 support. I think a 1-2-3 reversal is probably now in progress.

    I’m willing to wait to see if gold reverses the pattern of lower lows and lower highs. If I’m right and silver is going to $50 then losing .70 of profit potential is kind of meaningless, to me anyway.

    If that .70 is important to you, or anyone else, then just hang on. Even if gold does make a lower low it should be the final low and then we will be off to the races.

  42. alice

    “Men who can both be right and sit tight are uncommon. Do not try to sell and buy back (core positions) on reactions in a bull market.” ~ Jesse Livermore (the legend)

  43. Gary

    I don’t like the fact that the HUI lost the 530 support that it worked so hard to recover. We clearly have a pivot at 542. If the HUI can take that out we will break the pattern of lower lows and lower highs.

    That would be the signal to enter heavily.

  44. Gary

    Folks, Gold is the driver of the sector. You need to watch GLD.

    The miners will just follow gold (although a severe stock market correction could also influence miners).

    Use GLD as your trigger not GDXJ or SLV.

  45. basil

    The indices are just pausing so that the transports can catch up. As long as the Transports are in the green, ist’s all good.

    I won’t lighten up any silver positions here; makes no sense to me to try and trade around a small pull back here.

  46. basil

    The indices are just pausing so that the transports can catch up. As long as the Transports are in the green, ist’s all good.

    I won’t lighten up any silver positions here; makes no sense to me to try and trade around a small pull back here.

  47. Onlooker

    I understand what you’re saying Gary. I stand by what I’ve said though.

    At least nobody can accuse me of being an unquestioning worshiper! πŸ™‚

  48. TZ(5288)

    As per the current discussion, I’m not adjusting my position in any way this morning. I’m heavy long and my stops lower will get me out with a small loss if things don’t hold. I’m pretty sure they will.

    I’m only looking for a place to add more silver and havent found it yet.

  49. DG

    MLMT: NIce call. Just the kind of call I try to make and I saw nothing indicating a break today in gold and SPX (I did get the short term sell in SLV yesterday which I posted, but no comment on today specifically). You mentioned gold going to 1396 before any real break would get started. Still think that?

  50. TommyD

    DG and Gary,

    What is DMA?

    I have choices of
    simple, smoothed, Geometric and Exponential.

    I mostly use SMA and have added today based on that.


  51. Jayhawk

    All my miners are getting some support on their 10 DMA. Wait and see how the day ends on these 10 DMA and then see if the lows of today are violated on Friday before making a decision on whether or not the 10D failed.

    On the silver futures (SI-this level on the 4 hour was resistance now support for now. I’d like to see a 4 hour close above 30.35 for the bullish scenario. Also looks a bit like a flag there.


  52. TZ(5288)


    >I don’t like the fact that the HUI lost the 530 support that it worked so hard to recover. We clearly have a pivot at 542. If the HUI can take that out we will break the pattern of lower lows and lower highs.

    Since 2008 the returns and behavior of mining stocks to pure metal has been garbarge. There has been little to no outperformance against metal “in your hand”. The investment in the stocks is not good especially considering all the downside issues vs metal.

    Post 2008 the world recognized that they wanted something in a vault instead of something that can flood, go on strike, go broke from inflating expenses, be higher taxed or nationalized, etc.

    For over 3 years now mining stocks have NOT shown themselves to be a better deal than straight metal. That that is continuing now doesn’t worry me as much as it does you.

    If (when) the stocks clearly outperform the metal I will consider them more strongly.


    Down and flat. No value added.

  53. DG

    Basil: He just said ” a sharp move down” and this is the sharpest down move we have had since the bottom. Calling it yesterday has me impressed. The definition of “break” is besides the point. I sure didn’t know we’d be down today. He also mentioned stocks being down, which hasn’t happened very much. Calling an SLV top at 29.64 a week ahead of time also was a good call. These things catcs my attention.

  54. Jayhawk


    I’m pretty sure Gary is down to “core” not 100% like you said. I don’t know if core is 30% or 50% as his core interpretation varies.

  55. ALEX

    Tommy D said…

    I mostly use SMA and have added today based on that.


    NICE!!! Buying the dip! ( I use sma too , by the way)

    Jayhawk…nice charts , thx as usual

  56. Avann

    DG … I too have been impressed with MLMT’s calls … hence my disappointment yesterday at his call regarding $1400 gold.
    Happily he retracted that πŸ™‚

  57. Gary

    I’m just using the pivot at 542 as my confirmation the trend has reversed. It has nothing to do with performance compared to gold.

    It’s just a reversal of the pattern of lower lows and lower highs.

  58. Poly

    Gold is down .8% so the HUI is in response is down 2%.

    But, the HUI is up almost 10% in 11 trading days!

    GDXJ was up 16% in 11 days.

    This HUI reaction is well within was should be expected in light of its short run and still within the plan of many past days.

    IMO, a trade out this morning (already down 3% from the HUI highs yesterday anyway) is an over-reaction or not warranted yet. Time will tell, but I think it’s at least out of character.

  59. Jennifer

    I don’t like my online broker (Sharebuilder) Thinking today might be a good day to close that account and open a fresh one at a new site. What do you guys recommend? I don’t need anything too heavy duty.

  60. DG

    Vuvvy:Thanks. If memory serves, though, you said your buys are not as good as the sells, so you’re being on a buy is of less interest. Do I have that right? (It’s funny because my SPX system does much better with the buys. We ought to get together!)

  61. Gary

    I’m just waiting for confirmation before I go fully leveraged. There’s really no need for everyone to get their feathers ruffled.

    If you are confident this is just a minor pullback then use the opportunity to buy.

    .70 cents is meaningless to me especially considering I’ve been slightly leveraged already.

    If this is ready to run then 70 cents is nothing compared to the run from $30 to $50.

    I don’t mind waiting for confirmation.

    Everyone is acting like 70 cents is the end of the world.

    Now if I didn’t have a plan to re-enter that would be a different story but I do have. Once the HUI breaks above 543 I will re-enter with full margin.

  62. thedocument

    It’s fascinating to see everyone freaking out over PMs today when silver has only given up 40c of a $3.50 bounce out of its low. Gold is down less than 1%.

    I’ve warned my subscribers that this ride would be much more volatile than the relatively smooth sailing between July and December. Think of this trade as being on stormy seas. There is a big prize at the end of the boat ride, and the trick is to not get so sickened by all the ups and downs that you jump ship. To do that, you have to keep your eyes on the horizon, not on the waves. The horizon is made up of signals within cycle analysis that would tell us our ship won’t reach its destination. We are not even close to any of those signals with today’s action. Go take a nap, folks.

  63. ALEX

    TZ and TJ Rand


    Its really about choosing the right miners.

    That was a 2 or 3 yr chart posted. If you bought NG 2 yrs ago , its up 18x that price ( maybe you would have waited till it showed strength , so even buying in summer of 09 , you’d have been up 5x your money.

    SLW was under $3 , it hit over $40 this year!

    IAG = 10 x

    PAAS= 4x

    EXK= 7x

    so you said “Since 2008 the returns and behavior of mining stocks to pure metal has been garbarge. There has been little to no outperformance against metal “in your hand”.

    If (when) the stocks clearly outperform the metal I will consider them more strongly’

    I say it may be time to consider them πŸ™‚

  64. David Kafrick

    My opinion about today:

    The drop in gold had to come, I posted yesterday that the move in gold has been very uninspiring and we needed a spike down to attract the longer term buyers and shake out weak longs. So I am not worried about this move in gold so far.

    What I do not like about today, and what I did not expect, was for the Euro to drop this hard. This is a very weird move if the Euro is to maintain its uptrend against the dollar. So what makes me a little worried, is the move in the euro, not necessarily the move in gold, which needed to happen.

  65. Poly


    I’m confused, you went from 115% to 35% on this move and you’re saying we’re freaking out?

    Tell me I’m reading these posts incorrectly?

  66. Jesse


    I think you aren’t interpreting your chart correctly when you say GDX is flat to down relative to gold. The chart is saying that the GDX:GLD ratio went from 0.02 to 0.04, which means GDX outperformed by a factor of 2. From the low in Nov. 2008 GDX went from 17 to a recent high about 65. For GLD it went from 70 to 140. I would say the miners are outperforming the metal.

  67. Gary

    I think I mentioned Jim Rogers is now short tech.

    FWIW one could short the Q’s right now and put a stop at $58.14.

    We have a 4 day corollary on all indexes and a swing high and it now 58 days into the daily cycle.

    Risk is minimal and if the market is ready to move down into a daily cycle low there should be at least 4-5% of downside potential.

  68. Gary

    Read the post again. I have a clear plan to give me the signal to to full positions with leverage. Once the 1-2-3 reversal is complete that is the signal to enter heavy.

    Again you aren’t looking at full plan. I’m not selling because I think gold is going to come crashing down. I’m just waiting for a completion of the pattern reversal.

    Once we have a clear pattern of higher highs and higher lows we will have a confirmed uptrend. I’m just waiting for that confirmation before going all in (so to speak).

    If someone else is confident the pattern will reverse then use the weakness to buy. The risk is of course that you might be wrong. The stock market starts to correct violently and takes gold down one more time to a slightly lower low. If one is heavily leveraged in that case they will get a margin call and get knocked out of positions.

    I seriously doubt that will happen but I don’t mind losing 70 cents off a $20 move to have confirmation before a take on full margin.

  69. TZ(5288)


    Juniors are slightly better (GDXJ), but have limited history. And you are much more open to risk in a general market downturn.

    Again…nothing in aggregate is beating straight metal and it has been that way for years.

    If you want to pull out individual stocks to compare to gold/silver then just remember that you have now concentrated company risk. The only one I would do that with is SLW.

  70. T.J. Rand


    Point taken…I’ve not done the work to buy specific miners, so tend to veer toward the broader indices to keep company specific risk at bay.

  71. pimaCanyon


    Yesterday you said gold has topped and will never see 1400 again.

    Today you’re saying once gold hits 1390, there’s a good chance we’ll see a $30 gap on the hourly charts AND you’re saying that gap could be up or down.

    If gold has topped as you said yesterday, then how can it possibly gap to over 1400 which you said it would never see again???

  72. Poly

    Gary I did read your plan, thanks Gary and please no offense intended.

    What I tried to say is that the reversal, as you state, is well expected and in your plans outlined many times.

    I guess it seems you just took the bearish approach of selling and waiting for confirmation on the upside as opposed to bullish approach of holding and waiting for confirmation on the downside to sell, considering we’re in the trend.

    Being it’s a Bull market and that you already held a 115% position, in my opionion I would have expected you to hold your position.

  73. Redwine


    What’s your problem? Why won’t you answer the simple question of where you are concerning core? Are you down to 35%, 50%, 100%?

    What are you smoking this morning?

  74. Jayhawk

    “Since 2008 the returns and behavior of mining stocks to pure metal has been garbarge. There has been little to no outperformance against metal “in your hand”. The investment in the stocks is not good especially considering all the downside issues vs metal.”

    Yep, GDX & HUI components have sucked.

    The action has been in the juniors and more specifically junior silvers…Now try again with SLW or any of the favorite junior miners thrown around here.

    5 years SLW 397% to SLV 112%. EXK up 145%, etc. I know the bigger companies have not done well. SSRI, AUY, et all so I will grant you that. πŸ™‚


  75. TZ(5288)


    You guys are reading my comments wrong and also using data I’m not.

    The use of the 2008 LOW to measure something is USELESS. That’s like those people who keep using the 1980 high in gold to argue how little it has returned.

    The overall trend of stocks vs gold and silver BYPASSING THE 2008 CRASH is DOWN and FLAT.

    Please don’t start trying to justify something from the crash low like you are. You won’t get that again and it was probably a once in a 10-20 year event.

    The crash low prices bounced back up (as you would expect from an unnatural event) and have since BEEN FLAT. Just like I said.

    My comment and chart are based on the BEGINNING of 2008 on the very left (I can’t go back further than 3yrs without paying). You will see that (as I said) stocks have been down to flat, in general, for years. I know how to read a chart.

  76. T.J. Rand


    I’m holding a fair amount of metals as well, and am wrestling with physically backed paper(CEF, PSLV, etc.) vs derivative based paper (GLD, SLV and ultras – I’m likely a minority, but I do not believe that SLV and GLD are more than metals shush funds to allow their custodian, JPM, to trade/raid physical stores as needed).

    The 2 questions I keep turning over are what value the derivative-based ETFs will have if a) the COMEX fails or b) the derivative complex (God help us all) implodes. I just don’t know who all the counterparties are.

    To date, I’ve diversified across physically backed paper and miners, with some AGQ thrown in for juice. I see the miners as having physical assets that the derivative-based ETFs won’t have.

  77. Gary

    I just made a judgment call this morning. We have a swing high on gold, stocks are way overdue for a correction. It seemed like a the swing probably has good odds of forming a 1-2-3 reversal.

    Since I’ve already made good money off the bottom I’m content to wait for the 1-2-3 reversal to complete before going all in so to speak.

  78. basil


    the enter position, lighting up on position, re-enter position… that’s all trading. So this is a trading blog for gold. Got it.

  79. TZ(5288)



    silver vs. silver miners is FLAT.

    You are still NOT getting outperformance vs getting a lump of silver in a guarded, insured vault somewhere which is SIGNIFICANTLY safer.

    I already addressed the issue of penny stocks or explorers. Yes, in SOME cases they outperform, but you have to PICK them and then you have to risk a press release that slices you in half. So you then have to diversify and you are back to having an index.

    As I said, I consider SLW to be the only other possible investment besides the straight metal at this point. It DOES outperform without nearly as muchh company risk.

  80. Gary

    I’m waiting for confirmation before moving to a leveraged 130-150% position.

    You can certainly just hold positions as is. Like I said even if it turns out gold has one more leg down (which I doubt) as long as you aren’t leveraged you could just ride it out.

  81. Jesse


    How about the entire bull run? $HUI from Nov. 2000 to recent highs, 35 to 600. Gold on the other hand, 250 to 1425. Miners still look better to me.

  82. Sandy

    I have not used margin before, but contemplating to use it this time.

    What kind of interest rates do your brokers charge for margin. Schwab mentions 8 % at their website. Will appreciate your feedback if this seems good.

  83. aaronpalang

    The true battle for gold is for 1000 Euro, and they have been fighting that for the past 2 days. If you look at the fixes you will see how ridiculous these levels are. Its almost forced!
    And you want to tell me that its not manipulated? Silly Goose!
    This is why TA on gold is almost useless, and stops will be run so easily, and why people get swayed one way or the other so easily.
    Sit tight.

  84. TZ(5288)


    Please create and post a link of $hui:$gold and $hui:$silver from 2001 to present.

    I have some points to make, but need that chart. Thanks

    (imageshack.us will allow free image uploading if you need)

  85. Gary

    If you have a fairly large account you can probably talk them down to 4-5%. Even if you don’t it wouldn’t hurt to try and negotiate a better rate.

  86. Onlooker

    The irony here, Gary, is that you’re seeing all the things you’ve taught us coming back at you after this move. That’s what’s reflected in Poly’s, mine, and others comments.

    We’re just perplexed at the cognitive dissonance we’re feeling. πŸ™‚

  87. Jayhawk

    I actually agree with you for the most part TZ. So many of these miners have been garbage.

    I have most of my $ in SLW & AGQ, but then tried to pick the juniors with the best fundamentals & with the best price action. SVM, AG, NG, HL, AXU are my bigger holdings. I think these all will outperform SLV on this leg up…and I believe with do better than SIL. We will see.

  88. TZ(5288)


    >How about the entire bull run? $HUI from Nov. 2000 to recent highs, 35 to 600. Gold on the other hand, 250 to 1425. Miners still look better to me.

    Pausing my response to get those two charts i need. Suffice to say your comment chooses to ignore clear evidence that “something broke” in 2008, as we all clearly know.

    PS SOMEBODY: may I ask one more chart of $HUI:CEF since 2001

  89. DG

    Gary, I have to say that for you to cut back to 30% or so really does surprise me. I am not at all second guessing you, but as a “student” of your methods here I always try to figure out the rationale so I can learn. I’m surprised you’d sell 70% of your holdings bought lower. You must think it is a pretty reasonable chance that we’d go a fair bit lower from here. Your risk of missing an up move is not just 70 cents on silver due to gap risk. Since you cannot possibly get a margin call at only 100% invested, and your risk is to gold $1300,…? Seems very un-Old Turkey like. Please explain further, perhaps, here or this evening. What are the odds, in your opinion, we will see sub $1307?

