GET OUT!

This is for all you folks out there with retirement accounts in the general stock market. I’ve been warning for many months that the cyclical bull we’ve been in for almost two years is still just a counter trend rally in an ongoing secular bear market. I made that same warning about the last cyclical bull market from `02 to `07. Many people ignored me in November `07 when I said the second leg down in the secular bear had begun. I suspect many people wish they hadn’t.

There are now warning signs that this counter trend rally may have topped, and even if it hasn’t the potential upside is so small that it’s not worth the risk of getting caught in the next bear leg to catch a few more percentage points.

As of Thursday and Friday the stock market has now broken below the prior daily cycle low. When a daily cycle low gets violated it invariably signals the start of an intermediate degree correction.

The warning bells are going off not so much because an intermediate degree correction has begun, those happen like clock work about every 20-25 weeks,  but because of how quickly this daily cycle has topped. In only three days. That means we are now locked in an extremely left translated daily cycle. 

It is those extreme left translated cycles that do the most damage. The daily cycle following the flash crash last year was a left translated cycle that topped in only 4 days. We all know what that led to.

The bigger picture is the intermediate cycle. Notice the market is now on week 16 of the current intermediate cycle. I noted earlier that an intermediate cycle low is due about every 20 to 25 weeks. On an intermediate term basis the market is now due to move down into that major cycle low. The next larger cyclical structure is the yearly cycle. That is also due to bottom with this daily and intermediate cycle. The combination of all three cycle durations bottoming at the same time will almost always produce a very severe correction.

Because of how the dollar cycle is unfolding (available to premium subscribers) I expect the stock market cycles to bottom pretty close to the 1 year anniversary of the flash crash.

As a point of reference the last intermediate cycle low occurred in November. The danger is that both the industrials and transports might drop below the November bottom during this correction. If that happens a Dow Theory sell signal will be generated. If a Dow Theory sell signal is generated the odds will be very high that this counter trend rally is over and the next leg down in the secular bear market has begun.

And unfortunately Bernanke is not going to be able to just crank up the printing presses and rescue the markets like he did last summer. The problem isn’t that there is a shortage of liquidity. The problem is that there is too much liquidity. It is causing commodity prices to surge out of control. 

Oil is back over $100 despite continued high unemployment and impaired demand. Food prices are going through the roof and have already trigger social revolt throughout the mid east and most emerging markets. Once the next leg down in the dollar crisis gets underway it won’t be long before we here in the US will be looking at $4.00 or $5.00 for a gallon of gasoline.

As the dollar crisis intensifies Bernanke will be forced to end QE or risk breaking not only the currency but also the bond market. Without an endless supply of fresh money the markets and economy will quickly start to collapse. We saw this last summer when QE1 ended. The same thing will happen this time only Bernanke’s hands will be tied by the dollar crisis and surging commodity inflation. He will be powerless to prevent the return of the secular bear forces. Well unless he’s prepared to risk hyper inflation that is.

Personally I don’t think Ben is willing to completely destroy the dollar and crash the bond market just yet. I suspect when he finally realizes that Keynesian economic principles have led us down a path of no return he will resign and someone else will put the finishing touches on his master piece.

The only question is whether those finishing touches will be to allow the deflationary depression that is required to cleanse 5 decades of debt from the system or whether we will choose the hyper-inflationary path to service the debt spiral we’ve gotten ourselves into.

In any case it is time to exit all general stock market funds and position oneself in cash to ride out the next leg down in the secular bear market. If one has a gold or precious metal fund available in their IRA we should have about two months left of spectacular gains as the parabolic finale unfolds in the gold and silver markets. But once that has run it’s course even those positions will need to be exited as there is no real way to diversify against another severe bear leg down. 

The simple fact is that in a severe bear market everything gets taken down to some extent. Gold will hold up much better than practically all other assets but even gold will take a 20-30% hit during a  D-wave correction. And all parabolic C-wave finales are invariably followed by an severe regression to the mean profit taking event.

Unless one has the option of a gold fund, it’s now time to get out of general stock funds and move IRA’s to a money market fund until the next four year cycle low is reached (probably in late 2012).

891 thoughts on “GET OUT!

  1. jeff

    Thankyou again Gary

    I can’t begin to tell you the sheer panic I have felt since 06 or 07 over our economics. On princeable i knew how wrong they are(and one or two specific items). Tieing everything together and timing with the cycles puts the pieces together to a actionable strategy .

    Thankyou so much

  2. jeff

    The other good news is I think I found someone to jump on board that will catch on quick. That will give me someone to share with and learn with

  3. cody

    hi gary ,so glad i subscribed to your premium site, it is what i missed, patiency, no panic, thank you very much,mario.

  4. Gary

    Yes probably so. But then again most of us have made more in the last 6 months than Beanie made in the last two years, and that is assuming he caught the exact bottom of the bear market (he didn’t).

    And none of us (SMT subscribers) got caught in the previous bear market. Beanie did.

    So with Beanie’s less than stellar track record I’m not sure anyone here is terribly worried about his feelings much less interested in his investing advice 🙂

  5. ALEX

    Gary

    I may be mistaken, but I thought that it was only a week ago that you agreed that “possibly ,though unlikely’ , the dollar 3 yr low could come later this year , and a more sideways consolidation in metals could occur over the summer and the parabolic move in the Fall.

    Your wkend report sounds like you are quite convinced that, at this point, that the dollar is done now,and the parabolic move is likely imminent. Has something specifically changed in this regard ? ( You dont need to point it out on here,you can just say ‘yes’ , ‘no’ , or ‘Wthe heck are you talking about??” )

    thx

  6. Gary

    Alex,
    That was always a low probability event and it’s getting less likely by the day. If the November low is breached it will pretty much evaporate.

  7. Visitor

    Gary – Can you please explain/clarify why you think miners will hold up and as you say “have about two months left of spectacular gains as the parabolic finale unfolds in the gold and silver markets.” When on the other side you say exit now on everything else and state “The simple fact is that in a severe bear market everything gets taken down to some extent.” – This doesn’t make sense to me. When the market dropped the other day, miners got taken down as well as the general market.

    Also, if you were going to buy physical silver – would you buy today or wait until the D wave bottom (or best estimation for that time frame.)

    Thanks for your response.

  8. ike

    Gary,

    Thank you. Just last night I was trying to convince my wife to move her money out of her 15, yeah that’s right – 15, mutual funds and into a fixed account.

    She is sold on the idea of diversification. I was trying to make the point of now is the time for defense.

    Well, seeing this morning’s post made me smile. I promptly showed her and now she is convinced.

    Thanks again

  9. Gary

    Visitor,
    If you want the complete story you need to subscribe (it’s all about the dollar).

    But just briefly, miners will ultimately follow gold. If gold still has another two months into a parabolic C-wave top miners will be moving rapidly higher as they follow gold.

    But once that has run it’s course everything will get taken down as the next bear market starts to sink his teeth into all asset classes.

  10. Beanie

    Yep, another top equities market call. I want to clear my eyes this time to see it isn’t true.

    Gary, let’s not make up stuff about my returns or my calls if it isn’t true.

  11. ALEX

    Dumb Moving Average

    I dont know an ‘app’ that does that, but my wife does it quite frequently…Google and see if theres a , “Hon, can you stop at the store on your way home..” app 🙂

  12. Paul

    Gary,
    POT, CHK, XOM held up well during the last part of 07 and the being of 08. Would you advise against these or is any dollar based sector the place to be during a dollar collapse?

  13. Beanie

    Even as generally bullish as I am, I had this to say back in 1/21/2008 (which is kinda odd reading it now as I don’t like to be fear monger):

    Imminent Doom?

    Most bulls are hoping for a bounce, albeit short term, this week. Even some diehard bears think we are due a short term bounce. As i write this, the USA futures are getting their teeth knocked out. Many of the markets around the world dropped heavily on fears of a US recession. The Dow Jones are down 514 points and the Nasdaq futures are now down 76 points.

    Several things favor the bulls, like:

    – We are now in very oversold territory, and the VIX have spiked.
    – The Dow closed at above support on Friday.
    – An interest cut is coming next week, and we may even get an emergency cut this week.
    – The Bush economic stimulus package of $145 billion should limit the downside of recession if we are in one.
    – Some diehard bears have gone bullish.

    On the other hand, the bears can mawl the sh%t out of the bulls, like:

    – The bond insurers are in alot of trouble and any bankruptcy will spark a monumental selloff in the markets, as already indicated by Cramer on Friday.
    – The recession fears are growing strong by the day, and normally at best it takes 4-6 months to get out of a perceived recession. This means the bears can keep on mauling for a few more months, at the worst case for them.
    – The COT indicated the big boys have been selling for months.
    – Intel’s miss will have a negative impact on tech, adding to the already negative sentiment about the economy.
    – Precious metals like gold recently spiked, indicating investor may favor hard assets.
    – Lack of trust for the Bush-Benanke-Paulson complex because they didn’t give what market participants perceived as what they needed, when they needed it. The complex was seen as taunting the market, and now any fix is perceived as a little too late.
    – Historically, the crowning of a new Fed Chairman has resulted in big market declines in their first year on the job.
    – The Yen is spiking, forcing the end of the yen carry trade, which is highly leveraged (10:1). If the yen keeps on spiking and the dollar keeps on dropping, this can and will devastate many economies.
    – Warren Buffet is now at least $40 billion in cash. Typically he likes to buy at market bottoms with PE of around 8. The current market PE is around 18.
    – I can’t help but recall what my astrologer (most cycles theories have its basis in astrology ,btw) said, though he was early by a few months. He was too early and too adamant about it to be useful at the time. Anyhow, he said the meltdown would be unforgettable and many people will get really hurt by this decline and that it would likely be a worldwide event. It will not be a multiyear thing but rather a few months.

    As you can see from the above list, sentiment is very negative out there right now. The bulls need to muster some type of offense this week, starting tomorrow, or we could be headed to 11,600 and ultimately to 10,000 on the Dow. They won’t be able to do it without help from the Fed before tomorrow’s close, which is what’s really important. Even though the futures are crashing, the day is still young. We got today’s session and then tonites session and then the close of tuesday, enough time for things to turn around even though i am less hopeful.

    The stock i will be look to add to my swing short is WYNN, which closed at 101.5. It has heavy resistance at 102. If it can’t get above 102, i’m going in.

  14. Beanie

    And I said this in April 3, 2009. Like I say, just about everyone has claimed they have called the top and the bottom. I guess what matters is how you say it and what you did as a result:

    Getting Ready For The Next Bull Market

    I was at Borders this afternoon with my daughter. I happened to come across the newspaper aisle and saw the front cover of the IBD (Investors Business Daily) newspaper. This is the photo, from the G20 meeting:

    http://homepage.mac.com/j.monro/20090402_150041_573612E0.jpg.jpeg

    Never mind that the guy in the middle will be totally bald pretty soon. This picture is all I need to see to believe that this bear market is about to end and a new bull market is coming. Everything we’re doing to fight this potential depression differs than what we did in the 1930’s. The Fed has been showering the economy with money and saving many big firms. Bernanke believes that it’s better to do more than to do too little. We did too little in the 1930’s and thousands of banks ended up failing. Roosevelt, as did Bush, also shunned the international community. He wanted to do things his way, rather than the right way. This is a global recession! Only the ignorant would not cooperate and work together.

