DOLLAR ON THE EDGE OF THE ABYSS

The dollar is now poised on the edge of the abyss. 

The current intermediate cycle has rolled over and is making lower lows and lower highs. The current daily cycle has formed a swing high and is in jeopardy of rolling over into a left translated cycle. If the dollar breaks below the November intermediate bottom of 75.63 it will be an incredibly bearish sign as not only will the current intermediate cycle have topped in only 4 weeks but the larger yearly cycle will also have topped in only 4 weeks. 

If that happens there is little chance the dollar will be able to hold above the March 08 lows as the crash down into the three year cycle low begins in earnest.



This will not only drive the final leg up in gold’s huge C-wave it will also drive a huge spike in inflation in all other commodities. Food riots world wide will intensify. The rest of the world will be in an uproar over the collapsing dollar. Spiking commodity prices will collapse discretionary spending just like it did in 08 and 09. 

The phony economy driven by Ben’s printing press will roll over when he’s forced to turn off the presses to halt the dollar collapse. (Just like it started to do last summer when QE ended and the stock market started to collapse.) 

The dollar’s rally out of the three year cycle low should correspond with stocks beginning the next leg down in the secular bear market and the next brief deflationary period just like the bounce out of the 08 three year cycle low drove the second leg down in the secular bear market.

The rally out of a three year cycle low usually lasts about a year to a year and a half. The next 4 year cycle low in the stock market is due in 2012. I expect that year long rally out of the coming three year cycle bottom to drive stocks down into the next major 4 year cycle trough and drive the CRB into it’s next major cycle bottom.



A lot is riding on the next 2/3 weeks. If the swing high in the dollar yesterday does signal the top of the dollar’s daily cycle then the November low will almost surely be broken and the chain of events I laid out will be set in motion.

781 thoughts on “DOLLAR ON THE EDGE OF THE ABYSS”

  1. RA

    So what will happen to gold as the dollar rallys out of the three year cycle low and commodities and stocks take a beating?

    Will the D wave in gold last as long as the dollar rally?

  2. Gary

    D-waves usually last 5-8 weeks and are followed by an A-wave that should test the highs.

    All in all the result in gold should be a year to year and a half consolidation below the coming C-wave high.

  5. Gary

    The dollar rally won’t go straight up. There will still be corrections down into intermediate cycle lows. But even so gold should rally in an A-wave advance no matter what the dollar does.

  7. Rebecca

    Great post. Very clear big picture although I know for sure that there will be daily/hourly/60min/30min/15min/5min price wiggles and jiggles to get people’s emotion work up and stir up doubts and uncertainties. Thank you. You are the only adviser who has given me a road map that I have confidence to bank on.

  8. RA

    Gary,

    If the C wave started at 860 and if it hits 1600 at the top say – a 50% retracement means we get back to 1230!

    Wow! No wonder you want to get out of D waves!

  9. ALEX

    BASIL

    I will say it… 9.00 a.m. &
    I think I was wrong when I sold my AVL yesterday 🙂

    But I did purchase AXU with it, so I am already happy about that.

  11. sophia

    hi Gary,

    I understand your point. Gold/Silver going up if Dollar down or dollar up…My only concern is PM stocks: if there is more problem in the Middle East, the dollar will rally, stocks will go down and PM will follow to a certain extent…So, isn’t it better to just buy Gold or Silver?

  12. Driver

    Hi Gary,

    It would be helpful if you could move those charts in your new post to the left so we can get the full picture of what you’re discussing. No big deal if you can’t. Thanks.

  14. Poly

    Gary,

    Two questions.

    The 4 year cycle low was Match 2009, why wouldn’t we expect the next low to be in 2013?

    Being this cycle is almost right translated (and very positive), could we expect this 4 year cycle to be extremely right translated and therefore see further upside well into early 2012?

    I certainly agree we’re headed down into deep bear market lows at some point, I’m just wondering if we should consider alternative scenarios. A QE3 could be a possible extension and another severe correction like April-Aug 2010 could server as a catalyst (coupled with a QE3) for another even more massive runaway.

  15. aaronpalang

    Problems in the middle east dont always cause a rally in the dollar. Yesterday was a great example with the Iranian ships/Israel…the dollar actually fell.

  16. ALEX

    Perfect timing on this article Gary

    I was just reading this article this wkend ( He uses cycles and is calling for a bullish dollar surging higher on Euro debt fears and his cycle work.

    http://www.safehaven.com/article/19978/us-dollar-currency-short-term-bullish-long-term-bearish-not-so-sure

    Personally, I think yours’ matches what we’re seeing and this past summer , as a sub , I saw you repeatedly called for this dollar dive in the spring and c-wave in gold.

    DRIVER:

    You can click on those charts for full view

  17. mamaloshen

    I agree with Rebecca. An excellent post and a valuable road map to what lies ahead.

    But I have a question about the timing, Gary (maybe I misunderstood something in reading your remarks). Are you saying gold will be down for a year to a year and a half? The last major decline was from $1034 in March ’08 to $681 in Oct. ’08, or 7 months. Do you think it will last much longer this time? Is it due to the projected stock market cycle bottom in 2012? Just curious.

    Thanks in advance.

  18. Poly

    I’m only going on what I’ve read about bull markets, but we should not forget that this gold bull is now certainly past it’s half way point, meaning the swings get wilder, the corrections fast and steep and the snap-backs and C-Waves get ridiculous.

    Attempting to predict future action on what happened in say 2006 or 2008 could be costly.

  19. Haggerty

    This would be fantastic if it all works out this way

    We ride the last part of this C wave and then we will probably get a D wave correction at the same time the dollar rallies and the market starts to shit itself, which we can short on the way down. Then after that hop back on the gold and silver bull for the A wave.

    Sounds good

  20. Redwine

    This is a great quote from Marc Fabers latest newsletter.

    “All investors I know always ask around who the best advisors,
    strategists, brokers and fund managers are. However, I have never met anyone
    who asks whether he himself is a good client. If a broker calls a client with an
    idea, the good client will listen to the reasoning of the broker who presents the
    idea and either pass or agree to follow the idea with some money. The bad client
    will question everything the broker explained just for the sake of arguing.
    Consequently, he will waste the broker’s time. The bad client does not realize
    that since he wanted the “best broker” to service him, it’s obvious the best
    broker would be successful and extremely busy due to a very large customer
    base. Therefore, the next time the broker has a good idea who do you think he
    will call? The good client or the bad client! The same goes for clients who
    invest money with successful fund managers. The bad client will continuously
    question the successful managers about every investment decision he takes not
    realizing that the successful fund manager is successful because he devotes his
    time and energy on identifying good investment themes and not by wasting his
    time with irritating clients. It would never occur to the bad client that if every
    client called the successful fund manager every week, he would never ever have
    enough time for managing his fund.”

  21. ALEX

    POLY,

    I was thinking a similar thing, about trying to gauge a parabolic move up in Gold…and was trying to look at the oil spike and what preceded it, and the nasdaq 1995 to 2001.

    The only thing I was adding to it, is that Gold and P.M. stocks are small and demand could be HUGE. 1970’s to early ’80’s showed that.

  22. Poly

    Personally I think the NASDAQ fits the mold as the perfect euphoric Gold fever type bubble. Overlaying the gold chart to date fit’s nicely.

  23. Gary

    Sophia,
    Miners will follow gold.

    The only exception is at the very end of a selling climax the stock market will drag them down. They always rebound violently once the selling pressure is released though to get back in line with gold.

  24. Gary

    Poly,
    Because stretched cycles are almost always followed by shortened cycles.

    The 02-07 cycle was the most stretched cycle in history. It would be unusual to see another cycle of even normal length follow that.

    On top of that the next bear market will be driven by the deflationary forces of a powerful dollar rally.

    That will occur as the dollar rallies out of a 3 year cycle low.

    Unless the dollar cycle is going to stretch really long then stocks have to drop as the dollar rallies.

  25. Gary

    QE3 is not going to be politically possible with the rest of the world screaming about a collapsing dollar and inflation pressures spiking…no matter how much the government massages the data to make it disappear.

  26. Gary

    Mam,
    Gold will drop down into a D-wave which usually lasts about 2 months. Then it will go through an extended AB and initial stage C-wave consolidation pattern below the all time highs.

    I don’t expect the next C-wave breakout till at least the fall of 2012 or more likely the fall of 2013.

  27. pimaCanyon

    Gary,

    Do you think there’s any chance stocks will get spooked by a seriously falling dollar and as a result top out and begin to head south BEFORE the dollar makes its 3 year cycle low?

    If this were to happen, we’d have stocks and the dollar moving down concurrently and then when the dollar bottomed and headed higher, stocks just might accelerate their move to the downside, no?

  29. Gary

    I actually do expect stocks to top slightly before the dollar bottoms as inflation begins to surge out of control.

    We saw that very thing happen when the stock market topped in 07 ahead of the dollar bottom in 08.

    Surging inflation had already poisoned the economy and it was rolling over fully 5 months before the dollar bottomed. Ben’s printing strategy had already failed.

    I think this time they will top a little closer, maybe 1 or 2 months before the dollar bottoms.

  30. ALEX

    GARY

    “I don’t expect the next C-wave breakout till at least the fall of 2012 or more likely the fall of 2013.”

    Is it ( I thought so) more likely that as gold goes on in time, the climb gets steeper and the pullbacks quicker, thus speeding up the cycles? I thought I saw that in oil.

    POLY

    Any chance you can get a chart with Nasdaq overlayed over Gold as you mentioned,and post it here??? Or did you see that somewhere else. I dont know how to do that. Thanks

  32. DG

    Pima/Nike: I’m out of UNG. After perfect looking start I am disappointed it died. But that’s how my trades work. Took a tiny 1.5% loss and had a possible 10-15% gain, so a 5-to1 or better risk/reward ratio. If I had had a longer term opinion on gas I’d have played it differently but this was just a trade, so small loss and out it goes. If it rallies, good for whoever bought it from me. Alex: That’ll teach me to go long! (j/k–I am long as often as short for this kind of trade.)

  33. TommyD

    Gary,
    I went grocery shopping last evening.
    Price of meat got me to checking the ticker COW.

    What you think? Is it cheap? It’s still in the group of commodities that’s why I thought I would bring it up.

    Tom

  35. Ryan

    Just wanted to repost my questions from the last post:

    Thanks Gary and Alex, I’m definitely trying to learn. Today, I added more to my SLW position thinking if it does go down again to close the gap, I’ll put in more but I am already quite overweight with SLW compared to my other holdings. I’m trying to rebalance it more in lines with Gary’s portfolio. I do have a question regarding AGQ. I’ve been burnt really bad playing with HNU.to (2X natural gas futures). But from my understanding, AGQ follows 2X SLV and not the futures? So there’s no contango effect with AGQ just the daily rebalancing effect just like every other 2X etf?

  36. Poly

    Alex,

    I had seen it somewhere, don’t recall where now. Stockcharts wont let me pick two different time periods.

    But you can eyeball the Nasdaq from the first 10 years of that bull and see a similar 400-600% increase.
    It’s amazing how tame that first 10 year increase looks when viewing the entire NASDAQ bull market. It’s like the gold chart today looks steep, but this portion of the chart will look rather flat when looked back at the end of this run.

  37. Gary

    Alex,
    As this 2nd stage of the bull progresses we should see the swings become more volatile and larger. I don’t really expect the ABCD wave pattern to break down till the bubble phase though.

  40. Jayhawk

    That vuvvy guy has a model that should help us exit the top. Also, we could scale out and per Gary’s comments yesterday exit miners first, the let the pure silver plays ride a bit longer.

    .05 away from 31 silver. A close above there for a few days would be nice.

  41. Gary

    Ryann,
    Yes just the rebalancing effect. One only wants to hold AGQ during rallies.

    It’s not a long term investment vehicle.

  42. Haggerty

    Shalom

    My brother lives in buffalo and I was shocked at how nice wegmans was. They had the nicest bathrooms and changing stations for babies with free diapers. I am from nyc and the animals here would destroy a place like in a new york minute

  47. Shalom Bernanke

    Haggerty,

    You got that right. I lived in NYC for awhile as well, and couldn’t wait to leave. To each his own, I suppose.

    NYC was fun, but far too expensive for what I was getting in return. I like land and wide open spaces these days. 🙂

  48. DG

    Yeah, and now it’s tanking. I have always loved the line “‘Hope’ is not an investment strategy.” I heartily endorse Gary’s always having a Plan. Without it you are too scared to buy at bottoms, and let losses get out of hand.

  50. Jayhawk

    Miners being held down…OPEX Friday so I’m not banking on any fireworks this week. Most likely these miners being naked shorted too by the desperate EE.

  51. basil

    Hi Gary,

    they way I understand your prediction is as follows:

    Commodity inflation (or speculation) surging between now and late spring or early summer 2011. That surge in commodity related prices (particularly oil) breaks the neck of the ‘recovering’ economy, hence it comes to a more or less screeching halt with collapsing corporate profits and therefore collapsing share prices and overall speculation.
    In addition, inflated commodity prices also set the stage for more worldwide political turmoil in the coming months and will force the US government to act swiftly by pulling the plug on Bernanke’s printing press, possibly in the face of an economy, which at this point, shows only early signs of a repeat decline. The decline in share prices and speculation will accelerate once there is no QE 3 (June), and the air will deflate out of ALL markets including commodities as the end of QE will start a new round of liquidation among investors as a flight into the dollar starts in synchronicity.
    As for the timing, indices will begin to roll over any time after, say late April (my guess would be June) and start a decline that will bottom out between summer and fall 2011 (my guess would be October2012).

    Is my understanding of your view correct?
    If yes, I agree, because I can see all of it happen like this. However, I wonder about QE and whether there could really be anything at all that would stop the printing press (including international political pressure). And of course, it’s just an educated guess, and some things could change unexpectedly.

  53. Gary

    Basil,
    Correct on all accounts. Surging inflation in 08 demanded Ben quit printing and the same thing will happen this time to.

    It just won’t be politically feasible to keep running the presses during a dollar crisis.

  56. basil

    Alex,

    you made a reasonable decision based on price.
    My view is that the fundamentals for rare earths have been good anyway, but have much further improved by the Chinese export restrictions. This is a long term fundamental driver, which only stops once the Chinese change their rare earth policy, which I don’t see coming any time soon. I also look at the long term chart of the Canadian shares of AVL, which shows that their high in the late 1980s was $45, and that is not adjusted for inflation. With the new driving forces behind the prices for rare earths I would not be at all surprised if these old highs will be taken out during some manic, speculative phase in the course of this commodity bull. So I am very positive on this stock, but expect a very volatile and scary ride with lots of setbacks.

  62. TZ(5288)

    DAVID,

    >Silver stocks seriously underperforming the metal.
    Ominous.

    No. Normal and expected.

    I said this days ago.

    In the final surge of a C wave silver outperforms EVERYTHING.

    Somebody immediately contradicted me based on some uninformed snap reaction and everybody else stumbled over the truth and continued blissfully on their way.

    I wonder if anybody actually checked the facts. I guess not.

  63. basil

    David,

    my guess is that the actual metal is the beneficiary of the commodity price inflation while the stocks suffer from that price inflation. I would expect the miners to lag with oil that high and expected to go much higher.
    I am not invested in PM stocks. SLW for one is at a PE of about 50. That’s as high as it should be and stay, in my opinion.

  65. basil

    David PS: As with any corporate profit, the miner’s profit is suffering from higher costs of getting the metal out of the ground. And the projection is that their profits will suffer more. So it’s a number’s game between rising PM prices and rising oil prices, which might nullify each other to some extent.

  66. basil

    mama,

    hehe. When I look at the long term charts, the D waves decline sharply and quickly. The steepest bottom should occur early. I remember that I bought my metals after a major decline took place in I believe May 2006. Within a very short period of time the price of silver fell from 15$ to around 9$. That’s when I bought. It never ever again dropped below my entry point. The climb up was boringly slow, of course. In 2008 it was very similar. A crash down that hit the bottom quickly.

  74. DG

    Gary: I think you were the “somebody” that contradicted TZ. This statement was” In the final surge of a C wave silver outperforms EVERYTHING.” If I remember your point wads that that happens at the end of the final C wave, not at the start. Which is correct? (TZ: You make interesting points sometimes but why be sarcastic? It’s a nice friendly blog but you seem so annoyed sometimes that no one is as smart as you.)

  75. ddn3f

    Gary said that if silver breaks above its high on this cycle, that means that we will see something impressive in the silver market. So $50 here we go. Wow silver broke its high and we have about 2 weeks before we look for a top. Any guesses on how far it goes before this daily cycle tops?

    All this euphoria goes away if this is a double top.

  77. ALEX

    Thanks Gary , I guess we’ll just cross that volatility bridge when we get there

    Thanks Poly ( I couldnt find a way to overlay nasdaq 1990’s and gold now either)

    Jayhawk?? Can you? 🙂

  80. mamaloshen

    Basil,

    Actually, silver got as low as $8.40 in Oct. 2008 but that was short-lived and pretty unique as everything crashed then.

    There’s always a danger of a counter-trend move up after a big decline, followed by a lower low afterwards, but that seems rare in the silver chart, so maybe a huge drop 4-6 weeks after a major top could be a good buy point for those brave enough.

  81. basil

    Rebecca,

    I am holding several Uranium stocks and one Rare Earth stock (there are no sophisticated vehicles to invest in the commodity itself in these cases). I am also holding Japanese financial stocks. And finally some DAG (double long agricultural commodities). I am also holding physical silver. Overall silver is 50% of my portfolio.
    That’s plenty of diversification for me, but it’s of course a speculative portfolio.

  82. Redwine

    One thing that’s different between this bull and the 1970/1980 bull is the existence of ETF’s. Rather than money flowing into miners, as in the old bull, the money is flowing into GLD and SLV. I think this may be a reason the physicals are outperforming the equities. Also the existence of rip off artists running the mining companies. Any thoughts?

  83. Rebecca

    Basil,

    Thanks for the additional information. I guess I was looking for your confirmation or justification that within the PM complex, one needs not to worry about diversification in stocks and metals. Your thoughts please?

  84. ALEX

    Basil

    Yes, I was saying yesterday that I was wanting more volume on AVL , it had less than 1 million at lunchtime-

    boom, today it has 4.5 million at lunchtime. Where was it when I needed it– haha

  85. TZ(5288)

    DG,

    >you seem so annoyed sometimes that no one is as smart as you.

    You are confusing some sort of ‘smartness’ with a trait commonly known as HARD WORK.

    Someone putting in hard work to produce a result would not exactly being joyous in having those results dismissed by casual response of factless and effortless origin.

    Is this not fair? Please tell me if you disagree.

    What if the years and years of WORK you put in to create your trading system was dismissed by somebody who said “well..you were just LUCKY and had some extra vitamins when you were a kid.”

    I have no idea if it was gary who commented or not. Doesn’t matter.

    If anybody wants to disagree, fine, but please produce some evidence making your point to the contrary. The charts are pretty clear on my side unless I’m missing something. As ALWAYS, I WELCOME someone showing me a mistake cause I can use it to avoid losses and increase returns. Again, I think we all agree on this point.

    (And I define the “last part” or “last wave” of C as being the last almost continuous surge up WITHOUT any sort of major correction. An example of a “major correction” was what we just went through last month or two. Thus, in cycle terms, that means the final intermediate wave of the C.)

  86. DG

    Alex; Yeah, I am long a solid amount with AGQ the largest holding. I like to add as I get in the black and am willing to sacrifice some gains to not get too far in the red on a drawdown. As Gary has said, though, if silver goes to $50, a couple of percent here and there won’t matter much, and it ain’t getting to $50 without me having a full load. Thanks for the post!

  87. Shalom Bernanke

    Another great day, but it’s looking like I’ll be stuck at 67% invested. Pullbacks to add just don’t look like they’ll occur.

    Patience is all we need at this point and let them work. 🙂

  88. TZ(5288)

    If I’m really out of line with something I said, then I apologize.

    I think for the most part I’m about as helpful and adjusted as anybody else on the board.

    My most recent posts were helping RA on how to avoid getting blown out of stop loss trades. Yes, I wanted him to do much of the work, but I hardly think I’m here insulting people.

  89. basil

    Rebecca,
    I don’t worry about diversification in silver. AGQ and physical is all I care for. AGQ as a trading vehicle (weeks and months), physical as a buy and hold (years).
    At this time, I prefer to be invested in the price of silver rather than the miners for the reasons given.

  90. Steven

    Shalom Bernanke,

    Maybe you would be more than 67% invested if you had taken the “embedded” note a bit more seriously. Who knows what the future brings but this was a data point at least worth considering.
    No arguments here; just your response was arrogant and rude.

    L’Chaim!

    Steven

  91. Poly

    Shalom,

    You were on the Sep-Dec ride, no such thing as pullbacks, ESPECIALLY in Silver. The daily cycle lows were almost non existent.

  92. DG

    TZ: I was not debating your point as I have not done the research (but I bet Gary has, so I hope he will weigh in), and I myself am often calling for evidence for a claim. so no bone to pick there. My final comment was about stuff like:
    “Somebody immediately contradicted me based on some uninformed snap reaction and everybody else stumbled over the truth and continued blissfully on their way.” Seems sarcastic and arrogant to me. I know it’s hard to believe but even when you are sure of something, you could be wrong (If you don;t think that’s true you haven;t lived long enough yet. Don’t go Robert on us! I commend your hard work, but not your self-congratulatory attitude about it. Humility, even (or perhaps especially) when you believe you are the smartest guy around, is a lovely quality. Relax. You can always say what you want to say without the obvious irritation as to what fools everyone else is. Look, this is just how it seems to me. If I am off the mark, I will just drop it, but you asked what I meant, so here it is…

  94. pimaCanyon

    Silver is ripping today. Silver has topped it high of Jan 3. Gold is not too shabby either!

    I have been shifting my portfolio more into leveraged metals (via deep in the money calls on GLD and SLV with deltas > .90) and less in the miners. I still have some GDXJ and SIL and will probably keep what I have. Also SVM. New positions will be deep in the money GLD and SLV calls.

  95. pimaCanyon

    DG,

    Just read your comment about adding.

    I too want to add, but have not decided on a strategy, whether to wait for a daily cycle low (which could be minimal and may not even get close to today’s prices) or to just start adding now, a little today, a little tomorrow. (I did add yesterday, but have more adding I want to do.)

    What is your strategy for adding?

  97. ALEX

    TZ and DG

    I may be wrong here, but I find that at times when someone on here speaks, you cant tell if it was written to be read as

    1) the kindly voice of reason

    or 2) Scolding. maybe even in a sarcastic way.

    for ex: read this line both ways ..

    “I would expect that someone as experienced as you would remember how to average into a trade.”

    read it kindly in a soft tone..
    and read it harshly in a sarcastic tone.

    Big difference,

    please read ALL of mind kindly , I am never ruffled or angry on here. 🙂

  99. Ryan

    Jayhawk,

    I read from your previous posts that your largest holding is SLW. I’m in the same boat right only because I trade with the Canadian dollar and I would have to exchange a lot more USD if I was to rebalance my portfolio to mirror’s Gary. I was just wondering why you chose to have SLW as your largest holding vs SLV or AGQ?

  102. Shalom Bernanke

    Steven,

    You’re too sensitive and choose to take things personally. My response was simply “EMBEDDED!”, and somehow you twisted that into an insult. Sometimes I also say “BOING!” when metal spike higher, and you should also not take that personally.

    Poly,

    Hope you’re right about the lack of pullbacks. t’s just how I trade, and I rarely get 100% into any idea, no matter how much I believe in it. You’re right I was on last year, and it wasn’t just Sep-Dec, but we also caught a good move from Feb-May. Great year overall. 🙂

  103. Otis

    Hoping someone who understands volume and price levels can educate me on its validity in PMs. MLMTs prediction of 1390 turning gold down perked my interest. But when I look at GLD and SLV, it looks like the on GLD 131 and 133.50 should have acted as resistance, but only turned it down by 2-3 dollars before giving way. On SLV the 28.50 area should have turned it down, but SLV just gapped through it. Am I missing something here or is volume analsyis just not applicable to PMs?