  90. basil


    I understand that, but what indicates to you that it might possibly go down here? To me it looks like it’s gone fast the last ten days, and now it’s a second day in the red, to a very minor degree. Why would that tell me anything but the fact that gold needs to take a mini breather? What indicators am I missing that gold might drop here big time, to justify getting out of positions temporarily? For all I know, gold could go up, you miss out on 0.70 cents, as you say, then you get back in, only for gold to drop the day after.

  91. DG

    Gary: Lastly, you have said “The only reason to sell is to buy back lower” and “It’s so late in the cycle one can’t be at all sure of that, and even if you can it’ll only be for a day or two.” Please understand I am not at all trying too push you, and you are entitled to do whatever you think is best, butt if there is something I am missing I’d love to know what it is.

  92. basil


    I think this blog is morphing into a day-trade blog and gets carried away by too much talk as all popular blogs do. That shouldn’t change your original demeanor of old turkey. I think talking all day long about a trade makes everybody a day trader ultimately, it’s just the nature of the beast. Don’t you think?

  93. Gary

    I think you are perplexed because you don’t want to change your plan.

    And I’ve said at least a half dozen times already that there’s nothing wrong with that. If you are confident the pullback will be brief and recovered quickly then use the correction to buy.

    I’ve already made good money on this move already. I’m at the point where I want to put on much heavier leverage.

    I’m not going to do that until I see the pattern of lower lows and lower highs broken.

    So for now I’m going to set a trade trigger to buy with full margin as soon as the HUI or gold make a higher high.

  94. Poly

    DG that’s what i can not understand. The type of trade made today would be warranted if one believed we had around a 70% of breaking lower.

  95. ALEX


    Relax bro…

    It was a 3 yrs chart.

    You were specifically saying

    “For over 3 years now mining stocks have NOT shown themselves to be a better deal than straight metal.’

    and again…

    “If (when) the stocks clearly outperform the metal I will consider them more strongly.”

    Welcome… late to the party!

    I was trying to help you see that INDIVIDUAL STOCKS have outperformd LATELY , because you said…”UNTIL I SEE THEM OUTPERFORM…”

    They have moved 100%, 500% 800%

    Learn when to buy…learn when to sell. You said “I know how to read a chart!”

    My account is up more than 10x in the last 3 yrs, and it didnt get their buying an index and holding. Buy a basket of well researched juniors , and if one takes a bath…sell it. the others may return 200%,300%,500% etc

    but your statement that ‘MINERS ‘ have underperformed and that hasnt changed since 2008 …is dogmatic and incorrect.

    T.J. Rand

    That makes sense (your reply). If you havent had time to do the research necessary , playing it safe is best for you.

  96. TZ(5288)


    To get a chart going back more than 3yrs you have to have a subscription to SC. But you simply can’t link the chart cause when we click we don’t have subscriptions.

    A person would have to right-click the chart, save it as an image, and upload it to a site on the net.

  97. Shalom Bernanke


    SVM the lowest cost producer among it’s peers and earnings are behind us. It even pays a small dividend.

    I try not to be in love with any company or idea, and same applies here, so I own only a little more SVM than my other names. I do like how it trades and it typically makes big % swings both directions, offering great fills on both sides if you’ve been watching it. I’ve also gotten the bottom and top ticks when entering (with limit orders), while with many other miners my pre-placed order that should have been filled does not.

    Just my observations, but there are many good names out there as well.

  98. basil

    Wanted to write:

    Silver down 4 cents, gosh! Time to pull the plug???

    But he, silver is up 7 cents! We are in the green!!!
    Let’s get back in!

  99. pimaCanyon


    8 percent for margin is robbery when the Fed rate is near zero.

    However, I just checked with my broker (TOS) and they charge 7.45%.

    I don’t use margin because my funds are in an IRA account with TOS and margin is not allowed in an IRA.

  100. ALEX


    I reread my post , and it sounds like I am going off as I read it.

    I was actually smiling while writing it…kind of laughing.

    no offense meant…really was just trying to point out that lately…stocks have been pretty on fire.

    peace out

  101. Gary

    you are freaking out over nothing. If silver is going to $50 like I think it will then just buy once the HUI makes a higher high you still have $20 worth of upside profit.

    My plan is to just wait for confirmation the trend has reversed before putting on heavy (for me) leverage.

  102. aaronpalang

    You know whats funny? When Gary mentioned the pull back to the 10DMA, he said that it would be intraday and strong enough to make people think that the move has reversed.
    Golden words!

  103. Poly


    You may have done it before, but as our resident junior’s experts πŸ™‚ could you post your top 5 juniors each?

    I’m thinking of basket of real juniors (none of these $1b juniors!) might be in order.

    Do you mind posting your top 5 each? Cheers.

  104. DG

    aaronpalang: Imageshack used to let you post charts without registering. Now (as of this week) you have to register which I have hesitated to do. Why do you not want to use them?

  105. Shalom Bernanke

    The biggest risk in a bull market is losing one’s position as Gary says, so I could not bring myself to sell into weakness this morning. I also was looking to buy the dip but did nothing substantial, other than a token NUGT position just so I’ll be forced to keep an eye on it and see how it acts for possible future trading.

    NUGT added just less than 2% of my portfolio. Not enough volume in that one yet.

  106. pimaCanyon

    I had stops in on some of my SVM shares and on a small SLW position. Stops were just below their lower channel lines and were hit this morning.

    Very small part of my position. I also placed new buy orders down around 50 percent retracement of recent move up.

    SLW move way below the lower channel line and has now recovered all the way back to the channel. We’ll see whether this is a kiss goodbye for that channel line or whether it just gets back into the channel and continues higher.

  107. Onlooker

    Well Gary, you’re not gonna see this for what it is. You’re getting this feedback from folks for a reason.

    The last couple of days you were advising people to add the last of their positions on a retest of the 10 DMA. We get that today, but now you’re telling SOME folks to sell into this weakness instead.

    If you won’t admit that there are mixed signals here, then I don’t know what to say.

    I’m fine, as I have my plan and am following it. I learned from you and have the conviction to follow it and not trade like this.

    I won’t comment on this anymore. I just felt compelled to tell like I see it, for those who are confused here.

  108. pimaCanyon


    If gold continues higher today and tomorrow, then the anticipated 123 reversal has not occurred, right?

    That is the #2 point didn’t actually happen because we didn’t go low enough, right?

    Or did it? We DID make a lower low today (compared to yesterday). But do we need to have follow-thru on the downside for more than just one day in order to define the #2 point on the 123 reversal?

  109. vuvvy

    Looking like the 13 ma was the right place to add today, just like this summer. Intraday charts from then also indicate we may have a retracement of sorts after this initial pop with today’s lows holding.I expect some volatility tomorrow.I also have my system optimized to a 90 min chart and in the latest downtrend it had the shorts as winners 9 out of 10 times since the bottom at 1300plus and now has just had it’s 4th straight losing short since then indicating the clear trend change. I just hope USERX can now put in an up day if the pit session closes up.

  110. TZ(5288)

    Thanks DG,

    Ok, here people:

    This is a chart of the hui (mining stocks) vs CEF (PURE 50% gold and 50% silver, AUDITED and INSURED, sitting in vaults outside the US in canada).

    Since 2004 !!! it has been better to own the straight metal vs owning stocks. And the trend shows NO SIGNS of changing at this time.


  111. Gary

    I just decided that I was willing to wait and see where this reaction takes us. Like I said it’s only going to cost about 70 cents to get confirmation before I enter heavily.

    If that 70 cents is important to you then by all means hold or add.

    It’s not important to me because I’m going to add some margin once I have confirmation. That will more than make up for missing that 70 cents.

    And if by some small chance the reaction takes gold to new lows then I will enter full positions at the next cycle bottom.

  112. TZ(5288)

    imageshack requires no registration.

    Bold letters on home page say:

    “Welcome to ImageShack.
    No registration required. Free to use and enjoy.”

  113. Gary

    I think the HUI has moved far enough to consider the pivot at 542 important. If it’s broken then I would take that as a higher high and higher low.

  114. ALEX


    do you sell you r pure gold and silver during d-waves and buy back at the bottom? LOL

    Buying stocks at C-wave bottoms and selling at C-wave tops…compounds personal accounts far greater than gold/silver in a vault.

    No chart needed πŸ™‚

  115. TZ(5288)


    >I reread my post , and it sounds like I am going off as I read it.

    Half the people here are unstable. Join the club.
    Why else would I be 7x


  116. Jayhawk

    I agree with Onlooker Gary. You’ve been contradicting yourself a bit, but the market is dynamic and you are free to change your mind as you see fit.

  117. Poly

    Like onlooker I’m making this my last post on the subject.
    I think today’s post did not follow your staunch trading rules and philosophy. That’s ok, what’s more out off character is not acknowelding it.

    Now let’s hope you’re wrong πŸ™‚

  118. ALEX


    Is it safe to log onto my account and look now?? πŸ™‚

    I see NG , axu , ag is green already and maybe the storm is over?

    What GREAT looking reversals today on daily charts if this sticks

  119. DG

    TZ: You now need to register at imageshack to get direct url link to the full sized chart without ads. I posted a smaller version with their junk all over the place, that’s all.

  120. basil

    My best bet is that the markets in general (including the PMs) will go parabolic in the next eight weeks.

    2007 will in part be taken out, would be my best guess. And then it’s sell in May and go away to a nice vacation getaway.

  121. TZ(5288)


    >Buying stocks at C-wave bottoms and selling at C-wave tops…compounds personal accounts far greater than gold/silver in a vault. No chart needed.

    I agree. When people ask me for investing advice I always tell them to buy when something is at a bottom and sell it at the top.

    I also tell them to avoid buying stocks that are not going to go up. Whey would anybody do that?

    So, yes, I agree with your suggestion that a person should buy lows in mining stocks and sell the highs (but only stocks that will go up) since they will definitely beat gold and silver in an inactive vault or company somewhere.


  122. Shalom Bernanke


    One last point about SVM. Although any smaller miner could be a takeover candidate, SVM just happens to have the same market cap as recent buyout FRG. ($2 bil).

    Maybe that’s the size the bigger miners prefer, just big enough to make a difference in their reserves, while small enough they can afford the purchase?

  123. Gary

    Correct. That’s about what I figure I would miss by waiting for the HUI to move back above 542.

    So let me put it this way. I exit AGQ at about 146 this morning.

    I’ve already ridden it from roughly 130 to 146. I take those profits and wait for confirmation.

    Once the HUI confirms the trend reversal I enter AGQ at say 153ish and ride that to about 350-400 (That’s about were AGQ would be if silver hits $50.)

    I missed maybe 7 to 8 points of a 200+ point run. Don’t forget I will be slightly leveraged.

    In that scenario is it really too costly to wait for confirmation?

    And if the reaction does by some small chance takes gold to a lower low then I re-enter AGQ below 120.

  124. Uatatoka

    I’m puzzled by your calls this past few month Gary…usually your preaching not to try and move in and out of every wiggle in a bull market, yet it seems that is exactly what is going on. I’ll stick to the plan regardless of course. Just seems to be a lot of whipsaw as a result.

  125. Michael


    I think the reason you keep jumping in and out of your positions cuz you use leverage. Correct me if I am wrong, but I do not recall you doing that a few years ago while you only went in 100%.

  126. basil


    I would add to that. You should never advise some one to buy a stock that will implode some time in the future. And no one should buy the day before a crash! That is a vital rule!

  127. ALEX


    ‘Quite the candle on the 4 hour HUI.’

    You could draw arms and legs on that and anyone who sdidnt buy could say

    “They left me hanging”

    Not funny to those who sold…sorry

  128. Gary

    Correct. I would not use leverage unless I think gold is in a final leg up.

    I want some kind of confirmation before going to full leverage (for me that is 130-150%)

    See the example in the comment above.

  129. basil

    Michael, Gary,

    I think it’s simply that NO ONE can engage in the noise of a daily blog like this, which seems to have been rapidly growing, and remain completely focused. I just don’t think it is possible.
    Reasonable decisions in money matters need distance and detachment.

  130. ALEX


    Thanks , just read the other post. Now I dont have to mention that you cant leverage your gold in the vault 7x

    7x!! You are crazy , and soon to be wealthy If this thing does what I think it will.

  131. Rod

    King World News has received word from James Turk that silver is in extreme backwardation. Turk stated, “There is a huge story that is brewing. Silver is in backwardation to 2015, which is 13-cents cheaper than spot. This is unbelievable. Money does not go into backwardation except ‘in extremis’!”

  132. TZ(5288)


    Imageshack is definitely free and when you upload please notice there is a drop down box labeled “IMAGE RESIZE”. Set that to “Do not resize”.

    As always, it helps to read the directions. They are conveniently in english. πŸ™‚

  133. pimaCanyon

    Thanks, Gary. I see what you’re talking about on HUI.

    So you’ll come back to full position when HUI takes out its recent high of 542.82? Or will you wait till it breaks the 547.16 high it made when it was making lower highs and lower lows on its way down to the recent (and likely IT) low?

  134. Gary

    It just needs to break yesterdays high.

    When that happens I will have confirmation the trend has reversed and I will enter full positions plus leverage.

  135. DG

    TZ: imageshack (until last week) had an option to click on “direct link” which came up clean without all the jun k on the page. Try clicking on “Direct Link” now (2nd one down on left) and it makes you register.

  136. Wes


    For the record, can the 2-3 part of a 1-2-3 reversal occur on the same day ?

    I.e., can the higher low and higher high be made with the same daily bar ?

  137. pimaCanyon

    Lesson for me: Use HUI for channel lines.

    HUI perfectly touched its lower channel line at this morning’s low.

    Only on a break of that lower channel should I have considered selling ANY of my position, however small.

    Fortunately I sold only a small percentage of overall position. Will wait to reenter at either a lower price OR when HUI breaks above its recent high of 542.82

  138. Poly

    Keys, I think the Warsh announcement is huge.

    I believe he was the only permanent member considered “a hawk”? The other hark is Hoenig, but he is just an alternate.

  139. Shalom Bernanke


    The buyout would spike the price overnight by the amount of the premium. I’m not involved with this stock for that reason, but it’s nice to have the potential as a wildcard.

  140. Gary

    not really.

    We have a swing high in the sector. We need to see that reversed and preferably gold and miners both make a higher high.

  141. vuvvy

    IMO,Gary is exercising a good strategy by making the market prove itself before committing leverage.I have to think he may not have made the move if the miners were exhibiting relative strength to the metal.

  142. DG

    For those who think everyone is freaking out because of a one-day dip. That’s not what’s going on/. The question is whether the low is in or not. If I were convinced the low was in I’d relish the drop to buy more. The size of today’s drop isn’t the point. Dropping to or below $1307 is the question, and that is enough to care for non totally-Old-Turkey types

  143. Avann

    Thanks Vuvvy and DG. That’s all we’re talking about …. confirmation.
    If this were to happen deep in the cycle it would be a non-event.

  144. David

    I don’t envision buyouts in silver just yet. The sector’s too small, without the Barricks, newmonts and goldcorps. Who’s a buyer of a silver junior? Pan American?

    When it does happen, though, it will light a fire under the whole group.

  145. Gary

    Yesterday we didn’t have any indication of a top short term or other wise. Today the sector has formed a swing high. This came on day 9 so there is a slightly possibility that gold could form a left translated cycle and drop down to make a lower low.

    The miners and gold were turned back before being able to take out the 50 DMA.

    I’m at the point where I’m ready to put on my leverage but I’m not willing to do it with the threat of a left translated cycle hanging over me.

    So I will take some profits and wait for the market to reverse the pattern of lower lows and lower highs. I have a trade trigger set to buy if GDX takes out yesterday’s high.

    If one isn’t leveraged or is confident the swing will get corrected then use today’s weakness to add to positions and ignore my strategy.