    Some people, notably the vocal bears, believe we should let all these irresponsible companies fail. The Fed tried that approach by letting Lehman Brothers go belly up, and the markets got torpedoed in an egregious way. These companies are incredibly huge with widespread tentacles that they will disrupt all facets of the economy. The Lehman episode was shocking. I think the markets (and hence the economy) would have puked its brains out if AIG wasn’t bailed out, and let go the way Lehman was let go. I believe people were nuts when they called for the death of FNM/FRE. There is a time for “free markets” and a time for necessary intervention.

    Anyway, with so much money thrown into the economy and the credit markets starting to thaw and the MTM repealed, it’s hard to imagine the banks would not ease on their lending. So, I’m preparing for the next bull market. I believe some of these stocks listed below will be leaders. Stocks like AAPL and GOOG will continue to innovate and dominate their respective markets but, since they’re already so huge in market capitalization, they’re not gonna explode your portfolio from here unless they pay lots of dividends and do spinoffs. **Be sure to keep an eye on promising companies that will start going IPO as the stock market improves.

    In technology, the hot areas are likely:

    Virtualization – dominated by VMWare(VMW)
    Cloud computing – GOOG, Salesforce(CRM), AMZN
    Software as a service – Salesforce(CRM)
    Social networking – Facebook, Twitter, etc.
    Internet – GOOG, Akamai(AKAM)
    China internet – BIDU, Shanda(SNDA), NetEase(NTES)

    Retail – AMZN, Autozone(AZO)

    Financial – V, MA

    Alternative energy, with solar energy being the dominant theme as their technology continues to improve:
    First Solar(FSLR), Sunpower(SPWRA), Suntech(STP)

    I am leaving out Energy Conversion Devices(ENER) because it’s a relatively smaller solar firm compared with the other 3, but they have huge number of patents for advanced technology (which is not yet viable at the present time but could be huge in the future).

    The reasons I believe we will have a huge bull market in alternative energy is because of the threat of global warming and because we’re running out of oil with insatiable demand from growing economies such as China. Oil prices should spike higher in the years ahead. Any economy that depends mainly on oil consumption for their energy source will not survive in the future, imo.

  15. Driver

    Global warming is a farce. Enough reading will convince anyone with an open mind. Just another way to collect more taxes for the NWO.

  16. Redwine

    My two cents.

    What I see is Gary having the guts to call it like he sees it, over and over again, with very little wiggle room to his forecasts. Not always right, but that’s expected and he’s good with it.

    I also see some character spouting off on Garys blog about a boatload of gibberish. If Beanie is worth $100 per month and wants to sell his book for $400 (using Garys blog), the least he can do is make some firm forecasts about the future markets. All I see is Beanbag cherry picking some of his past comments, maybe not actually past comments, that he thinks make him look good.

    Somebody else said it and what a beautiful contrast in metaphors the avatars are. Gary Savage bravely climbing a golden wall of worry and Beanie a small dog with no energy sprawled out on his back on a filthy..ugly day bed. Cute little chihuahua dog though.

  17. Silverman

    Beanie,

    With all due respect, many of the posts on your blog are hedged 6 ways to Sunday. With that approach you will always be able to claim success.

  18. Movax

    Imposing policies based on global warming is also a good way to slow down the economy and thereby reduce population growth due to the extreme cost of ‘green’ energy. Even with fossil fuels increasing in price they are still much cheaper.

    And global warming being a farce doesn’t mean it won’t be a good investment. If policies requiring the use of green energy are (continued to be) imposed then it’s going to be the way to go, like it or not. Bye bye free markets.

  19. Beanie

    Redwine,

    You have mistaken. I’ve never mentioned about selling any of my wares here. Not once. In fact, I’ve already removed the links from the top blog page of my blog and brought them much lower.

    I’m only here for the intellectual (regarding the markets) challenge. I don’t like bull blogs because we’ll just be one happy dance there. 🙂

  20. Redwine

    Beanie

    This is a bull blog. Don’t you understand that there’s almost always a bull market somewhere? It’s just foolish to be a perma bear or a perma bull on any market because cycles are a fact of life.

  21. Beanie

    silverman,

    No, they are hardly hedged. I’m just as vocal as Gary.

    But to say since I’m a bull I was totally unaware of the 2008 downdraft or the 2009 bottom is far from reality.

  22. Mission

    Gary will the Japan catastrophe have impact on metals do you think? Shouldn’t this weaken the yen and strengthen the dollar?

  23. Beanie

    I admit, back in 9/2008 I thought the bottom may be in, but I did add there was a possibility of another leg down before it ultimately bottoms. At that time, I was nibbling on stuff. But by April 2009, I was diving in head first. I don’t pretend I called the exact bottom. The fact is nobody did. It took everyone at least 2 tries.

    Cycles theories don’t tell you exact tops or botttoms either, despite the numerous claims by many practitioners. I’ve been peddled with Cycles Theory, Elliott Wave Cycle Theory, Square Of Nine Cycle Theory, and other numerous offshoots of cycles theories. They work and don’t work just like anything else. Nothing more or less special. For if cycles theories have special powers, what kind of cycles theory predicts that the market goes up 70% of the time the last 100 years? None. (An average simpleton permabull did better than that just by staying long!) So there’s no special powers to cycles theories and they’re more wrong than just staying an average permabull (70% win) for life. I’m sure Warren Buffett realized that many years ago and that’s why he doesn’t believe in charts.

  24. Sang

    Similar analysis to mine…. in my view, the secular bear returns in 2011.

    Tim Wood agrees that this bull market is just a cyclical one within the larger bear secular market. Tim however is much more cautious about calling the top (will probably do so after a very serious and undeniable dow theory confirmation).

  25. Veronica

    Beanie, are you really that intellectually challenged? Since 2001:
    gold-250.00 to 1420.00
    S&P 500- dead $ for 10 years

    HUH? Not something I would pay 100/400.00$ for:)

  26. Redwine

    Beanie

    This is the type of gibberish I’m refering to:

    “what kind of cycles theory predicts that the market goes up 70% of the time the last 100 years? None. (An average simpleton permabull did better than that just by staying long!) So there’s no special powers to cycles theories and they’re more wrong than just staying an average permabull (70% win) for life. I’m sure Warren Buffett realized that many years ago and that’s why he doesn’t believe in charts.”

    Your claim that the market goes up “70% of the time” doesn’t take inflation (dollar debasement) into acoount at all. Besides that 70% of the time doesn’t equal 70% return and 70% in 100 years is less than one percent per year nominal. What nonsense.

    Cycles are a fact of life in that we have long bull markets and long bear markets (cycles) of approx. 20 years in the broad markets and commodities markets and varying lengths of time in all markets. That’s not to say that cycles theory is great for calling tops and bottoms, it’s to say that being a permabull is assinine.

  27. Brian

    Sang, Tim Wood does great work with the cycles. His big problem is the influence Prechter has over his work. Tim has been bearish on stocks through this whole move, and only recently started being a little bullish.

    He doesn’t recognize what is happening in PM’s at all. He now expects an 8 year cycle top to be imminent, even though it will most likely be right translated.

    I use him for chart dating. He is very good at that.

  28. Dobby

    Gary – I totally understand why one should be out of the market; however I’m confused about exiting precious metal funds – for example Tocqueville gold or PSLV – of course in ’08 everything was taken down, but if we sit in cash until late 2012 don’t we risk this incredible dollar devaluation that is taking place. I can only imagine what 18-21 months will do as inflation eats away at our principle. Any suggestions?
    Thanks you

  29. Shalom Bernanke

    Redwine,

    Acutally, Beano did make a few specific recommendations like the semiconductors a few weeks back. Unfortunately for him, they’ve tanked harder than any other group.

    I’d wager either MU or CY will be defunct in the next 5 years, and I’d double down that Beano will confidently proclaim that this is what always happens with the best names while predicting a triple from .01 to .03/share. lol

    Beano, you’re toast and you’ve been warned of what’s coming by the same guy that has spanked you handily for years. Good luck.

  30. Robert

    Just can’t see QE 2 ending,listen QE1 never ended .There is no way they can end QE2 –Simply, the U.S. bond market would INSTANTLY COLLAPSE if the bond-buying Ponzi-scheme ever ended–they may officially say they are ending it but will just call it something else.
    U.S. Treasury supply (read necessary purchases by the Fed) will explode as Japan will surely be a seller to repatriate necessary capital for rebuilding. Not that the Fed had any ability (pre earthquake) to stop QE never mind actually withdraw funds (actually tighten) but now global QE will need to ratchet up even more.

  31. Movax

    >SPECULATION: China collapse allows Feds to unload QE bonds

    You say that china has to deal with an increasingly inflationary environment or stop their growth to prevent inflation.

    Why not the prevailing view that they will let their currency appreciate while stopping the purchase of US debt?

  32. Redwine

    I believe more than 3/4 of USG debt is in 5 year or less durations (last time I checked).

    The USG doesn’t have the luxury of slowly debasing the currency any longer. The only thing I can see that might delay the inevitable would be another major sell off in equities, causing massive deleveraging (exiting margin) of speculations, causing dollar strengthening due to trading equities for dollars, which will allow interest rates to remain low or even drop further, allowing the USG to rollover more debt at low rates.

    This is basically what happened 08/09 melt down and will tie in with Garys’ visions.

    The dollar strengthening wasn’t so much due to “flight to safety” as it was due to the unwinding of margin (deleveraging) and trading equities and commodities for USD (demand for USD).

  33. ejoys

    Dear Gary,

    You are expecting an up move in CRB index. On Friday many commodities showed strengths but crude oil didn’t. Can you share your current view on oil? Thanks in advance!

  34. Shalom Bernanke

    That’s right, Robert. Long before there were any QE’s the dollar was being devalued (95% or so since 1913), so this was always the plan. Add on the current stress in financial markets resulting from all the theft and fraud, and now they must print more money to plug the leak.

    I have not doubt the Fed will posture and state, at some point, “no more QE’. This is nothing more than an attempt to get the masses to look favorable on the currency again, which they need to do if they want to steal as much value as possible. The last thing the Fed wants is everybody to lose interest in USD, so they’ll say whatever it takes to scare some back to the ever-eroding paper. That does not make it more sound, and the smart individuals realize (and bet alongside) this fact.

    I no longer listen to what comes out of their mouths, as it’s all just what they want you to believe for their benefit. Prices stable, sure. Unemployment decreasing, right. Everything is OK.

  35. Shalom Bernanke

    Whenever the Fed finally raises rates a 1/4 or 1/2 point to “signal” that it’s the beginning of higher rates long term, and gold/silver sell off sharply, that will possibly be the best buy of this secular bull as all those that take the Fed seriously dump their holdings into our hands. 🙂

  36. Redwine

    I don’t understand the theory that the economy must be expanding rapidly to produce inflationary price increases.