    SLV
    http://stockcharts.com/h-sc/ui?s=GLD&p=D&b=5&g=0&id=p06187960021

    GLD
    http://stockcharts.com/h-sc/ui?s=SLV&p=D&b=5&g=0&id=p69515779387

  104. Poly

    Guys, IMO, this train is not going to wait. 14 days out from a new cycle is a long time and if these are the last few cycles for this entire C-Wave, you’re not going to get anywhere near this price on the next low.

  106. thedocument

    When people get scared, they tend to sell stocks, so I think the stock market may roll over sooner than later… probably once the 3-year cycle trend line is cracked or the November low fails. Since the dollar will be the subject of the crisis/panic, it will obviously not be the beneficiary of the usual flight-to-safety trade. That onus will fall on precious metals, and the only way thin markets like gold and silver can absorb panic-scale liquidity is via a massive price adjustment. I don’t think the usual TA methods of targets and extensions will work this time around… they will all be blown away.

    By the way, the CRB cycle actually runs about 2.5 years. The last cycle was shortened to 2 years due to the crash, so the current cycle should run long at 3 years. This still puts the cycle low in early 2012.

  107. Gary

    Otis,
    Now you see why I don’t use technical analysis to trade the metals. If a C-wave is ready to run TA is worthless.

    The only way I’ve found to make consistent money is by watching the cycles, sentiment, COT and a very distant fourth place is TA.

  109. DG

    Pima: The question is what your priority is. If it is to maximize gains then the fact that it may not come back to today’s prices is significant. if it is to not get into a situation where you feel pressure (by, for example, getting in the hole) then waiting until you have a nice gain cushions you. There is no “right way” but there is a right way to achieve your preferred goal. I don;t like the pressure and am happy to sacrifice a little profit to wait until I get some room. I will surely add a lot at the next cycle low, and probably little bits on the way up. (I bought more AGQ yesterday, for example).

    Alex: Agreed. I always try to read the posts in a positive way, but some are clearly what they are. I have never felt put off by one of yours (except the ones that even hint at questioning anything I ever say, think, or imply).

  110. pimaCanyon

    TZ,

    Please don’t reduce your smartness. Smartness is appreciated. 🙂 We can use all the smartness we can get here, no?

    (I’m not being sarcastic, I come here for knowledge and am fortunate that there are quite a few smart, experienced traders here who are willing to share some of their hard won knowledge.)

  111. pimaCanyon

    Thanks, DG.

    I too don’t like getting into a hole, one that feels (emotionally) BIG.

    So adding on the way up sounds like a good plan. And certainly adding at what appears to be the next cycle low. (I say “appears” because you never know it’s the cycle low until after the fact.)

    I am also watching channels and may put in close stops on SIL and GDXJ when they approach the top of their channels.

  112. basil

    Whitebear,

    the double ETFs often wait for confirmation from the single ETFs at resistance points before they catch up and gallop. I for one always eye the single ETF at resistance points before drawing conclusions about the course of the double. The January high is considered an important resistance point and if silver stays above it you’ll see AGQ soon pace ahead.

  113. David

    Redwine,

    Indeed. The silver stocks should have run up ahead of the metal. Instead they’re lagging, even on a day when the metal is breaking out.

  115. Shalom Bernanke

    I hope you guys are right and silver just runs from here. For me, I like buying into weakness, which is the strategy that works best 90% of the time. Occasionally we see runaway markets like now, and this is the 10% of the time I find it difficult to add.

    I will say that adding can be done on the smallest of dips if this turns out like it’s showing itself to be. And with Silver taking out the 30 yr highs it could add fuel to the fire. Heck, even my most recent purchase (and highest price paid) is still up roughly 30%. I can live with 67% invested at this stage.

  116. Gary

    Redwine,
    Since the intermediate cycle bottom.
    SLV +17.9%
    SIL +18.2%
    SLW +26.8%

    SIL is underperforming a bit but other than that I don’t see anything wrong with any of those numbers and who knows SIL may get in gear and correct the unerperformance at any time.

  119. Shalom Bernanke

    Most recent sizable purchase, that is up 30%. I’ve been nibbling here and there with small additions that are up only 8%.

    But my big buys are always into the puke-outs.

  121. Gary

    Haven’t you guys figured out by now that the metals sector tends to move in big spurts followed by periods of lackluster performance.

    Usually the spurts come pre-market or in the first 5 minutes. So if one gets knocked out during the boring period they miss the entire move when the next spurt happens.

  123. Gary

    Basil,
    You aren’t going to have to worry about energy this time (that was the last bull market). Oil has been, and will continue to underperform during this bull as the metals continue to rocket higher. Profits will continue to soar in the sector.

  125. Steven

    Gary,

    I know you always talk about all-time highs (or in this case 30 year highs for silver) but do you have a way of seeing a short-term top other than the cycles. And if it is the cycles then I assume you do not focus on price but time, correct? The real question I’m getting at is where can we expect silver to take a break here?

  126. DG

    Pima: My only thought to add is not to rely much at all on channels and such. I believe Gary is right that that sort of stuff won’t work when we get a blow-off type C-wave. If you are in the black, be willing to lose some profit for a once-in-a-lifetime opportunity to make a pile and really change your financial situation. It is going to get volatile as we get deeper so tight stops will get triggered and you’ll be in cash wishing you weren’t. Just go Old Turkey until there are lines outside coin shops. As much of a trader as I am even I’m going to just sit.

  127. Steven

    Gary,

    One more question. Do you think there needs to be a catalyst for the PMs to launch into the C wave (other than the 3 year low in the dollar)?

  129. Gary

    Steven,
    The single worst thing you can do right now is “expect” silver to take a break and try to trade it.

    Maybe some of you who ignored my advice about trading during the fall rally can impart to Steven how much money you lost by trying to get cute during that rally.

  130. Steven

    Gary,

    I’m not trying to trade other than a small position that was in excess of my max leveraged position. And I maxed out a few weeks ago on AGQ but bought a bit more last week for a short-term trade. Not touching my full position (and this is not my core but my max leveraged position I was comfortable with).

  131. basil

    Gary,
    I am not saying that the miners won’t rise, but compared to the physical, particularly leveraged AGQ, they should underperform. It’s simple math. If the overall economy will be affected by rising commodity prices, the miners will too. Energy prices, which I expect to rise much further (even if proportionally not as much as the PMs), will have a huge impact on the miners in diminishing their profit margin. They have rising metal prices as a buffer, but their profit margins are nevertheless impaired, I therefore don’t see them outshine the metal itself, particularly a leverage on the metal price, like AGQ.

    As one could argue that SLW is less of a mining company, I add here another chart that compares to SVM, one of the greatest low-cost miners. I believe the picture is everywhere the same, no matter what miner chart you pull up.

    http://finance.yahoo.com/q/ta?s=SVM&t=3m&l=on&z=l&q=l&p=&a=&c=slv%2Cagq

  132. Bede

    Gary,

    Question about leverage. When you leverage 130%, and the price of silver goes up. The amount you borrowed stays the same, so your leverage percentage drops. Do you then add to your holdings, so the percentage stays the same?

    TIA

  133. Ryan

    Thanks for the chart Basil.

    Trade H, I do trade SLW but I’m overweight on that vs my other holdings. My dilemma is if I want to put more weight on the metal and use AGQ, I would have to change to USD but I’m worried that if the USD tanks, I would lose out changing it back to Canadian dollars. I guess I can always just hold the USD and wait for it to come out of the 3 year low and change it back to Canadian dollars later. Now the real question is should I add to AGQ now after such an explosive day or as some suggest, wait for a daily cycle low and then add?

  134. DG

    Gary: Do you have a comment on what TZ posted? The question seems to be whether the miners underperform at the end of the final C-wave, or during the entire final C-wave.

    TZ: do you have an old chart showing the under-performance for an entire final C-wave?

  137. mamaloshen

    PimaCanyon,

    I hadn’t thought of buying SLV calls until I read your post, so I just did so. It’s an excellent idea and I was surprised to find there’s not much premium if you go reasonably deep in the money.

    There’s actually more price potential with these than AGQ as you could double your money on a 20% move in silver (whereas in AGQ you would expect to get a return of 40%). I own some AGQ, too, as well as plenty of miners, but so nice to get a good return on a pure play on silver the metal on a day when the miners lag, and you don’t have to worry about company specific problems, of course.

    I sold my Jan. 2012 EGO calls to pay for it (EGO has done nothing in months).

    If you don’t mind my asking how far out do you go on the SLV calls? I bought the April 2011’s.

    Thanks for the heads up!

  138. Gary

    Basil,
    I’ve already shown you where the miners are outperforming the metal. Now of course they won’t outperform an ultra fund and that’s why I have a large position in AGQ.

    But I don’t think you will have to worry about oil during this C-wave. When emotions really start to heat up the price of energy is going to be the last thing PM speculators think about as they bid the miners up to the moon.

    DG,
    No miners don’t tend to lag until the very end of a C-wave (and even that isn’t 100%).

    At final C-wave tops smart money starts to sniff out an approaching top and sometimes miners will start to lag. But like I said it doesn’t always happen. Sometimes emotional retail traders continue to take the miners right up into a top even though smart money is long gone.

  139. Jayhawk

    Looked at Gary’s terminology charts–A-D wave that started in June of 2006 and ended in 2008,

    SLV did out perform the big, lumbering HUI index towards the end, but only briefly and not by much.

    SLV vs HUI

    Didn’t hold up next to SLW, PAAS, SSRI…No AGQ or SIL back then to compare. I think AGQ is the best bet, but I kinda like “owning” a company vs. have a derivative based instrument be what I own. I do have a core in the metal that is my longer term old turkey position.

    SLV vs SLW

    SLV vs SSRI

    SLV vs PAAS

    I bet certain juniors will keep up with AGQ

  144. Gary

    Weren’t we supposed to have a blood bath in silver not long ago??

    This is why I don’t use pure technicals to trade C-waves.

  146. DG

    MLMT: You also posted that there would be a $30 gap at around the $1390 level and that it could be up or down, but you thought it’d be down. Still think that, and what odds are there it’d be up through $1390 in your opinion?

  147. Rebecca

    Hi Gary,

    You have a good point on the miners as well. I guess the counter argument toward Basil’s point that rising energy price will hurt miners is that the rising energy usually accompanies with rising metal prices, which will help miners. So 50/50 here? But you and Basil both seem to agree on that AGQ is going to outperform miners. So why not put 100% into AGQ? Your thoughts please?

  149. Gary

    Rebecca,
    For all practical purposes I do have 100% in silver as I have 50% in AGQ. (It’s the same as being 100% in silver.)

    But if one wanted to simplify and didn’t mind the volatility they could just go 100% AGQ and then maybe a little leverage in SLW or SIL.

    That way one would only have to manage one or two positions.

  152. pimaCanyon

    mam,

    I have GLD 124 April Calls and SLV 23 April calls. So both are April exp. I figure that I can also roll them forward in early April if it looks like the C is going to continue on into May and June. I liked April better than months further out because the premium was lass (and delta higher).

    As I add more (and as gold and silver go up–we hope!), I will likely go with higher strike prices (but still deep in the money, so premium is low and delta is high).

    Yeah, if you run the numbers, for the same dollar amount these deep in the money calls should outperform even AGQ.

    Using this method I can get as deeply invested as I’m comfortable without using all of the cash in my account.

    The only downside I can see is the bid/ask is wider than with the etf’s. But I’m not planning to trade these, buy and hold till the C wave looks like it’s close to topping.

    I also like having both gold and silver, even though it’s likely silver will be the clear winner.

  153. Gary

    Ryan,
    You got a pullback yesterday. If you wanted to add why didn’t you do it yesterday?

    If it’s because the pullback made you nervous then it’s reasonable to assume that the next pullback will also make you nervous.

    If that’s the case then you are better off adding into strength and just weathering any drawdown. At least that way you will get in.

  154. NJ

    Gary: you may have answered this before elsewhere, but wanted to ask:

    Why not the end of this particular C wave mark the end of the secular bull? With gold @ 1600-1800, Silver between 43-50?

    Why go on till 2016 odd? Especially since given inflation later this year or next, the Fed will stop the presses and the fundamental driver of the Gold Bull will dry up.

    Thanks!

  155. Ken

    I am interested in the discussion of the possible gap at the 1390 area? What is the thinking behind this? I see the gap in GLD 136-138 that pulls prices to be filled-

  156. pimaCanyon

    Thanks, DG, for the feedback re channels and trying to get tricky and trade this beast. I agree with you.

    My use of channels on my SIL and GDXJ positions is partly due to the possibility that we get a serious curve ball and the market goes back down to tag the recent IT low or even lower. Those ETF’s seem tank the quickest when PM’s head south. And they are only a small part of my overall position.

  157. Ryan

    Gary,

    I saw the drop in AGQ yesterday but by the time I wanted to put in an entry, it already came back up and I just waited. I did take the opportunity to add to my SLW position. I may just add into strength and just hold on as you suggest. Thanks.

  159. DG

    Nice move in NLY for those who bought on the secondary announcement. It pays to buy those if the stock is in bull mode during a steep yield curve. 14% yielder.

  160. Gary

    NJ,
    Secular bull markets don’t end until valuations reach absolutely ridiculous levels. In the past that has been a Dow:gold ratio of 1:1.

    They don’t end until the public piles into the sector. Have you seen any lines outside the local coin dealer yet?

    This still has a long way to go. We are just starting to get the public sniffing at the sector. They are going to get burned during the next D-wave. Then a few more will catch on during the next C-wave and so on until finally everyone becomes convinced gold is a sure thing. Then the last buyer will buy and the bull will be over.

  162. oa92000

    gary, “Silver between 43-50”

    How you come to that ?
    I am looking at SLV 5 yrs weekly chart..
    19 – 8 = 11
    11 + 14 = 25 (obvious not right?)

  163. Gary

    The possible T1 pattern projects to about $43. But I think once silver gets over $40 the 1980 high of $50 will act like a magnet pulling it higher.

  166. Gary

    Jeff,
    Pretty unlikely at this point in my opinion. The current daily cycle in gold has now become right translated and the dollar should have 2 or more weeks of declining price ahead. That should drive gold higher for the next couple of weeks before any short term top.

  167. TZ(5288)

    I will address the ‘silver beats everything’ in more detail to assist in allowing people to decide.

    I have already defined ‘the last part of the C’ as being the last almost continuous move up (lasting many weeks, often 2 months) which does NOT have a significant correction like we have just experienced. A “significant correction” is one clearly visible on a WEEKLY chart. Not a dip of 2 or 3 days.

    I will not be vague. I will provide three EXACT date segments to denote “last part of C” historically:

    1/4/04(2/8/04; fuzzy start) – 4/4/04
    3/26/06 – 5/14/06
    12/23/07 – 3/16/08

    Each of those segments is the LAST part of a C wave with no “significant corrections” before the ultimate top.

    Silver beat everything in those segments.

    (Remember that I exclude penny stocks for reasons I already outlined. If you would NOT put your ENTIRE net worth in the SINGLE security, then you cannot use it for a counter example.)

    The theory is that we are in such a “final C wave” segment now because the theory is that this is the last intermediate move up for this C.

    And to address gary’s reply giving some gain amounts for slw/slv/sil in the last few weeks:

    1) Those gains are very short term gains from the immediate bounce out of the most recent correction. Stocks will tend to BRIEFLY outperform on such a bounce back (we are talking one or two weeks). That outperformance has already ended days ago though and will fall further behind as we continue.
    2) The sum total of the gains, even using gary’s measurement, at the END of this C will still show silver leading as per my note in #1.

    I have given the exact parameters if my statement and I believe everything is correct. Comments welcome.

  168. TZ(5288)

    3) and of course gary’s reply showing some gains from the bounce for last 2-3 weeks doesn’t address those three time segments historically I have mentioned.

  170. TZ(5288)

    Shalom,

    I am happy.

    Is there a problem in resolving a fairly important point on how to make money in the upcoming rally?

    When honest, thoughtful people disagree it is usually just because they are using different data or different definitions.

    I hope the last posts give enough info for people to decide and for flaws to be highlighted if I am wrong.

  172. mamaloshen

    Thanks for your comments, Pima, I was thinking the same thing: of rolling over into later months at some point. One could try to get cute and take profits in the upper $30’s if silver gets there, then re-enter on a pullback, but there’s the risk of not getting back in (and there might not be more than a 2 or 3 day pullback on the march into the $40’s).

    Personally, I hate margin and when I’ve gone into margin in the past I usually end up selling something I shouldn’t. Some can handle it (like Gary) but I can’t. I get very nervous.

    What I like about deep in the money options is that you have a great profit potential and are not margined (of course, if wrong you can lose most of the capital). But I think options are great for moves like the one we’re in. I seem to recall that Gary once discussed options and stressed they should always be fairly deep in the money.

  173. Gary

    TZ,
    You need to factor in that miners are still historically way too cheap compared to the price of gold. This should revert to the mean during this last leg up.

    So I want to have some money in SIL, SLW and GDXJ along with a much bigger position in AGQ. I’m confident these positions will continue to outperform silver but probably underperform AGQ.

  174. TZ(5288)

    NOTE: the date segments I gave in my post are based on a weekly chart. They might be off by 1,2 or 3 days from the exact points.

    It will be easy enough for someone to adjust looking at a daily chart if they are so inclined.

  177. TZ(5288)

    GARY,

    That miners are ‘undervalued’ I have no idea. Value is whatever people will pay for it. And they have been willing, as a whole, to pay less and less compared to straight metal since 2008 (as seen on comparisons to CEF at 50/50 gold/silver).

    I *do* believe that will change as we get closer to the end of the ENTIRE BULL as the masses come in and invest in what they know and like – stocks. But for now we aren’t there.

    I respectfully stand by my statements – At the end of this C wave silver gains (starting from the lows a few weeks ago) will beat slw, gdx, gdxj, sil.

    They might not beat other specific stocks like svm or great panther or whatever, but anybody with history in this game would not be willing to stake most of their wealth on such specific picks due to concentration and mining risk, whereas that is possible with silver, slw or the ETFs.

  179. Gary

    GDX (underperform) maybe – probably. But as I’ve pointed out SIL, GDXJ and SLW are all beating silver. GDXJ and SLW are outperforming handily.

  180. Elaine

    Gary is right, as usual. I bought AGQ on Monday at $155. Then on Tuesday it did a little reversal, so I just repeated my Gary mantra “I’m not worried about the little wiggles” and today, WOW!

    That’s all I have to say, except as always… Thank you, Gary.

  183. Mission

    Gary are you purchasing options on any of the etf’s you hold? I’m guessing you don’t since I haven’t seen mention of it and so I’m wondering why not, if that’s the case. If you’re convinced of silver’s rise (as am I) why not purchase calls 6 months out? Thanks.

  184. ALEX

    Blammo

    I just looked at AXU when you said that…nice volume today and I’m loving it too!

    You’re welcome,

    And thank you –to the canadian miner Great Panther SILVER(GPL here)…that 3 month wkly chart is gorgeous!

  185. DG

    TZ. Thanks. I will look at the dates you supplied over the weekend. I am interested in this question. I have been trading/investing longer than probably anyone on this blog. I have thoughts and ideas that I have relied on for many years. Sometimes things change and things that used to be true or work no longer do, but that is generally the exception (as Gary says, “Human nature doesn’t change.”) If in fact silver generally outperforms during the final C-wave. it goes into the tapestry of my experience as a simple one-sentence point to keep in kind. I like those and appreciate your posting what you have put up here. AGQ ho!

    Gary does make a good point thought that the miners may need to play catch up. Sometimes under-performance continues and sometimes it is temporary and later corrected. Makes sense to me that the miners would lag at the very end of the wave, but not at this stage. Have you looked at gold bulls other than the current one? Probably no easy way to get the data.

  187. Jayhawk

    I stand by my theory that OPEX on Friday will mess with these miner’s performance the next day. Next week, it should be interesting to see what they can do.

    Remember this inverse H&S chart from a few weeks back on gold?

    IHS

  188. Ryan

    Blammo,

    Thanks for the ticker HZU. I’ve been burned pretty bad with HNU (Natural gas) so I’m a bet hesistant with those funds. Now I’m a bit confused I think HZU follows silver future contracts but AGQ follows silver spot price, is that the case? Also, I find that the volume is quite low on AGQ and if I want to buy or sell I have to usually put in about 10 cents lower or higher to get my order filled. I’m guessing the liquidity is even worst with HZU?

  191. blammo

    Ryan, you’ve been burned by HNU because natural gas is in a massive downtrend and you’ve been caught trying to catch knives. That has nothing to do with the underlying instrument.

    As far as I know the silver futures follow the spot so the net effect (2x) is virtually the same as AGQ (without the currency friction).

    The volume *is* lower on HZU but I haven’t personally had any problem getting decent fills (or sales).

  192. fubsy_cooter

    Its interesting how weak GDXJ is on a day like today. Not that I mind daily wiggles so much, but their is clearly less demand for the juniors today. Assett allocation of the hedgies? Realancing toward large caps after the recent 20% move in the juniors?

  193. mamaloshen

    Speaking of beautiful charts, you might want to look at Sabina Gold & Silver (SBB.TO). They are located in the Nunavit region in northern Canada. Every drilling result seems to be better than the last. I met the then President Abraham Drost when he made a presentation at the London Silver Summit in 2006. They used to be 95% silver with zinc and other base metals, then started dicovering gold. I bought in 2006 and 2008 at average prices of about $1.50 (it’s now over $6.00). I have an account at Penntrade where you can buy Canadian miners. Drost is now Pres. of Sandspring Resources (SSP.TO). They mine in Guyana. I am not recommending Sabina but do think it has more to run. I am holding until 2015.

    I also learned about Great Panther and First Majestic at that conference and met their CEO’s. Both very capable, Keith Neumeyer particularly. FR.TO is one of my biggest gainers. Funny, but when I chatted with him, he saw me admire the 1 oz. round they produce. He gave it to me and I fished into my pocket for a £10 pound note (silver was about $10 then I think), but he refused to accept it, said it was a gift. I thought that was so nice of him I bought 500 shares the next day, and still have them. Another hold until 2015.

    I had an 80% loss at one point in GPR.TO but just held on, now have doubled my money, so something to be said for being a long-term “Old Turkey” with some of these juniors.

    Just some reminiscenses from a dyed-in-the-wool silver bug. But do have a look at SBB.TO, it’s a lovely chart.

  195. fubsy_cooter

    TZ, the time frames you mentioned include an intermediate correction. GDXJ and SIl are volatile instruments and corrected more than Gold and Silver. Is that not obvious. Thus, there climbs back from the correction put them at lesser returns over time frames that include the correction.
    Gary’s frame of looking at their repsonse to an int bottom is more relevant.

  196. Ryan

    I’m seeing SPY -77.17 on the SOS list from WSJ. Is that something we should be concerned about?

    Thanks Blammo, I just may use HZU when I want to add more to my AGQ position.

  197. Avann

    I’ve been using HZU also for the last 18 months or so. I always buy/sell at market and my fills are always perfect … I rarely buy/sell more then 500/order so never seems to be a problem. I’ll use a limit price if I want to buy a lot … but even then I usually split my orders up.

  198. Poly

    Unrelated.
    I dumped the last (20%) of my April S&P Puts this morning, when the market was down 3points. Deep losses on them, you all know the story.

    But I wanted to point out just how liberating it feels to have dumped them, losses and all. This was a great and expensive lesson. (Of course you know that was the top)

  199. DG

    Poly: If I may…You are so right. One of the great things about dumping a loser is the mental energy it frees up. I think people don’t appreciate how much is tied up with a position that goes against you day after day. Death by a thousand paper cuts. Selling it to clear your head and then buying it back if you want to even works (though once it’s gone you’ll see it’s wrong to buy it back). It’s part of my love for small losses. Bring the tiny ones on! I convince myself of this every day so I never damage my account, or more importantly,my psyche with a big fat ugly one. A cheap tuition.

  200. pimaCanyon

    Poly,

    Congrats on your new found freedom.

    Have you considered using SDS or QID (double short SPY and QQQQ) instead of put options when shorting? Or maybe you had deep in the money puts, so premium was small? Don’t know whether that would have kept your losses more manageable or whether the losses were mainly due to holding on so long.