  146. jak


    I’m not a trader and cannot keep up with all the wiggles. I got into 100% position this week – no leverage. Mostly holding GDX & GDXJ. Already down 3% and should emotionally be fine with taking another 7% draw down. In your opinion, is it still safe to go Old Turkey and ride this C-wave? Or do you foresee a 15%-20% draw down coming?

  147. aaronpalang

    DG thats not true. What everyone is complaining about is the change in strategy. All of a sudden the Blees rating that Gary talks about, and how late in the intermediate ccyle we had been 27 weeks, is simply not good enough to call the bottom, two weeks later and 50 dollars higher. Its the change in strategy that has some people confused.
    I for one, have disagreed with the call.

  148. Gary

    I doubt we will see a 15% drawdown form here. I’m actually just expecting a minor reaction and then a move to new highs.

    As long as you aren’t leveraged and don’t mind holding through a draw you could just ignore my strategy.

  149. Gary

    I’m ready to put on leverage. I want confirmation before doing that.

    I could just hold through any correction and see what plays out but after weighing the potential profit loss (small) I decided to just take some profits and initiate a re-entry plan with leverage once confirmation is complete.

    The fact that I already have some fairly sizable profits also played into the decision. It’s not like I’ve missed the entire move.

    I’ll say it again. As long as one isn’t leveraged and is confident the swing will get corrected quickly then just ignore my strategy.

  150. Ben

    TZ, I owned mostly NSU and NGD from the 2008 bottom, and they massively outperformed bullion. Thank goodness. All miners are not created equal. My PAAS position did poorly, but it was miner, er, minor compared to the my top positions.

    But you are right — in my 401k, I have been able to be in a Fido gold fund, and it has not done particularly well. But a lot better than my alternatives.

  151. aaronpalang

    Gary, I know that, and you are free to do as you please. Most of your subscribers who follow you religiously are becoming traders instead of investors which has been your claim the entire time.
    Everyone is free to do as they please, it is afterall thier money!
    I dont fault you for your actions, it simply caught many off guard.
    This is my last post on this topic though, didnt intend to rile up anyone.

  152. vuvvy

    TZ said “I think gold and silver will rally to highs for the week today or tomorrow the latest. Fri close will be higher than this”

    I’m gonna hold you to that:)

  153. TZ(5288)


    >TZ, I looked at the ratio charts for bullion vs miners. You are clearly wrong on this issue.

    You are welcome to demonstrate your point with something factual. I have already proven mine with the earlier chart going back to 2001. If you provide more than me being “clearly wrong” than i can address it.

  154. Bob loves Hawaii

    The silver, gold, and miner action looks just fine to me. Nice profit taking Gary, AGQ had a great move. I added again today, this time some NAK.

    The big four report over the next two weeks,and they are selling into the earnings reports, low risk to enter these here IMO. ABX, NEM, AEM, GG. I am playing GG and AEM myself.

  155. TZ(5288)


    >TZ, I owned mostly NSU and NGD from the 2008 bottom, and they massively outperformed bullion.

    “…from the 2008 bottom…”

    No offense, but people who can’t understand why that is not a valid metric are going to have problems for years and years with that data point.

    It is a horrible exception. Yes, if you bought in and held you made lots of money. Great. Same with almost ANY stock at that time.

    But that outperformance ENDED after the market returned from crash levels. The general outperformance of mining stocks from the 2008 low ENDED approx Jan 2010. Over a YEAR ago.

    Since then it has been flat to down.

    I have already covered the exceptions and they they do NOT generally disprove these statements.

  156. Ben

    TZ, I agree that on the whole, miners have underperformed for several years. I forget exactly when the underperformance began, around 2006?

    I expect that trend to reverse after this multiyear consolidation of sorts. I want to be in PM shares when that happens.

  157. Poly


    It’s a good comparison, but don’t forget you are taking today’s price toward the bottom of an int low, Miners not priced well in those spots.

    But more importantly, you’re forgetting leverage! As the gold bull progresses, for dollar increase in gold you’re getting most of it fall to the bottom line. So as the bull pushes, in subsequent rallies and years pushes up towards $2,000 and hopefully beyond, you’re going to see some divergence that will make you cry!

  158. aaronpalang

    Im still harping on my manipulation theory. Gold closed just in the right spot for a 1% rally to stop it right under the 50DMA so as to have more idiots sell.
    Thus, I think tomorrow we have a 1% rally into the low to mid 1370s πŸ™‚

  159. vuvvy

    Avvan,Divergences between USERX a gold fund and pit session in price of gold can lead to big price moves on a consistant basis the following day(s).

    Ex: pit session up yesterday and USERX down led to weakness today, although less than I anticipated.It works even better the other way; I love to go long for a day or 2 when Pit down/Userx up.

  160. Ben


    I know this is getting beaten to death, but it was just 12 hours ago that you were confident enough to be levered to 115% (including 50% position in AGQ which itself is levered 2x daily moves). Now you are at a lower level of core than during the intermediate decline last month.

    I see a $10 drop this morning which precipitated this.

    The commercial traders love to create wiggles to whipsaw the little guys. Maybe your feeling is right this time, but I’m trying to remove much of the emotion for my own trading. I heard much talk of how it was ‘likely’ that the 10 day SMA would be tagged. Only yesterday, one could have charted that dip to the 10 sma and seen the 1-2-3 reversal possibility.

    Do you see that yesterday, that likelihood was as an opportunity to strengthen positions (if one hadn’t yet), and today now that it happened (or nearly did) it was a huge cause for concern? And I saw huge because going from 115% to 30% is, in my book, a big change. It’s the biggest change I’ve seen in one day since following your blog.

  161. Gary

    All true. The swing high and possibility of a left translated cycle has me nervous enough that I want to wait for a clear pattern of higher highs and higher lows.

    I really didn’t think gold would form a swing yet nor the HUI drop back below 530.

    I have enough profit that I’m willing to sit a bit and see if the confirmation arrives.

  162. Gary

    FWIW if the swing had occurred after day 12 then the odds would be for a right translated cycle and a lot less chance of a significant move back down to or below the lows.

  163. David

    gdx/gdxj vs. Gold:

    Amateur discussion.

    the miners took a massive hit in the meltdown and went to unprecedented valuations. They are still roiling off that undervaluation. Pull up a chart of gold/xau — its normal range is between 4-5. You buy at five and sell at four. In the meltdown it went to 11. The stocks were pricing in $300 gold. Right now gold xau ratio is at 6.5 — a screaming buy at these levels.

    You can thank the meltdown for this opportunity. Anyone who buys GLD thinking it will outperform GDXJ is going to be disappointed.

  164. DG

    Vuvvy: Interesting about the pit and USERX divergences. Where do you get real-time USERX data? I only see yesterday’s prices. And where do you get “pit session” data—do you mean futures? Again, a url would be great. Thanks.

  165. pimaCanyon


    USERX is a mutual fund, so you will not see today’s prices until after markets close (stock market, that is).

    I wonder about the Userx/GC signal though. Seems like all it’s telling you is this: If GC closes down, but Userx closes up, it’s because GC rallied after its “close” (end of pit trading). Vice versa for GC close up, Userx down. Seems like you’re using this just as an indicator of what gold does between the close of the gold pit and the close of the stock market.

  166. Ben

    Gary, in your defence, I see systemic problems with all the markets due to the massive interventions. Distortions abound, and ruptures, which usually are a generational thing, have happened twice in the past two years, and it’s clear that more are in our future. I’m skittish. Nobody in their right mind would be sleeping like a baby right now. And I know you are helping many of us, and that is a responsibility for accuracy most of don’t have. I invest for my bro-in-law, but his account is only 15k, so no worries for me — if I make the wrong move, it hurts me a lot more than him.

    I’m here (and a subscriber) *because* it ain’t easy. Just trying to get through the wormhole being created by the Federal Reserve and the elite served by our elected officials.

  167. Mark

    One issue that hasn’t been considered for this potentially short term portfolio switch is if one holds positions in a retirement account or not. For those positions in a retirement account, you’d have to wait 3 days for the trade to settle before one could repurchase PM positions. If HUI 542 is surpassed during the settlement process, the repurchase may be much higher than the trigger point. For those with both types of accounts, once could continue to hold in their IRA but use the trigger in their taxable account.

    SVM sure looks like it will blast out of this consolidation, notwithstanding a small megaphone pattern developing.

  168. Bob loves Hawaii

    Mark, great point, that is why I do not touch core, but will sell options when I see it is overbought. If you hold GDX and SLV’s selling the weeklies is almost like stealing if you are not greedy.

  169. DG

    Pima: Vuvvy seems brighter than that! There used to be a very good indicator between the SPX close and the ES close that was quite reliable. It stopped working years ago, but this may be a version of that. But you need real-time USERX data to measure the divergence. Vuvvy…?

  170. Brian

    TZ, I would give you an A for effort in coming up with a security that fit your thesis. How about taking a look at $gold:gdxj, since most folks here are invested in the junior arena.

    I think we would label what you did as a FAIL. Seems odd coming from you though. You okay?

  171. vuvvy

    DG, you can’t get USERX data until close, that’s correct.I know of someone who has “built’ a similar portfolio and can fairly accurately track it during the day but I’ve found that waiting until price comes out after close and then executing futures works for me.Userx up/gold down is a winner approximately 90% of the time when held for 2-3 days. Maybe you can have your quant backtest it and give me some of the royalties:)

  172. Ben

    Mark, I treat my Fido fund as part of my core. There’s a short term trading penalty for one thing (1%) which isn’t that significant. But it’s less liquid, too — mental stops only, and of day settlement (and exchange must be requested by 11 AM Pacific Time or else it’s the next day). I’m lucky to have anything good at all in my retirement account. My other ones have nothing defensive at all — all are negative returns for the past 11 years save MMF, which is 0% right now.

  173. james r

    As for someone who is on the outside. I do not see a lot of conviction on the buy side today.

    Volume is still anemic. Buyers are waiting on the sidelines.


  174. vuvvy

    That should read:Userx up/gold pit session down and then going long gold futures at open of Globex at 6:05 PM is a winner approximately 90% of the time when held for 2-3 days. Maybe you can have your quant backtest it and give me some of the royalties:)

    DG, gold pit futures trade 8:20 AM to 1:30 PM and I get those figures through my broker.

  175. Mark


    It sounds like you have your retirement money in a 401K, which sometimes have 1% fees for short term trades. I’ve rolled my past 401Ks into IRAs (and 25% of my IRA into Roth IRAs) at a couple of brokerages, so that I can directly hold securities….that’s why there is a 3 day wait for funds to settle before they can be redeployed. Like you, I tend to hold core in the IRA and will look to go to cash when the C wave completes.

    BTW, another upcoming silver junior is Orko Silver (OK.V or OKOFF). I listened to their presentation in SF last November and think they’ll be one to watch. I’ve taken a pilot position.

  176. DG

    Vuvvy: Ah, that explains it. At the risk of getting TZ riled up about futures again, I don’t have a futures account, but I can trade after hours and will keep track of this for a while. Thanks! Always looking for a new indicator with a good track record.

    So you use the 1:30 p.m. futures close and the USERX current day’s close (which gets posted late). Got it.

  177. DG

    Vuvvy: Last question (I hope) I am looking at
    GOLD 100 OZ. (ZG G1) down 2.60 today to 1362.10 Does that work? Or should I use GOLD (GC H1). I really am a novice at futures. Thanks.

  178. AJ

    UUP seems to forming inverse H&S on 60m. Probably another push up on dollar coming shortly and hopefully another chance to buy the dip on PMs

  179. pimaCanyon


    My TOS account always has the most active front month displayed when I choose just GC. Right now it’s showing April Gold or /GCJ1.

    Apparently there are only a few (4 or 5) months that most futures traders use, and it’s different for each commodity. April is one of them for gold. Even though there’s a March gold, it’s thinly traded. Why? You’ll have to ask TZ or someone who knows the futures world.

  180. pimaCanyon

    And yet another question for vuvvy,

    When is the price for USERX generally available? 10 minutes after the close (of the stock market), it’s still not available on my charting platform.

  181. Razvan

    dont tell DG how your system works because if you ask DG about his he turns into Smeagol from the Lord of the Rings “No, its mine, must keep my precious system a secret”

  182. Keys

    …Smeagol from the Lord of the Rings “No, its mine, must keep my precious system a secret”

    Assuming said in fun!…that is pretty funny.

  183. DG

    Pima: usually the funds take a few hours to post their closing prices. Vanguard posts at 6:00 EST.

    Raz: Gary is right. I am in process (a damn long process I might add!) of trying to launch a hedge fund based on the buy signals I post here. I think my partners would be let’s say, unimpressed if I just posted the damn thing on this website, no? They’re supposed to sell this when I give it away for free? I am not trying to be a jerk, but I really have no realistic choice, now do I, Besides, it’s my preciousssss…

  184. vuvvy

    I don’t believe ZG is pit traded but GC is the one you’re looking for. Just make sure it’s the open outcry/pit session contract, and use the active month which is abbreviated J=April contract 2011

  185. Jayhawk


    We are counting on your to get us out at the top. πŸ™‚

    Do you tweak your holdings as you go along? (Like I had some GBG, but sold and dumped it into RBY) I have a few other junior silvers that I may move into AXU, AG, SVM, but wondering if I should just leave them be.

    Same deal with NG. I’ve got a pretty hefty chunk in that one, but so far it’s been a dud.

  186. LowTax

    Pima, I’ve been watching SoS all day too – it built up very nicely with each passing hour. They’re throwing the kitchen sink at this market – no way we’re going down with that kind of buying power on line.

  187. vuvvy

    Raz, LOL! Well too late because I already told him:)Anyways, It’s not my system/strategy so I don’t really care. DG, keep in mind it works better to the long side, but I’ve seen multiple massive moves start as if on cue from this signal long and short.

  188. Poly

    Careful waiting for HUI signal to enter AGQ. That puppy, as you know can really move and get away from. It’s also tied to Silver Bullion, X2, which has been on fire of late and trades around the clock.

    As the HUI has some potential equity headwinds, you may easily find yourself buying AGQ over $160 and not in the low $150’s. It’s already up over $3 from this morning sell price!

  189. Gary

    If it goes up 200+ points is it really that important if one misses 10 or even 15? I already caught the first 15 and with a little leverage.

    I don’t like the action in the miners and I don’t like the possible left translated cycle in gold. Now it’s going to have to prove to me it can complete the pattern of higher highs and higher lows.

    Once it does that then I will enter with leverage.

  190. Poly

    Come on Gary, $15 is a big deal, it’s almost 10%. AGQ going up another $200 is really not relevant and a hypothetical.

    I understand you didn’t like the action, I get it! But we already held the “strong hand”, with an int low to our backs in a bull market. A strong hand $15 in the black, wouldn’t just moving up our stops to cover the “off chance” a left translated eventuates be better?

    Please tell me shut up any time πŸ™‚

  191. TZ(5288)


    >For those positions in a retirement account, you’d have to wait 3 days for the trade to settle before one could repurchase PM positions.

    You have a crap broker and you didn’t do your homework. The 3 day rule is a broker issue, not an IRA issue.

    Interactivebrokers [dot} com

    Look into the “margin ira” and you can pretty much do anything including bypass that 3 day problem.

    I trade futures in my IRA.

  192. Gary

    If I’m not mistaken every broker will wait for trades to settle before allowing you to trade again unless your account is cleared for margin.

    You just need to activate margin in the account and that problem should go away.

  193. Poly

    No margin allowed in IRA accounts, that’s law. But of course trading options and futures, sure go ahead son. Got to love this country πŸ™‚

  194. TZ(5288)


    >TZ, I would give you an A for effort in coming up with a security that fit your thesis. How about taking a look at $gold:gdxj, since most folks here are invested in the junior arena. I think we would label what you did as a FAIL.

    I covered this earlier.

    First off, GDXJ includes reasonable silver components so you will forgive me if I don’t let you cheat by only measuring it against gold.

    SO, here is GDXJ measured against CEF which is 50/50 gold and silver:


    Oops. Your price today is the same as over a YEAR ago. Been bouncing roughly between 1.80-1.85.

    Yes, the regression has a SLIGHT upward tilt I will agree, but think about that for a second.

    Let’s say that upward tilt is 2-3% or so higher return than CEF. Barely.

    Well…all I have to do is buy 1.15x CEF or something like that and I’ve killed the advantage of GDXJ.