    I remember the seventies…early eighties and believe me, the economy was in terrible condition during the entire period of inflationary price pressures.

  37. Yash

    two other people I follow apart from gary. Tony C has bull market going most of 2011 till early 2012 to top out near all time high and then at least 50% decline of last uptrend. Although he has changed his views once during this uptrend, normally he is quick enough to change so that not get caught on wrong side more time.
    Other one is Andre Gratian. he also has bull market going on for some more months at least. I had invested in gdx at around 58 avg last October. Although I have no problem waiting its not very comforting that after 5 months we are around at same level.

  38. David

    More money printing (justified though it may be in this instance) from the inventors of QE:

    Reinforcing the Bank of Japan’s determination to keep markets stable in the wake of the disaster, the central bank governor, Masaaki Shirakawa, said Sunday that huge amounts of liquidity would be injected into the banking system on Monday.
    The central bank will probably provide 2 trillion to 3 trillion yen, or $25 billion to $37 billion, in funds through its market operations Monday morning, two to three times the normal amount, to soothe markets and keep short-term borrowing costs from spiking.
    “We will monitor market conditions and plan to provide markets with a lot of liquidity first thing tomorrow morning,” Mr. Shirakawa told reporters after attending a meeting of cabinet ministers on Sunday.

  39. TZ(5288)

    You will recall that approx wed night I suggested that the big boys were just as able to see the multi-day triangle congestions in gold and silver just as we.

    I argued that a good move on their part would be to slam the metals lower and make it look like the congestion was resolving to the downside. That would create some panic selling, get pattern traders to go short, etc.

    By Thursday morning that is exactly what we had – a breakdown.

    I was shooting for 31.50-33 as a silver buy target.

    I’m already significantly leveraged and therefore try to limit my additional buys to ‘deals’ where the selloff has a good chance of being a lasting low and where I can put in a tight stop.

    We never went that low.

    By friday, the reversal and sharp rally higher was canceling the thursday drop and giving it all appearances of an artificial ‘hit’ to the downside. (A good rule of thumb in the mkt is an action which can’t hold for at least 2 days isn’t legit. They nailed it thurday, but it was already pushing higher by fri.)

    When I saw the clear reversal of thursdays drop, I chased it (you have to adapt) and increased my silver by about 20% – buying near the highs of friday (with about a 50 cents stop).

    It wasn’t a good entry, clearly, but I’m pretty sure the stop will hold and we could be many dollars higher in days. So it isn’t too bad and I’m risking less than 1% on the stops if wrong.

    My work, gary’s comments, the fri reversal of thur’s drop, japan, dollar, etc…ALL make me pretty confident the low is in and we now resume higher, but not before a likely whipsaw overnight or monday morning.

    When I chased and added I didn’t increase position by much cause it was obviously a poor entry. I still want a bit more and at this point I’m going to look for that early morn entry point for a final add of some silver.

    I’m back up higher to 6x, but I’d like to get one more chunk (with small stop) before this next run gets underway.

  40. Gary

    The mistake everyone is making is to assume that conditions two months from now will be similar to what they are today.

    They will not be. The dollar will be hovering on the brink and ready to topple over into the abyss.

    In that scenario there is no option for the Fed but to immediately cease QE or risk the collapse of the dollar.

  41. TZ(5288)

    Gary,

    You said you couldn’t block a poster, but I want you to realize you have another option should you desire to ever use it.

    All you have to do is just repeatedly delete the posts of someone you would like to ‘move on’. After a few days they’ll get the idea and do just that.

  42. jeff

    tz

    one heck of a open, at this point i think its buying into stregth. swing low isnt quiet complete, but big pop on the open

  43. TZ(5288)

    Gary,

    A day or so ago you fought back on a post saying how QE would HAVE to be stopped in the near future.

    You were commenting after someone posted interview/comments from Jim Richards.

    http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/12_Jim_Rickards.html

    You should listen to the interview before your reaction.

    Rickards (who has a LONG LONG list of qualifications) explains how the fed’s balance sheet is SO LARGE now, that they can STOP QE and still continue printing simply by using the runoff payments of their existing securities payments.

    This situation has NEVER before existed in the world and the fed has already spoken (quietly) about it.

    They will be actually able to tell the world “we ARE and HAVE stopped ‘buying'” and yet continue to conduct QE by holding their balance sheet STEADY.

    Listen to his comments and dont’ be as reactionary.

  44. turkeyjerky4211894

    PS: *yes* at SOME POINT, the fed will have to stop EVERYTHING. I agree with that.

    But Rickards is saying they likely don’t have to stop NOW or at that boundary you are suggesting in a few months.

    They can just say “ok. we will stop BUYING”, the world will think that is adequate and our rebound will start…..while they Fed keeps buying in the background from their portfolio payments.

  45. Gary

    If the dollar is crashing rates will have to rise to compensate for currency depreciation.

    Folks I warned money months ago that this is what would happen to the dollar. Almost no one believed me.

    I’m telling you again that once the three year cycle low is in the dollar will explode higher and Qe will be halted as the panic of a complete dollar collapse rears its ugly head.

    These big long term cycles just don’t fail and I seriously doubt they will this time either.

    So everyone can delude themselves into thinking QE will continue indefinitely if they want to. The dollar bulls deluded themselves into thinking the dollar was a sound currency and the euro was crap. We know how well that worked out for them.

    If you make the same mistake with QE then the dollar rally out of the three year cycle low is going to run over you.

  46. Wes

    TZ,

    I’m glad you made the buy on Friday. All last fall I wondered why you didn’t just make an arbitrary entry into obvious strength.

    Setting stops a small percent below your entry will limit the losses at any level, of course, and I think that many times you have a lower chance of having your stop hit if you enter during a strong up move rather than guessing at a low.

    Good luck on the trade.

  47. jeff

    76.54 on the dollar
    the opening sceane is blood chilling as DR Brankinstins monster comes alive and terrorizes the world

  48. Redwine

    Gary makes good sense. As the dollar bounces out of its three year low, due to cessation of QE, the markets will sink, margin will unwind, dollars will be in demand due to equity and commodity selling, and the US will easily sell treasuries. No need to print for awhile. Wash, rinse, repeat. Kind of like 2008/9?

  49. jeff

    atease

    i have a live platform from my broker
    bloomberg has a stock ticker with gold and silver, a few minuets delayed but it does not show the dollar index

  50. Keiko

    Here’s NHK’s TV online in English, much more current than CNN etc.

    http://www3.nhk.or.jp/nhkworld/

    Gary, nice post. Good eyes on the lower low in $SPX. Curious here on $GOLD, apart from cycles, the chart looks a bit like the $SPX – compare $GOLD’s low on 3/3 at 1410.20 with 3/10 at 1403.10? Is that a lower low on 3/10? And does it matter? I know you say the charts are busted and all, so am just curious. Thanks.

  51. MrMiyagi

    The US$ spike was on fxstreet website,
    I’m pretty sure it was just a glitch.
    In other news, looks like Bahrain’s having protests and whatnot today.

  52. Gary

    K,
    Now you know why I don’t trade based on chart patterns. If I did that I would have missed the bottom in July and January and I would be thinking about selling when I should be buying.

  53. Keys

    To throw a monkey wrench in things…since this is a blog…this is a train of thought, not my thoughts.

    Once the dollar goes nose down, and the point comes to where the FED can no longer keep up with QE…which is the point….QE is not sustainable, it eventually results in hyper-inflation if not stopped.

    But I wonder if the result will not result in the end of QE, but rather the pause in US QE…ie the USD goes up, while other currencies continue the insane policies of the fed.

    This really isn’t a complete thought. But the QEJ coming out of Japan has some thoughts flowing. A USD collapse can be paused if the world decides to proceed with stronger QE policies in their local currencies…please remember the word pause or delay, not stop.

  54. jeff

    keys
    hmmm so if they did take turns, that would be the 0W0 powers with a plan . ok, ill be laying in bed all night on that one.

    ya, that has my head spinning

    ok focuse, cycle, cycle, make money, make money

  55. Gary

    Folks there really isn’t some mysterious group of guys in some back room deciding to “take down” silver.

    These are just normal profit taking events. They happen like clock work and are driven by normal human emotions and minor regression to the mean forces.

    Hell I’ve been telling you for a couple of years now when to expect them. Would I be able to do that if this was driven by some evil “cartel”?

    If you can get rid of this ridiculous need to believe in a higher power controlling the markets you will free yourself to make a lot more money in this business.

  56. Gary

    New York,
    I believe we do have a swing low in place.

    Remember nothing is 100% so only “load up” with as much as you can realistically hold on to if you are wrong and the dollar makes another spurt higher and gold one more push lower.

    If you are the kind of person that will freak out if you don’t time the entry perfectly then keep your position size small enough that you won’t sell into weakness.

    If you believe in the bull market and draw downs don’t bother you because you trust the bull will correct any timing mistake then the swing, even if it doesn’t mark the exact bottom, will be “close enough” so go ahead and take a full position.

  57. Robert

    Gary,
    Its been pretty well documented how the silver /gold markets have been manipulated for years .
    You would have to be blind not to see the manipulation that goes on in these markets.

  58. jeff

    gary

    i dont think they are after silver. i do believe there is a push for world domination. i dont think its 10 guys in a room. i think its a false philosophy that has caught on.
    shoot how many people on the street that are for being green. how the heck can ethonol even be in the market when its so counter productive. its all false philosophys

    or how many trading philosopys are there. gary, you even said elliote wave has lost more money for people, there is a bad trading philosophys.

  59. Gary

    Robert,
    That is complete and utter nonsense.

    If the market was manipulated gold would not be at $1400.

    If the market was manipulated shorts would not cover when gold drops back to the 200 DMA.

    If the market was manipulated cycles would not work.

    If the market was manipulated then gold is already much higher today than it would have been under normal market conditions. Anything that forces price below where the market would normally take it will increase demand resulting in much higher prices much faster than what would occur normally.

    People you’ve got to quit reading the GATA crap. It’s nothing more than a marketing scam and every bit as bad as Prechters end of the world, shock and awe, marketing tactics.

  60. New York

    Gary, gotcha. I’m riding this bull. Maybe I’ll split my position into two piles and load up at open and hold the second half for a potential draw back…

    Thanks.

    Robert, I think the point is that it doesn’t really matter. By talking about the conspiracy, however true or untrue it is, you are taking your focus off of the more important task at hand right now – making money in this secular bull market.

    The market is just to big a beast.

  61. jeff

    and it all may just possibly be of biblical proportions =)

    gary if pm’s are manipulated then you are the master and im glad we are on your side. go tear them up

  62. Robert

    Gary ,

    If the prices were not manipulated just think how much higher the gold and silver price would .I agree with you on most things, but sorry these markets are manipulated big time by the bullion banks ( JPM ) and the Fed.GATA has done great work in exposing this.