  201. Poly

    DG,

    You’re SO right, spoken like a man with all the experience.

    Pima,

    The trade was wrong from the start and from every level. Stubborn attachment to an S&P top. Chasing a top ever higher. No exit plan and day after day of pain. Very big position and leverage. Yes the puts were fairly deep in the money, but in the end it cost me 15%, total capital. Wiped out a 1/3 of the Sep-Dec gold rally.

  204. DG

    Ryan: Every trick I have has tried and failed to call this top. I suspect today’s SoS will be no different. We have had a few huge SoS days that have meant nothing. Until Ben stops printing up we go, I suspect. The time will come, but probably not yet. When it comes I will be short most of my net worth.

  205. Ryan

    Gary,DG,

    I’m just worried if this is a near term top and the S&P starts dropping from here that the miners would get dragged down with it. But I guess I’m just worrying for no reason as long as I just old turkey it. All of Gary’s indicators have been met so I’m hoping even if there is a pullback it’ll be a mild one. I still have money to put to work so that’ll be my chance to add if I don’t let my emotions get in the way.

  209. Slumdog

    Looking at the price breakout in silver, today, the rounding top of gold, and the setup for a reversal on a 3 month basis still moves towards realization, the odds that gold will merely double top appear to be low.

    There remain 7 trading days in Feb. So far, the compression in gold which will drive the market massively continues.

    Gold creeps towards its prior high, which, frankly for the massive run up to 2000, first to 1540-1550, and then a major stretch, ratifies this outcome by remaining in this trading range.

    As I own physical, I’m “in”. But I’m still ostrich in the sand until the end of next week when it comes to margined positions. I’m ready, but it’s very rough pulling that trigger.

    Gary’s a calm trader. I’ve found for me to assume risk, the risk must be way under 3-5%. So, I mark time…tick, tick, tick.

  212. Gary

    Well the first one is the S&P which is only in a cyclical bull market and extremely stretched above the mean.

    The second is silver which is in a secular bull market and in a C-wave advance.

    I’ll take silver over the S&P any day under those circumstances.

  213. David Kafrick

    Gary, you are pretty good with charts 🙂

    I was just trying to make a point, that as a trader/investor, that S&P chart is the kind of wave that I want to ride. If we just forget about the percentage numbers, and focus on the smoothness of the trend, it doesn´t get any better than that. Whoever bought S&P in September and is still holding it, has seen his account balance go up with almost no significant drawdown.

    By the way, I also rather have a position in silver (which I currently have) than in the S&P, but the past 6 months has been quite a ride for S&P buyers.

  214. Gary

    Actually that’s not the kind of wave I want to ride because something like that with no corrections almost always leads to a sudden crash. Anyone who gets caught in the down draft will see months of gains evaporate in a matter of seconds.

    Again I would take the second chart over the first any day of the week and twice on Sunday.

  216. mamaloshen

    If you don’t mind my chipping in to this discussion, looking at a monthly chart the S&P was twice turned back in 2000 and again in 2007 at 1553 and 1576 respectively.

    Looks to me as though there’s a lot of overhead resistance on the S&P 100 points or so north of here. No such pattern with silver.

    I own some non-pm stocks in energy, tech, and industrials but am looking to head for the exits soon. 1500-1600 could be a ceiling for a long time. I think (will have to look it up) that the 1965 high of 1000 on the Dow wasn’t taken out until 1983. It could be the end of this decade before the 2000 and 2007 S&P highs are decisively broken.

  217. Gary

    RB,
    Correct. It is the parabolic nature of the final advance that triggers a D-wave decline.

    That whole action/reaction, stretched rubber band thing.

  219. Wes

    I cannot identify with folks who are reluctant to jump into the PM market with Gary as a guide. For me, the easiest trade is the one made using someone else’s money. And when I’m at a profit for the year, that’s exactly what my mindset is, that I’m risking the other guy’s money.

    And with Gary’s timing skills, you’re almost instantly holding a profit.

    Now, when it comes to PM’s, I don’t even agree with Gary’s fundamentals, and I’m really hoping that his timing skills are independent of his expectations,because I think he’s wrong about them.

    For example, I don’t think inflation is much of an issue and I don’t think the dollar will crash. But I do acknowledge the gold bull and my expectations for future PM upside is not much different from Gary’s, but my reasons for them are completely different from his.

    I’m a decent market timer, but I’ve never seen anyone as good as Gary.

    Even without sharing his fundamentals, I have no problems following his lead on PM’s and have over 75% of my total account in AGQ. Thanks to Gary, I made enough for a car today.

  224. NJ

    Wes –

    So if not a dollar collapse, what are your reasons for PM’s going up?

    Do you share Gary’s current C-wave view or also share his view for 2016-2018 as far as PM’s go?

  226. fubsy_cooter

    I’m hoping the BMW 535d comes to the US. A perfect union of sport, luxury, style, and fuel efficiency. My further out dream is to get a Jaguar XKR.

    I fear however, that cars like that will make one stand out as a target in a society riddled with social unrest. It may be best in the next couple decades to keep a low pro. Be satisfied with a 91 Tercel.

  227. jeff

    i went to the store today and when the lady gave me my change i heard a clink! yes it was a 1958 quarter. soooo what did i do?….

    pulled out a 5 dollar bill and asked if she had enough change to give me quarters.. but that was the only one. very small vain of silver.

  230. Gary

    I think the Aden sisters are just wrong again. They tried to call a D-wave last year too.

    One needs to understand cycle analysis, especially in the dollar, to have an accurate read of where we are.

    Since I think the dollar still has one more major crash coming into the next three year cycle low it’s highly unlikely that gold is in a D-wave.

    No to mention D-waves are extreme regression to the mean events and activate because the sector gets terribly stretched above the 200 DMA.

    Obviously we haven’t seen that kind of parabolic event yet in gold or the major gold miners. I think we will though when the dollar hits the final bottom of it’s three year cycle.

  231. kmisak

    Good morning, Gary! Good grief, either you get up way earlier than I do, or you go to bed way later… I’m in Toronto, and often can’t sleep in past 5:00.

    I am very glad I follow this blog. One contributor wrote about HZU.T, and now I know that I, too, can invest in an AGQ type instrument. Had no idea…

    Looks like today I will finally sell off the rest of my lottery ticket laggards and buy some HZU!

    Kudos to you, Gary. Thanks to you I look like the investment prince to my bro, sis, and couple of friends. I always give you credit, tho.

    Looking forward to this part of the C-wave,

    Kevin

  233. pvm999

    Silver is breaking out to new highs and the dollar still hasn’t broke below the February lows…

    I am glad that I jumped back on the silver express — thanks Gary

  235. Strellsy

    That was pretty much how I read it Gary. The crazy thing is, the Aden Sisters are advising now to buy with both hands on any further weakness. Well we just had 8% of weakness, what more do you want!

    Looks to me like they missed that buying opportunity and are indulging in wishful thinking.

  240. RA

    Spot printed a higher high at 1388. Looks to be for sure right translated daily cycle now.

    MLMT I guess you will proceed with the shorting of gold?

    Don’t say Gary didn’t warn you…

  241. vuvvy

    My pivot system just went to a buy.It wins 59.46% of the time on long signals, with the average long winning trade 3.53 times the size of long losing trades.I’m now hoping for a shortened cycle bottom next week that happens on one washout day next week around future options expiration:)

  244. Shalom Bernanke

    Thanks. I think gold will be fine, and a much smoother ride. Silver is in a special situation fundamentally so might make bigger gains this round, but early last year I was in gold and expect to be again.

  248. DG

    MLMT: You never answered my question about your previous post saying the gap at $1390 could be up $30 instead of down (though your charts said down). Still your opinion or is up off the table and if so whY/

  256. Shalom Bernanke

    Looks like a fine ending to a beautiful week. Nothing to be done, so I’m outta here.

    I let you guys watch the wiggles. 🙂

    Just kiddng, good luck and have a great weekend.

  257. ALEX

    GPL

    All time highs / BREAK OUT (and volume is really coming in).

    It usually has less than or near 1,000,000 daily. Already has almost 1/2million!

    All aboard 🙂

  258. Poly

    This projected final few cycles in this C-Wave move is the type of move that does not come around often, but when it does you must jump in face first and ride it all the way to the top.

    60-100% moves over 60-90 day move, known in advance can do wonderful things for your financial future. If it doesn’t work out, the downside risk is defined and manageable.

    Gary has more than proven himself, we all know that, I’m giving his track record the odds they deserve.

  260. Poly

    WOW Alex, I see that, a few minutes ago it was almost trading flat.

    I traded some of my AGQ (in self managed 401K) over to GPL, EXK and AXU. If they can outperform AGQ I will be impressed.

  263. DG

    Alex: I bought GPL at 2.99! My first junior gold ever! (I only bought 1,000, so no need to move to another state and change your name…yet)

  264. DG

    James: Yeah, MLMT dodge that question and has still not answered mine about his comment that the gap at $1290 could be up OR down. Seems like he’s backing off his predictions.

    Lots of people jumping on GPL all of a sudden? Time for a silver rest (or maybe I’m too paranoid…?)

  266. Poly

    DG,

    IMO, it would not be unreasonable to expect a little shakeout and have Silver back test it’s previous Dec high’s of $31.28.

  267. ALEX

    DG

    NO, Think of it THIS way…NO ONE in this stock now can be in a losing position! So no one is feeling pressured to sell , they have accumulated and are riding this silver stock up. HIGH volume buying today is a great sign of strength.

    I bought more today, this is what I look for.

    Congrats on your purchase…this is a rocket 🙂

  268. DG

    Not that anyone will care here with Silver running, but I just re-shorted the China I covered last week. That country seems to be in a bear market already.

  270. Brian

    DG, Shorting FXI sure doesn’t match with what is really happening in China. The $SSEC chart formed a weekly swing low a month ago and has advanced every week since. This week being the biggest so far at 3.52% It just crossed back above the 75 week ma and the 13/34 combo are on top of each other.

    That’s a long winded way of saying China looks good to me!

  271. Poly

    Another way to look at GPL is that it’s only $0.50 or 20% above its 2006 high’s! What was the price of Silver then?

    Same applies for many of the juniors and if the last couple blow off C-Wave finales give any indication, these juniors should go parabolic by spring.

  272. ALEX

    POLY / BRIAN

    See that chart of AG, after consolidation last Oct to Nov.
    Even though it already ran up good , it broke to new highs on volume , and doubled. Actually quadrupled on that run , I am hoping for that kind of run on GPL. We’ll see.

    Oh and DG , this one just got listed on NYSE..so it now has more exposure and more buyers. 3/4 Million in the 1st hour!! 🙂

    it wont be straight up , but I think all of us just caught the second floor here. I’m in till mid-spring

  275. Gary

    Which just goes to show you that in inflation adjusted terms gold has a long way to go yet.

    Before this is over I suspect it will take a minimum wage worker 700-800 hours to earn enough to buy an oz. of gold.

  277. ALEX

    By then, minimum wage will probably need to be adjusted to $12/hr or $14 or so- what is it now? $7.50 – $8ish, depending on where you live?

  279. ALEX

    AGQ

    You could have bought for under $120 a couple weeks ago, now over $170!!

    and SLW is sure making up for that one down day after earnings!

  281. DG

    Brian: I have been shorting FXI/buying FXP for a year an a half or so and have made money good money on it. I will short rallies on the way up, keep the losses small, and redo it as it rallies if need be. Let’s see what happens.

    Alex: I sold my GPL for a $3 profit after reading that you said it won;t be straight up. I can’t handle it if it ever pulls back.

  286. ALEX

    DG

    Nice call..i confused it with PAAS earnings..it went down then.

    did you really want my email address or were you threatening to send me a virus?? I couldnt tell 🙂

  290. Fung

    Hi,

    I am getting a bit nervous now since I have never made so much money in a week! I am worried if I should take some money off the table now? I am 1.6x leverage and all on AGQ. Or should I wait for a short term target to be reached?

    Thanks.

  291. dallascfp

    Gary,

    Question 1. If the Comex defaults, as it may not have enough Physical Silver, how will it effect AGQ and other ETF’s?

    Question 2. If the Government bails out JPM for their Shorts, what will happen to Silver prices.

    Thanks

  294. Poly

    The March $34 SLV’s I posted here last week purchased for $0.14 now at $0.47. At this pace that lottery ticket will be a new car, just like WES 🙂

  295. Gary

    Fung,
    The reason you’ve never made this much money is because you never hang on to your positions long enough to allow yourself to make big money.

    Silver is a little over $32. I think it will probably go to $50 by sometime in April. Ask yourself are you ready to watch silver get away from you and throw away potentially another $18 in profit or would it be better to just turn off your computer and go on vacation for a couple of months so you can make the really big money?

  296. Gary

    Dallas,
    If the comex defaults then it means we have a silver shortage right?

    Economics 101, too little supply + too much demand = higher prices.

  298. Gary

    We are just starting to get a little taste of what’s going to happen as the dollar collapses down into the three year cycle low.

    Right now it’s just a little below 77. Before this is done it will almost surely be below 70.

  299. TZ(5288)

    Today is option ex day for SLV, GLD and the miners. There are a lot of calls that are now going in the money and it’s forcing the people who wrote them to hedge. That’s probably goosing things even more.

  300. Razvan

    we could have 2-3 more days of this type of action in silver before we get a pullback. We are already $1 outside of the daily bolinger.

  301. Ryan

    Now I’m really feeling the train left so I can’t add anymore. I should of just took Gary’s advice and added into strength but I couldn’t do it after seeing silver climb like that yesterday and now look at it today. Sorry, I guess I’m just asking for some hand holding here, what do you guys think I should do? Still add the rest of my 50% here or be patient and wait to see if there’s a retest of the previous high’s in silver and add then? Anybody still waiting to add the their position want to chime in?

  302. Gary

    Ryan,
    I think you should start focusing on the big picture instead of worrying about short term draw downs.

    Silver is just a little over $32. Before this is over I expect it to hit $50.

    Does it really matter if you enter at $32.70 or $32.20 at this point.

  305. David Kafrick

    1.6 leverage on an instrument which is itself a 2x leverage of silver, which is more or less a leveraged gold position.

    That’s not good position sizing in my book. If gold drops 2% in an hour (which I think will probaly happen sometime during this bull run) silver will probably drop 3% or more, which means AGQ will drop at least 6%, which means that your portfolio will drop 9-10% in an hour or so. That’s not good money management and risk control.

  306. ALEX

    RYAN

    I Agree. and some of these stocks arent even above their old highs, but will take off when they do.

    Nice set ups in SLW ,AG , EXK for a couple months.

  308. AJ

    Breaking: Egypt Approves Passage Of Iranian Warships Through Suez Canal

    Probably another reason to add to Gold intra day jump.

  310. Jennifer

    Hey guys let me ask your opinion on something. I have a whole bunch of Ford stock I bought at just over $1. I am having a hard time selling it for some reason, sentimentality I guess. It hasn’t been very strong these last few weeks. Is it time to dump it?

  311. DG

    David K: You know how conservative I tend to be, but once you get room in your trade it may be fine. If AGQ rallies 30% and then drops 10%, what matter? If you are willing to give a chunk of your 30% gain back, you are losing “house” money. On the other hand, if you can hang in there (a la TZ) you can make enough to change your life. Seems more reasonable than it does on the surface…once you get room in it, that is. That’s the hard part.

  313. Fung

    I know 1.6x leverage on AGQ is a lot of leverages.

    Luckily for me, I got in at $131. So I do have some “buffer”.

    However, it is still nerve-racking to sit on so much paper profit and worry about if any pullback may take all these away from me – suddenly!

  314. Gary

    Jen,
    If F breaks below $15 it will start a pattern of lower lows and lower highs. No sense hanging on at that point.

    Plus one has to wonder how much upside is left in F as compared to silver.

  316. ALEX

    Jennifer

    I think I know one reason why its hard to sell. It was $3 higher a month ago and inside you may hope it goes back there again.It may/may not.

    I cant say it will or wont, but if you dont mind paying the taxes on gains- I personally think putting that money in P.M. stocks now could gain you 40%? 50% ,or maybe just about double it.

    Staying in Ford doesnt look like you can do as good as fast.

    JUST MY OBSERVATION..I dont like to recommend what people do with their money

  317. Ryan

    Alex, Gary, Thanks, I guess I’m just hesitant to add the rest to AGQ b/c it is already at all time high’s. I did add to SLW a few days ago so I’m happy about that. But like Gary says perhaps I really should focus on the bigger picture here.

  318. ALEX

    DG

    Thanks..I have to run out for a bit now..( hurt my back in a car accident and have a DR appt I am almost going to be late), I will read it now and reply if necessary later.

    Thanks ( and EXK is looking really good 😉

  319. Gary

    Fung,
    Do you seriously think AGQ is going to drop from $175 to $131 overnight?

    It will have normal corrective moves just like any bull market. And it’s important that it does. But you will be fooling yourself if you think you will be able to trade them successfully. Just stay focused on the big picture and watch the weekly charts instead of the dailies.

  321. Poly

    DG,

    I agree, swinging for the fences is costly and foolish, but it’s not every day you’re pitched an under arm throw to hit. The really big (life changing) money is not made without some calculated risk.

  323. Gold Lion

    Strellsy/Gary,
    Larry Edelson over at Uncommon Wisdon has also called for Gold to pull back to 1225-1265 support area. Even as of yesterday he is holding to that call. One of my partners wanted to liquidate his PM stocks based on that call and I have had to be his emotional baby-setter to keep him in the trade.

  324. Jennifer

    Thanks Gary and Alex. I agree with you. I’ve just grown attached to it, as strange as that may sound. I’m going to sell it and put it back into PM’s.

  325. pimaCanyon

    Jenn,

    F is still in the uptrending weekly channel which has its lower line around 13.73 for next week. It’s likely it will stay in that channel as long as the stock market does not head south in a big way. Upside right now seems limited to upper channel line which is around 20 next week. But it could take a long time to get there (or to get to the lower channel as well).

    I’d say it depends on whether you want the “diversification”, because if you sell and put the money into PM’s, odds are you’ll do better there as long as this C wave continues to run.

  326. TZ(5288)

    The COMEX is unlikely to default for various reasons and indications. Essentially it is not within the interests of the people running this game to do that.

    However they will need to allow the price to rise enough to bring in sellers. That might be very high.

  327. Brian

    Jen,

    One thing I have learned over the years is that when a stock like F, that has been a momentum play, gaps down over earnings, the party is usually over for a good while.

  331. TZ(5288)

    AJ,

    The CME announced that on WED. Not today (see the PDF). And they are raising the margins on SPREADS and not outright positions (which is much more significant).

    Spread changes usually don’t do too much cause……(tada) the person is *spreading* and not outright long or short significantly.

    However that joker who was massively massively leveraged with spreads as mentioned by the WSJ a few weeks ago DID get trashed by the margin hike. But he was such a unique example that he warranted stories in major magazines.

    So…back to my inital point.

  334. pimaCanyon

    Nary a PM etf on the SoS page today. Not GDL, SLV, AGQ, GDX, GDXJ, or SIL. No hint of selling.

    (okay, okay, someone is dumping NEM, but that’s the only miner I see on the list.)

  335. DG

    I am seeing the kind of overbought readings in SLV that whet my short appetite. I am NOT shorting it nor even selling a single hare of AGQ, but it does warn me that a sharp pullback can happen at any time at this point, so this is just a strong caution about chasing here. I’ll just smile and wait for the dip to add.

  336. mamaloshen

    Anyone invested in Palladium? Looks like an earlier version of the silver chart and I think the slope could accelerate, maybe even going up 10%+ in the next month.

    Just thinking of diversifying a little. I own PAL but I don’t think it’s such a great vehicle as it mines gold which is lagging. Does anyone know if there is a double leveraged fund on palladium similar to AGQ in silver?

  337. Sandy

    DG,

    From your lips to God’s ears!

    We badly need a pullback to add. I can’t get myself to buy AGQ at this level, despite Gary’s reminder that it may go to 300 +.

    Fortunately, I am 90 % invested, hence very little to add:)

    Thanks Gary for keeping us focused. Very well done.

  340. Jennifer

    Brian, Thanks, but it was no genus move on my part, just luck. I bought the same amount of GM at the same time and look how well that did me 🙂

    PC: Yeah, you are right – which is part of why I’m still holding – but I think the bottom line is my money is going to work for me faster in PM, so I should just go there and stop anthropomorphizing my stocks like a weirdo. 🙂 Plus if I miss it too much, I could always buy it back…

  344. AJ

    Silver moves reminds more of the big move in early November. Certainly we should be prepared mentally for a correction back to breakout.

  345. Gary

    92000,
    Obviously there is some kind of supply shortage in the silver market. I think you can throw away all of your charts with their little lines.

    Just sit tight for a couple of months and let this thing run it’s course.

  347. Gary

    I have a feeling too many people are concentrating on the wrong thing.

    You need to be watching the dollar. It’s starting to come apart at the seams. And it still has a week or more before a short term bottom is due. If the dollar decline starts to accelerate why would gold or silver correct?

    More likely they will continue to accelerate as more and more people panic out of the dollar and into the protection of precious metals.

  351. Jennifer

    TZ: I have most of my money in AGQ already. Infact I bought the largest part of my position at $121, sold a little back when Gary went back to core but immediately got back all in when he gave the green light. This is not a panic move on my part. My question about Ford is one that has been on my mind since earnings came out and the stock took a big hit. I had hope that F was going to start heading back up today with volume with some of the things that are going on in the company, but its not doing well today and volume is low. So this was not a panic question but one that I just needed more experienced people to help push me in the direction that I had already chosen. Sorry if it bugged you.

  352. basil

    Gary,

    I don’t know if I would say the dollar is ‘beginning to come apart’ just yet. It’s also coming close to major, major, major support.

  353. mylifemytrade

    So, gold found a way to get to 1390+

    The best scenario is a finish around 1396 without a breach of 1400 today.

    There is good chance I am wrong if we breach and close above 1400 today.

  354. David Kafrick

    DG,

    I don´t agree with the concept of house money. For me, there is no such thing as house money. Your decisions sould not depend on where you bought something, but rather on the current risk/reward. The concept of house money is like saying that if someone bought the stock market in 1982, then he shouldn´t worry about a drawdown in 2000 because he is playing with house money.

    But that´s not the issue that I have with being 1.6X leveraged in AGQ. The problem is that it will be really hard for someone who is not an experienced trader to make rational decisions based on the kind of volatility that he will experience. The fact that Fung is posting on this blog about how nervous and anxious he is, shows that he isn´t ready to take this kind of position. If Gary was doing this, I would say that he could probably get away with it, but most people will make bad decisions with this kind of volatility.

  355. TZ(5288)

    Jen,

    There was no problem with your Ford comments and congrats on being in silver.

    That wasn’t my point and no offense was intended.

    The market works in very subtile ways. Unconsciously. Behind the scenes.

    My assertion/example is that your pondering about ford vs silver arising today are NOT a coincidence. EVEN IF you think they are.

    As markets rise, they play twists and small games on psychology. You could have wondered about ford at any time. But it happened TODAY.

    You will also notice there is more talk of adding TODAY.

    William said “oh, alright…i need to get long I guess” yesterday.

    These are the things markets do.

    I’m not immune either. On the huge silver rally then collapse day 2 months ago, I was so comfortable that silver was going to the moon, free and clear that I walked away to a casual, long lunch. That was the TOP almost exactly.

    Was it luck? No. The market had managed to induce complacency in people including me and that was the peak point.

  357. Wes

    @STEVEN

    I hope I’m remembering your name correctly. I have been following your comments since last summer on overbought readings becoming so strong that they become what you call “embedded” or what I call “strong market”. I have even incorporated that concept into 60 minute charts and have made many successful trades using it.

    Thank you, and keep posting the good ideas.