    100% GDXJ or 115% CEF. Which is safer? I would argue the CEF is.

    In my original comments on this top I clearly said that small exploration type stuff COULD outperform straight metals (gold AND SILVER), but the risk is high, which means you then have to pick them or buy a basket. There is illiquidity, etc. Plenty of issues.

    Seeing as how any gain from those small companies can PRESENTLY be negated or overcome by 100%-115% metal only, I hardly think going with GDXJ is an obvious decision.

  195. TZ(5288)


    >Pull up a chart of gold/xau — its normal range is between 4-5. You buy at five and sell at four. In the meltdown it went to 11. The stocks were pricing in $300 gold. Right now gold xau ratio is at 6.5 — a screaming buy at these levels.

    Same reply as with brian. Please note that the $XAU is called the “Gold and **SILVER** Index”, so I won’t let you cheat either by measuring it against only gold.

    Here is the $xau against CEF which is half gold and half silver:


    This is a “screaming buy” to you? It looks sick and dying. 3 years ago the ratio was 15. Now we are droping to 10 and heading lower.
    >You can thank the meltdown for this opportunity. Anyone who buys GLD thinking it will outperform GDXJ is going to be disappointed.

    No. I think:
    1) straight metals will outperform the MAIN mining stocks (gdx,$hui,$xau, etc.)

    2) the TINY EXPLORATION (gdxj,sil) stuff MIGHT outperform but *for now* it is only by a little (if that) and the difference is negated by margining CEF slightly.

    3) SLW is in its own category.

    4) None if this is a recommendation to buy CEF πŸ™‚

  196. TZ(5288)


    >If I’m not mistaken I think the laws regarding margin in an IRA were just changed.

    The us of the word “margin” by that type of IRA at IB is unfortunately a poor choice. It is not as you believe.

    Correct, an IRA cannot BORROW money. But the funds due the account (such as from a sale) can be made available and used instantly.

    Anybody needing the exact info should contact the company. I’m not selling it and I’m not giving professional advice. I’m just saying there is no reason to be limited in your accounts if you dont’ have to be.

  197. Poly

    TZ, you’re right, when viewed through the prism of historical data. Don’t make the mistake of expecting the same performance in the future when prices will be much higher.

    Simple math, the margins at the high gold prices are unreal and the P/E expansion of the 3rd phase of a bull market is insane.

    The out performance the miners will exhibit in the later parts of the bull market will be mind boggling.

  198. TZ(5288)

    I SUSPECT and AGREE that mid and small level mining stocks will go nuts and likely outperform near the end of this bull market.

    But as a ration person who is only out to make money, I can say with a fact that they ARE NOT DOING IT RIGHT NOW (and if so only slightly; not equal to the added risk).

    If/when that changes I can simply push a few buttons and get on board. If it doesn’t change, then *I* win by doing the right thing for NOW, while you sit and wait for “then”.

    Trust me, I’m watching them.

  199. TZ(5288)

    Let me say that I’m aware there are SPECIFIC small stocks that are clearly outperforming, but here is the problem:

    1) WHICH small stock is currently outperforming changes over time. So now you are in the pick-and-choose game. Get it wrong and you pay dearly. I’ve been in this thing for about 10 years now. I’ve see DROOY, BGO, GSS, etc….come **AND GO**!!! Each one of them had a turn, then dropped off the board. The metals you needed to hold instead haven’t changed.

    2) You have to pick more than 1 or you are being crazy. So now you have 5 or 10 to pick and keep track of, which starts to limit your ‘excess gains’ since you are now creating a managed index.

    3) The illiquidty of some of these things is bad. You can’t get out overnight and you can’t get in/out easily quickly if you need too. And I have NEEDED TOO enough times in 10yrs to not want to be stuck like that when I can match the performance with a much more liquid and 24hr security.

    Anway…just some points on how I see the issue. Nothing is perfect for all people and best of luck to whatever you all choose. I’ve changed my strategy MULTIPLE TIMES over the years and I’ll adjust in the future.

  200. Carlos


    You should create your blog and expose all your ideas, where anyone can access to them in only one plac.

    Sure your thoughts are interesting. Don´t stop.


  201. TZ(5288)

    CUP and HANDLE formations on gold and silver today. Rally back up near the highs by close.

    Looks good for a move up tomorrow and close at another high level.

  202. TZ(5288)


    Thanks. A bit too much posting for me today. Sorry all if I overdid it.

    Got caught up in the issue. I spent a lot of time on it in the past personally to adjust my strategies and I guess I was just passing it along for whatever it is worth.

  203. Jayhawk

    CEF, PSLV are PFICs and require some pain in the ass extra tax work (8621’s) for taxable accounts. Go to the Yahoo Message board for CEF and put in PFIC to read more. PAIN IN THE REAR.

  204. Gary

    I can certainly see silver. But wouldn’t gold have to rally back to the old highs and then fade to form a true cup and handle?

  205. fubsy_cooter

    My Take

    Gary, good daily report, as usual. I understand your strategy, and it seems sound to me. With that said, what I see as most likely is that the news in Egypt created the dip this morning and gave a chance for profit taking after the early move out the intermediate low. Without this mornings dip, we would have typical bull flags in Gold and Silver.

    I agree that the moves in the iners are disconcerting, as the corrections are steeper than bull flags, but given the size of the rally over the past ten days or so, these corrective moves are within normal ranges for a continued move higher. Like we all know, the bull will do everything it can to keep as many riders off its back as possible.

    Anyway, my strategy is to sit tight for the time being as I see a bull flag in the metals and the beginning of step 2 in a 1-2-3 reversal in the miners. I will get out if the miners turn higher, and can’t get through the recent pivot, then turn lower and break down through the pivot they create when they turn higher. Make sense? lol

    That’s my strategy and I’m sticking to it…until I something develops that makes me change my mind.

  206. fubsy_cooter

    A comment about Gary’s strategy shifts of late…

    I, for one, appreciate his flexibility. My belief is that its important to have a working strategy at all times, BUT….one has to be ready to read new developments and adapt for the highest odds of winning. What Gary has done today, and a couple weeks ago, was just that. He set a strategy, and changed his approach when the market gave him new data.

    His strategy today offers him an appx 3 to 1 ratio of reward to risk. If he gets to buy back 20 to 30 points lower (on Gold), or 7 points higher, remains to be seen.

    Keep up the good work Gary. You’ve really picked up an amazing amount of understanding of markets over a short period of time.


  207. Steven

    Can anyone give me some good reasons why someone would buy AGQ, for example, rather than buy silver futures but only use 2x leverage?

    I am assuming this will all be kept short-term. The tax advantages of the futures contracts is that the gain (regardless of how long you kept the contract) is taxed 60% long term capital gain and 40% short-term capital gain.

    Any thoughts are appreciated because I am considering switching from AGQ to silver futures but only leveraging 2X so it would basically be the same thing unless I’m missing something.


  208. ALEX


    Do you tweak your holdings as you go along…’

    Yes, And all the ones you named I own & Like (AXU , AG , SVM , RBY and NG). I try to keep it between 5 and 10 positions.

    when the IT bottom is in…I tend to trade a whole lot less-

    But I rotate some of them if one looks like it ran good first, then goes sideways, while another starts breaking out with volume. I keep a chacklist of my favorites.

    EX: I rode NG up and sold after it gapped to over $13+ in NOV. I was watching UXG do nothing all autumn, but it finally broke from LONG Consolidation…so I bought the pull back to 20sma in Nov…rode from $5 to $8.
    Now took that money and bought NG back at that gap.

    sometimes it works good, sometimes it doesnt ( I sold NAK near $14 , thought it was over extended…RAN TO $22!) πŸ™‚

  209. Slumdog

    Who besides Gary is a trustworthy source to be considered in the panoply of predictive stars?

    I will start.
    AGoldHamster at kitco and his own blog.


    QuadG at kitco.
    Major Market Movements https://www.kitcomm.com/showthread.php?t=41880

    Of course, Jim Sinclair and Trader Dan as backgrounders

    Who else?

    Do appreciate that Gary is imo worth a very serious consideration, and for some here, full trust. Like many here, I make my own decisions, even if it means following someone else.

  210. ALEX


    I’ve been in this thing for about 10 years now. I’ve see DROOY, BGO, GSS, etc….come **AND GO**!!!

    BGO!! Memories!! Bema gold! It actually got bought out after rising 20x!! I owned it! πŸ™‚

  211. pimaCanyon


    There is a small 3rd party risk with AGQ, small enough that most folks don’t worry about it.

    That, combined with the fact that futures trade nearly around the clock, gives silver futures the advantage in my book.

    Personally I can’t go the futures route because the bulk of my trading funds are in an IRA.

  212. alysomji

    Re: Egypt

    In the coming several hours, there will be Friday prayers and some Egyptians are promising the biggest protests in Egypt’s history.

    Already people are marching to the presidential palace and slowly members of the army are starting to join the protesters.

    Tomorrow could be an absolute powder keg.

    I will keep my gold, thank you very much.

  213. Wes


    Does a new weekly high in gold futures count as a confirmation to go all in ? If not, exactly what are the new rules ?

  214. Bob loves Hawaii

    Gary, this is why I am ot sweating the wiggles.

    This is the reason for the attack by the bankers…the total silver open interest fell by only 357 contracts to 135,440 from Wednesday’s total of 135797. The options expiry Feb contract shook the bankers as the open interest rose from 83 to today’s final reading of 182.

    These contract holders are going to need toget paid off in February, and they are lining up for March already where they have even more leverage.

  215. n1tro

    Gary doesn’t believe in the conspiracies. Open interest and Harvey Organ’s blog doesn’t go well here. But for those who are interested, the story is that big fund managers know of the upcoming delivery date and will be buying up contracts and holding for physical delivery, holders of shorts like JPM/HSBC will have to pay the premium to settle.

  216. Bob loves Hawaii

    Nitro, that is fine, but I give it credence. Gary most certainly admits that the system is gamed by Bernanke, hence the stretching of cycles and general confusion amongst us all.

    Being in the M and A business for many years, if someone has leverage of time on someone else they win, and it appears these long option holders are deep pockets with hedge funds along as remoras.

    I am tagging along, as well.

  217. n1tro

    They say the run up in silver at the end of Dec was the result of shorters paying the premium to settle. I’d expect another raid to try to shake the longs before Mar when the pain is brought to the sellers. I’m long and holding.

  218. Bob loves Hawaii

    Nitro, it seems a safe bet to position long for each quarter delivery month. JC, I love Marc, but impossible to trade off of him.

    This is why I kept my uranium miners, they have leverage over buyers for at least another year or so. Notice they are unfazed by all of the games, and prices are steadily rising.

  219. Gary

    No gold formed a weekly swing low last year and it turned out to be a curve ball with one more push lower.

    To really feel confident the intermediate trend has reversed we need to reverse the pattern of lower lows and lower highs.

    After the poor action today I need to see that pattern reversal before I’m willing to go further.

  220. Gary

    Let me ask, would you rather I just stick my head in the sand and not call em like I see em?

    Would you be happy if I saw something that I didn’t think was right but because I was too stubborn to change my mind I got everyone dragged down into another leg down?

    I’m pretty sure you wouldn’t because you were starting to freak out just a couple of weeks ago. Don’t tell me you wouldn’t completely lose it if gold were to turn around and drop to $1265.

    You and I both know you wouldn’t be able to hold through that.

    Now I’m telling you that I don’t like what I saw today. Gold shouldn’t be forming swing highs and miners definitely shouldn’t be selling off this hard with gold down $4 from the recent high.

    I don’t like it and I’m not willing to go further until it’s corrected.

    I’m not saying it won’t be corrected, it probably will, but until it does I’m not happy.

  221. Mark


    Thanks for the tip on Interactive Brokers. From reviewing their doc, they seem to be quite superior in services and cheaper than Fidelity. Additionally, as you said, funds are made available immediately after execution in an IRA. I like that flexibility. I’ll likely consolidate it with another IRA sitting at ETrade.

    I’ll let them know that TZ sent me…..!

  222. David

    Can’t argue with your logic. The action in the miners has been very strange.

    Is it possible that the miners have been selling off in anticipation of Mubarak stepping down, as was widely rumored in the past 48 hours?

    If so we could see a sharp reversal tomorrow.

  223. Gary

    Who’s going to be president of Egypt and the affairs in Egypt no longer have anything to do with the action in gold. This has been priced in for a week or more by now.

    Certainly nothing in the middle east controls the stock price of miners.

    What controls miners is the price of gold, or the anticipated price of gold, and on rare occasions an intermediate degree selling climax in the stock market will influence the HUI.

  224. Jayhawk

    Gary, I’m just poking fun. Now calm down, yes I know I’m a head case and I freak out over stupid crap all day long. πŸ™‚

    Actually, my mental game is much better than it was 1 year ago…which was my baptism into going heavy miners. I went down 20% then, took some painful losses on SLW options, sold too soon, etc. I pretty much made every mental mistake there was to make in 2010.

    I took my loss with the entry this January and was pretty calm about it. I’m at the point where I’m fairly thick skinned about these metals…For now, I’m staying put but like you if things keep going the wrong way I don’t want to taken a massive beating. I need to preserve my mental capital this year.

    I understand your call. Makes sense and a while back your original thought was to wait for the HUI to break that level before going nutso.

  225. Onlooker

    What swing high on gold?

    And why base trading on the miners when you’ve said over and over again that you have to analyze gold and silver and the miners follow?

    This is a whole new “trader Gary” we’re seeing here. Guarding against short term drawdowns in a secular bull at the possible expense of profits. You do realize how you’re acting contrary to advice you’ve given here ad nauseum, don’t you? It’s just weird. That’s why you’re getting such a reaction.

  226. Gary

    The miners should be leading out of this intermediate correction and they were until yesterday.

    The miners didn’t confirm the third push to $1420 by gold and that was a warning.

    They should not be selling off this hard with gold only down $4.

    All I can say is I don’t like what I saw today. It has the chance to initiate a left translated cycle. Until that is corrected I’m not willing to go further.

    If you feel it’s necessary to keep beating the horse then I guess so be it. It’s still not going to change the fact that I don’t like what I saw today.

  227. Onlooker

    They’re your words, that you’ve drilled into our heads. Now you’re free wheeling it, and it’s out of character and just downright weird.

    That’s all. I’m done, really.

  228. Gary

    So you would prefer that I not adapt to the market?

    What if I’m wrong and this is the beginning of a D-wave (unlikely). Would you prefer to get caught in it because I didn’t want to change my strategy or wasn’t willing to acknowledge the market wasn’t doing what it should be doing.

    All I’m doing is waiting for 17 measly points on the HUI before I go in fully leveraged. That just doesn’t seem like that big of a deal to be sure I’m right before taking the plunge.

    I still have a core position so it’s not like I will completely miss all 17 points.

  229. kmisak

    Wow. It’s a part time job reading the whole blog! I am really enjoying the action and reaction today. As for me, I went all in a little sooner than Gary out of this so-called maybe intermediate bottom; I buy Canadian miners, mostly small cap silvers, and they had dropped in the correction to irresistable levels.

    I know that in the States you now have the opportunity to buy Great Panther – GPL for you. It’s a real belwether for the silver market; today down over 3% but up 40% from the intermediate bottom I was lucky enough to catch! πŸ˜€ It’s a wild ride but could go nuts if Gary is right about the immediate future.

    Which brings me to my point. The fuss over Gary’s move today is impressive. Gary’s chart (the one with the LONG red line going up and up and up) should chill us all out. If it comes to pass, move today like Gary or not, our net worths will be much higher by the time all the @$%*@$ snow melts!


  230. Onlooker

    It’s not the move you made, in and of itself. It’s just that it’s contrary to so much other basic strategy and advice you’ve drilled into us here. And it’s your apparent inability to recognize that that has me (and others, I believe) perplexed. It’s jarring in the context of all that we’ve learned here. It kind of makes us think, “who are you, and what did you do to Gary?” πŸ™‚

    I understand the move, just not from you. It’s a trader move of the type you’ve derided many times.

    I really am done now. I think.

  231. Gary

    Let me put it this way then. I took profits when it became apparent gold was moving down into an intermediate cycle low. That was a trader type move.

    Turns out it was the right move.