  63. jeff

    im laughing so hard im crying. i had not seen garys comment on the preachers. then i wrote the biblical thing … TO FUNNY

  64. Gary

    If you absolutely have to believe that for some reason the Fed gives a damn about the price of a shiny yellow metal and is successfully forcing price down then what in the hell are you doing investing in it?

    That makes absolutely no sense at all.

  65. pimaCanyon

    With the BOJ pumping 85 billion into the Japanese banking system, seems like that will drive the Yen down and the Dollar up, no?

    Dollar is up strongly against the Yen as I write this. Gold and Silver made highs earlier this evening, but are now heading lower Silver is below Friday’s closing price.

  66. Gary

    The only thing GATA has done is expose what a group of idiots they are.

    The debate between Murphy and Christensen several months back was just hilarious. Murphy came across as a complete fool. He couldn’t back up any of his points with facts and when asked to his response was always “that’s our stance and we’re sticking to it”.

    Like I said, nothing more than a marketing scheme to draw in novice investors that don’t know any better.

  67. RA

    Hi Gary,

    I asked a question on your previos post Deja Vu but I think you missed it…

    If the stock market has just topped and you expect the 4 year cycle low in the next 18 months, would that not make the cycle a right translated one as the last low was Mar 2009?

    If so, why would you expect the market to make new marginal lows in late 2012?

  68. Gary

    PC,
    If the cycle has bottomed then any weakness will be bought. If not then gold will be on day 30 and it’s close enough to buy anyway especially if gold makes a lower low.

  69. Adam

    Gary,

    Have you ever applied cycle analysis to individual stocks (or sector ETFs)? Or do you just use cycle analysis for stocks in general with an index like the S&P 500?

    Some of us who do this for a living need to play in stock-land all the time regardless of whether there’s an cycle violation, etc. I was wondering if there was a more efficient way to do this than simply going to the defensive sectors.

    I’ve also noticed the EEM seems to have successfully test its 200 DMA. There aren’t any cycle violations on that instrument. Is this something you keep tabs on or does watching too many of these indices/ETFs cause “indicator fatigue”?

    BTW I thought you used to have Judo as a hobby on your blogger profile. Did you remove that? What gives!?

  70. pimaCanyon

    BOJ doing its own QE and SB comment brings this to mind, something I have been thinking about since the MMT discussions with TimAndJean (I’m not sure I have that name correct, but you know who I mean):

    I believe what we starting to see is a race to the bottom by all Central Banks and their fiat currencies. T&J said that the dollar was not going to head into hyperinflation unless all the world’s currencies go down at the same time. I am now beginning to believe that that is entirely possible. We will continue to see the Dollar go up and down AGAINST OTHER CURRENCIES, while it continues to go ONLY DOWN against commodities and other assets. And the other fiat currencies worldwide will do the same thing.

    How long until they all go to zero measured against assets, I don’t know. But I am beginning to suspect it will more likely be sooner rather than later, like in a few years, not a few decades.

  71. Gary

    Ra,
    I answered this somewhere else but I’ll do it again. First off just because a cycle is right or left translated doesn’t guarantee it will hold above or drop below the prior cycle low.

    The last 4 year cycle in the stock market was extremely right translated yet it still moved below the 02 bottom.

    But for reference I always calculate right and left translated from an average cycle length not an expected one.

    An average cycle length is 4 years so a cycle that tops in less than two (like this one possibly has) would be left translated.

  72. RA

    Thanks for your patience Gary – looks like I must have missed your comment on that.

    As always, much appreciated 🙂

  73. Gary

    Adam,
    The sector has to be large enough to encompass a large investor base for cycles to work. Individual stocks are way too small. Cycles mostly just work on the broad stock indexes, gold, oil and the dollar.

    Hmm I don’t remember ever putting Judo in my bio. I was a national Judo champion when I was 14 but I gave that sport up when I tore my ACL ligament.

  74. Adam

    Ah ok. I’ve been doing Brazilian Jiu-Jitsu for 8 years on top of my wrestling background. You ever consider hanging up the rock-climbing shoes & giving BJJ a shot? :o) Maybe we’ll show up at Slopefest and wear “Security” t-shirts.

  75. Mikey

    Gary,

    I’m looking at silver and seeing that the consolidation from November to January could be the half-way mark of a larger T-1 move. If it is such a formation, I’m measuring the final top to be about 38 or 39 dollars. Is that what you see? Thanks.

  76. Gary

    I don’t put much faith in patterns of any type when it comes to silver. the market is way too thin and volatile.

    Silver will top when gold does.

  77. Gary

    Russian,
    Unless the Fed can print Euros the only thing Ben can do is make the dollar go down.

    Well unless he reverses course and decides to unload a couple trillion in treasuries on the market. Anyone want to make bets on that happening?

  78. Aaron

    Sorry for the late reply. I get my quotes from my broker (live streamer), but if you like, there is a free streaming quotes site, on both gold and silver from netdania.

  79. john

    In November, the S&P had a 14-day bull flag that it broke out of on the 15th day. The flag was limited on the downside by the 50dma. Now the S&P 500 has had another 14-day bull (?) flag, which also has been limited on the downside by the 50dma. If this bull flag resolves like the other one, look for a big up day Monday in the index. Right now the SP futures are in an ascending right triangle. If that breaks to the upside, shorts will be forced to cover. The huge S&P futures spike earlier in the evening should have been enough of a foreshadowing. This also recalls the London terrorist bombing where the futures were down 2% or so overnight and rallied to finish up big by the 4pm close.

  80. Tim and Jeanene

    Granted, I am not a raging bull as my article history has shown, and we are probably due for a healthy pullback, but companies today are much more valuable than they were during the dotcom fraud. It’s easy to look at the price of the market and think we are overvalued again, but when you look at the earning power of the companies in the Dow for example, they are roughly 200% more valuable today than they were at the previous peak. The problem with stocks the past 10 years is that companies have not performed, it’s that the bubble drove prices too high in relation to the underlying business.

    Take a look at the chart showing the comparison of the earnings power of stocks in the Dow today compared to the earning power of stocks in 1999:

    http://seekingalpha.com/article/255201-the-case-for-a-higher-dow

  81. Tim and Jeanene

    For those not inclined to read the whole article, here is the conclusion:

    “The Dow closed on Dec 31, 1999 at 11497, and ended 2010 sitting at 11577. It seems to be a lost 11 years for investors, which, if you look at the price, is true. Buying the 25 stocks we looked at using the 2010 year end Dow price of 11577, is the equivalent of buying the Dow in 1999 at 4277. I would guess you would do that if you could go back in time and get the Dow at 4277. Another way to view it, if these stocks were to return to a free cash flow yield like that of 1999 around 2.66%, then the Dow today would have to rise 168% from the year end 2010 number of 11577. That puts the Dow at 31120. I am not saying we get there, but want you to just see the comparison apples to apples. Bottom line, based on 1999 valuations, today’s Dow would need to trade at 31120 to be a comparable valuation bubble. Now you can also understand the absurdity of the prices people were paying for stocks back in 1999.

    Today, you get over twice the cash flow for your money from these 25 Dow stocks, even though the price has not changed.

    This analysis causes the “caution bear” in me to stop and wonder why I keep waiting for the next crash. If nothing else, the case is there that these stocks could easily increase their dividend payout ratios to a level that is higher than the current yield on the 10 year treasury, and still have plenty of cash flow left over to expand the business, pay down debt, or buy back shares.”

  82. Turning Japanese

    Why do I get the feeling that this is going to be a very frustrating week of rangebound volatility until the markets figure out that natural disasters do not have any effect on PM fundamentals, or at the very least, should be be PM positive since Japan’s response is to print more money.

  83. Turning Japanese

    SB,

    Would buy more on dips, but I am already all in, and highly leveraged to boot. I’d really like to get to $40+ as quickly as possible to give me a little breathing room. Shouldn’t be this leveraged, but you only live once and its money I can live without if this C-wave stuff doesn’t work out.

  84. Turning Japanese

    Gary,

    Re: manipulation

    Agree that there is probably no larger macro-manipulation going on in the PM’s, but there are surely opportunistic MOMO algo’s from the banks and larger hedge funds out there gunning for stops and that in itself is manipulation, is it not?

    Re: QE3

    Are you saying no QE3 ever, or just not back-to-back with QE2? I think it might be delayed, but I am almost certain Ben will bring QE3 after stocks get pummeled on the dollar rally. Also, the government cannot currently even fund itself month-to-month without QE, can it?

  85. Gary

    I’ve always said there is short term manipulation. That happens in all markets.

    But there is no long term successful manipulation holding back the precious metals. I doubt it is even being attempted but if it is then it is the reason gold is above $1400 and not at $1000.

    In a true bull market, with real demand, anything that forces price below where the market would naturally take it doesn’t hold price back like the conspiracy theorists would like to believe. It actually accelerates price appreciation because it increases demand.

    So if the kooks over at GATA are right, and there is long term manipulation being attempted then gold is already much higher now than it would have been naturally.

    So instead of trying to sue JPM they should be thanking them for running the price up so far and so fast.

    Regarding QE3; no it won’t follow on the heels of QE2 but you can bet your bottom dollar when we hit the next 4 year cycle low Ben will have learned nothing and he will run QE3, 4 & 5 in another failed attempt to defeat the secular bear forces.

    And he will get the same result. A brief period of gains followed by another even larger collapse.

  86. Turning Japanese

    Thanks, Gary.

    Also, don’t take this as a challenge to your record, but without going back and searching through all the archives to find the answer, can you recap your calls during the last few C-wave tops, e.g. were you early/late, prices of your call and eventual top.

    I’m with you regardless, just wondering.

  87. jabalong

    Anyone interested in uranium? The miners and the material, at least via Uranium Participation Corp, have been hammered big time this morning, though bouncing back.

    It’s horrendous what’s going on in Japan but no matter what the outcome there, nuclear power isn’t going anywhere and is poised for a massive ramp-up with China leading the way.

    If it remains oversold due to events in Japan, uranium might be a sector to keep an eye on for capital allocation once the precious metals C-wave runs its course over the next month or two.

  88. alysomji

    Gary, we have a swing low in gold. This indicates the daily cycle has bottomed, no?

    Should that not mean the stop can be moved up?

    Just trying to understand your logic. Thanks.

  89. basil

    Wow! The Uranium space is getting absolutely clobbered! Most of the gains from the second half of 2011 evaporated on the Japan news. This shows what can happen overnight, when perception changes about a sector. Too early to get back into these as the news out of Japan might still worsen in respect to nuclear. I hope they won’t!!!

  90. jabalong

    I agree Basil, it’s probably early to get in to uranium as the news out of Japan is liable to get worse before it gets better. But I’d definitely keep an eye on this sector as there are huge growth plans here in Asia for nuclear power that won’t be deterred by whatever the outcome in Japan.

  91. Jayhawk

    Way too early to look at Uraniums. The situation is building up to be a huge disaster…and we all know the governments will lie to cover their butts and to not induce panic. Think about the gulf oil spill and the initial spin coming out of that one.