  358. coolkevs

    DeMark – targets and sell signals have been blown through lately – will it continue??? I have not been short yet, but am highly considering it now…not expecting a full-blown correction – more like the daily cycle correction pointed out by Gary.
    Another SPX WEEKLY SELL signal records this week. These are good for 12 weeks. There are other factors to consider – Daily D-WAVE (Demark-Wave, not Gary’s D-wave) 1342.88 which is being hit today. Prof Kevin Depew at Minyanville sees a correction possibly going down to ~1200. But there is another WEEKLY target, up at 1436.40, that he expects to be hit some time during the spring. By that point, the MONTHLY time frames will be exhausted (end of May, provided some rules are met). So, sounding like Gary’s last article, eh? Prof Marc Eckleberry on the Buzz also is showing the DOW is approaching the 76.4% Fib retrace of the 2008/2009 bear market at 12375 which has been the high so far today – coincidence??? hahaha. Will we get a retest of the 61.8% Fib at 11250??
    AAPL the hero of this whole bull market since March 2009 is looking punk today – maybe nothing, of course!
    I know you are all interested in Gold/Silver. Well, were we wrong about it hitting 1256.10?? Seems like it at the moment. Gold itself is 2 bars past a MONTHLY SELL setup, so we have March and April left to see if anything can push it down. 1378.81 is THE level – on Daily, Weekly, and Monthly time frames – it has to be qualified – down close, then up close, followed by up open. It should be resistance, but looks like it is blowing past those levels. If the rest of the market rolls over, will the metals go with it?? The market didn’t roll over with gold/silver earlier – we shall see!

  359. DG

    David K. I basically have always agreed with you about the “house” money idea. You make decisions at each moment. Where you bought it is irrelevant (the market has no memory). However, an offsetting idea is that the utility of money is not a smooth curve. This distorts the risk/reward equation. It can actually make sense to by a lottery ticket even though your expectancy is negative. If you lose the $2 makes no difference, but if you win your life is changed, even though your expected loss was $1.98. If you put $10,000 into a spec and it goes to $20,000, that’s great. You are $10,000 richer. Big deal. BUt if you accept that you may wind up back at $10,000 and let it ride to $100,000, now you’ve got something. I use break-even stops as a money management technique once I get in the black in something. Why break-even if the market has no memory. While i agree you are mathematically correct, I think the real world changes the situation. At least this is how I look at it.

  361. mylifemytrade

    @Peter I was very clear that 1360 may lead to a small pullback but eventually higher …

    1396 was laid out back in Jan… Having learnt my lesson of waiting for a certain price level in Jan, I am looking at the range 1388-1396.

  363. TZ(5288)

    >All of Sept and Oct and Nov all we heard from TZ was that we had just reached the top

    Yup. Last fall was my worst trading in years and I said as much.

    But I’m BACK BABY!!
    🙂

  364. David Kafrick

    DG,

    Good points. Soros, in his book The Alchemy of Finance, talks about how he takes more risk and tries to swing for the fences once he is halfway through the year and is up a decent ammount.

    I kind of agree with what you said, about taking more risk when you have some kind of cushion, but at the same time I think it is dangerous (based on my own experience) to think about paper profits as though they were house money, because you can end up making bad decisions.

  366. blammo

    Good points TZ but you could also flip your theory as Gary has mentioned and sell too soon because you have just made some ‘easy’ money.

    Personally, I am fighting the urge to sell my SLW calls because I am aiming for the fences with this trade (small position). Instead I am stealing myself psychologically to see a good chunk of those gains disappear over the next few days.

    Also, on days like this when you feel compelled to add you can usually find a laggard such as AXU, which is likely just resting as SLW was earlier in the week.

  367. funmike

    If gold is going up then why wouldn’t you want to own GDX? And if there is a good reason not to own it then what point would be a good one to sell?

  368. TZ(5288)

    BLAMMO,

    I *could* do anything, but i’m not.
    🙂

    I’ll let my actions speak for themselves, but I have little desire to sell here. It’s only money.

    I WILL be entering the ‘top calling’ competition with VWVVY though (and Gary/Doc of course).

    I have no anticipate of a top for at least 4 weeks. I dont’ think this will last as long as gary is expecting.

  369. TZ(5288)

    Oh…and my gains sure as hell were NOT ‘easy’. I’m well aware of what it took to get my current position and what sort of boat I would be in if I sold for a quick gain.

    No sir.

  372. DG

    David K: I agree completely. It takes a lot of practice to be ahed and not squander the gains. Most traders get cocky (“look how good i am”
    get reckless and then give it all back. But I am a Soros fan (hard not to be after all the money he’s made) and that’s what i was going after. I plan to do the same thing myself on this C-wave, so I hope I don’t do something foolish! I tend to run scared, so maybe that’ll save me

  373. TZ(5288)

    DG,

    My comment was about people who trade and say “easy come, easy go” when they lose in the market.

    It had **NOTHING** do to with you or your trading despite you thinking that.

    I see how david commenting on you and then me commenting on david’s comment created that. I will delete the post.

  374. TZ(5288)

    DG,

    After weeks and months do you really think I was calling you a loser?

    Come on.
    This was a crossing of posts and unrelated comments.

    David’s thoughts triggered a thought in my head relating to people who trade, then when they lose they say “easy come, easy go”.

    Since when do YOU say that? Or since when does that apply to YOU.

    My mistake was saying “Spot On” seeming to be going with his comments going after you.

    It was an unrelated comment and more like a quick “TZ’s rule #47” that just happened to pop into my head.

  376. mylifemytrade

    Remember – the day we top… they ALWAYS give you a dip to suck in the last batch…. Best set up is to close near highs of the day, but slightly lower…

    Monday should be fun otherwise I will buy into gold going to $1800 thesis.

  378. TZ(5288)

    DG,

    Now that I look, I don’t even KNOW which post or topic david was referring to about you. I didn’t even see what discussion you two were having. No clue AT ALL.

    I read:
    “..I don´t agree with the concept of house money. For me, there is no such thing as house money…”

    And I thought, Hell, i agree with that. Spot on. When somebody makes money and then decides it is somehow OK to lose it again, it isn’t a proper way to invest. And then I commented.

    Please understand.

  382. basil

    Nike,

    MLMT just wants to spook people out of their position. I’ve heard that Monday doom story so many times, it’s not even funny.

  384. DG

    Alex: Have you seen FCX lately? Remember the morning I overslept (I’m in CA) and missed my shot to reshort it? Damn!

  385. rapper

    I can see gold trading down to 1376 and if that were to fail then to 1348 but at this point 1480 looks like the next stop, after some work of course.

  386. mamaloshen

    Presidents’ Day in the U.S. Stock markets are closed.

    In Canada it is Family Day (although in Manitoba it is Louis Riel day and on Prince Edward Island it is Islander Day). Wouldn’t know this stuff ordinarily–quoting from an email I received from PennTrade which trades on the Canadian exchanges.

  390. basil

    wow, the Flash Crash Panel calls for market overhaul!

    They needed a year to find out?

    just a reminder: it’s FLASH crash, not crawl crash!

  394. Chicken Burrito

    “Anyway… joy ride already started.. This one may be elevator instead of escalator”

    Your account balance?

    Go over to Slope of Hope and have Tim join you on your “GDX to 44” and “Gold will never again hit 1400 in the history of the world” calls.

  396. Wes

    DG,

    What you are talking about is what I call a lottery ticket wager. This is actually a form of Pascal’s wager, where the reward so outweighs the price of playing as to make that price unimportant.

    But, the concept of playing with “house” money is completely different, IMHO. Most of us tend to play defensively, no matter what the situation. Playing with “house” money removes the defensive nature for me.

    I only consider the money “house” money if I’m ahead during the current year. All the profit I made last year started being ‘mine” on January 1. I’ve been told that in my mind I “own” it if I’ve paid (or owe) taxes on it.

  399. fubsy_cooter

    Gary et al,
    I think a part of the problem some are having who feel left behind is that they feel they have to go all in at once oin order to fully benefit from this bull. i.e, “Should I add my other 50% now?” To me that is too much risk for the typical person. And, one can ride the bull successfully slowly adding exposure. In fact, as Gary has said, what we don;t want to do is have a position that makes the wiggles stress us out to the point of jumping ship in a drawdown. One needn’t be leveraged to feel leveraged.

    Why not add 10% today, and wait to see what happens? If it keeps going add another 3 or 5 or 8 percent to your holdings. Then wait until there’s a pullback and buy another 8 to 10% on that pullback, and another 10% if it breaks out etc….This is how I build my positions. Over the past few weeks I went from 15% invested to appx 80% invested. I will still add more on bull flags and breakouts, but I’ve never been comfortable going all in at once. I now have a buffer to add into.

    I’d rather forego a few percent of gains to better control losses in case of a drawdown. I prioritize how much I can lose over how much I can gain. The gains take care of themselves if I’m sitting in a comfortable position. If I’m stressed about jumping in with guns a blazing, I will likely jump ship if things don’t work out right away. I think that is the same for most people.

    So Gary, I have often let you know how much I appreciate your wisdom and skill in reading the market, but I think this may be an opportunity for improvement in your guidance on this blog. I’ve seen you let people know they should consider their own risk tolerance etc… but most recommendations passed along lately seem to be closer to the theme of taking a large (50 to 100%) position in AGQ. That is huge risk. It could cost someone 20% of their portfolio in the blink of an eye. And as you say, they will sell to stop the pain at exactly the wrong time.

    Just saying, it is something to consider for those asking for help getting on this bull. If they are asking, they are likely not very experienced, and will become emotional with a drawdown.

    The goal is to stay in with what you have, and hopefully build a position within your risk tolerance that allows you to be at your max exposure during the parabolic rise, which is not in process yet. Gold and the miners haven’t even gotten back to their old highs, yet.

    Good luck everyone. This can be an awesome good time. But trying to get rich quick usually doesn’t work out. Keep in mind there will be opportunities after the C-wave. From experience, I now that positioning for the fall of overvalued assets is equally fun to ride. My portfolio rocked in 2008!! When that time comes, The Slope of Hope is bar none, the best blog in the universe for short ideas. Unfortunately, Tim can’t get out of the way of his biases during a rally, but when the bear is snarling, he is brilliant. My strategy is to follow Gary’s advice to ride this C-Wave using my own tactics, and then when he helps me see the bear is awakening, bring Slope to the top of my blog list, and thank Tim for his insights.

    Ok, long post. Have a great weekend!

    Fubsy

  400. pimaCanyon

    TZ,

    You wrote:

    “My assertion/example is that your pondering about ford vs silver arising today are NOT a coincidence. EVEN IF you think they are.”

    What a load of crap! Who gave you the boon of reading someone else’s subconscious? Talk about self-righteous and arrogant!!

    Jenn posted why she was considering dumping Ford–it had to do with its recent price movement after earning/dividends. Whatever additional motivations you make up are just that–stuff you made up in YOUR own mind.

  403. Wes

    @ Pima Canyon

    Thanks for reminding me about the deep in the money options, yesterday. That was actually what I used years ago to build my account.

    I bought some SLV Apr $24’s at the open today, and will probably add a few more on a pullback.

  404. DG

    Fubsy: Great post. These big exposures are real money to people and it’s hard to gauge how you will react emotionally to different market scenarios until they actually occur. Experience is very useful in this game. Have a good long weekend.

  405. pimaCanyon

    You’re welcome, Wes.

    I’m just keeping the idea going–I forget who reminded me that I could do that, maybe Poly?

    One of the things I did with that was dump 100 shares of GLD that I had and bought 4 deep in the money GLD calls. Freed up a bunch of cash AND those 4 calls are generating more profit that 100 lousy shares of GLD. I plan to add more to that group of calls.

    I did nibble on a few more deep in the money SLV calls today, continuing to build my position.

  406. DG

    MLMT had posted that if Gold closes under $1388 he retracts his prediction…then he deleted that post…? I guess by tuesday he’ll hid in shame, or crow. Should be interesting.

  407. pimaCanyon

    Gold and Silver futures as well as several related etf’s are all bumping up against upper channel lines today (small channels drawn off recent low. There are much bigger channels drawn from lows from way back…)

    Probably as good a place as any for a pullback.

    However, the pullback may be only sideways consolidation. Or price may hug the upper channel line as it continues to rise. Or price could just blow past the upper channel line. So a pullback is certainly not a lock here. And, as Gary has said, the dollar is likely to have another 7 days or more of downside action which can only put more upward pressure on PM’s.

  409. mylifemytrade

    Ok.. so my thought is if Gold ends the day (4pm ET) anywhere in the range of 1388-1396, monday should bring a big down day to gold… That is my final comment.. I know I ended up confusing a lot of people.

    I think there will be one more upleg to tag 1396 in NYSE hours some time later, but in near future.

  410. DG

    Gary: YOu mentioned you expect the daily cycle low in a week or so But if this turns into a runaway move that’d would be off the table I suspect. Wouldn’t you think the final C-wave leg would turn into a runaway?

  415. pimaCanyon

    Great post, Fub.

    Continuing to add in small increments is a comfortable way to play it. That’s what I’m doing. That way I keep some powder dry just in case we do get a big down day or worse, a drop all the way back to the 1308 low.

  417. ddn3f

    Anyone know how many daily cycles Gary is expecting this C-wave up to be. I am guessing 2 daily cycles up and the third one will be left translated?

  421. Poly

    Pima I’ve got about 80% of my “Gary Trade” in SLW calls.

    The “big chunk” are July $25 SLW, I believe April are way too soon and don’t afford protection and easy exit. Got a smaller chunk in ATM July $30’s and a big lottery of 100 contracts of $34 “March”, bought at $0.14, posted last week.

    Not afraid to swing here and any draw-down will not bother me. I would exist at around SLW $29 for a small loss.

  423. pimaCanyon

    Thanks, Poly. I hadn’t considered SLW options, but I should look into it.

    Sophia, I hope you are kidding about CNBC and the Gary trade! Seems like once something hits the national news, it’s all over.

  424. pimaCanyon

    Just read your correction post, Poly.

    Yes, I’m building a position in SLV calls.

    My thinking on using April is that the premium is lower than July and I should be able to dump them in late March and buy July’s then. Don’t know whether that’s a better plan that going with July’s now–because there is a bid/ask issue with options–it’s about 10 cents on SLV April calls, deep in the money.

    Maybe I’ll take a look over the weekend and compare premium on April versus July and consider that I’ll have to fork over 20 cents PER OPTION when I roll them because of the bid/ask spread (plus commissions, but commissions are down in the noise–$1.50 per option)

  425. Poly

    Pima,

    If you’re only playing deep ITM I guess it does not matter, next to know time premium down there to worry about.

    I just like knowing that longer options don’t get destroyed by time and draw-downs (as much). Again not a real concern with deep ITM’s.

  426. Wes

    Poly,

    My software allows me to overlay charts by varying times, amplitudes, etc.

    By plotting GLD and NASDQ, both on log scales, both weekly, and shifting the GLD chart anywhere in the 1990’s. I cannot make them look at all like each other at any relative starting point.

    Maybe you misremember this.

  429. Clarkatroid

    anyone care to elaborate on why AGQ is the choice leveraged vehicle of most investors here.

    Theres a lot written about avoiding leveraged products, leveraged etfs particularly, so why is AGQ different?

    thanks in advance

  430. Jayhawk

    OK, now this is fun. Congrats everyone! (Except MLMT, he’s short gold and miners, correct?)

    Silver bullet has left the station, everyone enjoy the ride.

  431. wingman

    Pima,

    If I may, I would say SLW options are the way to go. Good moves, good liquidity, tight spreads.

    I picked up half my March $35 calls on 2/9 and the other half on 2/16 and as of now they’re up 113.33%.

    I picked up June $36 calls on 2/8 and they’re up 61.38%.

    I will hold them until the next daily cycle correction. I will unload them when Gary says we are moving into it.

    Once we start to move out of the daily cycle low I will then look to pick up April and May calls just out of the money (assuming they are added), otherwise I will continue to add into June as I really believe Gary’s timetable here and want to max out this opportunity.

    One more thing. If you can get a tight spread on AGQ calls grab it as that offers the most juice. I picked up the March 160’s at $7.50 on Wednesday when the spread tightened up to .50, today it closed at $19.50.

    Good luck. This appears to be the move we’ve been waiting for and we need to cease the opportunity.

  432. Arun

    Jayhawk.. you had a IHS with neck at 1350, head at 1310 on a 60-min GC. The target is achieved today. What’s next? I know you carry more Silver, but still got thoughts?

  433. Jayhawk

    Wingman-

    I’d like to add some options positions on the next daily cycle too. I’m interested in SLW for the reasons you gave. I have some in my IRA and they are up nicely, wish I loaded up more. SLV is very liquid with tight spreads and weekly options as well. Does anyone trade the weeklies?

  434. Ryan

    Clarkatroid,

    Leveraged ETF’s are quite dangerous if you’re not riding with the trend or if it’s basically just moving sideways. You will lose out from the daily rebalancing. It’s an investment tool not a long term hold. I’ve been burned really badly playing with HNU.to (double leveraged natural gas) because I kept on trying to catch a falling knife and instead of having a stop loss, I put more in when clearly the trend was down. I had to basically suck it up and take a HUGE loss.

  435. Steven

    AJ,

    Isn’t there a gap in the SLW chart? Do you think this needs to be filled before moving onto new highs? They just almost always seem to get them filled.

  437. David Kafrick

    I was just looking at the USD Index monthly chart, going back to the 70´s, and there is a lot of similarities between what happened after the 3 year cycle low of 1973 and what has happened so far after the 3 year cycle low of 2008. The action that followed the 3 year cycle low of 1991 also resembles both of these situations.

    New all time lows were made after the 3 year cycle lows of 73 and 91, but in both cases the dollar then started a rally that lasted at least 6 years.

    Could this happen again? Meaning that the next 3 year cycle low, probably coming this spring, will be the start of a multi-year rally lasting at least 6 years?

  438. Clarkatroid

    thanks ryan.

    What are the actual mechanics behind how AGQ operates?

    How does it offer 2x return on the silver price?

    Why does it return sometimes more than 2x target?

    cheers again

  441. Jayhawk

    Arun-

    I saw that pattern on the 60 & 4 Hour charts and it tagged it’s target perfectly. By no means do I see that being the extent of this move. Perhaps some sideways consolidation and a launch higher? I like to step back and look at the momentum on the weekly and daily charts. Silver looks outstanding, gold looks steady and solid. I noticed a daily close above this level and rising trend line support as well.

    http://www.screencast.com/users/Jayhawk1991/folders/Jing/media/6b18c2a2-7242-444e-ad46-149aa58b575f

    Bob-Great to know about Wingman. Wingman, please share more here we appreciate your thoughts.

  442. mylifemytrade

    DG,

    I couldn’t find a way to edit that comment.. So I deleted that and posted another comment.

    I have no reason to be ashamed of anything or hide. Those who are afraid of being wrong have no place in the world of trading… I am not afraid of being wrong. Tell me how many people here post the levels at which they are wrong.. Or come out accept that what they said was wrong…

  444. Wes

    Poly,

    Let’s go old school on comparing gold to Nasdaq.

    Print a weekly chart of each on separate sheets of paper. Then hold them up to a window, slide them around and see what you get.

    If you can get an interesting match that way, let me know and I’ll try again.

  446. Wes

    @NJ

    >>>Wes –

    So if not a dollar collapse, what are your reasons for PM’s going up?

    Do you share Gary’s current C-wave view or also share his view for 2016-2018 as far as PM’s go?<<<<

    NJ,

    I’ll try to discuss this a bit over the weekend. But, whether my thoughts prove correct or whether Gary’s do, or it’s some combination, both ideas point to significantly higher gold prices ahead.

    And nothing in my ideas would change anything Gary has said about how difficult it can be to ride the gold bull, so we both best keep following his lead.

  447. Poly

    WES, you’re missing my point. Basically the idea behind the chart was to show that over say a 15 or so year bull market, like the NASDAQ, it’s the last (3rd stage) third that produce most of the gains. It’s this last third we have yet to witness on Gold, so the chart attempted to show what’s ahead.

    The chart I referenced simply highlighted that Gold’s current 500% run (From $285) after 11 years was similar (not an exact overlay that you seek) to the NASDAQ first 11 years. For example the NASDAQ in 1985 was at $285 and 11 years later was at $1,250. 4 years later the bull expired at almost $5,000.
    The point being we are tracking a similar path and if it follows that Bull to Bubble we could expect $5,000 gold.

  448. Wes

    Poly,

    I don’t think I’m missing the point. If the first 11 years mapped out O.K., then the last 5 of those 11 should also.

    GLD tracks closely those last 5 and I got zip.

    Try the old school idea.

  450. Gary

    DG,
    Yes if gold also begins a runaway move then daily cycles are going to become very vague or nonexistent.

    Just another reason to go old turkey at this point.

  451. Wes

    Poly,

    I shifted the GLD chart back into the 1980’s, and all points in between. This is not rocket science.

    Don’t go TZ on me.

  452. Wes

    Poly,

    Both the GLD and Nasdaq charts are low on the left side of the page and high on the right side. It’s what’s in between that doesn’t seem to match. I could find no part of the GLD chart that matched any part of the Nasdaq chart no matter how far left (back in time) I shifted the GLD chart.

    It took both charts about 5 years to go from 500 to 1250. But, if you line up the 500’s and the 1250’s, in between they look like a clam shell.

  456. Wes

    Poly,

    From that chart, it looks like housing and Nasdaq went down during the 6 months between year 8.5 and 9. (i.e., where the chart says we are now)

    Of course the article was dated 6 months ago, so it seems to get that part wrong.

    Better take that up with Gary.

  457. Gary

    We don’t need to worry about gold till the Dow:gold ratio is down to 1:1 and we see lines outside the local coin dealer.

    Secular bull markets don’t end until valuations reach stupid expensive levels.

    Gold hasn’t even reached inflation adjusted new highs yet much less extreme overvaluation.

    And silver hasn’t even reached nominal new highs.

  458. Poly

    I wasn’t clear. My point was not to say that gold will experience all of the same wiggles and drops the NASDAQ experienced, at the same time comparison. It was only to show that if gold is a real bull, we still have a LONG way to go higher, much higher. It also clearly shows the “juicy” gains are still ahead.

  459. Chicken Burrito

    OK, every one got that? MLMT is calling for a massive, fall down an elevator shaft plunge is the price of gold starting next week. This is in addition to the GDX to 44 call and the gold will never touch 1400 again, ever, call.

    A drop to the 1360-1375 doesn’t count. It needs to be under the previous low a at 1307 to count. As a matter of fact, I think he said 1150. We will see what happens.

  460. Pseudopersona

    Gary,

    Do we currently have a mental stop price to save us from some unforeseen massive event – I don’t mean a drawdown, I mean like a full on market crash event? Thanks
    P

  464. trond56

    Anybody knows if AGQ is based on futures? May silver lags 6$ compared to XAG spot on my charts here. I’m long XAG-fx silver, spread betting. (Gold is XAU) Only 4% (stable, never hiked) margin. What if default happen and futures really starts to lag badly. This XAG will be king?

    Also remember, long term AGQ decays (evaporates) badly, especially in sideways markets, 30% per year. But it leverages steep uptrends, that’s advantage.

  467. Gold Lion

    Gary,
    Whenever you make long term projections they NEVER turn out like your charts. I challenge you to show me one chart that looks like you projected it would. Please prove me wrong.

  468. Jayhawk

    So they even jacked up margin requirements again on silver today and the result the price rocketed higher vs. the panic sell off back in Nov/Dec when then did that. (Don’t recall the exact date)

  469. Gary

    goldlion,

    You are making the mistake of thinking I’m charting targets. I’ve said countless times when I draw a chart I’m just trying to illustrate general trajectories.

    I’ve been saying for months the dollar would go down into a three year cycle low. I said it long before anyone believed me and everyone was bullish on the dollar.

    The dollar is now dropping down into it’s three year cycle low.

    I’ve said for months that gold would put in it’s final C-wave advance as the dollar dropped into it’s three year cycle low. It’s now starting.

    I think the stock market will roll over into the next leg down in the long term bear market once the dollar starts to rally out of the three year cycle low. That should also drive gold down into a D-wave decline.

    We’ll have to see if I’m right on this one because it hasn’t started yet.

    I said the Fed would run QE2 and it would cause inflation to surge and exacerbate the dollar’s collapse into the three year cycle low. Inflation is surging. We are starting to see food riots all over the world and commodities in general have exhibited massive gains since QE2 began.