    Now there are warning signs that the intermediate degree correction may not be over. Until I’m confident it is I’m going to go back into trader mode πŸ™‚

  232. basil

    No job growth + no housing turnaround = higher stocks.

    That’s the title of an article on financial sense today. I love that sort of math.

  233. Steven


    Let me point the question to you (but anyone else can chime in – thank you PimyaCanyon for your answer).

    Given that there is a huge tax advantage of using futures over AGQ why not go with the futures. You could just double-up (2x) leverage and you would have the same risk as AGQ but save a ton in short terms taxes. For example, my account tells me that short-term gains on AGQ will be over 47% (I live in NYC) but would only be 31% if I did the same thing with futures.

    This is a very large difference and I see that you dismiss the futures market but it seems like you can have the same leverage and same risk but better tax treatment with the futures over AGQ.

    Like I said all opinions are welcome. I’m considering moving from AGQ to silver futures but for the life of me I can’t see why someone would be in AGQ over silver futures (but I’m thick headed sometimes and may very well be missing something).

    Thanks in advance.

  234. Gary

    You should be able to accomplish the same thing by trading futures as with buying AGQ.

    I just have never traded futures. I suppose I should make the effort and open a futures account πŸ™‚

  235. thedocument

    The only drawback to trading futures is position-sizing. The mini silver contract is 1,000 oz, so one would have to trade in $30k increments (at current prices). So, if one had a $100k account and wanted exactly 100% exposure, it couldn’t be done with futures. You’d have to go either 90% or 120%.

    However, the tax advantages are tremendous, as is the ability to make trades nearly 22 hours per day… no need to rush decisions based on Wall Street’s closing bell.

  236. n1tro

    get a forex account. mini accounts allow you to trade 500oz of silver and 10oz of gold at a time. there are micro accounts out there that lets you trade even smaller amounts. but like gary says, got to dream big to win big.

  237. RA


    Using forex account to trade silver sounds like a good alternative.

    More control over position sizing, no expiration date.

    I assume that we can use leverage and that it is 24hrs?

    Am I right?

  238. n1tro

    yeah. I got 200:1 leverage if I want it. trade 24hr/day. I wake up at 5am to check what happened in London and can get in or out and go back to sleep till N. American markets open. no expiry for metals or currency trades. only thing you have to worry about is the carrying cost that is charged for holding “paper” silver. Rates vary but today it is $1.60 per 500 ounces.

  239. Slumdog

    ‘vuvvy said…

    BTW, my system backtested in the 70’s gold bull sold the second day after the final high:)’

    vuvvy, what are the factors you look at? volume? price retracement? time? any of the traditional indicators?

    when you backtested, how many of those same reversal setups did you encounter? or is your approach based on your experience in reality in 1970?

  240. Keys

    My voice is simple.
    You will not make money on this bull by trading…I don’t care who you are.

    Shut up and put your chips in the game, or you will be raped by this massive bull.

    I hate charts…they won’t work. Ben is messing with everything…
    QE3 is on its way; sorry but I understand I will be the only one profiting from the insane actions of Ben by simply buying and holding….but heck you guys are freaking missing everything…man!

    I actually want you guys to do better than me, but you won’t if you keep looking at little wiggles and this and that…Are your freaking kidding me, get a grip..If you are talking about big money, you need to simply ignore the wiggles. Suck it up and ride.

    Many are acting like the gold bull doesn’t exist…I can’t help on this one. My firm advice to those that want to make a mint, and help their families in the process….at this point buy 50% gold and 50% silver physical. Bury it, put in the safety deposit box, whatever. Sell it once we a) go back onto a gold/silver standard or b) you neigbor asks you about gold.

    This in and out crap is nonsense….buy the bull or don’t….just pure crap…price action is meaningless. I find it very hard to believe so many are looking at charts, when a big fundie action took place today. Warsh quite….nobody cares!!! really the only hawk quits and not even a mention on the blog. I believe two of us mention…big freaking deal! If a hawk resigns what do you think will happen for QE? QE2 is scheduled to end, why would Warsh quit if he believed QE would end as detailed? BIG BIG story here, and we are talking about miners not going up, and charts not looking so good….all bullshit!

    Of course from my very naive and foolish viewpoint. Maybe others know better than I….But I am at 120% now, with over 50% in physical metals…No pride on this one….If i am wrong, I will be dead bankrupt wrong. And for what its worth, I can cover the 20% if I need to…..so I really have zero leverage at the end of the day.

    Really my best advice is to spend time with the family, and let the bull do what it wants!

  241. Jerred

    just want to point out a few things on currency futures, forex accounts, commodity futures.

    commodity futures – the mini contracts have horrible slippage and low volume.

    the larger contracts can be traded but you need to be well capitalized. If you have a limit up day or limit down and you are on the wrong side you can not exit the trade until the day that trades openly. Multiple limit ups and downs do occur.

    In futures you can loose more than what is in your account. They will garnish your wages and lien your assets.

    Please keep this in mind before you run in and buy a 5 handle on SI or GC.

    Currency futures have huge pip moves and you should be looking for swings not intraday trades.

    Forex accounts – I dare you to go read the prospectus. It reads that your broker takes the other side of your trade. If you dont know what that means then you shouldnt be in the forex market. (They trade against you!!!)(They know your entry and your stops!!)

    In essence they can run your stop and take all of your money out of your account and put it in theirs.

    Hope this sheds some light on trading futures and forex

  242. hiptwist

    Keys said:
    My voice is simple.
    You will not make money on this bull by trading…I don’t care who you are.

    Keys, thank you for your rant: It’s really getting hard to read this blog. Some gems are found but most comments are just about daily wiggles and endless loops of the same questions.
    Maybe the curse of size.

    Your posting states what brought me to this blog in the first place and what I’m clearly missing now: The big picture.

    Now I go back to spend time with the family, and let the bull do what it wants.

  243. alysomji


    Gold hasn’t even made a swing high.

    And you’re moving from 130% long to 35% long.

    You’re worried about the miners yet you should know better than anyone that gold is what drives everything.

    Surprises come on the upside in bull markets, usually, not the downside.

    Never mind the fact that so many are expecting another leg down, and the Blees rating is so bullish.

    This just isn’t you no matter how you may try to slice it.

    I hope you aren’t losing your touch.

  244. William

    Gary, a great post on cycles – I now understand it better. And this 1-2-3 reversal bit was good as well. Higher lows are at the heart of my own swing trading model.

    I also listened to the Webinar, and that was great, too. I liked your comment about gold being just a rock – I’ve felt the same for years now – but now I have a new thought that it’s what people think & believe, and not reality, that affects the markets, and if folks gold is money, then that’s important to note. Historically gold has always been thought of as money, as you know.

    I’m still not convinced on using cycles for timing. I think like james r that your initial cycle theory of the S&P crashing down, temporarily pulling the $HUI w/it is still a high probability event, ahead of us soon. We’ll see.

    I also think that COT and blees is suspect due to the same reasons you well state in your public archives under COT. I don’t trust COT at all now. I’ve stopped looking at it altogether.

    Gold ‘n Silver have had a huge run up since summer. Seems a bit short to not make 1 more test of lower breakout levels, like $GOLD at 1265. But, I don’t predict, I just follow.

    I do see the H&S in the daily $HUI, LS starting from Oct, triple head, RS forming now, neck at 500. I’m not big on patterns, but if $HUI’s price breaks below 500 then the H&S could be real, pointing to $HUI 400.

    A swing trader, I’m still 100% in cash, like you (now) awaiting a higher low in the $HUI. Fundamentals suggest that we’re just backtesting the breakout, and that prices will likely be higher. Again, I don’t predict, I just follow and execute, so for me $HUI decisively below 500 would be a short (which like you I don’t do in bull markets), and a higher low above 500 would be a long (though for me w/o leverage).

    I always use a floor, and use the last pivot low. A higher pivot low in the $HUI would be my new floor.

    I still hope cycles works out, but like EW it seems like a lot of changes and variation – again a beginner here I just don’t get them yet. I also listen to Tim Wood every weekend, but as I recall he totally missed 2 yrs back, so I believe cycles failed him there. Now looking back he re-numbered his cycles, same as EW’s renumbering past waves, at least to my novice eyes. John Grant nailed it though, as he’s a follower like me.

  245. Dan

    You are absolutely correct when you say “….it’s what people think & believe, and not reality, that affects the markets,…”
    It has always been and will always be that a persons perception is their reality. Cycles, EW even TA are all to some degree affected by human emotion which is affected by a persons reality based on their perception. Thats why I believe trading is as much art as science

  246. vuvvy

    Slumdog,I can’t tell you what my system is built from:) I can say it was built around GC from 2001, and applying the same system all the way back to 1974 seems to work.It has spotted the top of every large move since 2001 within 1-3 days.If you want to see a good automated strategy in action go to http://www.risinggroup.com Those boys from Colombia have a gold strategy that has returned over 1000% since 2008 and now have Striker(out of Chicago I believe) autotrade your account with their algo.

  247. Avann

    All the BS about Gary being schizophrenic … you people are amazing. When Gary jumped the gun twice last month and cost us a few percentage points there wasn’t the backlash that there is here. And this move doesn’t cost you anything … just don’t play it if you don’t like it. As for me I’ll tag along with Gary and risk a few percentage profits for a solid confirmation.
    Let’s get over it please.

  248. vuvvy

    New high for this move on low volume in gold.Sure would be nice to retrace back to the 13 ma again now for a very low risk area to load up

  249. DG

    Keys and Hiptwist: If you’re plan is to just buy and do nothing, why read the blog? I’m not trying to be challenging, but what might you read that would be of any use? You’re already all in and done.

    As for me, I generally like what’s happening. I just skip the stuff that doesn’t apply to what I do. The blog serves lots of people with lots of different goals. As well, I have caught more $/ounce of the move my way since I started because I’ve missed two declines so far and gotten back in a good amount lower both times. To be fair, I am not (and never will be) 100% long, but that’s a risk management question not a “you can’t trade in a bull” question.

  250. Onlooker

    Now you’re just being willfully obtuse Gary. You’re not that dumb. You know the difference between swing trading and short term trading. You’ve “lectured” on this endlessly here. And many have learned these important tenets that you are now blithely dismissing. Oh well.

    You know I’ve been a supporter of yours, and at times a defender.

    How are you ever going to be able to delve out all the wisdom to people here on this blog when you’ve violated so many of “Gary’s wise words”? You’re losing credibility with this, whether you want to acknowledge it or not.

  251. Gary

    The bottom line is I’m now not convinced the intermediate decline is done. Until I am then I’m back to doing what I was doing last month while waiting for the intermediate decline to run it’s course.

    Take it or leave it.

  252. DG

    Gary: If memory serves you posted that if we trade above $1367 it takes the left translated cycle question off the table. I assume that doesn’t effect your wanting HUI above 543 to add, so what does taking the left-translation off the table mean? That the dip (if we have one) will be less?

  253. Gary

    If you will send me your email address I will take you off the subscriber list and refund you subscription price.

    Apparently making you money is a bad thing.

  254. Gary

    Gold has to rise at least 12 days to take the left translated cycle off the table.

    Last year gold rallied 12 days and then rolled over into one more leg down. So to be safe 13 days would be better.

  255. DG

    Sorry, Gary. I get that part, but taking the LTC off the table doesn’t change the “lower lows/lower highs” that’s going on so what difference does it make?

  256. Shalom Bernanke

    I haven’t yet weighed in on the issue of Gary’s decision yesterday, but have a few observations.

    I see that it wasn’t a typical Gary-like decision and that does make readers uncomfortable. However, he did what he felt was right and is strong enough to share with others unlike most people out there. we should let it rest, IMO, because nobody would disagree that Gary is invaluable even if he makes a mistake (if it turns out to be a mistake) here and there. Sure, right now with the benefit of hindsight we can say he should not have made the move, but what if miners puked 7% yesterday and this morning instead of going higher?

    I didn’t sell but I was also in a different situation, so it was an easier decision for me. We all have stress in trading, and we can only imagine how Gary must feel not only trading/investing his money, but having many people follow his moves on top of that. The last thing we want is to shake Gary’s confidence, make him apprehensive about sharing what he sees or worse, decide he’d be better off going it alone.

    In the end, we all make our own decisions even if it’s just to follow somebody 100% or not. We can’t expect perfection, and maybe Gary just made a mistake (or not, time will tell). It’s not like we all haven’t made our share. πŸ™‚

    Although I did not agree with or follow his decision yesterday, he acted the way he felt was justified. I don’t believe he’s lost credibility because of one call we think is out of character.
    Let’s help Gary focus his energy on the next correct move. πŸ™‚

  257. Gary

    Exactly I need to see the lower lows and lower highs corrected at this point. So just rallying 13 days would only be one level of confirmation.

  258. Jennifer

    Onlooker, it seems to me that Gary has just switched back to his original plan of a few weeks ago where he was planning on staying in core position until he saw higher lows and higher highs. If anything, he changed his rules when he had us jump in at the “bottom” without waiting for proof. And it was a good call at the time. And now he just wants to make sure that early unplanned jump was a good one in hindsight before he commits to it. I agree it does seem to be in conflict with his advice the other day that says if you get in near the bottom just sit there, but it’s not really, not if the bottom isn’t in. Which, according to his original theory, was never confirmed.

  259. hiptwist

    DG, you asked “If you’re plan is to just buy and do nothing, why read the blog?”

    Because of the “gems” sometimes posted on this blog. To read the complete blog is the price you have to pay for this IMHO.

    You and some other contributors here are always worth reading. But the danger I see is to get lost in the daily wiggles…

  260. vuvvy

    People should really stop complaining, IMO. You’ll be thanking Gary whether gold goes to 1265 or silver goes to 50 as he’ll be ready to capitalize either way.It’s a good thing to have you guru be dynamic:)At any rate, things don’t really look all that different on the intraday charts than they did at the initial pullback at the last IT bottom, at least in gold, and a pullback to low/mid 1350’s would be an almost exact match.

  261. Shalom Bernanke

    That was a long post, but my point is that we can also help Gary get on track at times instead of always relying on him to help us.

    In 20 years of trading, the best we can get is to be close to perfect, but I’ve never seen anybody reach perfection.

  262. sophia

    guys, guys,

    could you please give to the man a break? he teased me about being short sighted when I sold back at 1363, but I don’t mind…
    Gary is like all of us, ie at the end the day, he is smart enough for not letting his view obscure his judgement and cost him money!
    I felt awkward a day before him because you guys were uneasy with your positions, so I sold…And I have the feeling that Gary felt the same overnight…
    So be it, WHY on earth do you want him to stick to it if he doesn’t feel it? Enough people lost enough money in those markets, he is preserving his and our money!!
    Thanks Gary, stick with the good work

  263. T.J. Rand

    Everybody needs to give it a rest. Gary encountered new info and, with complete transparency, made a portfolio shift. That’s all. This is a terrific blog, with great discussion…but if it doesn’t work for you, no one is forcing you to be here. But please stop bitching and/or trying to prove some point. Gary’s intuition told him that pulling back and waiting for confirmation would be prudent. So that’s what he did, and he told us why.

    I, for one, find learning enhanced by the daily input, including discussion by Gary of what he is uncertain of.

  264. notGreedIsGood


    You mentioned that “We need to see a move above $1367 sometime in the next few days in order to take the left translated scenario off the table.”

    according to goldseek, gold traded to $1368… does this take out the left translated cycle theory of yours?


  265. pimaCanyon

    Whew, still lots of whining from folks who didn’t like what Gary did! I really don’t get the whining at all. I mean, if you don’t like it, just stand pat, no need to do anything.

    For me personally, I am very appreciative of the way Gary analyzes the markets EVERY DAY. If the markets throws us a curve ball, Gary is there to analyze and possibly make adjustments to his (and our) strategy.

    But probably what would be even more challenging (for most of us, if we had Gary’s job) is to take all the whining and complaining and arguing about what he comes up with! Not only does he take it, he actually responds to nearly every one of these complaints here in the comments section of the blog! How many of us would be willing to do the same?

    We get the benefit of Gary’s analysis in at least a couple of ways: 1) We can use the strategy he’s using in our own trading, and 2) we just might learn something.