    I’m thinking about coal & solar as a counter play here.

  92. Gary

    A swing isn’t a guarantee of a cycle low. This late in the cycle it probably does mark the low but I want to see enough of a rally first before I call the bottom.

    A new low on the dollar would also confirm golds cycle low.

  93. David

    The contrarian play here is to buy Japan.

    Japanese stocks have just been through a 20-year bear market. Valuations are the lowest in the world. There is probably more weakness to come, because we are entering the next leg of the global bear market, but at the bottom of that cycle Japanese companies will be absurdly cheap.

  94. Aaron

    The metals looking lethargic, it can only be the Fed meeting tomorrow that is causing that. If they pull back further, I will add to leverage…since that would mean that the Fed will say something PM bullish.

  95. David

    When we reach the bottom of our secular bear market, there will be a lot of articles about our dysfunctional culture too. At the top all the articles are glowing. When gold was at $275 all the articles and analysts were calling for $50 gold.

    Japan’s hordes of single women (the horror!) have nothing to do with Toyota or Panasonic’s ability to make money.

  96. DG

    HYG just showed up on my buy screen. It’s a short term screen, but the idea is to get in, get a nice 2-3% pop, and then set a break-even stop. Sometimes you get out even and sometimes they just keep going (and o.k.—fair enough—sometimes it just doesn’t work and you get out with a small loss).

  97. ddn3f

    SB,

    Just a slow day with silver being rangebound. Although the stock market is down hard, and miners are taking a beating, but silver and gold are range-bound. Usually when the stock market is down, silver is down as well, but I don’t remember the last time when silver held up with the stock market down by a lot. That must be a sign of srength for silver and gold.

    Maybe the money is flowing from stocks into gold and silver just like Gary said it would.

  98. DG

    I’m not sure today’s action shows strength for the PM’s. I don’t like that the metals are up and the miners are getting hit. Hopefully today’s behavior is just a wiggle.

  99. Tim and Jeanene

    “The contrarian play here is to buy Japan.”

    That is correct David – and small cap at that.

    DFJ is down 10% today. The average company in the ETF trades at a valuation of $3 in sales for every $1 in market cap and at 75 cents on the dollar in book value. That is ridiculously cheap.

    If you could by every company whole in the ETF, the cashflow you would generate each and every year stands at a 34% return. Compare that to the Dow which stands a little over 7%.

    Crazy good numbers for those who do not have a weak heart!

  100. DG

    oa92: no! That’s a totally separate thing. My SPX buys are done completely differently and have been backtested for 30 years. My individual ETF buys are very good, but not as good. I have no idea where the SPX is going to go over the next few days. For me, a lot of my work is about entry points, getting a pop in your direction, and then setting a break-even stop. Buy SPX at yourt won risk here!

  101. ddn3f

    DG,

    On a day like today when the stock market is down 1%, the steady hold in the metals seems like strength to me. The miners or course will always get dragged down by the stock market. So if metals are decoupling from the stock market, that’s a good sign. That is money leaking from the stock market into the metals. But my guess is as good as anyone else’s.

  102. Romeo Bravo

    Hi All, thanks for your comments and kind wishes late last week. My wife had a beautiful baby girl on Saturday morning. I was by her side for all 20+ hours of labor and delivery.

    Other than the joy of my first child, watching the birth process is just unreal in its intensity and animal nature. Wow, what an experience.

  103. Gary

    Folks everyone is watching the wrong thing again.

    The dollar is the key. It’s what’s driving this final C-wave surge. It’s collapsing despite everything that’s happened in the world.

    Long after everyone has moved on from the Japan incident the dollar will still be collapsing and investors will still need to protect their purchasing power from the three year cycle low.

    The best way to do that will be to hold gold and silver.

    Ignore the daily wiggles, especially on a day like today when emotions are in control of the market.

    Once emotions cool miners will get back to the business of following the metals higher.

    Remember those who can keep their head about them when everyone else is losing their cool are the people that stand to make fortunes.

  104. guy

    romeo,

    know what you mean.
    had the same experience last year.
    then you realise that beyond the facade manners, etiquette,.. we are still beasts.
    one of the most beautiful things ever witnessed.
    btw, what’s the name?

  105. Steven

    gary,

    what number are we looking for to determine if there is a failed daily cycle in the dollar? 76.1,75.63 or some other number?

  106. MrMiyagi

    Someone posted a link late lst afternoon that I can’t find today, it was netdata? netsomething? for live streaming quotes of currencies and pms.
    I would appreciate it again please as I didn’t bookmark it.
    As with the majority of you, patiently watching and waiting….

  107. basil

    Gary,

    tell me otherwise, but I don’t think PM stocks stand a chance to go up in the face of a weakening stock market; that is even despite rising silver and gold prices. I think being in PM stocks is the wrong move. Period.

  108. blammo

    Watching my Uranium stocks get blasted. Was so close to selling them for a loss on Friday.

    Surprised nobody made the nuclear connection last week (at least I didn’t hear about it). I’m sure some did – seems so obvious in hindsight.

  109. Turning Japanese

    I hate that I was right about this rangebound BS today. Not like I am going to get shaken out even for a couple dollars in silver, but still frustrating. Would like to just not look at the charts for a month, but that’s an impossibility with a drug like PM trading.

  110. Shalom Bernanke

    I’m not concerned about metal vs miners. I like that miners own what’s in the ground, and at some point the should outperform SLV, although it’s not guaranteed.

    Either is fine if we’re right about this C-wave.

  111. Turning Japanese

    Basil,

    I would tend to agree. When the herd catch on and start to chase, they now have very easy to understand instruments like SLV and GLD, and will probably rather just chase the metal (albeit paper metal) than the fickle, underperforming miners. I mean, were GLD and SLV even around the last C-wave, or at least that well known?

  112. marinho

    sentiment on this board is becoming very negative for pm stocks in spite of Gary’s message. I think we must be real close to a bottom and a skyrocket to new highs. I just got a quote on UUP and the low for the past 52 weeks was 21.9, we are now at 21.93 and tomorrow could be the day for a new 52 weeks low. hold on the faith for this week, please.

  113. Gary

    If you don’t think the miners can rise in the face of a falling stock market then you probably shouldn’t look at the Hui from late 2000 to march 2003 or Nov. 08 to March 09.

    You are again making the mistake of extrapolating the past into the future. Just because the miners are getting dragged down today doesn’t mean they won’t rally violently once the selling pressure eases in the stock market.

    Ultimately miners always follow gold and silver.

  114. Visitor

    Sorry Gary, but I still say you contradict yourself . . . a lot. You just said . . “You are again making the mistake of extrapolating the past into the future. Just because the miners are getting dragged down today doesn’t mean they won’t rally violently once the selling pressure eases in the stock market.”

    Well, you say get out of the market (yeah I know, not miners/metals) and yet above you said selling pressure will ease. I don’t think you can have it both ways. Spin however you like.

  115. Turning Japanese

    marinho,

    I am not negative about PM stocks, I just think the metals will probably outperform this time around and am positioned accordingly in my highly leveraged trading accounts. That said, I also have massive positions (over 75% of my combined investments) in PMs in my retirement accounts where I am limited to mutual funds.

    However, Gary has the real experience here, so listen to him, not me.

  116. Gary

    Nothing goes straight down. There will be bounces in the stock market as this progresses. During those rebounds miners will rally violently. They will rally even if stocks are down mildly.

    Today we just have emotional selling.

    But hey if you don’t want to own miners or metals then don’t.

    For me personally I”m going to stay the course, especially since I’ve already made so much money with this strategy and I have a reasonable stop to prevent me from losing money. As a matter of fact we are close to moving the stop up to where we will not only not lose money but will lock in big gains even if the stop is hit.

    If you know a better way then I’m all ears.

  117. Ryan

    “DG said:

    I’m not sure today’s action shows strength for the PM’s. I don’t like that the metals are up and the miners are getting hit. “

    I agree with you here. I think that’s what’s making be a bit tentative adding the rest of my dry powder at this point.

    I think I’ll probably just wait for Gary to call the swing low.

  118. Poly

    OMG, it’s like you put a gun to their head and forced them to make the trade. Own your trade, if you can’t live with it, don’t make it!

    Ironic, it’s after massive gains too.

  119. DG

    O.K. time to vent a little: [Visitor, this is not specifically for you as this happens all the time]

    I really wish people would stop pointing out how Gary contradicts himself. It is absurd to pick a sentence without context and then find another sentence without context and show how they disagree. Instead of playing “Gotcha!” how about trying to see how both statements could be true. You might learn something that way. I have quite a good BS detector and am a bit anal about word usage and meaning, and I do not see where Gary ever contradicts himself. Rather than assuming that he is full of it, maybe, just maybe, it’s you?! When you see someone contradicting himself your attitude could be “Hey. There must be a nuance here I am not getting. Great—I can learn something.” but if this is just some dumb ego game, you will never do that and just say instead “Hah! I am smarter than he is! You can’t fool me!” If that’s you, good luck to you in trading (and in life.)

  120. Sean

    When the tech bubble was a “this time is different” story, Martin Armstrong (some hate him, some swear by him) was saying that the Nasdaq would sell off from 5000 to 1200. My broker laughed. But we all know how that story ended.

    Here’s his latest piece, mostly devoted to gold.

    http://tinyurl.com/4szjwta

  121. David Kafrick

    I think the chances are very high that gold will spike down after FOMC and make a marginal new low. Unless we rally this afternoon, last week’s bottom is still close enough to act like a magnet.

  122. ...at ease

    thank you DG for your response to visitor. I have not been on long enough to judge the visitors comment, however it did peeve me with the attitude. Thank you for taking the time to write a proper response.

  123. Gary

    We are getting a front row seat to human emotions today.

    If one believes in the bull and is waiting for a swing to mark the bottom then any weakness is a gift because you are getting assets on sale.

    But virtually no one can make that switch in their mind. Instead they see a down day and can’t pull the trigger.

    This is why I just laugh when I hear people say they will back up the truck if they get a pullback.

    When the pullback comes it never looks like a pullback because ones mind has switched from greed to fear.

  124. Turning Japanese

    Gary,

    Apologies if this has been discussed already, and if so tell me to piss off, but do you think there will still be a worthwhile opportunity to short equities once we have exited PMs. I mean, surely they will have already dropped significantly by then, or do you think they range along until the dollar bottoms/PMs peak and then collapse?

  125. Gary

    The question isn’t whether gold might dip back down tomorrow or Wednesday. The real question is where will it be a month from now.

    If you think it will be much higher then what difference does it make what gold does tomorrow?

    If you can’t pull the trigger today you certainly aren’t going to be able to pull the trigger at lower prices.

    In order to win big at this game one has to change the way they think and view the markets.

    If are unable to operate in any other way than to avoid short term pain you will never be able to make the big bucks.

    Unfortunately that is exactly how most retail investors invest whereas an elite trader has a completely different mindset.

  126. Gary

    Japenese,
    Because of the mathematics on the short side one doesn’t have to catch the top to make big money.