    I said that the bond bull expired back in 09 when Bernanke professed to be able to artificially hold rates down. I also said one could take the other side of the Fed’s trade because the market was bigger than the Fed and they would not be able to manipulate the bond market.

    I was right on both accounts. The bond bubble has or is in the process of bursting and fading the Fed was the right trade.

    I said silver would outperform when most everyone was fed up with silver’s boring lack of movement for over two years.

    Silver has massively outperformed virtually every other asset except maybe cotton and sugar.

    I said that the Fed could print all the money they wanted and it wouldn’t create jobs. They did and it hasn’t.

    Other than the stock market rallying longer than I expected (I warned traders countless times not to short the stock market even though I expected it to drop) I think I’ve gotten just about everything else pretty close don’t you?

  471. ALEX

    We had Just broken out and he said we’d prob go just over 1400 (we did) then consolidate up & down , then off to 1600ish.

    On his chart , he also shows the consolidation Nov end to a break out end of Feb/start of March.

    That chart was not bad for last Aug to now?

  472. Rob

    Gary,

    I noticed a few posts ago you drew a chart of gold’s possible D-wave low, at around 1250 – you didn’t mention your views about where silver would end up.

  473. aviat72

    Gary:
    Wonderful summary of your calls. Amazing. Simply Amazing.

    I was looking for the catalyst for the USD to drop and it seems the ECB is providing it by their interest rate calls. So while Ben ponders QE3, the ECB is going to raise rates. This is so much like the spring of 2008.

    The one caveat though is the fundamental existence of Europe. They are going to have that meeting in the end of March where they will decide on the big bailout fund. I guess we will see a pause in the rise of the Euro then. Depending on the outcome of the meeting (I believe they will decide to continue with a super-fund), the Euro will also get a stability bid, driving the USD to its 3 year cycle low.

    But I guess something dramatic will happen in the geo-political front to end that cycle as the one-eyed comes back to rule. My the Greeks decide that the taxes are too much to pay and decide to leave the EU and then Ireland follows after looking at Iceland, and the dominos start falling. That perhaps will be the period where the Dollar and PMs will rise in synch.

  474. Paul

    Gary,
    You are doing a superb job for your subscribers and yourself. Do you anticipate a pullback in silver next week or are we still headed higher going into delivery at the COMEX?

  476. Ollie

    Gary said: “We don’t need to worry about gold till the Dow:gold ratio is down to 1:1 and we see lines outside the local coin dealer.

    Secular bull markets don’t end until valuations reach stupid expensive levels.

    Gold hasn’t even reached inflation adjusted new highs yet much less extreme overvaluation.

    And silver hasn’t even reached nominal new highs.”

    Gary I am now 100% invested Old Turkey style and looking to ride the c-wave

    However I’m very concerned that the Fed will stop at nothing to disrupt or even destroy the natural course of the PM bull with CME rate hikes, mining company royalties even confiscation and anything else I can’t even think about…

    Just can’t see gold hitting $5000 or silver hitting $300 with the Fed/government doing nothing

    Does this have an impact on your long term view?
    Do we need to expect the unexpected?
    Thanks

  477. jeff

    ollie

    gary and alot of these guys know more than Me,
    but the fed do nothing? that is one option i have not heard of anyone talk about =)

  478. Gary

    Rod,
    Again let me stress charts just show general trajectories. I have no idea where gold or silver will be at the bottom of the next D-wave.

  479. Gary

    Ollie,
    You need to quit reading the Gata conspiracy nonsense.

    The Fed could care less what the price of gold is and they certainly have no need to confiscate it. They didn’t confiscate gold in the 70’s why would they do so now?

    The Fed is no longer restricted by gold. They can print as much money as they want. If they want to control something they need to control the price of oil.

    They can’t though anymore than they could force interest rates artificially lower. The markets are bigger than the Fed.

  480. Gary

    HKC,
    We only need the one stop for the entire sector. We aren’t trading these things separately. If the stop is hit we would exit the entire sector.

  482. Ollie

    Thanks Gary, true, the price of oil does seems much more important than the price of gold

    And also true there was no confiscation in the 70’s

    Yes, it seems I spend too much time reading zerohedge! 🙂

  483. Aaron

    Gary, the Fed does care about gold prices, that is a fact. Also, they do care about the price of oil. Have you seen the difference between crude and Brent? The CFTC said that it was due to storage/transportation issues…such stupid responses make me laugh.
    The fact that the Fed (through its instruments…JPM), shorts the hell out of anything they dont like is very apparent.

  484. Brian

    Gold Lion, On 12/17/09 Gary published a long term chart of the 3 year cycles on the dollar. I duplicated that chart complete with the lines, arrows showing yearly cycles, and boxes showing the 3 year cycles. Amazingly accurate to date.

    Now we have this massive Head and shoulders pattern on that chart. It projects to his price target.

    I think Gary is doing an outstanding job for his subs, and usually quite a bit more than that.

  485. Gary

    Aaron,
    The difference in the price of WTI and Brent is that we have a huge oversupply of Lt sweet crude. We have no where to put it.

    If the Fed is using JPM to short gold or silver why isn’t it going down? How could it be in a secular bull market if the Fed can short unlimited amounts of gold and silver?

    Give me one logical reason why the Fed gives a damn about the price of gold. And don’t give me that useless crap about how rising gold signals inflation.

    If the Fed is targeting gold why isn’t every other central bank in the world doing the same. Instead they are buying gold.

    You and I both know 9 out of 10 people on the street have no earthly idea what the price of gold is. Gold isn’t factored into the CPI. Rising gold has no bearing on the quality of life of anyone.

    What signals to the general public that inflation is rising is gasoline and food, along with health care, insurance and other assorted necessities.

    The only reason the Fed has ever cared about the price of gold was during the period when the dollar was backed by gold. During that period they would have to manage the price of gold to stay in line with money supply.

    That’s not the case now. The Fed is free to print all the money they want.

    Instead of blindly buying into this ridiculous conspiracy nonsense, just ask yourself if there really is any reason what so ever for the Fed to give a rat’s ass about what the price of gold or silver is.

  486. Bob loves Hawaii

    But what I cannot figure out is why would some of the smartest people in the world continue to create more short positions for themselves in silver and gold knowing the nature of cycles, COT reports, and dollar yearly lows?

    They are the smart money, aren’t they? Conspiracy or stupidity to have the level of unbacked paper to a physical commodity against a delivery month. We are on the long side of this trade who is short?

  487. Aaron

    Gary,
    Just because the price of gold or silver are going up, does not mean that there is no manipulation, they can easily kill the intensity, yet not the direction. Why you ask that is? simply…physical. When countries like China and Russia buy up physical, there is a strain in paper, which is why the price is ‘forced’ to move up. This also explains the recent shallow dips that cant last longer than a month or two, there just isnt enough physical to meet demand. This is very evident is silver as you know, with unprecedented backwardation.
    The oil story doesnt hold water and you know it. Its rigged, plain and simple. YOu cant have 1 entity short 1/5 of the market and call it a hedge, thats just being silly.
    On to your question of ‘why’. The higher gold goes, and the faster it moves in times of crisis, the better of a safe haven it is deemed, and there lies the clue. Treasuries and the dollar are the only things that keep this country going, the last thing the Fed needs is competition from Gold.
    We shall agree to disagree on the manipulation yet you cant just throw out ideas that are starting to make sense. The physical short squeeze in silver is a result of manipulation!

  488. Gary

    Bob,
    What the conspiracy nuts don’t bother to tell you is that most of those shorts are miners hedging forward production into record high prices.

    Entities like GATA with with their own agenda would rather you not know that. That way when they miss a call they can just blame it on some mysterious group of bankers.

    It’s one of the oldest tricks in the book for never having to own up to your own mistakes.

    If the Fed was trying to depress the price of gold or silver then how on earth did the COT reach a Blees rating of 100 recently?

    Gold was going down. They had it on the run. How can they possibly achieve successful manipulation if they lift shorts at the very time they got the metals moving in the direction they want.

    If one just uses a little common sense its easy to see though the conspiracy baloney.

  489. bamster

    Gary,

    With regards to your response to Aaron, and I’m only talking about this because we are on the subject.
    the one thing that I always have in the back of my mind is “what is the Fed going to do to make sure JPM doesn’t end up like Lehman or Bear Stearns”.
    They say that JPM has a big short position in silver that can wipe them out. Because of all the backroom dealings that have been going on between the brokerage houses and the Fed since 2008, I’m always suspicious of what they might come up with to make sure JPM survives. They banned short selling, margin requirements keep rising for gold and silver, now they want too tax the mining companies…Now I’m not saying the Fed is behind all this but who knows. The fact that JPM is now accepting Gold as collateral as of a few weeks ago made my spider sense tingle…who knows how much gold is hidden in Ft.Knox, and how they can manipulate it to their benefit. All this to say I don’t trust the Fed one bit.
    I don’t want to start a debate about government conspiracy theories cause we’ll never end that conversation. I just thought give my personal paranoia. Thanks for listening. Now back the C wave.

  490. Gary

    Bam,
    Any position that JPM has in silver is miniscule compared to what the banks had in collaterlized debt in 2008/9.

    I suspect JPM could write off every silver position and not even blink an eye.

    Besides the Fed can just hand out free money to the banks like they’ve been doing for the last two years. What difference does it make if JPM has to write off a couple of billion in bad silver trades when they can just borrow another 500 billion from the Fed at 0% interest?

    You people really have to stay away from the GATA site. 🙂

  491. jeff

    Hamster

    Raising margin a little at a time seems prudent to me. When they crushed the hunt brothers , I think they went from 10% to 50% overnight

  493. kmisak

    Having just read the weekend report, let me be the first to say how exciting it is to read what Gary wrote and see those silver charts!

    I’m locked in and already my portfolio balance is way above the December top, before the whipsawing and gnashing of teeth and calming words from Gary. I was down over 8% from my top after all that craziness, but I had decided to follow Gary last year and I’m glad I’ve had the good sense to do so. Just this week I’m up 10% overall, and 20% since buying back in @140% last month (no margin, just my big line of credit, for which sensible people deem me crazy). 😀

    After becoming a subscriber I found out that Gary is a former US Olympic team weightlifter. Hell, he linked us videos of the Pocket Hercules! It all makes sense to me; unexpected sanity from an unexpected source.

    Yes, I’m hyped today, but I am also determined not to get too down when the down days come (like Jan. 3-6!). So let’s buckle up, enjoy the various reasons for a long weekend, and enjoy this ride.

    A shout out to the Canuck who led me to HZU.T. I added it this week to my miners, and plan to add more next week, too.

    K.

  494. Jayhawk

    Dave Morgan is not on the bull side for this move in silver. He thinks the rumors out there are bunk, backwardation is misunderstood and not a big deal, this is still an intermediate top, etc…He also said that if certain things change he will jump on board. This is he first time I’ve heard him interviewed. Kind of cocky guy who seems to be pushing that he’s pretty much the go to guy and the average schmucks like us need to subscribe to him to be able to trade silver.

    Towards the end—the last hour overall is interesting-

    http://radio.goldseek.com/

  496. mamaloshen

    Jayhawk,

    David Morgan is a bit cocky and you are right, he likes everyone to think he’s the foremost silver guru on in the world. To be fair, he was one of the first to be bullish on silver a decade ago and still is bullish long-term, but doesn’t hold a candle to Gary in terms of timing.

    I subscribe to his Report but will not renew when it expires next month. It’s mostly interviews with silver and industry “experts” and answering questions from readers. A lot of stuff on rare earths as well which is not my bag.

    I met him at the London Silver Summit last Nov. where he was the guest speaker. At a coffee break I asked him why he was still recommending Goldcorp as his top gold stock pick when it hadn’t done anything in over a year, and he admitted it hadn’t performed that well. Then I noticed he had removed it from his list in the next report (who knows, maybe I had something to do with it).

    He likes PAAS but some of his silver jr recommendations have been awful–one of them went down 80% after terrible drilling results and he sent emails around to subscribers apologising and telling them to consider selling, that the mgmt hadn’t been truthful with him.

    Anyone reading, you could save yourself $160 a year by not subscribing. It is only a monthly letter anyway (wish I had heard of Gary when I last took out a yr sub to Morgan). Incidentally, far better ideas on individual miners from this blog IMO.

    Cheers.

  497. Slumdog

    mamaloshen said…

    “Can anyone tell me the exact date of the D wave bottom so I can note it in my diary?”

    Gold at 2140 will be within 50 points of the top. That’s a 55/45 probability. It will become easier to see after we see the March breakout formation. And, no, it won’t go directly there. This is achieved only if you are buckled in to this rollercoaster.

    What’s needed is a firm conviction, and a way to slough positions as one moves towards it. IMO, if one wants a million bucks at 2140, then one has to prepare to invest double what will yield that million because along the way, profits should be seized without affecting the bingo outcome. It reduces the anxiety in the game to exit at 2 or 3 prior price points, thereby reducing risk as probability drops in the outlier areas.

  498. mamaloshen

    Thanks for your thoughts, Slumdog.

    $2140 seems awfully high and implies gold outperforming silver from now on, but who can say, it’s possible.

    If I aim for a million, I’m going to fall on my face, so my pyschology is to settle for paying my credit card bill each month:-)

    Actually, like most here I’m doing well, and better for not being on margin as I can’t handle it pyschologically. Then it’s easier for me to hold out for higher prices rather than selling too soon (which is what I’ve done when on margin before).

    I thought Gary’s weekend report was great for his thoughts on “staying the course” and not selling early. I had actually thought of selling some of my SLV calls when (if silver) gets to $37 (maybe even next week), but think I’ll hold out for a higher price (though I might jump the gun and get out at $48.95 and not $50:-).

    I do agree it makes sense to scale out as prices rise, though. As to the D wave that comes after, previous declines have lasted 5-6 weeks after a major C wave top, but plenty of time to think about a stategy as to whether or not to play that bounce later.

  499. Jayhawk

    mama-

    Thanks for the feeback on Morgan. I’ll take Gary & Doc as well.

    Gary-

    That interview had to have been recorded before the break out Thursday & Friday. He sounded a bit silly in light on the massive move up last week! 🙂

    I’d love to see some big picture expectations for this intermediate cycle.

    1. I’m assuming this was indeed the intermediate low. The timing for putting in one more leg down makes it almost impossible especially in light of the price action across the board. So, that HAD to be the yearly low on gold as well, correct? Your cycle theory says will form a low once a year and last years came in Feb. So, if we saw the low at 1307, how would a D wave fit into that model. A peak of our C this Spring/Summer then a furious D wave could retrace gold to 1250 before the end of the year.

    2. This first daily cycle is a confirmed right translated cycle. I’d assume all dailies in this intermediate would be right and all the dailies on the dollar would be left.

    3. I’m guessing this cycle would run longer than the short end of most intermediates. (15 weeks) and push pretty far out.

    I totally agree with your comments about having to chase this and losing positions. Last summer’s move was so fast and offered little to no opportunities to get on board. Other cycles were a bit more tame and gave bulls a shot. I just recall one daily cycle last summer/fall that had a daily swing high/swing low in one day.

    My major concern is being too heavily weighted on the silver side. I could see TPTB throw the kitchen sink at this thing to keep it from going crazy (as witnessed by the constant margin requirement hikes).

    Thanks/

  500. bamster

    Thanks for the report Gary. Heard on CNBC yesterday the next stop for silver is $36.5. I don’t know how they came up with that number. Do you have a specific price for silver to take a breather before resuming its ascent to $50.?

    Now Gary, please don’t read the follwing:
    For options traders out there. I would like to know if any of you are able to put a stop limit price on your options. My broker does not allow it and I’d like to know if that is the norm. That is the one big thing I hate about options. I can’t put a stop limit so you basically have to be on top of it constantly which is very stressful. Thanks.

  501. Poly

    Of course you should be able to put in a stop limit! Who are you with?

    Be very careful doing it though, make sure there is liquidity and tight spreads otherwise you could get caught on any sudden drop. Make sure it’s not tied to the bid price.

  502. TZ(5288)

    >If the Fed is using JPM to short gold or silver why isn’t it going down?

    If the wind is pushing against my car while I drive down the road, how come my car isn’t going IN REVERSE?

  503. Poly

    All of this JPM losses and needing FED bailout talk nonsense only confirms this gold bull is certainly bleeding into the mainstream.

    I’m not sure If we’re entering the so called 3rd stage yet, but I doubt we’re far away.

  504. TZ(5288)

    http://www.constitution.org/mon/greenspan_gold.htm

    The reasons that the government (or “statists” as worded here) have a desire to mislead, suppress, or attack gold was clearly outlined by Greenspan decades ago well before he became Fed chairman. (I’m sure that was just a coincidence.)

    I respect Gary, but I would suggest Greenspan has some clout on this topic. I’m on Greenspan’s side.

  505. mamaloshen

    TZ,

    Just my opinion, but I doubt Greenspan has much credibility anymore. Wasn’t it he that created the easy money partly responsible for the housing bubble? And then he recommended people getting adjustable rate mortgages and levering up their housing debt (many who followed his advice are now in foreclosure).

    This is a contrary view, but I wonder if the Fed might actually want gold prices to go up. With by far the largest gold reserves in the world, they stand a lot to gain it if was revalued closer to the current price. Right now I believe U.S. gold holdings are valued at the official price of $42.22.

  506. TZ(5288)

    >How could it be in a secular bull market if the Fed can short unlimited amounts of gold and silver?

    The flaw here is simple and known buy the Fed. It is based on freshman economics 101 and the reason that their paper ‘adjustments’ to metals markets have natural limits.

    Tonight the president, congress, UN, and all countries of the world declare that Ferrari’s are officially $100 each.

    What happens?

    So shall it occur with gold and silver if the “official” (Comex) price is pushed too low for too long.

  507. Rebecca

    TZ,

    Thanks for Greenspan’s article. It all makes sense now. Taxation, deficit spending and inflation are all about wealth redistribution. Deficit spending and inflation would not have been possible under gold standard. Good analogy on Government pricing on Ferrari.

  508. TZ(5288)

    MAMA,

    >I doubt Greenspan has much credibility anymore. Wasn’t it he that created the easy money partly responsible for the housing bubble?

    The tobacco companies readily tell you that their product is bad and will kill you.

    People say “OK, give me a carton”.

    There are two types of responses:

    1) “I won’t do that cause I think it is wrong”.

    This response never makes any money and lives in a shack eating ramen for their life. But they die diseased and in poverty comforted that they did the ‘right’ thing.

    2) “Sure thing! You only want two? We have a special on a box of 5 and I can put you on a frequent purchasing plan with low rates!”.

    This response says “I told them the risks and they still wanted it. I might as well get rich instead of somebody else”. This response lives well, enjoys the finer things in life and never has a bad conscious because they know they told the person and the person still decided to destroy themselves anyway.

    Greenspan decided not to suffer because people wanted to be stupid. He was, however, nice and honest enough to tell them exactly what would happen if they demanded (or quietly accepted) paper money.

  509. bamster

    Poly,

    Sorry I was called away by my boss(wife). I live in Canada and I trade with Royal Bank action direct. Who do you deal with? So just to make sure we understand each other, if, for example, an option is trading bid $14 ask $15, you can put a stop limit at $13?

  512. aviat72

    Gary:

    Again wonderful comments about conspiracy theories.

    It SHOULD be well known but Silver broke out of the $20 ceiling the week JPM announced that it is shutting down its prop commodities desk; yes the famous desk which shorts silver.

    There have been numerous reports of silver miners hedging their production by selling futures expiring further out. If you have the supply side hedging, it is a no-brainer for the backwardation to occur.

    The futures market are showing exactly what should be happening. There is a short term supply squeeze, while in the longer term there is supply from miners available. Reflected really well in the forward curve.

    FWIW the 32.80 area saw some good supply side pressure in the /SI contract. I also noticed that $5 scaffolding on the AQG is a good place to define support and resistance.

  513. aviat72

    Jayhawk:

    I respect your opinion, but please do not talk about the margin requirements hike as a measure by the big boyz to control the price.

    Margin works both ways: for longs and shorts. The silver contract is heavily leveraged and very volatile. It can easily exhaust your margin in a single day and ruin you. Hence it is appropriate for the margin to rise with the value of the underlying and increase in volatility.

    Just to offer a perspective, the margin for ES will not be exhausted unless it moves 100 ES points against you; i.e. about an 8% move in the SPX. Keeping in mind the daily movement in ES, the margin for /SI is too small. It should go up even more.

  514. james r

    It’s going to get very interesting in the next several years when the price of gold reaches $3,000, $4,000, $5,000 and beyond. That will be the time when gold fluctuates over a $100.00 an ounce on a single day and one’s account can produce swings in the excess of tens of thousands of dollars

    Will you people be mentally prepared when that day comes?

    Will the stress be too much?

    Will one panic and sell too soon?

    Yes, things are going to get very interesting.

  516. Poly

    Yes Bamster and I’m certain all the major online brokers offer stop limits on options, it’s a very basic trading order type. I use Schwab primarily. .

  519. Ben

    Gary, great post today, esp. the chart pattern example of the candlestick showing that it may be over when it was extremely premature to sell — the ‘down’ time was so brief that few of us would have gotten our positions back (not me, I know that). Patience, grasshopper, is what I tell my self. Also the idea that these intraday reversals from what appears to be overbought to intense buying pressure somtimes within the span of an hour or less is very revealing about the many sweating it out on the sidelines.

  520. Ben

    James R, I’m getting ready for it. On a bike ride a couple years ago, I met a guy who built a fortune during the tech bubble. He raised his asset value from about $1 million to $12 million at the peak, and he has single days when it went up, or down, by over $1 million. But, alas, he had no Gary in his corner (or even me, for that matter) and he rode the beast all the the way down and lost over 100% of what he had — he also had to give up his home on Lake Washington and move up the hill (he showed me his former home, worth over a million today). The single most valuable help we will get from Gary is a concrete exit strategy at or near C-wave tops. The 2nd most valuable thing we will get imo is help in staying aboard the train.

  521. Brian

    Ben, Gary will tell us when to exit. Of course as the bull is running, many won’t listen! Your friend would have been one of those.

  522. mamaloshen

    Agree with you on both counts, Ben. A few years ago, I read “Reminiscenses of a Stock Market Operator” and one thing Jesse Livermore pointed out was how when small traders got a profit of 10% they were happy and sold out, whereas he would let his profits run and ride a stock bought at $20 all the way to $100.

    I’ve been in and out of SLW 4 or 5 times in the last 2 years and, except once, I ended up buying higher than when I’d sold, so missing out on a lot of profits in between.

    What I find particularly useful is Gary’s pointing to previous action in the silver market as examples, such as he did in this weekend’s report. I was actually thinking of taking some profits next week; now I will just stand pat.

    Now if only someone could only tell me the exact date and price of the D-waqve bottom:-).

  523. vuvvy

    Yup, JPMorgue is going out of business. This was released a week or 2 ago.

    “A scary figure was revealed at J.P. Morgan’s investor day presentation on Tuesday: the bank had a perfect trading record for the second half of 2010 and only lost money on 8 days out of 260 possible trading days for the full year.”

  524. vuvvy

    Just maybe, Gary is right,and JPM is actually very good at trading silver’s reversion to the mean and their short position is actually reflecting hedged mining positions…?;)

  527. Bob loves Hawaii

    Gary, is this bogus information? From Harvey Organ.

    The huge rise in silver price has caught the silver bankers totally offside on the silver banking. The BIS data released in November (www.goldexsextant.com) shows that the G 10 bankers have collectively sold forwards and swaps to the tune of 4 billion oz and short naked calls for another 3 billion oz. The total, 7 billion oz represents 10 years of production. If you just do the forwards, then it is 7 years of annual silver production. Let us say the average cost of acquiring these derivatives and forwards equate to $15.00 for silver. Thus collectively the entire G10 bankers are feeling massive pain (losses) to the tune of:

    7 billion oz of silver( 32.30-12.00) = 7 billion x $17.30 = 121.1 billion dollars of losses.

    This is in a market of only 14 billion dollars. It begs the question to what economic need was this done.This is still off balance sheet.
    If you include only the forwards or swaps (the lending of actual metal to which nothing has come back yet) then the losses are:
    4 billion x 17.30 or 69 billion dollars.