    So even if you don’t agree with whatever strategy comes up with, first of all, you don’t have to do anything, just stick with the plan you had been using. Second, you get the bonus of seeing the market thru his eyes and maybe learning a new way to analyze market action. It’s win/win to me, no matter what action I decide to take with my own portfolio.

  266. Gary

    I probably didn’t word that perfectly. We need to see gold rally at least 12 days and 13 would be better to take the left translated cycle off the table.

    And that is just one confirmation. I still need to see the miners get in gear and make a higher high before I will be confident the intermediate correction is done.

  267. Nick

    Yeah Guys, give Gary a break. I’d rather we all be in this till 2016-2018 than worry about daily wiggles. I am in @ 70% and would welcome a drop. If it goes higher, can go to 100% once Gary loads up.

  268. Keys


    All in is not, buy and hide. You are incorrect about the assumption that “all-in” is a passive choice; you need to constantly challenge your beliefs and your perspectives….

    Simply skip my posts if you don’t like them and if I am so obtuse, Gary is always welcomed to delete them. And of course those like yourself would like what is going on; since you are a trader…the blog has turned into a trader’s blog. And if this is the evolution of the blog, I will shut up. There is nothing wrong with trading, but for those that have been here for some time should sense something strange.

    But I will say, that Gary’s advice has been instrumental to a turkey such as myself….I just think we are off the path at this point as a collective…we are missing the big picture….and because of this many will be whipsawed out this bull forever. Trader mentality leads one to trade. So if the bull burns you, you will never go back in again. So what good does selling do you(even if you save 10%), if you stress out over the bull and get yourself so sick that you never return? You get yourself sick over the small pops and drops, and run for cover because you refuse to take a drawdown….90% of this blog, I would gather, over a period of time would be too exhausted to keep up at that pace.

  269. Shalom Bernanke

    I agree with Keys. Although I’m not “all in, all the time”, it still is a decision that requires fortitude, and
    that confidence can get shaken from time to time. Gary and a few others here are good reminders of where this market is going long term.

  270. Glen


    We all know that the markets are constantly changing, therefore we must constantly refine our trading strategy.

    I, for one, am glad you are flexible enough to change your strategy when you see the need.

    Thank you.

  271. DG

    Keys: Sorry. I did not imply your posts are worthless nor that you are obtuse. I actually do read yours, in fact. I was just wondering why YOU were reading since you are all in and not selling until a neighbor asks you about gold. You’ve answered it. Thanks.

  272. Shalom Bernanke

    Thanks guys. I have the LIFFE contracts (mini) and traded them several years ago, but the volume looks kinda light.


    on the Comex, how do you like the micro’s? Any better/worse than the ones I’m looking at on the NYSE-LIFFE?

    There have been so many deals between exchanges that the last I traded the mini’s I believe they were on the CME. πŸ™‚

  273. vuvvy

    Shalom, all 3 are traded on Globex and with a choice of 100,33,10 oz contracts virtually any size account can trade futures.Interactive Brokers allows you to trrade all these and stocks/options from the same account although you don’t get the privilage of a true segregated futures account as all cash is swept into a money market multiple times per day.

  274. vuvvy

    Shalom, I’ve stated here before that the micro MGC seems to be arbitrated very well even though the volume is very low and tracks the big Comex contract well.I wish there was a micro silver as I’m so risk averse:)

  275. Shalom Bernanke

    Thanks again. I have a few good size accounts at IB and just haven’t traded the futures much, other than grains on the ECBOT. With the advent of metals etfs I started using the etfs, but feel I should go back to futures for the tax consequences, lower commissions, and no management fees.

  276. Sandy


    In your decision to revert to core, did you consider moving to SLV position rather than GDXJ and SIL, since if your assumption is that IT bottom is not in is correct, GDXJ and SIL would fall much more, and SLV would cushion the downfall & help protect upside if it happens.

  277. Keys

    I never took your challenge as a personal attack…don’t be afraid to challenge my words, especially when I am so frank! Part of the reason I am here, is to have other perspectives.

    I already know I am an “ass”, don’t worry about calling me out on it! πŸ™‚

  278. james r

    Nice job Gary,

    I will concede that 1308 was our bottom. I did additional research on gold sentiment and the COT contracts. And we were at our lowest last month since last August’s bottom.

    Hard to believe I bought at the bottom. It was too easy!

    Keep up the good work!


  279. vuvvy

    The micro tracks Comex better than the Liffe product YG.I’ve seen YG and ZG(not sure if that one trades anymore)blatantly run stops sometimes differing 5-6 dollars from Comex.

  280. Gary

    I think some people got the mistaken idea that a 100 Blees rating guarantees there is no downside risk.

    That’s not the case. But the downside risk should be minimal. If we have one more push down I doubt it would drop much below $1300.

    The poor action in the miners has brought into question whether or not gold has one more push down to a slightly lower low.

    If gold can rally for at least 13 days and if the miners can correct the ugly breakdown and make a higher high then I will be convinced we do indeed have an intermediate bottom.

    At that point I will enter full leveraged for the rest of the ride.

    It will be only week two or three so there is plenty of upside to be had especially if slightly leveraged.

  281. Rebecca

    Miners are leading today. Yesterday’s low could be the higher low we are looking for, just waiting for a higher higher to confirm the IT bottom, right? Gary? or anyone else who cares to comment?

  282. DG

    Gary: If I understand, the Blees rating just shows that the smart/dumb ration of traders is more bullish than any time in the past 18 months. But that’s just 18 months. It certainly implies limited downside, but we could of course drop and the smart guys could go even longer, right? It limits the risk down as you wouldn’t think they’d buy a ton right before a serious drop—assuming they are right, as they usually are.

  283. Gary

    Mostly correct although it has nothing to do with dumb money just how bullish or bearish the large commercial traders are.

  284. Rebecca


    Thanks and keep up the good works. People like me who trade on the intermediate trends need your knowledge and appreciate your help.

  285. Shalom Bernanke

    We’ll know better if the bottom (in miners) has already been put in after the next move lower. Let’s see how sharp the next pullback is, and I might decide to add then if it’s not too severe.

  286. DG

    Gary. Ah, got it. FWIW then Jason shows the dumb money (both futures and Rydex traders) being mostly out or short, so that’s a nice confirmation of the smart money being long.

  287. pimaCanyon


    From a post you made a few minutes ago, it sounds like you will wait to go back to full leveraged position until HUI makes a higher high AND gold continues to make higher highs until day 13 of this daily cycle, right?

    If HUI goes above 542.82 but we’re not yet at day 13, will you do a partial add to your position? And then top off your position (including leverage) at day 13 of the daily cycle? In other words, go back to full position in stages.

    If you wait till day 13, you might end up adding at the very top of the daily cycle, right? So you’d be willing to ride out the daily cycle low at that point, right?

  288. Bede

    Keys – LOL

    “I already know I am an “ass”, don’t worry about calling me out on it!”

    You may be an “ass”, but you sure are a HUMBLE “ass.”

  289. Gary

    If the HUI can correct the selloff then I will go back to 130%. Today is day 10. I doubt it will manage a higher high today. The earliest would be Monday and that would put gold on day 11. If the HUI & gold are making higher highs and higher lows by day 11 that would be good enough for me.

    I will wait till the next daily cycle low before adding the next level of leverage.

  290. Beanie

    No depression, no deflation, no hyperinflation:

    “I got a little story for you. In 1898, the first international urban-planning conference convened in New York. It was abandoned after three days because none of the delegates could see any solution to the growing crisis caused by urban horses and their output. In the Times of London, one reporter estimated that in 50 years, every street in London would be buried under nine feet of manure.

    I know, everyone hates the financials, but the PIIGS –[Portugal, Ireland, Italy, Greece, and Spain] every single one has a deficit-reduction plan! The ECB—the Bundesbank—bought back government bonds! Holy Christ. It’s like the chastity belt is off, and the girl is starting to play.

    On the way to work this morning, I got a headache because I was listening to one guy talking about how there’s gonna be hyperinflation. And then after him there was some guy telling me there’s going to be a depression and deflation. Neither is most likely going to happen.

    The point is, markets adapt, people adapt. Don’t listen to all the crap out there.”

    David Tepper

  291. vuvvy

    TommyD, Comex won’t close,they’ll just raise the margins.Go ask the Hunt brothers:)I would feel much safer with my $ in a futures account as they are segregated from all other accounts and in the event of a broker/bank failure nobody can touch your$ because it goes mark to market at 5PM.Ask Scottrade,E-Trade,Ameritrade etc what would happen if they failed,as all funds are co-mingled.You’d be protected by SPIC with limited funds in case of a large failure.

  292. DG

    Alex: BTW, I sold my FXP China short when FXI bettered yesterday’s high. Looked like a high volume reversal after the day before’s gap down. Looking to redo on a rally.

  293. AJ

    UUP broke its inverse H&S on 60m.Seems to be putting pressure on PMs. Hopefully, it gets us another chance to accumulate.

  294. DG

    For traders: UNG just showed up on my buy screen. This ETF works very well for these signals. I’m a buyer at 5.32.

  295. basil


    I’ve been looking at UNG for a while and got in and out a few painful times.

    You might want to read this article, which is out today on the CNBC website:


    it’s bottom line is that UNG entered new bear market territory and is likely to fall further.
    Not my opinion, just something I’d read if I consider buying UNG.

  296. pimaCanyon

    Gary, it’s looking like your call could turn out to be a good one, and will save you and your subs (those who followed you) some serious coin if we do retest the recent low, or even go lower!

  297. DG

    Thanks Basil. I am in it for a trade and it’s rallies can be violent. My last buy signal was on October 22 of last year and it rallied 25% right away, so I have taken another shot. It is in a bear market, but bear market rallies are the sharpest. I will not be holding it if it pops for me. It also is remarkably lousy at tracking gas prices and is a wasting asset if held long term.

  298. Daniel

    If the C wave is still intact as we all believe it is–

    What time frame might you be looking for a bottom?

    I am assuming you are just going to wait for confirmation up or swing lows to develop in the correct time frame?

  299. TZ(5288)

    I see no problems this morning. We got a higher high in gold, but the Egypt situation is allowing Fed/JPmorgan to hit the metals and try to get some downward momo going on.

    Pretty mild drop and I expect it won’t hold long – maybe not even till the end of today.

  300. Gary

    If the weakness we are seeing in miners is indicative of one more move down then we will just track the daily cycle and once gold moves into the timing band for the next cycle low we will pick a spot to buy. At that point I will go in with 130-150% leverage.

  301. Daniel

    I kind of agree with you!
    Was just looking for some confirmation!
    PM stocks are also not being affected as much as the metals? that cannot last forever.

  302. Gary

    People nothing in Egypt has any effect on PM. If gold drops it’s because the intermediate cycle isn’t done yet not because of anything that is happening in Egypt.

    Ask yourself did you sell or buy today because of what is happening in Egypt? Of course not.

    And nobody else did either.

  303. pimaCanyon

    HUI is approaching lower channel line (currently around 519).

    gold has a ways to go to hit the lower channel, at least the way I’ve drawn it (off the lows of 1/27, 1/28 and 2/3). It’s currently at 1347 on the April futures.

  304. Poly

    Picked up a packet of March SLV $34 calls for $0.12. Pure lottery, but anything close to $35 silver by start of Spring will pay for the family Spring trip πŸ™‚

  305. Shalom Bernanke

    “then we will just track the daily cycle and once gold moves into the timing band for the next cycle low we will pick a spot to buy.”-Gary

    So, if it happens to be the case that we do see another move lower, we’re talking roughly 10-15 before buying miners again, correct?

  306. bamster

    The market makers on AGQ options are incredibly sneaky. They are keeping very wide spreads, sometimes as much $2.40 on out of the money calls. I tried to sell some calls with an offer 10 cents below the offering price. I did this 3 times, and everytime I moved my offer lower by 10 cents, they came down with me. I knew I wouldn’t get hit so I kept playing with them. Very sneaky

  307. Patrik

    Hi Gary!

    I have a question for you..

    Be ready!

    The stockmarket is moving higher today and also the dollar.

    We have 50Dma for the dollar at 79,29. The chances for the dollar to go further than that must be limited?

    So if we see a pullback in PM it probably will be a minor one?

    But you also told us that if gold was moving down into a intermediate low it doesnt matter if the dollar was rallying or not. So i have that in mind.

    I can see that both gold and silver bouncing back very strong as TZ was predicting.

    Have a nice weekend all.


  308. Tudor


    Are you saying that you offer below their ask, and they bring the ask down to meet your sell order? Is there any tactic to this to get a buy executed closer to the mark?

  309. rkp


    The ask is the price at which someone is willing to sell than option. If you put an order to sell 10 cents below current ask, then your price is the new ask. and yes, the programs will probably match your ask.


  310. bamster


    Yesterday’s spreads were the more normal $1.00. I just tried it again. I have the march 150’s. Bid was $8.40 the ask was $10.20. I sent out my order to sell at 10.10. suddenly the offer went ot $10.00. Now I’m going to remove my sell and see if he goes back to $10.20.

  311. rkp

    The bid/ask spread is wide for AGQ is because it is thinly traded. That would be true for any thinly traded stock/etf. If you don’t like the spread, then find a stock (like SLW) that has lots of options volume.


  312. James

    “Ask yourself did you sell or buy today because of what is happening in Egypt? Of course not.

    And nobody else did either.”

    Not correct, Gary. There was an immediate and sharp drop in PM prices immediately after the announcement that Mubarek was resigning. Check out the intra-day charts.

    Does it matter in the bigger picture? No, but just putting it out there for the sake of accuracy…

  313. James

    “Ask yourself did you sell or buy today because of what is happening in Egypt? Of course not.

    And nobody else did either.”

    Not correct, Gary. There was an immediate and sharp drop in PM prices immediately after the announcement that Mubarek was resigning. Check out the intra-day charts.

    Does it matter in the bigger picture? No, but just putting it out there for the sake of accuracy…

  314. Shalom Bernanke

    Even at only $1 spread on an $8 option, that’s still 12.5%

    Some will suggest trading options closer to the strike as they’re more active and thus tighter spreads, but even at 1% spread it’s still too much, IMO. Commissions are also higher.

    To exit the AGQ option, you’ll have to leave your limit order out there until another retail customer comes along to buy at your price, or the market moves far enough that it pays the market maker to buy yours. It doesn’t look like he’s going to let you stay the low offer unless you shave off maybe a half-point+ from his offer, thus denting your returns.

  315. Josh


    Was I the only one who didn’t know about the extra margin requirements on the 2x and 3x leveraged ETFs, such as AGQ? I don’t use margin, but that’s something I’d want to know if I were putting AGQ in my pocket with my broker’s money.

  316. Poly


    I traded a LOT of AGQ options during the last rally and I can tell you you’re playing with FIRE. The spread’s are horrible, volume light and the premium’s are outrageous. You need to be selling into strength on those options or you get killed. You also need Silver to move like it did Sep-Dec to have any chance due to the premiums.

    I’ve found that SLV has good volume and tight spreads, but better still the premium is low. (relative)

    For example I hold a good amount of SLV July $20 calls. They are trading at $9.55 ($0.10 spread), at ONLY $0.26 premium, for an option going out to the summer!

  317. TZ(5288)


    >Can you elaborate?

    I simply think there is a lot of strength in the metals, that we did hit the low 3 weeks ago, and that we aren’t done going up yet.

    The selloff this morning is just a snap reaction of little consequence. I predicted yesterday that we would go higher (we did in gold this morning) and close higher for the week (not true yet).

    I simply think it is quite possible for gold and silver to return to teh highs and put in a strong week by close today.

    I’m heavily long and just holding. The ‘reduce down’ issues of yesterday and the drop didn’t phase me.

  318. Ben

    I would expect Mubarek’s resignation to temporarily impact the dollar (positive) and gold (negative) because the dollar is still the world’s safest currency (perceived) and when political uncertainty rears it’s head, there’s always a flight to the dollar. That effect is less now than it used to be, and gold may get some of that effect shortly. Just my two cents.

  319. Gold Lion

    There is a nice chart (see link) that points to what I also think might happen with gold and the HUI in the next week or two. It won’t affect how I trade, because I plan to stay long either way. But, knowing that is could happen might prepare you if you are inclined to freak out and sell at the wrong time. Bottom line is that it would be a great buying oppertunity.


    Any thoughts?