    The move from 100 to 20 is 80%.

    The move from 80 to 20 is 75%.

    See what I mean?

  127. David Kafrick

    Tomorrow will probably be a $40 range day, IMO buying the spike down tomorrow will probably get you a better price than buying today. I will put in a limit order on gold 20 points below the price it is trading right before the FOMC release and just turn off the computer. That way the spike will not scare the hell out of me, lol.

  128. Ryan

    Gary,

    Thanks, I know you said there’s no guarantee it doesn’t go lower from here but if I was to add a bit more, do you suggest adding here or wait until we raise our stops?

  129. Shalom Bernanke

    “In order to win big at this game one has to change the way they think and view the markets.

    If are unable to operate in any other way than to avoid short term pain you will never be able to make the big bucks.”

    Well said, G.

  130. Gary

    Ryan,
    If you wait to move the stop then your risk will be larger because gold will likely already be trading at new highs and you will be buying into overbought conditions.

    Unfortunately there is no right way to enter. But if you believe the bull will correct timing mistakes then you needn’t worry about perfect timing.

  131. MrMiyagi

    Gary, wife and I are going to Vegas first week of April to escape the cold (snowing, -20’s -30’s and stuff).
    Is that a critical timeframe, I don’t want to bring her laptop and I sure as hell don’t want to be on the downside of the D wave. I understand by your analysis we’re looking latter end of April but thought I’d ask.

  132. MrMiyagi

    That’s what I gathered from all the readings, thought I’d ask.
    Thanks again, reading your analysis is like opening Christmas presents.

  133. MrMiyagi

    One more thing, folks enough of this bickering crap. If I wanted to read all that shit I’d head on over to Yahoo! Answers.
    No one has a gun to anyone’s head, to the best of my knowledge. Mad Money comes on at 3pm, go there.

  134. basil

    Gary,

    I know very well what happened in November 2008 to the miners. I also know what happened in the months before. They were crashing like everything else, leaving 90% or more of their value in the dust. So how good of a logic is it when you point out the extreme climb without mention of the extreme fall that just preluded it? SLW went from about just about 20 or so to 2.50. I just look at the current market and I don’t see miners holding up any better than the rest of the market. So if indeed we are at the verge of a steep stock market correction, I don’t see the miners withstanding the downdraft, but if they do, I certainly don’t see a steep rise in miners in the face of a steep stock market correction.

  135. basil

    at ease,

    you are correct. But that’s what this blog is for, to voice your opinion and read about the opinion of others and then make your own investment decision.

  136. pimaCanyon

    Gary,

    Seems like the primary reason for your saying that it’s likely the stock market has topped here is because we have a failed daily cycle.

    But why do you need to label the 2/24 as a daily cycle low? What if today’s low is the daily cycle low and the last daily cycle low was 11/30? Is that too long a period (from 11/30 to 3/14) for a daily cycle?

    Thanks!

  137. DG

    Basil: With the dollar dropping maybe we don’t get the SPX drop until the PM’s top? If we knew the SPX was about to crash that’d be one thing, but that’s not at all clear to me (and I’m a bear.) Are you confident that the SPX is about to tank starting now? If it didn’t would that affect your position?

  138. basil

    Gary,

    to sum up my point: I see a stock like SLW outperform the market when the market is rising. I see it drop less if the market is correcting. But to imagine it climb like nuts while the market tanks… that’s a real stretch for me. I am not saying it cannot happen, lots of things can happen, I just don’t see it happen, and I don’t see any indication right now that would make me believe otherwise. Why else would SLW be down over 1% while SLV is flat. Shouldn’t it be rather up 1% or perhaps flat, or is this a hint that SLW is just as married to the broader stock market as it is to the metal?

  139. pimaCanyon

    basil,

    I’m cautious on the miners for the very reasons you’re expressing concern. I’m about 90 percent in the metals and 10 percent in SVM, SIL, and GDXJ.

  140. Shalom Bernanke

    I don’t see what all the worry is ab out the miners. Silver is flat, and silver miners down 1.5% (SIL)

    Gold up .5%, and gold miners down .5%, all in the face of a weak stock market.

    I’m long and holding, looking to add more of dips or at these prices if we float around a few days.

  141. pimaCanyon

    Basil,

    And I am considering dumping the miners altogether and just going straight metals. If I want the “leverage” of the miners, I’ll do that with deep in the money call options on GLD and SLV.

  142. Shalom Bernanke

    This is where the bull will shake off the next bunch of riders, with the feared stock market correction upon us scaring some investors out of a good trade. I hear 2008 brought up everywhere and what happened to the miners then. I highly doubt it will go the same way only 2 years later. It could, and that’s what stops are for, but I wouldn’t exit my positions because of 2008. It’s entirely possible that this time the big money rushes to metals/miners instead of panicking out.

  143. basil

    DG,

    you are right, if stocks don’t tank, miners might have more room to run. I just cannot imagine them going in exact opposite directions. When I look at the indices however, they all seem headed lower at this time, and this despite the further falling dollar. You say that stocks might go up if the dollar drops further, and I would have thought the same about a month ago, but the dollar has already continued it’s slide and still stocks don’t want to recover. To me this looks like something is broken.

  144. DumbMovingAvg

    Polonius:
    What is the matter, my lord?

    Hamlet:
    Between who?

    Polonius:
    I mean, the matter that you read, my lord.

    Hamlet:
    Slanders, sir; for the satirical rogue says here that old men
    have grey beards, that their faces are wrinkled, their eyes purging
    thick amber and plum-tree gum, and that they have a plentiful
    lack of wit, together with most weak hams; all which, sir, though
    I most powerfully and potently believe, yet I hold it not honesty
    to have it thus set down, for yourself, sir, shall grow old as I am, if
    like a crab you could go backward.

    Polonius:
    [Aside] Though this be madness, yet there is method in’t.

    Hamlet Act 2, scene 2, 193–206

  145. DG

    Basil: Fair enough, but tops are usually built. That is, a bottom can V, but a top tends to be broader, so if we spend a few weeks testing the high (which I think is likely once Japan news dies down) that will give miners a chance to rally with the metals. I suspect that is what will unfold. We’ll see.

    Unrelated: HYG is at the lowerBB and at the rising 50DMA. I just bought more.

  146. DumbMovingAvg

    Falstaff:
    To die is to be a counterfeit, for he is but the counterfeit of
    a man who hath not the life of a man; but to counterfeit dying,
    when a man thereby liveth, is to be no counterfeit, but the true
    and perfect image of life indeed. The better part of valor is
    discretion, in the which better part I have sav’d my life.

    Henry The Fourth, Part 1 Act 5, scene 4, 115–121

  147. David

    In 2007-2009 PM stocks outperformed during the beginning and end of the bear. It was only during the extreme liquidation event that they got killed with everything else.

    It should be noted that Gary isn’t saying this time is different; he’s saying this time’s the same or similar. We will also see a dollar rally/liquidation event during the D wave.

    But we are still in the early innings of this cyclical bear, more a la late 2007 than late 2008.

  148. Visitor

    DG – I know you weren’t calling me out directly and even if so, that’s OK. I respect Gary and had subscribed to his service for a year previously so I’ve probably “been here” longer than most of you. He never had this amount of traffic. I own 30% net worth in miners, so I’m “invested” and feel I can at least express an opinion.

    I’ll just say that the majority here follow like puppy dogs and never question as if Gary can do no wrong. He won’t make every call right and he will change 180 at will. He used to say buy a basket of juniors, now he doesn’t. He says don’t trade go Old Turkey and you’ll be rich, but then ends of trading and claims not to be a trader. He is also selective in what he answers. The force of his conviction is powerful . . . until he changes his mind. Yes, he’s entitled, I have no issues.

    It was bothersome that the real hamster got berated when he actually has been more accurate than Gary. Jesse from his blog has also had more correct calls too. – I just think people should be a little more open minded.

    Again, no disrespect to Gary. He’s mostly right, but not always. You still have to pick and choose what’s right for you.

    Thanks for letting me post Gary.

  149. Bob loves Hawaii

    My view is if there is even a hint of panic, the FED will print hard, and now with oil retreating this past five days will take pressure off of the miners.

    Stay with small caps as they are the most leveraged to metal prices.

    I am still buying on weakness, GORO.

  150. Yash

    I had mentioned about Andre Gratian yetserday. He is very good at cycles and p&f on spx. He has at least till 1425 on spx. Astologically also Raymand Marriman has asset inflation express going on at least until half of this year or even early 2012. Tony C has bull market till 2012 too. With Gary’s views adding to above views guess is top of C wave, Spx top around half of this year. May 23, 2011

  151. Daniel

    While I do not post much here and have been a subsciber for a while! I would like to add that I follow Gary because he added extreme clarity to an overall investment theme I already had! (Saying we all follow like puppets is a stretch in my humble opinion!)

  152. DG

    Visitor: I was not in the slightest suggesting he was always right. On the other hand I see people trying to pin things down when they can’t be. This is a probabilistic game. If I offer you an even-money bet where you flip coins and you win whenever you flip five times and one of them is a head, you’d obviously take that bet. If you flipped five tails and lost were you “wrong?” If the bull in gold has already ended he’s wrong. Everything else is trying to play the game well, using the odds.

    Contradicting oneself is another matter entirely. For every “contradiction” you have mentioned I can see a clear explanation (for example, by his definition of trader, he isn’t. You have your own definition. Even Buffett is a trader, right? He buys AND sells stocks. Depends how you define it. And SIL IS a basket of miners, etc.)

    Regarding people following like puppy dogs. Some may. And frankly I have been concerned that if he makes a major call wrong people may get really hurt, but there are stops (the last cycle low) and he screams about not having too much leverage. Those that get really clocked do so because they didn’t follow the plan. (Remember Robert and his blowing his account out in TZA despite “don’t short a bull” and “don;t use too much leverage.”?)

    And Hamster and MLMT ( and a few others) are obnoxious. I never object to someone posting other ideas—it’s the whole point of a blog— but if you want to contradict “the plan”, do so without evidence, AND are obnoxious about it, be prepared to get nailed. As for his being more accurate, he was writing about the wiggles so no one cared. Frankly, as a trader, I am more accurate than he is. I just don’t post it because—well—who cares. And if I did it’d be without the attitude that I am God, and woe to those who don’t heed my Word.

    Anyway, I appreciate your thoughts and of course you are entitled to post! Good luck on your miners—and to us all.

  153. David

    All the Gary-worship is because he helped people make money. If he makes a bad call — or even if PM’s fail to rise every single day — the tone of the comments quickly change. Right now is a good example of that.

    At this point people feel entitled to 4% every day, and if that doesn’t happen, the PMs are broken and Gary is expected to do something about it.

    I can only imagine what it would be like if Gary was actually wrong for even a couple of months.

  154. DG

    Damn! I just posted a very long post at around 12:00 that has disappeared (first time that’s happened to me) Gary, do you see it?

  155. Poly

    All the newbies come on head strong. They question the advice, the following and the money being made, until they see a major run slip right by them.