    Regardless how you look at it, the bankers are in serious trouble with this huge rise in silver prices. I hope you understand the severity of the situation.

    There may not be a conspiracy, but they did the same stuff with naked CDO’s in 2008. Why are bankers even screwing around with silver if it is so insignificant and only miners are hedging their book?

    I don’t mind as I am very long, but something does not pass the smell test to me.

    Thanks

  529. fubsy_cooter

    Having a thought and figured I’d run it by here.

    Given the time decay of the ulra funds, and the advantage to the downside over time, it makes sense to short the ultra short funds ZSL and GLL. They are bound to go to zero over time as they return double the inverse of silver and gold and lose value with each reversal of price.

    Has anyone tried this tactic?

    Fubsy

  530. Jayhawk

    Aviat-

    Couple questions- Are you long anything in the pm complex at this point? If so, what % are you in? I’m just curious how big of a believer you are in this overall thesis and how much you are risking on it.

    I’m also wondering what age bracket you are in? I’m 42 and find that most of the baby boomers tend to be much more trusting of the system. I’m a cynic and my default is to question authority or what the status quo is in most areas of life. So, I tend to have a lot of distrust for what we are being told.

  536. Gary

    Bob,
    I couldn’t get the link to work but I can tell you that there is nothing in the COT report that says who individual holders are. Just total position sizes for each category.

    So I never did understand how the conspiracy theorists came up with the idea that it was a certain bank or banks that held such and such a position.

    That data simply can not be determined from the COT data as far as I can tell.

    It does make for an interesting read just like the end of the world Elliot wave nonsense will certainly catch ones eye. But all in all they are both probably worthless for making money.

  537. Gary

    Fubsy,
    Just for the heck of it I tried to short a few shares of one of the ultra funds several months back.

    Like I suspected you can’t borrow the stock.

  538. Wes

    bamster,

    Are you sure that you’ve thought through the idea of placing a stop limit, especially on options ? That sounds like a way to be left holding the bag at just the wrong time.

    The whole idea of a sell stop is to sell the security. If you have a stop limit, and the price trades through your limit, even by a penny, you won’t be stopped out.

    I think that’s a bad idea.

  539. marinho

    GARY,
    silver is on his 18th day , gold in the 15th and the dollar in the 12th day of their cycle. Do you see a short cycle for silver to digest its gains or the dollar slide will override the lenght of the silver cycle? it seems to me that we could see a little weakness soon in the miners to allow a little digestion of gains

  542. Gary

    From my experience the PM market is volatile enough that if you put stops on options there’s a good chance you will get knocked out of your position.

    If you are using options correctly you can use a trade trigger to activate a stop when the underlying asset hits your trigger. ie. if GDX tags our stop your trade trigger would sell your options.

    If you are using options for leverage and you are trying to treat it like a normal trade then the only way to avoid getting stopped out is to pick the bottom of a dip and never have the underlying move against you.

    How often does that happen? Pretty much only at the exact bottom of a daily or intermediate cycle. which means you have to have perfect timing.

    If after all the warnings and all the examples I’ve given and even a few real time blow-ups (think Robert and Gary UK) you still ignore me about leverage then I have no sympathy for you if you blow up your account.

    Please tell me you aren’t leveraging to the moon with options.

  543. bamster

    Hi Gary,

    The only options I have been trading since last year is the AGQ. What I’m trying to accomplish is to have the least amount of money at risk but get the biggest bang for my buck. Last year, you got me in just before the run up to $30 for silver. I got out just before it came down. Since then, I’ve been waiting for your signal to get back in for the final C wave advance. I have made only very small trades since then. My account hardly budged since december. Now when you gave the lastest signal, I got back in with out of the money AGQ options, maybe 10 points out of the money, for the month of march. As these options came into the money, I would sell them and buy the same amount of out of the money options again, thus reducing the amount of cash at risk, but having the same amount of options still in the game. As of Friday, I am now playing with the houses money. I am now waiting for April options to become available as June was the next month available as of Friday. Hopefully, they will be available Tuesday at which time I will sell my March options and buy April to give more time for the C wave to complete. Now if what you say that silver is going to be anywhere between $43 – $50 by April, I will be able to afford the next get together in Maui and thank you personally.

  544. Gary

    Bam,
    You are gambling with out of the month front month options. If you’ve read the option doc you know I rarely ever buy anything but deep in the money and only as a substitute for shares.

    The problem with what you are doing is that you might be successful at it. Actually the problem is that you were successful at it last fall so now the spiral has begun.

    You think you or I am smarter than the market and that you will be able to “get away” with this very dangerous strategy forever.

    I can assure you at some point you are going to miss and lose everything you’ve made in the blink of an eye.

    I’ll say it again. Huge leverage always ends up in a blown out account. There are never any exceptions. And the worst thing that can happen is to win big the first time you go down this path.

    It convinces you that this is easy. It’s just like a casino. Why do you think the house will comp you all kinds of goodies if you are winning? Because they don’t care if you win they actually love it when you win. All they care is that you stay at the table. If they can keep you playing they know they will eventually get all your money.

    Leverage is the same way. It’s incredibly seductive if you initially win. It will keep you at the table until the odds finally defeat you.

  545. bamster

    Gary,

    You’re right, options are always dangerous. Believe me I have listened to you and kept the amounts small. Right now, I only have a small amount invested and its going to stay that way. I’m not aiming for the fences. Maybe if I was 25 years old, I would have the balls and energy to go crazy, but at 50 years old, I want to make enough money to buy a nice condo in florida for retirement in 10 years, and get met out of this cold part of the world. My trading account is not six figures, so when I tell you I have only a quarter of it invested in AGQ options and the rest in cash, do you still think it’s too much?

  546. Gary

    Well only you can answer that question. If you were to lose 25% of your account in less than a week how would it affect you?

    If you did lose that much would you then double down and go in with 50% to try and make it all back in one trade? And if that trade was mistimed also and you lost 75% of your account in a very short time how would that affect your livelihood?

    Remember we’ve already had a mistimed trade at the top and one at the bottom. The one at the top could have cost you all 25%. The one at the bottom probably would have cost you 15 or 20%.

    If you managed to avoid both of those it was pure luck. How long can you expect to survive on luck?

  548. bamster

    Gary,

    I got caught in the last one. I bought AGQ puts to counter that trade which minimized the loss but I still wound up with a loss albeit a smaller loss.

    Okay Gary, what I’m going to do tuesday is sell the options and buy 500 shares of AGQ. By the way, do you have a stop limit price on AGQ?

  554. Slumdog

    trond, from your referral website, GATA’s secretary observes:
    “The minutes of the April 1997 meeting of the G-10 Gold and Foreign Exchange Committee, which the Fed sought to conceal, along with the secrecy on which the Fed successfully has insisted for its other gold records, are powerful confirmations of Western central bank interest in controlling the gold market surreptitiously. The minutes have been posted at GATA’s Internet site here:

    http://www.gata.org/files/FedMemoG-10Gold&FXCommittee-4-29-1997.pdf“

    GATA’s problem here is that these are not “powerful confirmations of Western central bank interest in controlling the gold market surreptitiously. It’s powerful confirmation of Western central bank concern, but not that they took any action to control price.

    Is it probable that if the public were to become aware of how much physical gold is either not in Ft Knox or has been sold by the lessee (JPM) to others and can’t be replaced except in the open market, that would blow the roof off of the price of gold?

    Do you know if GATA publishes its guesstimate of how much gold the USTreasury has assigned out on lease, either directly or via the Gold Certificates the Treasury issued to the FedRes?

    In this tightening supply market, IMO, this rumor or now legitimate conclusion (as we have no idea how much gold was reacquired by JPM to get back the gold, unless JPM itself merely leased the gold to “others” and can claim it back) that the UST is without recourse save “please” and “mother may I”, could and IMO would, legitimately cause a panic against the USD and in favor of the precious.

    This is bothersome. What are the consequences? Blood in the pits, and massive front months and even front years price appreciation nearly overnight.

    That is a respectable parabolic culmination moment. Only Jim Sinclair thinks the price will rise and stick rather than collapse.

    I’ve never seen a parabola rise on a longer term basis and stay up, although at this time, we’re experiencing an old but for all alive, a new, ballgame.

    I hate to drag in more physical as I want the money for other things. Pennies worth of gold relative to anyone’s portfolio just doesn’t do the trick, does it?

    So, there are two operative facts: true impossibility or improbability to replace the gold that’s been sold or leased by JPM in any timely manner; and major up and down trading opportunities in the futures and stocks over this certain to become an actionable issue by the public.

    Choices… but it’s clear there are only 2 choices, and one that’s not a choice is ownership of any currency which is not provably backed by signficant amounts of gold.

    Who needs this Gordion’s Knot?

    Probably doing both of the above is the rational set of actions.

    Whadda pity.
    The minutes point out clearly that much gold

  555. Slumdog

    Chris, if one is honest with the daily chart pattern, it’s been the higher probability now for months. The recent failed retracement I speculated last week, will result in an increasing parabolic curve up in the US equity market indices, but as of Wed/Thurs/Fri, it’s just been the same grind “up”.

  556. RA

    If the silver miners are selling their contracts forward at say 30-31, what would happen to SIL if silver keeps going up?

  557. Gary

    trond,
    I don’t see anything in this supposed document that says the Fed is manipulating gold. BTW in 1997 gold was in the depths of a multi decade bear market.

    Why would the Fed need to pressure gold down during a bear market?

    Just more ridiculous GATA BS to draw in suckers.

    I’ll ask again. If the Fed is supposedly trying to depress gold why aren’t all central banks not doing the same?

    Central banks are now net buyers of gold. If they are buying gold then they are contributing to the rise in gold price.

    If the Fed is actively trying to depress price then they are just making it easier for other central banks around the world to drain gold out of the US.

    Like I said people just a little commonsense is all it takes.

    It’s safe to say there is a complete lack of commonsense at the GATA site.

    You people really have to quit reading that crap.

  558. Gary

    Notice how the stock market rally as slowed as inflation has risen.

    There will be no melt up in stocks. The market will struggle more and more to rise in the face of higher and higher inflation.

    Obviously liquidity is and will continue to leak out of the stock market and go into commodities as the only real protection against the Fed debasing the dollar.

    This runaway move in stocks will end like all runaway moves end. Momentum will continue to fade and then when the downturn begins everyone will try to get out the exit door at the same time and we will see months of gains evaporate in minutes.

    It happened in Feb. 07 as the 8 month runaway move collapsed and it happened last May during the flash crash.

    QE2 has set in motion the next crash scenario.

  559. jeff

    gary

    i agree with you, but in order to get the heart rate up =) how about this

    If the Fed is actively trying to depress price then they are just making it easier for other central banks around the world to drain gold out of the US.

    answer : to spred the wealth

    i do believe that is the stated goal of our beloved leader

  560. jeff

    sometimes for me its hard to tell even on the job site if

    a) people are stupid
    b) really working for the otherside and destroying a project on purpose
    c) or really think they are doing a good job

  561. Redwine

    Common sense tells us the reason CB’s want to keep gold price down is because they want to buy it in large quantities cheaply in order to cover the paper gold they’ve floated.

  563. Redwine

    The same way smart money managers have been doing it. They cause dumb money panic selling whenever possible and use other tactics that I’m sure are above my head and yours.

  564. Gary

    Really? Smart money tactics?

    Isn’t it more likely that the gold bull is just doing what normal bulls do?

    That the ABCD waves are running just as would be expected in a normal bull market?

    That the daily, intermediate, yearly and 8 year cycles are all playing out just like clockwork as would be expected in a normal bull market?

    That when the parabolic phase of a C-wave gets too stretched above the 200 DMA a normal regression to the mean profit taking event occurs just as would be expected?

    Is there anything about this bull market that doesn’t look like just a normal bull market? And if not then why would anyone think the Fed is “tampering” with gold?

  565. Redwine

    Gary said,

    “Central banks are now net buyers of gold. If they are buying gold then they are contributing to the rise in gold price.”

    Two questions.

    1) Why are they net buyers of gold if, as you say, gold is just an intrinsically worthless shiny metal?

    2) Why wouldn’t CB’s try to manipulate the price of gold if it constitutes their greatest reserves and if they’re wanting to buy it up?

    It’s not a conspiracy because its right out in the open for anyone with eyes to see. Gold is, after all, the most important reserve for central banks. They are well aware that gold is fiats only true competitor.

  566. Gary

    This is just short term manipulation that we see at the bottom of an intermediate cycle I have to ask who cares?

    We use that short term manipulation to our advantage to take positions at the bottom of corrections also.

    There’s nothing catastrophic about that. It’s just a short term move below a support level so big money can enter positions into liquid conditions.

    Is this really what GATA is so up in arms about? Usually this kind of manipulation lasts one or two days tops.

  567. Redwine

    “Is there anything about this bull market that doesn’t look like just a normal bull market? And if not then why would anyone think the Fed is “tampering” with gold?”

    Your cycles seem to work well with DXY and I’m fairly certain you wouldn’t claim the USD has not been manipulated.

  568. Redwine

    “Is this really what GATA is so up in arms about? Usually this kind of manipulation lasts one or two days tops.”

    I don’t know what GATA is worried about. I’m just pointing out that the USD and gold are obviously manipulated by CB’s. Knowing it is and how it is can be beneficial to someone wanting to make scads of money.

    You track smart money in order to make money, right? Why not just admit that central banks manipulate currencies and gold and attemptm to use those manipulations to make money?

  569. Gary

    Red,
    There is a very good reason for the government to manipulate the currency markets. They are debasing the currency in a failed attempt to abort a secular bear market.

    They are monetizing a debt spiral that can’t be service any other way.

    There is no logical reason for the government or Fed to give a damn about the price of gold unless the money supply was backed by it.

    It’s not anymore. The Fed can print as much paper as they wish with no constraint. The Government can then trade that freshly printed money in for goods and services, effectively stealing from the public.

    If the money supply was constrained by gold they couldn’t do that as the public would retaliate by trading their debased dollars in for gold.

    When the US went off the gold standard they ended all recourse the public has against government theft from the masses.

    So like I said before there is simply no need for the government or Fed to give one rat’s ass about the price of gold. They’ve already perfected theft from the masses to the point where we can no longer prevent it.

  570. Bob loves Hawaii

    Redwine, I can empathize with you wanting to know why and to affix a sinister reason to this.

    I tend to go there myself, but I an tell you overthinking this will lose you money.

    Our beliefs trump market discipline. This is why I subscribed to Gary last year, my beliefs were not jiving with these moves at intermediate moves and Gary’s cycle work was a big aha for me.

    I can tell you my trading is a lot less stressful and much more profitable.

  571. Redwine

    Gary,

    “There is no logical reason for the government or Fed to give a damn about the price of gold unless the money supply was backed by it.”

    What you fail to recognize is that gold IS money. It’s part of the money supply. Why do you think CB’s use it for reserves? Why do you think the richest families have used gold for reserves throughout history?

    Of course they give a rats ass what gold price is in USD. The problem, as they see it, is a global confidence shift from fiat to gold. It’s happened in CYCLES throughout history.

  572. Gary

    Red,
    You’re kidding yourself if you think gold will ever be used as money again. It’s way too unwieldy and to hard to divide into serviceable units. How would one go about paying for a gallon of milk with gold?

    Gold is a store of value. It’s never going to be money again. Copper is also a store of value. So is oil or wheat or cotton. So are diamonds, rubies and emeralds.

    Is the government going to manipulate the price of every commodity because it can be used to store value?

  573. Power Corrupts

    Gary,
    Thanks for circling the weekly return indicator at the top of the Stockcharts.com charts (weekend report). Hadn’t noticed it before, and it’s very useful information!

  574. David Kafrick

    Why does it matter if an asset class is being “manipulated” or not? Your job as a trader is to win money, the price of all assets go up and down regardless of any collusion that could be happening, therefore one can always win money in any market under any condition.

  575. Gary

    All governments can do is print money. When they succumb to the temptation of free money it leads to inflation. If they succumb to the temptation of debt and if they try to service that debt by inflating the money supply it leads to the destruction of the currency.

    This is the path of every empire in history, mostly because human nature never changes. If the temptation of free money is available every country or empire in history always eventually takes a bite of the forbidden fruit.

    And once a country starts down this path they almost never get off.

  576. Redwine

    BLH

    I really don’t see anything sinister about CB gold and dollar manipulation. They are run by very booksmart people who’ve experienced a certain level of indoctrination during formal education. I believe their intentions are pure.

    My only point is that a knee jerk reaction to anything associated with GATA or any other organization can be counterproductive in attempts to understand the world of money.

    Gold is money, not just a shiny metal. Nothing works better as a wealth preservative, throughout history. That’s the reason for this gold bull same as it was in the seventies.

  577. Redwine

    DK
    “Why does it matter if an asset class is being “manipulated” or not?”

    For the same reason we care about SOS or blees numbers. It’s easier to make money if you follow the “smart money”.

    Gold is smart money.

  578. Gary

    It seems like we have been making pretty good money… despite the governments best efforts to take down the price of gold 🙂

  579. Brian

    Redwine, The smart money got in during the accumulation phase of the 1st ten years of this bull. Now that we are in the recognition phase, the late comers are jumping in. The mania phase is when the public fully engages. Hence the bigger swings you will soon see.

  580. Redwine

    Gary

    “You’re kidding yourself if you think gold will ever be used as money again.”

    Gold is money.

    “It’s way too unwieldy and to hard to divide into serviceable units. How would one go about paying for a gallon of milk with gold?”

    Ever heard of digital cash or Goldmoney? Not that I support either gold as medium of small exchange or a gold standard. Since we weren’t discussing this I’ll call it a strawman argument.

    “Gold is a store of value. It’s never going to be money again.”

    Because gold is the best store of value it IS money.

    “Copper is also a store of value. So is oil or wheat or cotton. So are diamonds, rubies and emeralds.”

    Again, off topic, I will say that gold is , by far, the world champion store of wealth. It’s simply the best for many reasons I won’t get into.

    “Is the government going to manipulate the price of every commodity because it can be used to store value?”

    Of course not. Only gold competes with fiat as a store of value in the real world. Note that central banks don’t use wheat or silver as reserves and neither do the wealthiest families.

  581. Redwine

    “It seems like we have been making pretty good money… despite the governments best efforts to take down the price of gold :)”

    Manipulating and ‘taking down’ the price are two different things.

  582. David

    The fed is manipulating gold — but it’s manipulating the price upward, not downward. The intent of QE is to lower the value of the dollar against gold in order to create inflation. And it’s working.

    BTW, as for the JPM conspiracy — not only will JPM not go bankrupt anytime soon, but they will make vast sums of money from the coming PM bubble, just as they did in the last two bubbles.

  583. Gary

    Ok as soon as the world starts using gold as money again you come let me know.

    You want to define a normal profit taking event as a take down. I just look at it as a normal occurrence in normal bull market. I use it to take profits and then re-enter at lower prices.

  584. Redwine

    Brian

    The smart money is still getting in. They know gold is the deal of the century and are gladly exchanging slips of paper for it hand over fist. They know to keep it slow…otherwise will have to pay much more.

  585. Redwine

    “Ok as soon as the world starts using gold as money again you come let me know.”

    You’re kidding right? The world is using gold as money. The central banks are using it for international exchange of huge amounts of wealth. They’re using it for wealth reserves and, yes, they’re using it to back their fiat (secretly in the open).

    If you can’t accept the fact that gold is money then we have a vastly different definition of money.

  586. basil

    Hey Gary,

    as of this weekend I’m a proud paying member of the Gary club; I think yours is only the second paid newsletter I have ever subscribed to.

    So you’re targets are 43 $ and 50 $ as I understand. 43 wouldn’t be much, considering that we just ran 5 bucks in about two weeks. At that same pace we’d be there in a month; but you’re saying that you’re going to pull the plug only at the end of the fourth quarter?

    Also, by the time we get to 43 AGQ should be around 100$ higher from now, that’ll put the price at about 270$. 320$ roughly, if Silver goes to 50$. Is my calculation right?

    Thanks

  587. Redwine

    Just because Nixon took us off the international USD/gold exchange doesn’t mean gold isn’t money. It actually has the opposite meaning, otherwise why would Nixon have cared about foreign countries emptying Fort Knox of worthless shiny metal?

  588. Gary

    red,
    Just because you keep repeating that gold is money doesn’t make it true. Gold hasn’t been used as money in ages.

    Gold is a store of value. In order to purchase groceries or fill up your tank or any of the myriad activities of life you would first have to exchange your gold for paper currency (money) before you could buy anything.

    It’s been that way for more than a century here in the US and it’s not going to change anytime soon.

  589. David Kafrick

    Redwine,

    How has your knowledge of a hypothetical manipulation in gold improved your trading results? Do you have any specific strategy that comes directly from this knowledge and that gives you an edge in trading gold?

  591. Redwine

    DK

    It’s yet to be determined. Like most I try not to let ideology get in the way of business. I’m not a gold bug but at some point, using a rising scale, I expect to be fully transitioned from paper to physical.

    My theory is that counterparty risks will continue to increase for paper gold, paper silver, derivatives, USD, bonds, equities, and everything else besides physical gold.

    The main thing holding gold down has been paper “equivalents” synthetically increasing the supply. These will probably collapse as physical surges.

    There are over 600 trillion in derivatives globally. If/when this house of cards collapses I believe pretty much all paper investments will go up in smoke.

    Mining shares are subject to massive exogenous forces, especially during panics. Governments can change the rules and in the blink of an eye our paper profits could vanish. Mine nationalizations and windfall profits taxes are just two examples of an infinite number.

    I’m still trying to figure it all out, like most of us I’m sure. I know my knowledge is very limited and appreciate Garys’ extreme intelligence along with yours and others here.

  592. Gary

    “Money is any object or record, that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context.”

    As I said try using gold to pay for goods and services nowadays.

    I guarantee if you go into Walmart you will not be able to use a 1 oz. gold coin to purchase anything.

    You would have to exchange your gold for paper currency before you could transact any exchange.

    Gold is a store of value but it hasn’t been used as money in over a century and it won’t be used as money any time in the near future. It will remain as a store of value probably for many thousands of years but it’s never going to be used as money again. Certainly not in our lifetime.

  593. Gary

    Basil,
    $43 is the target of the possible T-1 pattern on the silver chart. However silver is notoriously volatile so I would put virtually 0 faith in chart patterns for silver.

    I tend to think as soon as silver clears $40 the 1980 high of $50 is going to act like a magnate drawing silver relentlessly to it.

  594. Redwine

    Gary,

    Not to belabor the point but:

    Medium of exchange. Central Banks constantly use gold as a medium of exchange presently.

    Unit of account. USD are priced in gold. I know that’s weak but it was the ultimate goal of statists.

    Store of value. Central banks and the very wealthy know it’s the best long term store of value and has been for millennia.

    But we’re conveniently off the subject of whether or not central banks care about the dollar price of gold.

  596. Gary

    N,
    When we see gold being traded for products at Walmart then I’ll believe gold is being used as money again.

    Gold is a store of value and as such it can be hoarded or traded by central banks as Redwine points out, but it is not going to be used as a medium of exchange for common every day transactions. That is the role of money. And in modern society that role is filled by paper currencies.

  597. Redwine

    Gary,

    “When we see gold being traded for products at Walmart then I’ll believe gold is being used as money again.”

    I certainly don’t remember having to pay for anything with gold coins in the sixties and, surprise…surprise, we were on the gold standard in the sixties.

    Have you ever heard of silver or gold certificates? Sheesh.

  598. Gary

    Still not money in the sixties either. The money supply was backed by a store of value (gold) but gold was not used as money.

    You are confusing store of value to mean money. One doesn’t lead to the other.

    In order to complete virtually any transaction gold must be first converted to money.

  599. Slumdog

    I heard of the silver certificates. They were a fraud, more than there was silver in the vaults.

    Remember the big turn in? On x date, one could no longer exchange them for silver. Every certificate controlled silver worth more than the certificate face value.

    That too, btw, added silver into the private market, as did the liquidation of the govt stockpile., and the 1981-82 silver melt.