  320. bamster


    I guess we were doing the same thing. After that big run up, I cashed out and haven’t done much with AGQ options until last week. Since Dec., I have been buying and selling 100 or 200 shares of AGQ, while waiting for Gary to give the next signal to go in. I don’t plan to go in as much as I did in nov,dec.Too stressful. Believe me, I wish I could just buy 2 or 3 thousand shares of AGQ. At least you can set you stops and forget about it.

  321. pimaCanyon


    Appreciate your comments re deep in the money options for SLV.

    That is a way to use leverage. Something I may consider here in the new couple of weeks. I like the idea of using deep in the money SLV calls with expir out to late spring better than using AGQ.

  322. pimaCanyon


    the reason the premium is small is because the option is so deep in the money.

    This is exactly the way Gary recommends using options (if you must). Small premium so the option price tracks very close to the underlying. The cool thing is that for the price of 100 shares of SLV, you can buy THREE of these deep in the money options, so you’re getting triple leverage.

  323. DG

    Pima: Sorry, I missed your post earlier. I have no stop. If it doesn’t go up from here it’ll dip and rally back to here at which point I’d get out close to even. I rarely have a target and exit by tape feel. Sorry that’s not much help on either end, but there you have it.

  324. vuvvy

    Gold looks fine, we need to be cheering the miners because we have a dangerous divergence building.I was hoping for down gold/up miners today but it’s not looking like it.

  325. Poly

    Considering the volatility of Silver and its recent run up, I think the premium is dirt cheap.

    Plus we all know somehting about Silver the market doesn’t, cough cough πŸ™‚

  326. pimaCanyon

    Thanks DG.

    I took the trade, just a few hundred shares. More of something to do while waiting for gold to get out of the doldrums rather than being a potential big money maker.

    I put a stop at 5.22. My thinking was that if it goes higher, when it gets up by 10 cents or so, I’ll move the stop to b/e and then let it run and see where it goes.

  327. pimaCanyon

    DG, how low will UNG have to go before you decide to abandon the trade when it comes back to near b/e?

    Today’s LOD is 5.30, only 2 cents below your entry price.

  328. bamster

    I don’t know about anyone else but being out of the market the last couple of months has really been hard to stomach considering the run up its had. This f’n C wave better work out for all of us.

  329. DG

    Pima; Hard for me to say regarding the stop. When something gets this overdone it almost always bounces. I don’t ever let losses get too bad, though, so I will feel when it is time to give up, but I really don’t expect it. I bought a few thousand and will probably buy more if it opens down tomorrow.

  330. sophia

    and the S&P keeps cruising for a bruising! Dollar up, S&P up, Dollar down S&P up, US Bonds down, S&P up, US Bonds down S&P up….Truely frustrating!

  331. pimaCanyon


    I hear you re the stock market. I thought 1200 seemed like a remote possibility. Now 1400 seems likely.

    If Ben unleashes QE3, new all time highs are probably a lock.

  332. Jayhawk

    Everyone expecting a huge move in gold and silver==most likely won’t happen according to our plan.

    The last 2 Winter-Springs have been chop & consolidate and the launch in the summer. I know other C-waves have been in the Spring, but this seems pretty drab for the start of an epic blow off top.

  333. Beanie

    The bears are getting killed left and right for trying to time a top. If we’re meant to move next leg higher, then the charts will continue to look overbought (it actually isn’t that overbought even though everyone is saying it is) for a long time.

    Take a look at the semis: http://stockcharts.com/freecharts/gallery.html?s=smh

    Just beautiful.

    Nothing in that chart says we pull back; and even if we do, it should just be minor pullbacks and buying opportunities.

    I’m basically trying to say, DON’T SHORT.

    Long and strong.

  334. Romeo Bravo

    Uh oh Jayhawk, you’re making me nervous! Stop it! I just did a quick check of SLW and 2005 and 2007 it had a ramp that started right around mid February.

  335. Jayhawk


    I think there might be one or 2 people here holding a small short position.

    I think SPX is going to 1400 easy.

    This isn’t Slope of Hope for crying out loud!

  336. MBS

    Lets assume the daily cycle bottomed on 1/28 at 29 days, somewhat of a long cycle. Aren’t long cycles generally followed by very short ones? A bottom in 20 days wouldn’t be out of the norm if thats the case. Thanks

  337. Beanie


    Here’s the thing. I find it kinda hard to believe that if the SPX continues to move higher in the next 1-2 years that precious metals will come along for the ride. Personally, i think PM’s trade sideways, at best, as the SPX moves higher. Where do you see gold and silver if the SPX trades at 1800?

  338. Beanie

    Since PM’s are fear-based trades, isn’t it reasonable to assume that they will collapse as SPX heads higher to 1800 and beyond? Just wondering.

  339. Poly


    The miners doubled since the start of the March 2009, along with equities, what’s your point? Miners are tied to gold, which has increase Y over Y for 10 straight. This bull pre-dates your financial crises and “great-recession” fears.

  340. Romeo Bravo

    Beanie, where are all the jobs? I don’t see millions of new jobs being created. That is what we need. Tech companies manufacture overseas not in the US.

    Have you seen what has happened to your beloved solar companies. They take government subsidies to the tune of millions and then close factories and move to China. Nice work if you can get it!

  341. David

    Beanie says things he knows to be foolish in order to get a rise out of people.

    Even Beanie is smart enough to pull up a chart of gold over the past ten years.

    Even he is smart enough to see that in 2008, when fear was at its peak, the PMs were crashing along with everything else.

    Even Beanie is smart enough to see that since then PMs and stocks have risen together.

    Even Beanie is smart enough to see that the XAU has outperformed the S&P even as “the fear trade”, i.e. the VIX, has come off.

    He’s not as dumb as he pretends to be.

  342. Rosabarba

    “Fear-based trade”?

    News to me.

    As others have pointed out, the bulk of the PM rally coincided with the ’02-’07 bull market for equities.

    Gold will catch a fear bid from time to time, but that doesn’t appear to be the primary driver to this country boy.

  343. Yash

    Fundamental question to beanie – Do you see gold in secular bull market? Answer this question to yourself without thinking S&P is in bull or bear. If answer is yes then gold secular bull should end normally when gold/dow around or little higher than 1. Both can go up, both can go down, one can go up one can go down to arrive at same result. So now pick whichever combination you want absolute percentage winner should be gold only. So S&P can go to 1800 means dow 18000 so gold also 18000.
    Two things break this – 1. Gold is not in secular bull market. This is up to you to decide. 2. Ratio won’t come close to 1. Possible. That means history is re-written. But till history is not proven wrong, you have to believe it.

  344. Nick


    Sometime back you had mentioned you being a little “weak kneed” (literally) and some technique had helped you get better.

    I have zero expertise in this area, but is this something related to your condition?:


    Have a good weekend! Hopefully next week, and the remainder of this C wave is a little less exciting and more “straight up”!

    This bull sure has strong knees! πŸ™‚

  345. Done

    Haha David I actually agree with your opinion of Beanie. His stock picks aren’t too shabby at all. Still I’m also confused why he can’t just look at the chart of gold and also participate in this bull.

  346. Ben

    Unless there’s a possibility that the add-in-price is revised downward, it only makes sense to add now. If you add now, the buy-in price is 523 versus 543 to buy later.

    Unless one believes they will somehow get a lower buy-in-price or that this is actually part of the D-wave, then waiting will leave 3.8% on the table.

    So… what are the chances of the “current strategy” being revised downward? The only reason to wait should be to buy at lower prices, so the implication is that being OUT right now will help one buy at lower prices. I don’t see where that’s in the plan. I presume the plan could be revised of course based on what actually happens.

    Staying out of AGQ during the oscillation phase makes sense since there is a downward bias to a daily up-down-up-down cycle that yields nothing for the underlying miners but the 2X fund ends up slowly leaking.

  347. Ben

    Jeff, got cliff?

    Seriously, there’s the stealth QE where the too-big-to-fail banks are allowed to borrow at zero percent and they can then buy Treasuries and pocket the free money. That will continue regardless. The big question will be the same as now: what continuing gov’t interventions and manipulations will continue and at what level? And what curveballs with the SEC or Congress throw at us, e.g. banning the short sale of too-big-to-fails, ala fall of ’08, or legislation to restrict commodity trading, taxes, possession of bullion, etc.

  348. Jayhawk

    Saw this on SLW’s Yahoo board-

    Thanks to the gutless CFTC, the commercials were able to go wild on a shorting binge!!! They added over 5,000 shorts contract, and even decreased longs in an expectation of killing the POS. This explains the drop in silver miners, the commercials are expecting to pull induce a sell off in silver.

    Almost all the covering that was done in the expecteation of position limits has been reversed since the CFTC defied Congress and refused to implement them. In 2 weeks, the commercial net short position has grown over 8000 contracts, or 40 million ounces

  349. Shalom Bernanke

    Whether QE continues or not, the Fed will continue to debase the currency. That’s what they do=rob purchasing power.

    As more people have come to understand this, the metals will be seen as the best place to save. Stated QE is just rocket fuel should it continue.

  350. Jayhawk

    Starting to think Gary’s gut might be right.

    He’s been at this longer than most here and must have a feel for how these things must behave coming out of cycle lows. I think there must have been something really wrong for him to scale all the way back to 30%.

    If that channel breaks down, I may just go to 30% too.

    The one thing I thought was interesting is most intermediate lows get the miners to tag the 252 MA along with the gold tagging the 144.

  351. Mehdi

    Whatever happened to this line of thinking:

    “Surprises come on the upside in secular bull markets. You should only sell if you’re quite confident you can get back in at a lower price. Many of those who do sell end up getting back in at higher prices.”

    How confident are you that gold is going to decline, Gary?

  352. Mehdi

    Chicken Burrito:

    No swing high yet on my charts. Gold needs to break $1351.40.

    That’s based on the 24H charts of the big Gold (GC) continuous contract (more reliable than what Stockcharts offers, IMHO).

  353. pvm999


    It looks like the dollar just printed a weekly swing low on week 14. This follows a shorten intermediate cycle of 13 weeks.

    Is it too early for this to mark the intermediate low in the dollar?

    If last week was the weekly low in the dollar, that would help to explain the weakness in gold and precious metals.

    And if the dollar rallies out of this weekly swing low, maybe that smart move was to move back down to core…

  354. Gary

    If the intermediate decline isn’t over then the odds are very good we will get an opportunity to enter lower.

    At the moment it’s not looking good. That’s why I want to be back in core only mode.

    The fact is that we made some good money riding this move. Easily recovering the small loss from the curve ball gold through us at the top.

    Now gold has reached a significant resistance level, and so far it’s not pushing through. If the action in the miners is any indication then it’s not going to push through and it has one more leg down before this intermediate cycle bottoms.

    I’m going to cover all this in the weekend report.

  355. ALEX


    I’m not sure if I am misunderstanding. Cot added shorts as gold/ silver rose?

    Thats a good sign if thats what you were saying. Look at the chart of COT last July to Nov.

    Gold /silver ran up…cot shorts ran up. They always add shorts as gold rally s . They close shorts as P.M.’s fall…. OR- were you saying something else??


  356. ALEX


    P.S. Mini Pep-talk

    you sound close to selling, BUT I am Still holding confidently SO FAR TIL NOW-

    1) I use 242 sma for GDX… to pullback to- It did.

    2) Also, all my miners ( EXK, NG, AXU, SLW) are all STILL ABOVE the 10 or 20sma after the rally off the bottom. Thats a good sign ..SO FAR.

    3)ALL my miners also crossed positive on MACD and now crossed ABOVE the 0 line. (except SLW)

    4) going sideays to wear off overbought Stochastics…and forming reverse head and shoulders possibly.(AXU and EXK, etc)

    5) Down on weak volume, sellers drying up. SO FAR..

    6) Everyone is scared and talking bearish short term.

    7) downtrends broken (possible retest, but slim)




    Until this changes (not including any Monday shake-out) I think it looks perfect since my buying on Jan 25th.

    I.M.O.—Bottoms arent hard to buy, they are hard to hold.

    Time will tell —
    …and I will sell if things change.Holding for Now.

  357. Brian

    Good pep talk Alex. A few other thoughts would be we have not broken any trend lines. We bought nearly at the low, so I’m willing to have more leeway.

    A big one I have been watching is bonds ($USB). The daily chart has a very large 14 day RSI divergence, and same with MACD. It seems there will be another push to defend the long term trend line. It completed a clear 5 waves down complete with a 4th wave triangle on the weekly chart. Point being if money flows back to oversold bonds stocks may be running out of gas.

    Possible all this benefits our gold and silver if money backs off overbought stocks.

  358. David Kafrick

    Lol, people need to stop freaking out whenever Gary does something unexpected. Are you here to learn about cycle analysis and incorporate that into your own analysis or are you here simply to piggy-back on someone else´s trades?

    By the way, I think Gary made the right move by selling some of his portfolio. The move in the dollar is really suspicious. If it doesn´t turn back down on Monday, I will close my Euro position immediately. Since the driver of all markets right now is the dollar, if it decides to go higher the move in gold is in jeopardy, at least for the time being.

    I still believe the dollar will go at least to the mid 60´s sometime this year, but maybe it will go to 82 now before heading lower.

  359. Romeo Bravo

    Gary, great weekend report, as usual. I appreciate the advise in the beginning. It is important to always keep that in mind!

    If in fact we do have another leg down, does this alter the coming C wave top in any way as far as timing (does this then make greater odds the top is pushed out to later in the summer, etc?)

    Also, again, a big if, perhaps we get a push down in gold that combines with a long awaited cycle low in the market which then runs back up with gold for the top of the C and the cycle then collapses into the beginning of our bear market. Just thinking out loud.

  360. Gary

    If gold has another push lower and the dollar manages a higher high it could very well push the final C-wave top out to next fall and the dollars three year cycle low also out to next fall.

    We’ll just have to see how quickly gold rallies out of another lower low.

  361. David Kafrick


    A question about cycles: If gold manages to put in a new low below the January 1308 low, why can´t that represent a failed intermediate cycle?

    From reading the weekend report, I understand that if we head back down, you would simply say that the January low was not an intermeditate low and that we were now in the process of finding that intermediate low, right? But why can´t the January low be an intermediate low and any move below that represent a failed Intermediate cycle?


  362. Keys

    I get what you are saying…I hope it works out for you and those that follow. You have been pretty accurate to date…I will not be following your lead, for obvious reasons, but I respect your approach.

    I tend to think the Fed wants the dollar up right now, for the potential of QE3…pushing the c-wave out to this fall makes sense. Perhaps….

    My approach is based upon the FED screwing things up, and wanting to be on the side that is fundamentally strong. In fairness I have all the time in the world, and have the ability to whether severe drawdowns.

  363. Gary

    There is always a chance that gold has put in a failed intermediate cycle. But that would entail a 15 to 20 week D-wave.

    The only time something like that should happen is at an 8 year cycle low. So while it’s in the realm of the possible it doesn’t have very high odds of happening.

  364. Wes


    Are swing highs really such a big deal ? I know that a swing high can lead to a big deal, but it seems to me that they are fairly common, and usually don’t mean much.

    For example, for gold coming out of the August low, there is a meaningless swing high on Aug 10 and another meaningless swing high on Aug 20.

    Just why is this potential swing high so different ?

  365. Ben

    Gary, I think you state everything perfectly in the weekend report. However… the problem this week isn’t what you did — it’s that it was unclear. You got a dozen or more questions about what you had done. I think you assumed from the headline 1-2-3 Reversal that there was great understanding on what had happened. I just re-read the blog post, and it simply is unclear, just outlining a strategy “if” but even then I could not see exactly you had done (and what I’d do, too) — this imo should have been clearly summarized on the premium site and not buried in the comments in the blog.

    Change in strategy is great, but it needs to be a bit clearer. That, plus the gold action appeared to be what was expected the day before but somehow that changed the future in an unexpected way, and that I think requires a much more thorough explanation.

    Don’t confuse our confusion with bullheadedness. No doubt that’s part of what happened. There will just be time when curve balls happen, and we subscribe for help in finding them and reacting to them.

  366. Steven

    What do people think the implications are of what Harvery Organ says here?