  156. Slumdog

    David said…

    The hamster was berated for being a jerk, not for his calls.

    David, the person, AGoldHamster at kitco and his own I think now closed to new people due to his holding a programming job for which he’s behind in work hours, thus no time, has been the most successful of all traders I know of this year. His return is around 700%. He has a portfolio of now $85-90M, which is tiny.

    He has no vested interest, just his best guess of what the charts show that he posts and follows by others.

    That posting series by the hamster here which were quite funny as the real hammy is probably either German, Austrian or Swiss, and he doesn’t have full command of the English language, were not imo AGH.

  157. Poly

    Dollar at the low for the day.

    The timing of tomorrow’s FOMC with any dollar drop and gold cycle low is an interesting coincidence. The market has now priced in no extension of QE2 and only 1-2 months of re-investment post QE2.

    You’ve got to believe that the FED will not be anymore hawkish than this market view, so there should be limited downside annoucnement risk.
    But with Japan in the news and an equity market showing weakness, the slightest hint of change to this market view tomorrow could send the dollar into it’s drop and gold to confirm its cycle.

    Basically, I say the FED announcement tomorrow should be either a neutral or positive bias for gold.

  158. ...at ease

    Daniel, you are correct, I came to value Gary’s insight as he provided clarity to following the cycles, trends whatever you call them of the gold/silver market at a micro level. I heard from enough folks who give you a line, like it’s a bull a bear, up or down. However Gary can guide those of us who are learning and if he can make calls that pin point prices within pennies, I am a happy camper. This doesn’t mean I don’t do my own research. For it was my research that brought me here. Like minds do tend to gather together, so I will say we are here because we enjoy the site and what Gary has to offer to us on our investment trade journeys. We all have a choice, but to belittle those who value Gary’s advice, and we have to sit back and take it. Nah, we have a voice and we do use it.

  159. Poly

    I made $44 million last year, not as good, but not bad.

    Wait, got to go guys, my boss is calling, damn those 5 minute breaks down last long.

  160. ALEX

    Hey guys

    Just popping in for a minute , just caught up w/reading a lot of todays blog comments.

    If I was contemplating buying- but was torn between…

    1) “If it goes down tomorrow I may get a better price” , and …

    2) “If this is the bottom being retested , I may miss this opportunity ”
    I would also add this thought –

    Do you know where we are in the daily cycle? (rhymes with flirty , or bun 🙂

    What If they buy hard at days end…then tomorrow gaps up big and runs hard , then imagine we all read on this blog…

    ” Was that the low? Should I buy now? Should I just jump in?? should I wait for tomorrow and see if we close that gap? Do gaps always get closed or will it Not close the gap till the d-wave? Crap. did I miss it?

    🙂

    So I would say , if you see both possibilities…why not grab 1/2 a position in whatever you thought of getting Right Now?

    If it goes down tomorrow..WINNER! (C.Sheen)- you get to add more, cheaper too.

    If it gaps up…WINNER! (C.Sheen)-add more and bottoms prob in!

    I’d buy 1/2 position here if I really believe this Bull is in a C-Wave ( and if I was in analysis -paralysis limbo, but really wanting to get in). Thats just me.

  161. marinho

    I just saw a discrepancy in the value of the dollar
    kitco reports it at 76.34 down 39 cents, previous close 76.73.
    while finviz.com = 76.61 down 9 cents
    which one is right?

  162. David Kafrick

    I won´t be posting on the blog anymore, at least for quite some time, so I just wanted to wish everyone here the best of luck in extracting money from the markets. DG, Alex, Jayhawk, Poly, pimaCanyon, TZ, Wes, Slumdog, Shalom Bernanke and other great contributors that I could be forgetting, all the best to you. And of course to Gary as well.

    Keep riding the bull!

  163. Slumdog

    Miyagi, Leo… that’s M as in K. It’s in the tens of thousands.
    USD 85,000 to 90,000. So, he posts. I look at his postings as he surveys for himself all the chartists who he thinks are kewl.

    Saves time.

  164. Gary

    basil,
    08 was a completely different environment than anything we’ve experienced in decades or are likely to experience again for decades.

    We were dealing with a credit market implosion. That caused a once in a generation selling climax that took everything down.

    Gold at the time was moving down into it’s 8 year cycle low.

    That combination took miners down much further than what normally occurs during a typical run of the mill D-wave.

    The stock market isn’t going to crash anytime in the next decade simply because we aren’t going to have another exogenous event like that.

    The next bear will be driven by a recession caused by spiking inflation. The Fed will fight the bear with more and more liquidity. That’s the recipe for a slow grinding bear market with many violent counter trend rallies.

    The rain of liquidity is the fundamental driver behind the PM bull.

    Let me say this again. It’s almost always a mistake to project the past into the future. The future is almost always driven by different fundamentals than what came before.

  165. David Kafrick

    Poly,

    Yes I do. I have half of a position already, and will probably add another half tomorrow after FOMC. I will get out if there is any weakness below 1270 and will try to ride it at least to 1400.

  166. ALEX

    Yeah Dave K.

    Thats a bummer- you post of things I want to contemplate. Your thoughts will be missed.

    Maybe post when you can- if you can?-not sure why you’re leaving.

    Best wishes!!

  167. Gary

    DG,
    probably got caught in the spam filter. I just published everything from spam.

    If something disappears note it on the blog and I will check spam.

  168. DG

    David K: I also am sorry to see you go. There are only 5-6 people here I really take note of. Now there are 4-5. Surely they have laptops where you are going? (hint, hint)

  169. MD

    DG (or anyone),

    What was the website/blog and the book that someone thanked you for over the weekend.
    Just curious…

    Thanks,

  170. David

    Just bought a little AGQ, GPL, and USSIF just for kicks.

    I also sold some SIL, which I think I will be wary of in the future because it trades at such low volume. I found it easier to get a good fill on USSIF than on SIL. Its illiquidity will make it hard to manage even if you have a semi-large portfolo.

    BTW, re Miyagi’s question — most people keep working long after they don’t need the money, I’ve found. Retirement tends to be boring.

  171. ALEX

    Blogger DG said…

    ‘David K: I also am sorry to see you go. There are only 5-6 people here I really take note of. Now there are 4-5.’

    If I pay you , can you add me to that list?? Sounds elite 🙂

  172. MrMiyagi

    “BTW, re Miyagi’s question — most people keep working long after they don’t need the money, I’ve found. Retirement tends to be boring. “

    Not for me! I’m looking forward to not working at anything at all. The house is paid off, zero debts, all we need is security in the bank and that’s it. Travel 4-6 months a year and maybe buy a stock here and there for fun.

  173. marinho

    UUP closed at 21.91 very close to a new 52 weeks low. Now how is that possible when we know in november the $ was below 76? Is it slippage of the ETF?

  174. PuppyDogFollower

    Gary-

    Should I add, should I sell a little, what miners would you go with, should I go heavier silver, should I have pizza or hot dogs for dinner, should I buy a new car, should I marry that girl I’m dating, who should I pick for my final four?

    Waiting patiently for your answers. 😛

  175. DG

    Yes, Alex, if you pay me I’ll put you on that list. For 10 grand you can even have the number one spot! (and if GPL hits 10 you will have earned the number one spot.)

  176. CMT

    Wow, crazy goings on here today. I missed as, thought I retired on 2/28/11, I had to swing by the office to pick up mail and have lunch with a former partner.

    A couple of thoughts.

    David K. , you will be missed, I enjoyed and benefited from reading your posts.

    I agree with Slumdog, the “problem” with Hammy I think to be largely language based. He does good research and makes interesting comments often.

  177. daniele

    pdf, puppy on pic seems to be more intelliget and smart than your post.Have you got anythings better to do than say this stuff?

  178. Leo

    Mr Miyagi!

    I do not know who YOU travel but it costs me about $1000 a day when I do (between hotels, tickets, restaurants and sightseeing). 4-6 months out of a year would be about $150K by my reckoning. A million in the bank will not last long…

    And BTW, I did retire a couple of years ago at the ripe age of 47 and no matter how much I enjoy reading and music and travel and the rest, I will have to find out something to do, otherwise I will go nuts!

  179. David

    We’ll know soon enough.

    Gary’s scenario will play out in the next few weeks, or it won’t. One way or the other, you’ll be out of PMs in a month’s time.

  180. Robert

    If you follow Morgan’s predictions on gold/silver prices you would see that he has been wrong most of the time.I subscribed to his newsletter for over a year and can’t tell how many times he called for a major corrections in both gold and silver and most of the time they were incorrect.If he says gold is going down ,then load the boat.I would put him in the same category ad Gartman-enough said

  181. Vegeta

    hey gary,
    i own some palladium and im thinking if i should sell now or wait a bit before i sell, because lately its been showing some weakness just like the market, do you think its actually following the market more than following gold at this point in time? i brought it when it was at $250 in 2009. let me know what you think?

  182. David

    Palladium is more of an industrial metal, so it’ll get hit more with the stock market.

    I held SWC for two years and sold it to put the $$$ into silver.

  183. Gary

    I seriously doubt the Fed will make any mention about raising rates or contemplating stopping QE early with everything that’s happening in the world and the market now back on it’s heels.

  184. ALEX

    Gary

    If you are planning the trip to Switzerland ,I wonder how you are planning on using their currency?

    If the dollar Breaks down hard to the 3 yr low, the Swiss Franc will (should) head straight up. Wiser to exchange your currency now?
    However, if your trip is as planned this summer- the dollar may be rebounding quite rapidly , and the Swiss franc retracing?

    Are you purchasing things in advance? Like tonight 🙂

  185. Poly

    To the contrary, it’s either goin to be status quo or a hint of concern out of Japan, which the market could “jump on” to mean possible easing in aome form. My point was simply the fed meeting is just in the timing belt for your gold spike and it will be used as the catalyst in the media. We know that’s not the case.

  186. Slumdog

    I need to buy 8,000 metric tonnes of gold. Where do you think would be the best place to buy? Thank you.
    The Chairman

    Will that be irradiated or plain?

  187. Slumdog

    Would it not be reasonable to expect that the Japanese are selling their assets, including PM’s, to raise yen?

    I don’t have any idea how to equate the world panic from the probable meltdown at Unit 1, reactors 1 2 and 3, as when one goes, I’ll guess the other 2 will go.

    OK, massive, sustained nuclear cloud coming to the US West Coast. Nice.

    What does that do to the price of gold or silver?

  188. Marc

    “OK, massive, sustained nuclear cloud coming to the US West Coast. Nice.

    What does that do to the price of gold or silver?”

    Watch the old Bond move “GoldFinger” and you’ll understand 😉

  189. Slumdog

    Gary, you’re thinking country level and I’m thinking about all the grandma’s there who are a large factor.

    What crossed my mind is that people will first cling to currency, but they’ll see this problem won’t go away in a week or two. The container vessel of reactor 2 is apparently cracked. That’s not a quick fix. The situation per NHK TV is one of reaction, like BB to this economy. The thing has a reasonable probability of emitting unprotected nuke radiation unless one is crazy and wants to fly over and dump cement on it or lead or whatever they do.