    Assuming a gradual increase in the commercial demand for silver (even with it being dropped from xrays which are now in western countries I assume digital), imo, the stocks are now depleted.

    We can always each of us look into the future. When I took my position in 2000-2002, in physical, this shortage was obvious and looming. What was weird and of note was, like with the miners a few years ago, a major disconnect, a dissonance, between reasonable consequences of greater consumption than available inventory.

    The price had to go up. It’s going up.

  601. Redwine

    “Still not money in the sixties either. The money supply was backed by a store of value (gold) but gold was not used as money.”

    The fact that paper was backed by gold meant that gold was the money and paper was representative of gold money.

    Just as digits in cyberspace or gold certificates could now represent gold as medium of exchange.

    By the way, what do you think will replace the USD after its predicted, by you, collapse?

  602. Slumdog

    RW, I was around and participating at first indirectly, when gold was re-permitted to be held by the US public, and then active again in 80-82, and now.

    Your claim that gold is the premier store of value is untrue.

    What is true is this: There is a concept in human minds that we should have some way to carry forward into the future the value of current effort. That’s “store of value”; I term it “world buying power”.

    And what is also true, for reasons I haven’t chosen to investigate, is that this store of value continues to be assigned and then reassigned.

    What is the store of value today definitely will not be the store of value tomorrow.

    Speculation to win more of the store of value, rather than to create it, leads to more seeking something solely for an increase in the value, rather than as a stable store of value.

    We’re doing that here. (Earlier this week, the sales manager a major US weaver spoke to me contemptuously about the speculators in cotton, as he is a real consumer of this “store of value”.)

    My point is that in the mind of the public, and the government managers, this store of value will continue to shift. That is the constant…the store of value shifts from asset to asset, slowly, over time. Think of them as sine waves, or breathing in and exhaling.

    Your claim that gold is premier is malarky. It was 850 in 1981. That 850 dropped to 225, a loss in nominal value by 70%+. Iterating, a loss of 70% nominally. And measured against other commodities, a loss of 90% or more, still, today.

    I’d trade all my silver right now, for its store of value buying power in 1981, which has to be $100-200, now. Plus, maybe there would be interest, at a mere 3% compounded for 30 years? So, the store of value, plus a little vig.. would be worth $200-400, today. Same logic for gold.

    Reiterating, gold won’t hold this store of value, after the parabolic panic phase. The store of value will shift yet again.

    What one n

  604. Slumdog

    Gary,

    Would you list here the value of a hypothetical portfolio over the past 49 days?

    Assume $1000 as of Jan 1. Based solely on your advice, including in-out-in losses and brokerage, and the price appreciation now, what would that $1000 be valued at today?

  605. jeff

    Slumdog

    I think Gary said that after pm play out , he will be looking for the next bull

    I hope Gary is doing this a long time ((please be careful on the cliffs !!! ) =)

  606. Redwine

    SD

    “Your claim that gold is premier is malarky. It was 850 in 1981. That 850 dropped to 225, a loss in nominal value by 70%+. Iterating, a loss of 70% nominally. And measured against other commodities, a loss of 90% or more, still, today.”

    Your comparing the exact top of a bubble s price to the lowest price afterwards. Why not compare the price from 1971, at $35, to the top at 850?

    Look, it’s not even debatable that gold isn’t the best long term store of wealth. It just is and has been for thousands of years. It’s simply the absolute best element for this purpose, bar none.

    Cotton would have to be one of the worst stores of value. The USD is mainly cotton after all.

    Personally I don’t believe in a gold standard. Gold and fiat both have their purposes and should exist unchained to one another.

  607. David Kafrick

    Excellent post, Slumdog.

    This is all just a game, where we are all trying to outguess the other, trying to anticipate what others will value more in the future and what others will value less in the future. The problem is that everyone is doing this. So no one is buying something based on how they value it, but rather on how they think the others will value it in the future. We don´t want to store value, we want whatever we have to be more valuable than it is.

  608. Jerred

    A few trading resolutions from a great trader, Joe Donahue “upsidetrader”.

    Here are some “tips” that will help:

    If your not sure and don’t have an edge, cash IS a strategy.

    If you are on a cold streak, reduce size by 70% and tighten stops for a week.

    Stocks aren’t people, they cant be trusted, an algorithm doesn’t care that you think you know the story or the chart.

    Don’t be “all in” in any name, you will blow up your account.

    It’s totally cool to change your mind right after a trade, the market changes by the minute, so should you.

    Pick one strategy and stick to it. This may take time if you are a beginner.

    You have to break a few eggs to make an omelet, so take losses but keep them very small.

    I haven’t taken someone else s idea in a long time, you have just as good a chance of being right or wrong as some other putz.

    Don’t have 15 technical indicators on your screen, that’s and EKG not a chart. Less is more.

    Don’t trade pissed off, it will crush your P&L

    Guess who wins when you “revenge” trade?

    Take partial profits on the way up and raise your stops.

    When you have three losing trades in a row, take a walk around the block. You may get an epiphany, at the very least it’s therapeutic.

    Realize early that the market will always be smarter than you.

  609. Redwine

    “We don´t want to store value, we want whatever we have to be more valuable than it is.”

    Yes, without risk. Who was it that said “I’m less interested in the return on my money than I am with the return of my money.”?

  610. Gary

    Slum,
    That’s a tough one. It all depends on percentage one has invested. Whether or not they were leveraged. What their exact entry and exit points were, etc.

    My portfolio and the portfolio of several friends that I manage are up between 10-20% from the top in January depending on how aggressive they want me to be.

  611. ALEX

    Holy cow!

    Dave Morgan, Clive Maund, Adam Hamilton, The Adens , and quite a few more (That I’ve respected in the past..Clive is on and off,’iffy’) all calling for readers to go to cash for a sizable pull back in P.M.’s!

    This is going to be one of those ‘hand holding’ moments for the next couple days or weeks.

    Gary

    I have a couple of friends that ask my advice..and ALWAYS panic during corrections –it can keep me sharp, but also can cause me to be less focused on my more important things,and even certain convictions. Its a hand-holding session 🙁
    I feel bad for you at times, because I know if you were sailing alone at any time, you could traverse through this bull and be happy with all your changes and decisions (necessary adaptations IF needed) minor or major corrections.
    But at times like this…I would pull my hair out if I were you, with all the differing opinions written (plan or no plan, you will be the dart board)…Best Wishes!

  613. Gary

    That’s why I don’t bother reading what others are saying:)

    We have our stop that will tell us if we are wrong. Other than that I think the dollar will continue down into the three year cycle low and that will drive the last leg of this C-wave.

    I’ll leave the top picking to others.

  617. Slumdog

    DK: “So no one is buying something based on how they value it, but rather on how they think the others will value it in the future. We don´t want to store value, we want whatever we have to be more valuable than it is.”

    What I’ve observed over the past year in textile manufacturing is that for the mid-sized and small cmmmercial consumers, this intense game, speculation, was not recognized for its ability to shift the store of value so significantly. Just like traders use stops, the consumers should have hedged their bets. I beat them with a stick and took positions myself via future-delivery orders from them. They discounted me. And the major suppliers 6 months ago refused to accept small or even midsized orders if not for immediate delivery; so what’s happened is a current tightness of supply to make the yarn to make the textiles! So, the price is being bid up by the consumers who must receive the physical to operate their businesses.

    We can all ponder how this ends. Factory layoffs? Major inflation being pushed on to the buyers (on to me, the wholesale and retail vendor…I’m vertical). Where I can, I pass it on. Where I can’t, as in next year, as I’m not hedged that far out, it’s a game of chicken, with me waiting for the next guy to raise his prices first and fully. One vendor, Gildan, changed its fabric blend, adding much more polyester. But in the end, the manufacturer holdouts, like me, will pass this on, later, about 1 year from now. The Gildans/Vanity Fairs are doing it now, prices rising monthly at the distributor level. We’re acting as the bellows. At some point, we’ll blow out those price rises.

  618. Redwine

    Even though I don’t have a plan as to timing, at this point my general plan is to slowly, over a period of a few years, transition into physical. I expect physical to far outperform paper in the later phases of the bull if for no other reason than people will become increasingly risk averse. As more and more institutions fail people should have less and less confidence in counter parties.

    So far I’ve decided to keep the physicals away from home and have avoided numismatic and collectible type bullion. No safe deposit boxes.

    My main concern is where the lowest risk vaults are located. ViaMat, Brinks in Utah, Switzerland, London, New York, Perth Mint, GoldMoney.com, and all the others.

    I know Paulson trusts GLD but who cares? This guy would be a pennyless failure if the USG hadn’t bailed out AIG. He’s a just lucky schmuck.

  619. Slumdog

    Thx Gary. Those %’s are against total portfolio? Or are those against a set amount of dollars at risk?

    I’m just seeking clarification.

    What is a realistic percentage return one can expect in this PM rise, assuming leverage that you consider reasonable/rational, between 130 and 150% leverage? (if one has 100, buying AGQ creates 100% leverage; and if on margin, then it’s 130%. Is this accurately stating what you mean by leverage?)

    If one invests 1000 at this point, 31-33, one can try to get 150-200%, if leveraged above, when silver reaches 50?

    Is this the ballpark goal on this momentary rise?

  621. Slumdog

    RW, don’t forget to tell somebody, probably in writing, where you got what you got. It’s a perpetual problem when one has physical. Envelope at an attorney’s or close friend’s as well as in spouse’s hands, off the property? Don’t forget the key!

  622. Gary

    Bob,
    That’s always a possibility but so far the current intermediate dollar cycle has topped in 4 weeks and the last two daily cycles have been left translated. All signs that the dollar is in severe trouble and that the decline into the three year cycle low has begun.

  623. Slumdog

    “ALEX said…

    Holy cow!

    Dave Morgan, Clive Maund, Adam Hamilton, The Adens , and quite a few more (That I’ve respected in the past..Clive is on and off,’iffy’) all calling for readers to go to cash for a sizable pull back in P.M.’s!”

    Alex, what will the subscribers to those folks and their camp followers do when/if the PM’s continue to rise in March?

    We all know, they’re the powderkeg that are ready to rush in and that will drive the price dramatically.

    So, might we gots’d more of those “advisors” who will help this along? Cramer?

    Thx for mentioning this. Instead of handholding, this is the best news I’ve heard. They’re sidelining players, and still PM’s are rising.

    If gold stays “calm” until Feb 28 close, we will, not might, will see a rocket take off if it then exceeds the 142x-3x high of Dec. 5 more trading days.

    FYI, I’m talking about the monthly chart which means it doesn’t need to rocket out on 3-1, but it means that gold will rocket at least to 1530-50. And then, The Great Doubling, 2000 will become the magnet.

  625. Gary

    Slum,
    My expectation is for silver to reach or almost reach $50 during this final C-wave advance.

    That would equate to an AGQ price of about $350 to $400.

    I doubt one will be able to significantly outperform AGQ so one could just base a guess off of how large a position they are willing to hold in AGQ and then subtract a little bit for capital invested in SIL, GDXJ and SLW as they would be expected to underperform a bit.

  626. Redwine

    Can anyone give me advice on good books…sources covering futures trading? I like the idea of reducing company and industry specific risk and bettering AGQ risk/reward ratio. Also sounds like short term trading tax advantages. Thanks.

  627. ALEX

    Gary

    At this time I believe that to be the case too ( with minor pullbacks or even a few strong intra day pullbacks).

    I guess what I was meaning was that your readers on here read a lot of ‘kitco’ and ‘safehaven’ articles too. I do too, for the viewpoints and some I try to mentally prove wrong or debate for keeping myself sharp, or maybe learn from some of them. I Just that you’ll be bombarded again with concerns if we get those articles and a pullback simultaneously. Some of the last comments were a bit harsh and sharp- i.m.o. I know you have the plan…but the last couple times the plan worked, some sounded rather upset that they had to use the plan, etc.

    Well, Maybe thats what keeps you sharp. Like your answer (to my last post) about the dollars 3 yr low and so on.

    so again, best wishes ( but I know you’ll be fine)

  629. Gary

    GLDX seems to do about the same percentage wise as GDX.

    It’s probably going to be pretty tough to outperform AGQ, SIL and SLW during this run.

  630. ALEX

    SLUMDOG

    I am in the same camp as you there. At this point I think we could get a small pull back, but when it starts up and gets bought…they may all change their view (Clive changes his charts every 2 to 3 wks 🙂 Then they all buy.

    That would be typical and appreciated by the rest of us 🙂

  632. Gary

    Seems like everyone is expecting a pullback based more or less on the powerful move we saw in silver last week.

    What everyone is overlooking is that the dollar is just now starting it’s run down into the next daily cycle low.

    It looks like what no one is expecting is for another week of strong gains.

    I’ll just sit tight myself. If the market corrects I’ll decide whether I want to add more exposure, if not I’m positioned to profit from further upside.

  635. Slumdog

    Sideways, neutral at this point, favors Gary’s position, imo.

    Those predicting a retracement down, like MLMT, really have the burden of proof for the event to materialilze. Or do they have that responsibility?

    MLMT believes it will be on Tuesday.

    Those predicting higher prices are just camped out, in Gary’s camp, waiting.

    External “justification” triggers in the fundamentals are being strewn like flower petals at a wedding. The heart of what drove gold many times before, the MidEast, is the movie of the week. Any who are rational who watch the mobs in the street (there’s a new LiveLeak.com video of a screaming mob of men in Tunisia on Friday in front of a synagogue, shouting for Mohammedan revenge against the Jews… this being the new “freedom” they’ve won for themselves). As Western rational reason has evaded the Street in the dictator-run ME, the wealthy have no choice but to move into gold as what freedom is bringing is not Western-style democracy, but zealotry and anger, sadly not against their own lack of reason.

    And the dollar cycle, and the still large open contracts for delivery of silver which I think must settle on Monday next, and the gaggle of advisors who are warning off their flocks from the long position, plus, plus, plus.

    What a wonderful witches brew! The PM’s love this kind’a stuff.

    Add the salt of China actions, and the pepper of Russia, and the mysterious spices of so many of the rest of the countries, and we’re gonna make a fantastic goulash.

    The weight of self-serving countries, and now seemingly unstoppable irrational zealotry, now focused at the ME, will be the underlying supports to the rises in the PM’s.

    Imagine the PM is like an oil skim on boiling water. The bigger the boils, the higher the PM’s.

    It’s the backside of this parabola, the D Wave Gary references for we who are unconscious, is the thing to watch.

    The rise in silver and the non-rise in gold this week are nowhere near enough to warrant the D wave at this time.

    I’m here because Gary’s for me a surprisingly stable, very knowledgable captain of his own ship. He did scare me with the in-out-in recently, but I am now absorbing his belief that the losses were inconsequential compared to the gains now being made.

    For some reason of his own, Gary’s willing to share, and in turn, he’s being rewarded reasonably by the subscribers. It’s the right model, a unique model imo, as he’s engaged and teaching, as well. I saw that model in academia, where very successful people return to teach what they understand.

    What’s fascinating is how many who are enrolled are themselves vetting the teacher, repeatedly.

  640. mamaloshen

    Slumdog,

    That’s one of the finest posts I’ve read, and beautifully phrased. Are you a professional author?

    I agree with you about the Middle East. So far, the equity markets seem to be in denial, but it is not lost on gold and silver. Perhaps the increasingly sluggish rise in the S&P Gary noted in the weekend report may end up with a break to the downside and a resumption of the traditional role of gold moving opposite to equity markets.

    I’ve read about 20 market comments and newsletters over the weekend. While many see $50 silver later this year, none of them is calling for that in the next month or two.

    The most optimistic I read thinks it’s “possible” silver could spike up another $8-$10 before a $15-$20 correction (and buying opportunity). He suggested buying SLV put options as a hedge. Many others see a decline beginning almost immediately.

    I wonder how many are going to sit on the sidelines aghast as silver is drawn like a “magnet” to that round $50 number. In fact, it wouldn’t surprise me if silver traded over $50 for a day or two as a “hook” to lure in small retail speculators just prior to the D wave.

    I, too, got caught offside by the recent in-and-out’s, but gold exhibited an unusual and difficult pattern–I’ve never seen that kind of triple top, and as you say, losses are inconsequential compared to the profits to come.

    I’m surprised, too, by the challenging by some here. And need for constant reassurance by others. I admire Gary for his patience–I couldn’t do it.

  641. Redwine

    Gary

    Any thoughts on what will replace the USD after it collapses? Do you believe gold will be out of the equation entirely? Nobody I know of is proposing gold coins as the only medium of exchange, by the way, so you can forget that tired argument.

  642. Gary

    Red,
    No clue. I suppose the dollar will just be retired and a new currency issued. That’s usually the path taken once a country is forced by the market to actually default on it’s debt once they destroy their currency.

  648. Gary

    The act of trying to monetize a debt spiral is what destroys a currency.

    The only true and sustainable way out is to default. Unfortunately when the United States of America finally defaults on trillions and trillions of dollars of debt it’s going to set in motion a global deflationary depression much worse than what happened in the 30’s.

  650. Redwine

    jeff

    You mean remonetize silver? I wouldn’t want to use an industrial metal that’s in a supply shortage and has drastic supply/demand shifts.

  651. Gary

    Most of the time paper money works wonderfully. Unfortunately politicians always eventually succumb to the temptation to try to get something for nothing.

    Once a country starts down that path it’s very hard to get off. Debt spirals out of control until eventually the end game is arrived at and a choice is made as to whether to default or hyperinflate.

  653. Redwine

    “Unfortunately when the United States of America finally defaults on trillions and trillions of dollars of debt it’s going to set in motion a global deflationary depression much worse than what happened in the 30’s.”

    Deflationary in terms of gold, yes. Gold could end up not bidding for any amount of paper. It seems inevitable that the debt will be erased by USD debasement. Why refuse to pay your debt when you can legally counterfeit money?

    Could end up heating our homes with $100,000,000.00 bills.

  656. noam

    Gary,

    With AGQ we are already leveraged. Does one need to leverage additionally should we want to be more aggressive with our strategy? Or, would one simply be able to allocate a larger % of their portfolio to AGQ since its already providing leverage innately?

  657. Gary

    AGQ isn’t actually leverage. It’s just a very volatile asset. You can take a 100% position in AGQ and never have to worry about getting a margin call.

    Technically I wasn’t correct when I said Bam was leveraging on top of leverage by purchasing AGQ options.

    When I say leverage I mean either borrowing from your broker on margin to buy more shares than you could normally control or buying options or futures and controlling more shares or more oz. than you could with an outright purchase of the shares or oz.

  658. Gary

    FWIW you can achieve the same kind of volatile moves as AGQ by purchasing individual juniors. Some of them will move hundreds of percent during this final C-wave but they aren’t technically leverage.

  663. pimaCanyon

    I take a look at this blog on a regular basis, and his latest entry is about PM’s.

    http://animalspiritforecasts.blogspot.com/

    The blog owner has come up with a calculation that he refers to as I1 for stocks and PM1 for precious metals. In the chart PM1 is the blue line. As you can see from past PM1 versus past price history it doesn’t always track exactly, but it often comes close. (PM1 doesn’t give price, just direction and maybe the severity of the move.)

    I’m posting this because his PM1 is gradually rising into late April/early May which corresponds to Gary’s rough timing for this next leg (and last leg) in the C wave.

    Note that after that top in PM1, it tanks into June. Gary’s D wave?

    Also note that in the past PM1 turned down before gold price turned, so the timing on PM1 is not likely to nail the day, or even exact week, of the top.

  664. mamaloshen

    Agree about Maund. Another BB I belonged to, we used him as a contrary indicator (except it wasn’t perfect, he was right about 1 in 6 times).

    He loves to draw those dome patterns. Gold has to go up by only 8 bucks or so to negate it. You could draw a dome around the June-July action last year, too, and it came in at $1200. Gold broke right through it and ran to $1400+.

    A lot of newsletter writers naturally want to add subscriptions and the strategy of some is to scare the hell out of people to get them. Look at Prechter, he had been calling for gold to go to $400 for years. Still claims the Dow will drop to 1000.

  665. David Kafrick

    Gary,

    You are wrong about AGQ. It is leverage. You will not get a margin call simply because AGQ adjusts its leverage on a daily basis. If you leverage yourself on the futures market but always adjust your position you will also not get a margin call.

  666. Gary

    It is a very volatile asset that is designed to double the percentage moves in silver but then like I said so will some juniors. Does that mean they are leverage?

    The bottom line is you won’t get a margin call with AGQ even if you buy with 100% of your account but you will have to weather big moves in either direction. So everyone will have to decide how much of this is appropriate for their portfolio.

    Just do the calculation and figure out what your loss would be if the HUI tags 518 and then only buy as much as you can handle if that event does happen.

  667. MLMT

    I was talking about gold 1396 for a while. However, having learnt my lesson when I missed gold short by a few ticks when it crapped out from 1400+, I decided to use a range of 1388-1396. I was looking for gold close of 1388 or higher… Yeah in Globex, gold is higher… but come Tuesday cash close… I expect something very different.

    Honestly speaking, the way dollar is tanking DOES bother me… but I will stick to my plan.. Entered big short positions in /GC and GDX and small speculative short in Silver (via SLV puts) at EOD Friday.

    I am not looking for a very big down move… not at least right now… I suspect 1310 will more or less hold for now… We need to see the nature of the down move to decide how far down this will go…

    Two possibilities

    1. Final shake out for weak bulls coming now with breach of 1300 before we go into orbit as far as PMs are concerned (terminal crash of USD)

    2. We indeed see a more bigger down move… What will be the catalyst – not sure…

    At this point higher probability scenario is (1).

  669. noam

    Gary,

    Thanks. My calculation shows that’s about a 6.5% drop, is that correct?

    In regards to those two juniors you mentioned, GPL and USA.v, would you expect AGQ to outperform or is it probable that these juniors may?

    If not, all things be equal would it be advisable to just pick up more AGQ and ride – OR – better to diversify those funds even if it be into those juniors?

    TIA.

  670. MLMT

    Burrito Dude,

    I am sharing what I see right now…. I will adjust my view based on what I see.. I have NO ISSUES accept if and when I am wrong.

    You can’t come to me with what I said 3 months ago… As market changes, so does our view. Only fools hold onto their view of months and years ago even when things are changing.

  671. Gary

    Noam,
    I just pulled those two names out of the air as examples.

    If one spreads risk across a basket of juniors I doubt they will be able to outperform AGQ. If someone is willing to accept huge risk and concentrate in one or two juniors…and they get lucky they may outperform AGQ, maybe even by a huge margin. However the risk is gigantic concentrating in one or two highly speculative juniors. And what are the odds you catch one of the very few big movers? Not good.

    All in all very few people will be able to outperform a simple strategy of holding AGQ with what are exposure you are comfortable with.

  672. Shalom Bernanke

    MLMT cannot see the forest for the trees. He still can’t understand that nobody cares about a 2 day pullback. Not only do we have fat profits, but we’d welcome the opportunity to buy more. Keep guessing which direction the next 3% will go, while the rest of us get paid.

  673. David Kafrick

    Gary,

    Do you think you are outperforming SLV by holding AGQ? You are just adding risk and return. On a risk-adjusted basis, both of these assets are exactly the same.

  674. Pseudopersona

    Gary,

    So, if eventually the state of our currency gets to the point where the government just scraps it and starts over as you say, where is your wealth going to be sitting at that point? Do you plan to have moved to physical by then? I suppose its pointless to own shares of silver and silver miners worth millions of dollars if millions of dollars won’t be enough to buy food…

  675. Gary

    David,
    Yes AGQ is just a way to achieve a greater return on invested capital during what I believe will be the final leg up in this C-wave.

  676. Gary

    P,
    If it becomes apparent the US is going to hyperinflate I will have already left the country by then 🙂

    New Zealand or Australia are both appealing and both have excellent climbing opportunities.

  679. Gary

    Rob,
    I really couldn’t say as I’ve never experienced a hyperinflation.

    Let’s just hope that we are smart enough to get Ben out of office and someone in who can understand the concept of unintended consequences and stop this before it goes beyond the point of no return.

  680. pimaCanyon

    MLMT,

    I appreciate your 666 post. You gave possible scenarios and also stated that neither might not happen. What would be even better is if you gave some reasons as to why you think we’re in for a move down here.