    The total silver comex open interest exploded by almost 5000 contracts rising to a level not seen for a couple of years. The final reading for the silver comex came in at 140,275 from Thursday’s level of 135,440. As I pointed out to you on many occasions, any total open interest at figures greater than 135,000 necessitates our banking ninjas into action. Their mission: to remove as many of the silver leaves from the tree. They are frightened to death of the many that may stand for delivery


  367. Steven


    I’m still confused about the items (preferably in order of what you think are important) you are looking for to reverse your position?

    Second, is there anything else you need to re-confirm you short-term bearish view?

    Thanks in advance.

  368. Gold Lion

    Another great weekend report. I for one appreciate your ability to “flip flop” based on updated chart actions. But I hope you can appreciate that not everyone is trading the same time frames you are. While I think there is at least a 60% chance that the intermediate cycle hasn’t yet bottomed, I hope you can understand that not everyone chose to trade the intermediate trend move. For instance I am long HL at $2.20. So should I sell it because it MIGHT pull back to $8.50 from $9.54 in the next couple weeks? Or I am long SWC at $4.48 and it MIGHT pull back to $22 from $23.79 where it is now? I have subscribed to your service three times because your cycle analysis and market perspective adds value to my decision making, not because I need a Guru to follow. Thanks for a terrific service.

  369. Bob loves Hawaii

    I have a question, do miners sell their gold at the spot price from the COMEX?

    If China is truly selling GLD shares for the underlying bullion, we should see divergences from GLD to Gold at London/Comex, and then the miners.

    We are seeing divergences in retail to spot of over 12% Sprott et al.

    I cannot believe the mine executives would sell at a lower price due to unbaked paper pushing down the spot price.

    Anyone care to comment?

    My bias is there will be a squeeze in March like December.

  370. Rebecca

    Just my two cents. It appears that there have recently been a lot focus on the daily price action of the PM in the blog. That has brought a great deal of uncertainties, and even confusions. However if you look at the weekly charts of $Gold and GDX, the bigger picture seems to be less uncertain. There appears to be similarities between the recent weekly charts of $Gold and GDX and those coming out of the July 2010 IT bottom. While there are two up candles in $Gold, there is a little hesitation in GDX. The truth is that nobody knows for sure what the future may bring. It is possible that the IT bottom is not yet in. But one (specially those who trade on the intermediate trends) ought to also look at the weekly charts before making any decisions.

  371. sophia


    Great report… I think that you are ( once again) right about the scenario…I could feel last week that the crowd was still shaken by January’s selloff… And the dollar is not behaving the way it should do. Bonds as well ( DK is right) are oversold and that strategy is starting to fade…
    So, lt’s play defense and have fun!

  372. sophia

    I have a question Gary…since you are on the west coast, does it mean that you are done with work at lunchtime and that you free to train and rockclimb the whole fternokn?

  373. Jayhawk


    I see all of those things too…Not quite ready to throw in the towel, but can see the bearish side too…especially with the dollar not collapsing, the overall market still overdue for some kind of pullback and these things impacting the miners.

    Most of my miners did hold the 10 & did not violate Thursday’s lows on Friday. That HUI channel is just at the breaking point, we should know much in the next few trading days.

    Not sure that is a bear flag or not. Looks a bit too steep and if it is, where do you measure the pattern from? I see 2 possible starting points-one measures to the 440 area, the other all the way back to 400. They 440 target would completely wash out all gains off the huge move coming out of the summer intermediate low. 400 would be a massive hit. Either way, I don’t know how a move that strong can fit within the context of a blow off top/dollar collapse/c-wave coming soon scenario.

    The 252 is rising and closing in on the 491 area where the HUI hit it’s first bottom and bounced hard at the 61.8% fib. I could see if we drift lower like Gary thinks, that MA would move up toward that target and form a double bottom there, possibly with decent daily MACD divergence being set up.

    Also, a move to the top of the flag/channel would move the price above Gary’s target of 545, however, it could still be in the “bear flag” even at those levels.


  374. Bob loves Hawaii

    I agree with you Rebecca, it seems pointless to me to sell a bunch of miners for a one month swoon. I sell options against my positions anyway every month so I take out some of the volatility, and if you hold GDX, sell weekly calls OTM on any stretch of the 30 EMA on a 15 minute chart, do the reverse with put spreads when the C wave version 2011 comes. It is unlikely you will be called and if so the delta is less than your underlying gain.

    Another thing to bear in mind, if you hold juniors, FRG is helping to set a floor.

    I’ll keep buying a little more every big down day on my miners of choice, I’m not sweating 10% against a 100% + opportunity.

  375. Nike Boy2008

    hey guys..

    1) Gary is not abandoning the ship….if HUI makes a higher high Gary will go all in…

    2) Like any smart person, he’s locked in his profits and riding the rest

    3) He’ll be giving up maybe 2% extra profit while waiting for the higher high, but at the same time he is avoiding maybe 10-20% of downside risk…the benefit:risk ratio is small that that he is wise to lock in profits.

    ~just my 2 cents

  376. Shalom Bernanke

    I tend to think Gary will be correct about a move lower in the metals, but since I’m only 62% invested and looking to get to 100%, I won’t sell anything I have to avoid the decline (unless stopped out, which is very unlikely with my stops far below even Gary’s worst case scenario).

    Since I have huge unrealized gains thus far, I’m choosing to ride it out while looking to put the other 38% and maybe some margin to work. While I think G’s prognostication is likely, I just can’t risk losing my positions over a potential 7-10% drawdown when I believe the upside is 10x+ that.

    I also believe I’ll be better able to have a full position into the decline if I keep what I have. If I book profits now I’ll probably just start over by buying a core near the bottom, and then only have 35% or so for the move higher. I’ll just buckle up for the next couple weeks.

    And congratulations on your recent achievement, Gary. πŸ™‚

  377. jeff

    shalom bernanke

    Im thankfull for the caution. im looking for a entry. my first old turkey entry. I still had a stop at 1320 just because mf global made the call at 1310 and i went with that. I am following gary like a hawk and i am going to do the old tukey thing when its time. the leverage i use goes like this.
    gary says caution
    i say runnnn lmao
    so i am working on it and trying to get on board.
    thanks again gary

  378. Gary

    No swing highs aren’t usually significant unless they happen to mark a cycle top. And no we have no way of knowing if a swing on Monday will be significant.

    It just has the potential to mark a cycle top. The extremely poor action in the miners lately increase the odds that a swing is going to be significant this time.

  379. Rob

    I think that most of us, who entered at the swing-low ($1313), might be best to stay in the market, as Gary uses quite a large amount of leverage. He also stated that if gold were to drop to a lower low, it wouldn’t be all that significant (-5% ?). I’m in SLW at 31.36 – a 50% retracement from the Dec high of 42. Unless gold drops well under 1250, those of us who entered at the recent swing low should be more than happy with our entry. And don’t forget that the weekly chart for gold looks good. Gold has had two consecutive weeks of higher prices since the weekly swing low. Maybe that’s a question for Gary.

    Gary, if you were an average-type of investor, buying into the gold sector at the recent swing-low prices, would you be happy/content/confident with a buy and hold strategy- selling only when the dollar finds its 3 year cycle low?

  380. Gary

    I can see where I probably should have explained a little clearer in the post that it was the action in the miners that changed my opinion not anything gold had done.

    I’ll try to be more clear next time.

  381. Gary

    My current view is already bearish it’s now up to the metals to change my mind. I’ve been very clear what it will take to do that.

  382. Silverman


    re:Ben’s post. Since I work for a living I don’t have much time when I check your site during the day. It would have been very helpful if you had clearly stated in your post on the premium site that you were moving to 35% core. It took quite some time (that I don’t really have) to figure this out. That said, I do appreciate your flexible & direct approach. Thanks for your continued guidance.

  383. Gary

    To answer your question yes…if I thought the intermediate decline had bottomed.

    Let me make a point. Remember how back in Dec. everyone was crowing about how they would be backing up the truck if gold pulled back?

    Now fast forward to the end of Jan. where were all those trucks? Mostly they were no where to be seen because in real time it’s not quite as easy to take the leap into the unknown.

    Now we after a nice 12% (in the HUI) or 28% (in AGQ) rally everyone is again crowing about how they will easily ride out another correction and how they will easily buy at lower prices.

    I’m going to tell you again that it isn’t going to be that easy. If gold breaks below $1307 it’s going to look like a D-wave has begun.

    Buying into that, or holding in the face of that is going to be one of the toughest things your going to do this year.

    I have no trouble buying into that kind of decline, but even so I would much rather do it with a lot of dry powder than after watching my position in AGQ go from 151 to 105.

  384. jeff


    so buying into a decline?

    the stratagy is still buying after some sort of a reversal? a swing low. some indication?

    if you are just going to start buying into a decline and then be leveraged.
    still going to make a call ?

    and yes i read the comment 3 times, i can be a little thick in the head sometimes.

  385. Avann

    Right … and if by getting out now you’re giving yourself the option of getting back it in at either 105 or 165 … I choose to get out and have that option.

  386. Gary

    I will buy when I get some indication that gold has put in a cycle bottom …or if the HUI can rectify the current divergence and make a higher high. Which ever comes first.

  387. zstock7.com

    Hello Gary,
    i have gold stocks on the weekly charts, getting ready to rally next 6 weeks.

    btw, gold stocks, haven’t even put in their 52 weeks highs, imo.
    NEM is under valued, at $67, trading at $57. support 54.

  388. jeff


    that is what i was thinking, i was afraid you were just going to dollar cost average and start buying on the way down

    sigh of relief

  389. Jayhawk

    OK, last 2 and I’m done! πŸ™‚

    HUI inverse chart. C&H looking thing with a 100 pt move off the break of the cup. MLMT will love that one.


    Stepping back to monthly closes on the HUI. 487 should be support. Ironic it matches the 252 MA that has stopped other intermediate declines.


  390. RA


    Thanks for outlining your thinking in the weekend report.

    What is interesting (and perhaps even surprising) to me is that you normally look at timing bands, money flows and sentiment to identify intermediate bottoms – but this time it is $HUI that takes center stage.

    You have taught us, for example, at all intermediate lows, sentiment tends to be extreme.

    So I am curious as to what kind of action, in general, do you expect of the price action of miners when coming out of intermediate bottoms. And in particular, the 530pivot in this case.

    Is it because you expect that all resistance levels to be easily broken when coming out of intermediate lows? Do we always wait for a pattern of higher highs and higher lows in the $HUI? What should we be looking for in the $HUI?

    Thanks in advance for your inputs. I am learning something new here.

  391. Gary

    What caught my attention was the weak behavior in the miners compared to relatively strong action in gold and the stock market.

    That made me decide to take the profits I had at that point and stand aside until either the miners corrected the divergence or gold dropped down into another lower bottom.

  392. RA


    The miners and gold seem to have similar problems breaking through resistance after a run up. They do not seem to diverge that much?

    The bigger divergence is the divergence between the miners and the general stock market.

    So we should expect the strength of the general market to rub off on miners if we are coming out from the lows. If not, then maybe we have not put in a low yet.

  393. Beanie

    The stock market had based for 10 years and is ready to rock n’ super roll. Don’t anyone dare to short z market. The technicals means, it’s gonna be huge huge huge stock market rally into the later part of this decade. If you’re an objective chartist, you realize what I’m saying, right?

  394. Gary

    Secular bear markets don’t have anything to do with lines on a chart. Secular bear markets are about regression to the mean from extreme overvaluation to extreme undervaluation.

    At the market top in 2000 the P/E ratio of the market had reached overvaluation levels never seen in all of history. After 10 years P/E ratios have compressed till they are about back to the historic average.

    However never in history has a market just regressed back to the mean and then stopped. Not on the down side and not on the up side. That’s not the way human emotions work.

    After the extreme undervaluation in 1982 the market over shot on the upside to an incredible degree culminating in the Nasdaq bubble. It now has to overshoot on the down side before we even begin to look for a final bottom.

    If we factor in inflation the market has already lost a tremendous amount of value. Even at the 07 top stocks were worth considerably less than at the 2000 high.

    The bear is doing his job of clearing the excesses created during the last bull phase. The problem is that the Fed is getting in the way of the natural cleansing process so instead of taking 8-10 years this could drag out for 20 or more years like Japan.

    It would be much better if the government would just get out of the way and let nature take it’s course. Sure it would be painful for 2-3 years but it would then be over. The path we are now on leads to excruciating pain for many many years with a final collapse that none of us are going to come out of unscathed.

  395. Beanie

    The exponential speed at which technology is progressing is the reason for our increased productivity. It is why we can bounce so fast from recessions of late. The bears still think we’re in the Industrial Revolution.

    The speed of technology improvements means within a few years alternative energy will take center stage in the greatest bull market the world has ever known. Some companies are already expected to get to cost parity by 2012-2013.

  396. Gary

    Secular bear markets also have nothing to do with technology any more than lines on a chart.

    Again they are about regression back to levels of extreme undervaluation.

    The only thing that would change this would be for human nature to change. I see no sign of that happening anytime soon.

  397. Gary

    Ask yourself why we need interest rates at 0 percent and a seemingly never ending series of QE and stimulus.

    If this was a healthy market none of that would be necessary.

  398. Beanie


    That’s what happened in early 1990; we had very low interest rates. That helped to brew the internet revolution. The end of bear markets is when we have low interest rates.

    We are now in the same situation we were in back in the early 1990s — low interest rates. What is brewing now is Internet 2.0 and The Green Energy Revolution. A lot of the money that is in the economic system right now will go to Internet 2.0 and Green Energy.

    And the cycle repeats, and this next bull market eventually dies. And then we get the real secular bear market when there is no more new and disruptive technology on the horizon.

  399. Gary

    If you think a market that is nominally 15% below were it was 11 years ago and in inflation adjusted terms probably more like 30% below where it was 11 years ago is a bull market then you and I have completely different definitions of a bull market.

    In my world a bull market means one makes money on the long side.

  400. Arun

    Gary.. compared to the miners, one can anticipate another breakdown in gold. But you could also use silver to anticipate gold movement. In that case, the silver futures is in a healthy uptrend. Its hardly retraced 15% from the 1/28 bottom. What do you think, is it a valid conclusion?

  401. Steven


    Arun has a point. The silver futures chart looks fairly healthy with higher highs and higher lows (for now anyway). And the correction has not been that severein the commodity itself. Have you ever seen either silver or gold decouple from the other?

  402. Beanie


    You are fond of saying secular bear market all the time, yet you don’t seem to understand what a secular bull market is. It’s just the opposite, to put it succintly. Within the multidecade secular bull market, there obviously will be cyclical bear markets in between. The last 10 years weren’t all fun for the bulls (or bears in 2003-2007 and 2009-2010) — there were cyclical bear markets and cyclical bull markets. We were just “basing”, is what I like to think. Many people who bought stocks back in 1980’s and early 1990’s made a lot of money, even if they kept the stocks the last 10 years. They made a lot of money and their long term portfolios still did very well. What all the grieving is from are those who bought during the end of the internet bull market as well as those who bought before the 2007-2008 collapse.

    How do I know that we’re on the verge of another huge bull market? I learn to ask the question, “What does our government want (in terms of technology) for Americans to have so America can continue to achieve prosperity and be the nation of the world’s envy?” Whatever the government wants, it will get.

    Back in 1990, our government wanted us to have the internet. Did they think we would achieve productivity and prosperity if we built up the internet and most Americans get access? Hell yeah! The govt knew; after all, the internet technology were already used by the govt, specifically within the military. To get internet to the masses, the govt needed to fund it. And it did that via the money supply.

    So what is the govt seeing right now and want Americans to have? Internet 2.0 (continuation of the internet) and green energy revolution. Especially green energy. If we don’t build out our green energy technologies, the chinese (their govt is actively funding green tech) or another country will beat us to it. We don’t stay a super power by letting another country beat us to important technologies — and green energy is most definitely very important. This is why we will have the green energy super bull market, not the nonsense poluting peaked oil or “bridge fuel” natural gas.

    The chinese Suntech, for instance, is almost getting near grid parity within the next 2-3 years. Americans just aren’t the type that stand around and let others beat us. I have to believe our govt will most likely brew the green energy revolution.

  403. n1tro

    Forget green energy and web 2.0. Those are not going to be the next big things. If I had to guess, it will be nano technology and or stem cell research.

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