    I think what people here have reacted to regarding your posts have been the way what you’re saying comes across as certainty (rather than probability) and the way most of your posts say nothing about why you’re expecting the market to move the way you’re stating it will.

    What are your stops on your short positions (or to put it another way, what price will gold and miners have to trade at in order to convince you that your scenario is off the table)?

  682. joe-il

    Well it looks like silver is well bid tonight. So I am guessing this leg up may/will be extreme/parabolic due to the collapse of the $usd (3yr low) and the inflation it drives compared to the first leg up ?

  684. Shalom Bernanke

    pima,

    I don’t really care about MLMT’s certainty in his predictions as he might even be right. I tend to think he won’t be, but that’s not the jist of my observation.

    The fact he is only betting (or suggesting) the next few percent lower just proves he’s focused on something entirely different than the rest of us. I don’t care one iota if metals drop from here because I’m a buyer.

  686. vuvvy

    I have to say that MLMT is an absolute genius to call for a correction after gold has been up now for 6 straight days,including today and has hit the top of it’s upchannel from the low at 1308. That’s a ballsy call(extreme sarcasm).

  688. jeff

    silver gapped up 16 cents on the futures open. i looked back to jan 6 and could not look back any futher.. normal is jump up but not gap up. i hear yall talking about gaps being filled. Would this quallify?

  690. Slumdog

    Gary: “New Zealand or Australia are both appealing and both have excellent climbing opportunities.”

    Ah, but burritos will be made using kangaroo in one place and mutton in the other. The tortilla chips will be beer-battered, and there will be no limes for your cervezas.

    Are you prepared?

  691. Wes

    I want to write a few words about why I think PM’s are increasing in price. Please note that in light of what I’m observing here, it really doesn’t matter whether inflation soars or the dollar collapses. Gold will just keep increasing in price.

    Back about the turn of the century (this one), the gold industry faced a marketing problem that split them severely. Some gold miners thought that increased demand through jewelry (the traditional way) was the answer. These miners had heavily sold forward contracts in the market and were not actually looking for higher prices.

    But a more forward thinking group (one of the more prominent and outspoken was Gold Fields) advocated marketing gold directly to investors. This group pointed out that traditionally the weakest holders of gold were central banks, and the very strongest holders were individuals who bought gold for their own account!

    But the problem was that very few people wanted to haggle with coin dealers to purchase gold. In short, it was just too hard to buy. And few trusted gold miners stock for obvious reasons.

    But these miners knew one thing. If they could find a way to market physical gold directly to investors, and the price started to climb, this alone would create more additional demand than untold advertising dollars could ever create.

    So someone suggested that gold could be sold as a stock, where each share of stock represented a physical quantity of gold stored in a vault. This idea led to GLD years later in 2005.

    But with the very rumor of this idea, the current gold bull market was born.

    In 2001 Adam Hamilton wrote these words that have proved all too true:

    “Wake up and seize your destiny, gold industry! You can control your own fate! Give the citizens of the world an easy way to buy small quantities of gold and watch global gold investment demand and the gold price soar!”

    In 1999, the Fed flooded the market with excess liquidity fearing Y2K, and the price of gold yawned. With the advent of the gold and silver ETF’s, that sort of thing cannot happen anymore.

    Where is gold going ? It’s going into about 5% of the average investors account worldwide from less than one percent today. I suspect that will ultimately be about the recommended level for PM’s in every portfolio. And at today’s gold prices, there isn’t anywhere like enough gold in the entire world to do that!

  693. Gary

    Selling because one is looking for a gap fill is one of the easiest ways to lose one’s position.

    If the gap is going to fill just ride it out because the penalty for losing ones position could cause you to miss a much bigger move.

    Besides unless the gap fills immediately virtually everyone will freak out and buy back higher if the gap starts to widen. Then if the gap fills you have an even larger draw down.

  695. makutaku

    “What happens to personal debt if the US dollar is replaced?”

    After living through 6 different currencies in Brazil:

    Cruzeiro Novo Cr$ 1967–1986
    Cruzado Cz$ 1986–1989
    Cruzado Novo NCz$ 1989–1990 Cruzeiro Cr$ 1990–1993
    Cruzeiro Real CR$ 1993–1994
    and Real R$ 1994–present

    your personal debt is converted to the new currency according to an official exchange rate table. I don’t know more details than that. I remember though, how important it is, not get sucked into inflation adjusted debt.

    (There were two more other currencies before I was born!)

  696. jeff

    gary i will not be doing any tradeing. i have one more contract to put on and i will try to do that on the next pullback. that will put me at 120%

  697. Slumdog

    Breakaway gaps fill within 1 to 5 periods. So far, the 1 min is history. The 5 is smoked, too.

    Gary is right; the longer the gap remains open, the more anxiety, especially if not filled within 3 periods.

    The MLMT’s of the world are faced now with their revealing where their come to jesus epiphany really is.

    Reference the list of who’s trapped and why, posted by me earlier in this thread.

    The fundamentals? Anyone care to comment on the joke of the G20 meeting failure? Or the Libyan turkey shoot? Or or or?

  699. jeff

    gary . i only learned of the gap trade from this blog. never heard of it before. i dont think the futures get to many gaps

    Movax.

    ok i see that one

  700. jeff

    i told my broker i was going old turkey and he very nicely said that would be a good idea. nice guy, he just isnt going to make much off of me now

  702. basil

    Gary,

    you write “I’ll just sit tight myself. If the market corrects I’ll decide whether I want to add more exposure”.
    You are, I believe, at 130%. What would be your max exposure?

  703. jeff

    gary

    My wife has her 401k and it has almost recovered. Now its going to get clobbered again. How could i Hedge it for her.
    no she is not going to go with pm
    so can i short something along the way to offset it?

  704. pimaCanyon

    SB,

    MLMT’s recent post has a completely different tone than the ones he made a few days ago. The earlier ones were short and were calling for a huge drop to 1150 or so, as well as stating 1400 would never be seen again.

    You’re right that this new post really doesn’t concern those of us who are in this for more than a few percentage points, although if he turns out to be right about a drop to 1308, that would be uncomfortable while it lasted.

    But as we speak, silver is above $33! And gold at 1394, so a drop to 1308 seems like a bit of a long shot at this point, eh?

  705. jeff

    funny artical about john naddler, the head of kitco. for the last 10 years, the artical said, if you double his prediction for the price of gold for the end of the year he was within 30 dollars. he said 400 it would be 800 and so forth.. so for this year he is saying 1150. i guess gold will be 2300.. ya baby

  707. n1tro

    Gary,

    You have stated before you don’t believe in physical metals but you can imagine a scenario of the US being in an era of hyperinflation. Would it be safe to say you would be picking up some physical during the D wave? Because if you are going to take off to Australia, what would you carry with you? All your worthless USD??

  710. james r

    Gold and silver are rising. We will see very shortly if MLMT is correct.

    I think he is wrong based on gold sentiment and the COT being at there lowest since August of last year.

    It seems those who are bearish are only looking at charts and NOT fundamentals.

    James

  711. jabalong

    I’m a Canuck abroad in Asia and a big fan of New Zealand as a future destination. It’s nice and compact, with beautiful geography and friendly people. And don’t quote me on it, but I’ve heard there’s some sort of four-year tax holiday on money that’s brought in there by immigrants (and maybe returning Kiwi emigres).

  713. Beanie

    The question still remains: Where will pm’s be trading when the SPX is trading at 2800?

    Then we will know what the pm trade was really based on.

    Fear.

    Fear and Optimism don’t go hand in hand.

  714. james r

    This is the week fund managers and investors will chase the price of gold and silver as the dollar tanks and people realize that gold is not going to fall back to 1300.

  716. Chicken Burrito

    Beanie-

    You’re a jackass. Several times you have posted that and several times you have been solidly rebuffed. PMs starting trading higher in 2001 once the dollar trashing went into overdrive. At the absolute height of total fear in the markets in 2008, gold was getting rocked (paper price). There’s is absolutely no fear in the markets these days and even during the fear sell off last spring/summer we saw gold trade higher but they sell off during the summer. This is all about the USD and other fiat currencies around the world being trashed one by one.

    Besides, we are all mostly long silver here–an industrial/monetary metal that is way under valued and impacted by economic growth, money growth, supply/demand imbalances, etc. SLW is up 20%+ since many here bought it last month. I think we are in a pretty good intermediate and long term trade here, thanks.

  721. Slumdog

    Trader Dan 2-20 5:20 pm pdst
    I prefer to … see how the market handles resistance levels. Silver this week has taken them out as if they were non-existent. That tells me that some large short is in serious trouble and that buying momentum is extremely strong. If silver can take out the region near $33.25-$33.50 I am expecting it to then make a sharp push towards $35. If it takes out $35, my goodness, this thing is going to get ugly for the shorts!”

  722. Chicken Burrito

    http://jessescrossroadscafe.blogspot.com/2011/02/silver-bankers-sitting-on-big.html

    My question is simple. What are bankers like J.P. Morgan and HSBC doing playing in such size in this market? What is the economic and productive benefit? Perhaps there is a good answer. The taxpaying public certainly deserves to know. The CFTC says they have looked into this, but the detailed results of their findings remain less than forthcoming.

    IF this is legitimate hedging for producers then all well and good, but then there is no justification for secrecy. If these are trading positions held by the bank, or by the bank as agent for speculators, then there may be a greater reason for secrecy, but the magnitude of the shorts is far out of bounds in size. Ten years of production is not a short position, but the entire market and then some.

  724. Slumdog

    This CSF however, when reflecting on this, is a valid reason why the miners are lagging. They’re short and they need to ante up more margin. So, they, the producers, are panicking because they need to pony up the silver, not JPM!

  725. Slumdog

    That idea came from “Stock” at Trader Dan’s site. A stunning bit of thinking. What a fundamental reason that really does drive markets.

  727. Slumdog

    The silver market is funny to watch in the access session.

    at 3312, the bid was 2 at 11.50 and the ask was 167 at 12.

    surrounding this were bids of 1’s 2’s 5’s, and a few 7’s

    The big boys have just tried to cap the market and they did frighten away the rally., it now being 09.50

  729. Beanie

    Chicken Burrito,

    Remember, the silver trade is based on the belief that the Fed will print us into oblivion. It is a fear trade. What if the fed decides it stocks printing tomorrow and starts raising interest rates? What if the government decides it wants to confiscate silver to slow down its speculative excess.

    Gary’s reasoning is basically the market goes down and pm’s zoom through the roof. I think he realizes pm’s and the market can’t rise together and that eventually one of the two has to give. Since he is a believer of pm’s, he believes the market is going to plunge and soon.

    What if Gary is wrong? What if the market continues to rise, on its way to SPX 2,800? If Gary’s thesis is that precious metals go higher and stock market plunges, what if the stock market moves much higher? Isn’t it logical, then, that pm’s must plunge based on the same reasoning/thesis?

  730. Slumdog

    Is this unusual that now in the nite session with trading in the 1’s and 5’s, there’s an ask at 1312, now 5 pts above the market of 06.5, of 162 contracts?

    There’s an elephant trying to unload there. I don’t get it. They want to be seen, as the big bad boys. If they’re signaling, they’re trying to scare the longs. Instead of driving the price down by selling, they’re waiving a flag.

  732. Jayhawk

    Slum-

    I just read that Norcini blog. SLW not being a miner would not be hedging like the producers, correct? I still would think that if the comment were true about the producers, SLW would be lagging as well. SLW is looking tremendous.

  733. mylifemytrade

    AH action esp on a sunday night when monday is a holiday means nothing.

    Go see what happened to NQ on Steven Jobs on Monday morning news… And see where NQ closed a day later….

    This is just sucker action… nothing more…

  734. mylifemytrade

    I am not afraid to be wrong…. I know my risk/reward… 1396 breached in NYSE hours…. means I am wrong… Overnight action like this is bullshit and nothing more…

  738. RA

    MLMT,

    You said a number of times you are not afraid to be wrong. Once you also said “so I am wrong, what do you want me to do?”

    I think you are missing the point.

    No harm being wrong and admitting it. But what we would like you to do is…

    1. ANALYSIS. ANALYSIS. ANALYSIS. How many times must we say this? Gary coached us in detail on his analysis. We tooks months to fully appreciate his approach. Those of us who are fortunate enough to follow him at least over the past few months (or years) have experienced the success of his methods. And you are trying to convince us otherwise with one-liners? Like “Watch out at 1396!”

    2. Nothing is fullproof though and that is why we have stops. Gary laid out what the stops are before hand in case he is wrong. As for you, you prognosticate as though you were 100% certain. You do not tell us what to look for in case you are wrong. In fact you sometimes give predictions like you will never be wrong. YOu only admit to your mistakes after the fact – sometimes way after. If we were to follow you, we might lose big time before you posted that you were wrong.

    DG does not agree with Gary all the time but he states his stops up front. That is useful information even if you do not agree with his trading style.

    In sum, I (and maybe some others) won’t bother with your posts until you address those points. But if you feel an urge to post – just go ahead. Don’t be surprised if no one bothers.

  741. Arun

    MLMT

    You have been asked umpteen times why gold will fail at 1396. Not once, you have outlined the reasons. As RA mentioned, only 1-liners. A contrary idea is welcome with reasons. Its ANNOYING otherwise.

  743. trond56

    Ok, so the document that the judge ordered released was ‘gata-crap’ because the transcripts in it doesn’t correspond to one’s point of view. “this is the conclusion on which i draw my facts”. (Stevenson)

  744. Gary

    Beanie,
    If the Fed does quit printing the stock market will collapse.

    We saw that happen this summer.

    Not to mention we’ve seen gold rise during the bear market of 2000-2002. We’ve seen it rise during the cyclical bull market from 2002-2007.

    We’ve seen it rise from Oct. 07 to March 08 when the stock market had already entered another bear market.

    We saw gold bottom months before the stock market and by the time the stock market bottomed gold was already back near all time highs.

    Gold has gone up when the stock market has gone down and it has gone up when stocks have risen. It’s called a secular bull market.

    Sheesh, At least look at a long term chart before you make ridiculous statements like gold has to trade inversely of stocks.

  745. Poly

    It’s not “overnight” when it trades around the world and around the clock!

    Why you guys keep emotionally reacting to the trolls is beyond me.

  746. David Kafrick

    The fact that the rest of the world is working doesn´t mean much. The US is still responsible for much of the trading volume in futures market, and you also have to consider the fact that the rest of the world takes into account the US holliday and therefore the big players are not initiating big positions today.

    Not that I agree with MLMT´s calls, but he is right to say that you shouldn´t put much emphasis in yesterday´s and today´s action.

  747. Poly

    Ordinarily I would agree, but the “US futures” markets are open, this isn’t just overseas markets!
    The type of move you’re seeing this morning is very far from normal US equity holiday trading. It’s plain to see that traders are not going to wait, the confirmation is clear, IMO.

  749. Shalom Bernanke

    I don’t think anybody is “putting too much emphasis” on today’s action. This is just one day in a several month trade.

    Besides, try buying silver right now. You’ll pay roughly a buck more than Friday. The price is the price, and it’s going up.

  750. jabalong

    I agree, this action certainly doesn’t feel like bullshit. As someone based in Asia, I’m used to relatively quiet days for the PMs when North America is closed. But today’s action here is very impressive. I imagine it has to do with traders in other parts of the world reacting to silver’s big move on Friday in US trading. And in turn, I expect North American action to have some sizzle tomorrow following silver’s big move up here. It really is a global market for the PMs.

  751. Shalom Bernanke

    “Hammy in the UK thinks there will be a pullback when the UK market closes.”

    So what’s he doing with that information? I have no idea what will happen after the UK closes, and it’s likely Hammy doesn’t, either.

  752. Slumdog

    Hey, it’s the overnite market. It’s nearly 5 am, dark outside, and cold. The US market, like it or not, now at least 1/2 the time, that 4%, dictates the game. Or didn’t you notice that most of the time the markets after hours, oops, after the US trading window, as in conscious, awake peeps looking at the US market, have thin volumes?

    When these facts change, then we can look at it again.

  753. Slumdog

    MLMT, is this trading here all BS, too? It’s 1401.4 now and was 1403. That’s only 5 or 6 above your predicted high, or 13 to 15 above the lower number in your band.

    At what number do you think there’s a loss?

    As Hammy would say, “It’s Mister Market that’s in charge.” These are real numbers, and if you’re short, your will against the market, to be right? Go read Trader Dan’s posting about this, posted yesterday, my time.

  754. Poly

    Yeah but 5am “is the other side of the world” 🙂 EST is all that matters.

    Well the US market is open today, so we shall see the action in 15 minutes.

  755. Slumdog

    BB, Hammy’s record in the past year is either 5 or 6 X on his positions.
    He’s like water on a hot skillet, and he’s crazily diligent in his examining of all opinions.

    Gary, Hammy, QuadG, and a few other less committed to be present in the public eye consistently are the current, near term, future callers.

    Your logic is fine for those who like it. Mine is large physical postion, but never large enough, which is parked as in never moves, and high anxiety over tiny positions relative to NAV traded often. Old Turkey when in the market is way difficult for me, but not for you.

  756. Shalom Bernanke

    Again I ask, what’s Hammy doing with his information?

    Who cares about volume? It’s far over-rated. Sure, it’s nice to have “confirmation”, but often big volume signals the end of a move. Makes sense when you consider that everybody has already placed their bets.

    Price is all I care about. If somebody wanted to make a volume comparison, they should compare typical after-hours to todays, not regular daily volume to now. Apples to apples, as they say.

  758. Slumdog

    BB: “what’s Hammy doing with his information?”

    He’s long til 37 which he conjectures will be tomorrow or through the end of this month. He’s looking at contracts open for delivery and has been for weeks. That’s his most important fact, right now. He’s very ecclectic, everywhere, like the best type of an ADHD personality, brilliant and hugely aware.

    Gary’s much more stable, calm and committed. Hammy is out for himself and other independently thinking traders whose ideas he welcomed in the past, but for the moment, those he terms as “haters” clearly influence his demeanor, so he privatized his blog. Gary has a strong sense of commitment to his subs and he’s rooted. Hammy is great if one likes that style of thought process.

    My own serious, real money in size at risk for me is dependent on the price of gold over the next 5 days, US time. So far, so good.

  760. Redwine

    $1,645,000,000,000.00 is the projected U.S. deficit for 2011, revised upward from $1,400,000,000,000.00, revised upward from $1,270,000,000,000.00 in December.

    It appears that the Federal Reserve will need to continue monetizing the debt endlessly. Not doing so would guarantee very high interest charges, collapsing the US Government. QE-2 will be extended in June.

  761. Redwine

    As inflation picks up USG spending will skyrocket, revenue will sink, increasing the deficit by leaps and bounds, increasing the mandatory monetization of the debt by leaps and bounds.

    This is what leads to hyperinflation down the road, government spending/debt that is. It’s obviously on the cusp of spinning out of control.

  762. Redwine

    The states will have to be bailed out with counterfeit money, increasing the deficit. What other emergency spending will crop up?

    We’re in the eye of the storm here and as the tide goes out more will be revealed as wearing no clothes, increasing bailouts, increasing deficits, increasing monetization of debt.

  763. vuvvy

    MLMT, could you please elaborate on your “we will never see 1400 gold in our lifetime again” or something to that effect? How about you elaborate a bit too about how you may have discouraged some with less gold market experience to not get invested near the lows? Oh, and while you’re at it please make some more “predictions” like NEVER will we see 1500,1600,1800,2000 gold ever? I hope anyone here that has been influenced by his bullshit will realize it for what it is(just a BS opinion) and trade accordingly.The gold market may well get a correction this week with futures options expiry but all probabilities point to it being just that, a correction that should be bought until proven otherwise.

  764. Poly

    Why bother with random unqualified posts from trolls?

    NYMEX is confirming the “afterhours” action. It’s as official as can be 🙂

  765. mamaloshen

    Hedging is an issue for those (like me) who own miners as well as vehicles like AGQ etc. I wouldn’t want to be invested in any company shorting the product it produces.

    As I understand it, SLW is OK as it buys silver at fixed prices and sells it on later when the miners they make deals with are producing. The junior exploration companies are OK, too, because they are exploring, not producing, so they have nothing to hedge anyway.

    However, I am wondering about some of the smaller junior silver producers just coming into production. My understanding is that they are often required to hedge in order to obtain financing.

    Does anyone know of any smaller miners that are hedged? Am I right not to be concerned about junior explorers? I own a few of them.

    Thanks in advance.

  766. Razvan

    for the record MLMT is shorting silver as per his admission last night. Lets see how many more days he will maintain his bearish views.

  767. pimaCanyon

    vuvvy, MLMT has already said that this overnight stuff “doesn’t count”, so even though MLMT said gold would NEVER see 1400 again and gold is at 1402.50 as I type this and , IT DOESN’T COUNT!

  768. Avann

    Just for the record … not that I support MLMT’s opinion but … he did retract that comment about gold never reaching 1400 ever again.

  769. Redwine

    What I find fascinating is that people are carrying on like everything is fine. We’re in a surreal world aboard a vessel that’s unsinkable but sinking.

    Maybe the ill fated passengers aboard the Titanic behaved similarly. Thinking everything will be fine, there’s plenty of time. The music is soothing. But the lower decks are flooding and the pumps are screaming, unable to keep up. The hull is torn and the engine rooms are awash.

    The captain, officers, and crew are aware of the impending tragedy but stay busy keeping the passengers calm. God forbid they panic.

    Not enough lifeboats for everyone anyway and no rescue ships on the horizon. It’ll take a miracle.

  770. pimaCanyon

    okay, I’ll bite… Redwine, what are you doing to be prepared for the moment the ship goes down? And it sounds like in your opinion that could be sooner rather than later? What is your estimated time of sinkage (ETS)?

  771. fubsy_cooter

    Should be interesting to see what happens with today’s move given that US markets are closed. Obviously big traders can use trading desks in London and around the world to participate, but will the volume in the US be affected tomorrow by bottled up interest in the metals?

    I don’t recall seeing Silver up over a buck three days in a row during this C-Wave.

  772. pimaCanyon

    Avann, I didn’t know that MLMT had retracted the “never about 1400” call. Thanks for clearing that up.

    He has said that he has no problem in being wrong, but some of his statements are pretty bold.

  777. ALEX

    Dear Clive Maund

    Thank you for the bearish post on Gold YESTERDAY 🙂

    http://www.clivemaund.com/article.php?art_id=68

    AHHH , Your DOME currently has a Gaping hole in it…what will you use to patch it? follow up bullish post?

    Thx 🙂

    p.s. todays move also changes your rising wedge to a nice up-trending channel ( I wish you wouldn’t jump the gun so much. Let the chart tell you what gold is doing and not visa versa-) or else you’ll continue to give tech analysis a bad name.

  779. n1tro

    I might have this flipped flopped but the silver options expire on the 23rd and the futures options expire on the 28th could explain some of the upward movement. Shorters need to cover 🙂

  781. Steven

    Wes,

    The embedded nature of silver (and as of a couple of days ago gold) are extremely strong imo. This is a really “hidden” T/A element b/c almost all traders would say that silver is is nose bleed overbought status. But strangely enough when something becomes overbought enough (slow stochs, both lines over 80 for at least 3 days) it is actually getting stronger in that direction.

    Silver became embedded around 28-29 area and most people thought it was overbought but of course we know what happened since then.

    I’ve followed this indicator for a number of years and it can give head-fakes but I do not believe this is one of them. The headfakes usually occur when the stochs are over 80 for maybe a day or two and then fall back under 80 on the third day. I’ve been burned once jumping the gun but also benefitted a couple of times by jumping the gun.

    Again, any dips so long as we stay embedded are bear traps (as in all the dips, to the extent there were a few) and should be bought. The one issue that someone mentioned earlier is that we are over the bolinger band.

    What I usually notice in these situations is that the upper bb starts a steep rise (in this case the one that I am using is moving about 30 cents per day) and the commodity simply continues to ride it.

    Other very recent examples of this include the CRB, copper, cotton, and a number of other commodities.

    I’ve tried it on stocks and it seems to work there as well but I haven’t used it as extensively in that area.

    Hope this helps.

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