    Assume the cloud starts and keeps coming. It will be bad news to the US which is in the direct path of the air rotating around the earth which passes over the affected area of Japan.

    What’s the impact in terms of choosing what to store, besides iodine and a quick move to Latin America? Will gold have more value? Less?

    Is this a reasonable question?

  190. Gary

    I expect something tangible will always have more value that something that can be printed into oblivion.

    Despite all that the fundamentals haven’t changed. The dollar is collapsing down into it’s three year cycle low. The market is going to have to protect itself from that event. The only way to do so is to trade paper dollars for tangible commodities.

  191. Brian

    Gary, After reading all that went on today on the blog, I realize how truly difficult it is to convey; and get folks to understand, that the unfolding scenario is exactly what we have been waiting on to unfold.

  192. Bob loves Hawaii

    Slumdog, the worst case scenario for a nuclear accident has already passed. Control rods have stopped the fission some days ago, and what is now happening is the melting due to decay, nasty yes, but not Chernobyl. Two of the three reactors are already cooling from the seawater and will be room temperature in a week or so. The other reactor may very well melt down and through, releasing its radiation, but the U.S. will receive very little beyond background radiation as it needs to be catapulted intot he stratosphere to make the journey east.

    Helsinki, was in the direct path of a cascading reactor failure and endured moderately higher levels for a few days before it settled to earth, Helsinki is 6 times closer than the U.S.

    Radiation is carried by dust particles not some sort of neutron bomb beaming radiation around the world.

    This information is from the Scientific American article written yesterday. My synopsis.

  193. fat boy

    Let’s face it gary and DG,s golden top 5/6 is why we are all here.
    And not for the laughs or banter
    Thanks David K good contributions

  194. blammo

    Thanks for the post Bob. I didn’t sell my U stocks today but I don’t think West coast of NA is our only concern. I am hearing low-level radioactive winds could hit Tokyo in 10 hours… not good.

    DX getting a bid…

  195. gold silver

    this is starting to look like 2008 when everything got pummeled together…

    going to tighten my stops to lock in profits…

    good luck to everyone

  196. DG

    gold silver: The SPX topped in 2007 and gold went straight up for most of a year. Our market topped last week. Are you saying everything is going down together because silver is a few days from it’s bull market high? Are you expecting another credit crisis right now like 2008? If we follow the previous script, we will have a huge rally (like after the 2007 SPX top). Are you saying this will be similar or different from 2007? I can’t quite tell from your post.

  197. Gary

    Miners were mostly flat today.

    What do you do if you end up getting whipsawed out of your position? Do you, or can you, buy into strength? Can you chase an overbought market.

    Even if we have one more lower low one would still be selling into a daily cycle low. The correct strategy is to buy into a daily cycle bottom not sell into it.

    But I guess this is why most retail investors are unable to profit from bull markets. They sell when they should be buying, and buy when they should be selling.

  198. David

    Gold silver,

    We are about to experience an avalanche of liquidity as the world’s central banks do what they always do in a crisis.

    I think it’s very unfortunate that it had to happen this way, but it’s getting easier to see how we are going to experience a short-term explosion in PM’s.

  199. Gary

    Again I have to ask why would one sell into a panic. No one ever made a dime by panicking. The big money is made by keeping your cool when everyone else is losing theirs.

    Hopefully no one here is invested in the stock market and hasn’t been for a long time. So no one is going to get caught in a stock market sell off. Plus we all know what Ben’s response to deflating asset prices will be. It will be the same as it was last year when the market took a dive. Print more money.

    That is the fundamental driver behind the dollar collapse and the final leg up in the C-wave. All the pieces are starting to fall into place. Now we just have to weather this emotional period.

  200. Brian

    gold silver, check the reaction to any other event like this (think 09/11/2011 etc). It will be similar. The snap back will be the answer to all the questions.

    As bad as thing seem, this is not the time I would be looking to sell. From where we bought AGQ and miners we are up 60%. We do have wiggle room.

    If it morphs into the end of the world, nothing will matter.

  201. David

    We are in PMs for the next month. Then we’re out. If for any reason things do not go according to plan, we have stops in place. Gold is flat right now. Why get worked up?

  202. Ryan

    Brian,

    Wow, I wish I had that kind of wiggle room. I’ve started my position late and I’ve been adding on the way up so I don’t nearly have close to the strong hand status as most of you guys. However, with Gary’s cool and calm guidance (and the others here), hopefully I won’t panic and can weather the storm.

  203. Bosco

    Gary,

    The S&P (after-market) future is down by 20 which may be caused by Japan’s index down by >6% for each of two consecutive days. This may affect miners’ stock price and against us. Would you think normal rules do not apply to abnormal situation? Would you think it is better to stay in cash until the uncertainty got cleared?

  204. Gary

    Gold hasn’t officially formed a swing yet. So possibly one more move lower before a final cycle low. But again I would caution against freaking out and selling at a cycle bottom.

    When everyone is irrationally selling is when great bargains can be had.

  205. Brian

    Ryan,

    I know you have been here for awhile now. The key is always to buy when the intermediate bottom call is made. It could be a wrong call, and if it is we have a stop. If the call is correct we are quickly in the money and able to make rational decisions about aborting positions.

  206. Aaron

    One is either a believer or they arent. Considering the meltdown in the markets, the dollar should be up HUGE…yet its not up that much(its only up 0.23…AKA Pathetic)
    Im itching to buy some silver here, if it cracks 35…hopefully the idiots will sell stops right under it will drag it to 34.50 and Ill buy there, since my wish for below 34 never materialized last week.

  207. Moneyman

    But if this mess escalate more how much further can gold go?

    I think that gold is showing some strength in this mess..I think the central bank all over the world will start to put liquidity to the markets..

    But can they stop the markets from falling apart?

  208. David

    Nikkei down 12%. Wow.

    The 9/11 analogy is apt.

    The liquidity spigots will be on in full force tomorrow morning. We may see a quick drop tomorrow, but the recovery out of that will be very powerful.

    I would not like to be short here.

  209. David

    Keep in mind that the markets sold off after 9/11 — and then they rallied for months. 9/11 put a short-term floor under the market.

  210. Bosco

    Japan is down >14% now. I guess this will trigger demand for liquidity in next few days. Hence, cash is king.

    We may have a buying opportunity for Japanese stocks several days later.

  211. Gary

    I’ve got as much leverage as I want at this point. Now it’s time to focus on where we will be in late April not where we will be tomorrow.

  212. David

    Or, conversely, could the liquidity dump by central bankers extend the C-wave?

    Will it make it more difficult to get a sense of where the dollar bottom lies?

  213. Bosco

    The Japanese government has to print money to save the nation. Saving lifes and re-building their nation is much more urgent than fixing the budget deficit. They must also find ways to improve the sentiment. With such hugh demand of materials in upcoming years, where would the smart money go today?

    Also, with fears about nuclear energy plants, it gives another reasons to institutional investors to speculate on oil. The oil price can go much higher after the short-term panic. It will be an intersting few days.

  214. Gary

    Emotional moves like we are seeing now always create great bargains. One just has to keep their head and buy when there’s blood in the street’s.

    Although by the look of the overnight action there isn’t going to be much blood in the precious metals market. Both gold and silver are holding up amazingly well considering the avalanche of selling around the world right now.

  215. Shalom Bernanke

    I don’t like riding things lower, and especially a smackdown like we might see today, but it’s part of the game.
    As long as I’m not stopped out, which is highly unlikely with my wide stops, I will look to add with limit orders to buy way beneath mkt prices.
    Still, I’ll only add another 5% of total capital.

    Nothing has changed, and governments now have another excuse to print even more money b/c of events in Japan. Stop-loss orders must be honored, but other than that, only amateurs will sell metals into this weakness. That I’m sure of.

  216. Turning Japanese

    Not sure why a simple 8.9 earthquake, 10,000 dead tsunami and a nuclear meltdown should be killing PM’s.

    Seriously though, this is all too sad, and all too surreal thanks to the ongoing footage from a well-wired population.

    If PM longs can hold on this week through all the Japan mayhem, Fed decisions and OPEX, we could see some serious upside next week.

  217. Shalom Bernanke

    Haggerty,

    I see that with the GDX, although that is not my stop out level. They’re gonna be puking ’em out today! My plan is to only put another 5% in, but would’ve raised that to 10% if it weren’t for the Fed BS this afternoon.

    I don’t care about what the Fed says, only that the anticipation of 2:15 might keep a lid on any rally if it occurs.

  218. Aaron

    Gary, you got your wish 🙂
    1400 did crack afterall.
    I doubt the Fed can say anything negative today, its just bad timing for them.

  219. Turning Japanese

    Actually, let me reword that, every f-ing day there is any hint of weakness in PM’s the price gets hammered for the mid-day London fix. Unbelievable.

    I’m sure we will get back up off the mat once again. Just tired of clawing the ground back from the stop running algos.

  220. Aaron

    Fully loaded, got my 34 wish. Now its just waiting for things to come to fruition.

    BTW DG, that was an awesome short on oil! Congrats on a great trade!

  221. Turning Japanese

    Arun,

    I’ll let Gary speak for himself, but I would take this as a gift and BUY. The rallies from the mid-dau smackdowns on average have been impressive and quick.

  222. ddn3f

    Turning Japanese,

    I agree, this is one great gift if anyone has dry powder left. So late in the daily cycle, Gary will be screaming don’t sell, don’t sell, BUY if you are not fully loaded.

  223. DG

    TJ/SB: I’m not sure I agree on the algo/stops run. I believe what is going on is just a desperate need for liquidity. If you own lots of items and they are all getting trashed you sell what you have: PM’s or what have you. If it were just the PM’s diving I’d agree, but they can;t be running the stops on everything. I think the question is how much and how long the dollar rallies in the face of this disaster in Japan. I am not saying we won;t snap back, just that this is not your typical “run the shorts” action going on.

    Aaron: Yeah, but I now wish I had shorted a ton of oil and I didn’t (isn’t hindsight great?). The belief in the dollar cave in slowed me down there as well. I am a hell of a lot longer PM’s than I am short oil!

  224. Turning Japanese

    DG,

    But during the big hourly candle smackdowns in PMs, nothing else is also getting run, that’s why I think it is probably PM targeted algos. EUR strong and oil strong in the last hour, PMs still getting hammered.

    Anyway, doesn’t matter. Still a long way to go before my stops are hit.

  225. Aaron

    James, USD is still under 77, it failed to hold above it (briefly)despite the Yen being weakened by the BOJ.
    Its very telling.

  226. Poly

    I understand the “don’t panic”, but to say Silver and even gold are holding up well is very far from true. In fact, they are getting hit more than any other asset class. Even Copper, a pure industrial is holding up.

    Oh well, we’re all well in the money, only thing to do is wait and watch.

  227. alex

    I am watching it and am not delighted. Panic was and is full on since this morning here in europe they sell everything.
    As I said last week when BTFD stoped working change was in the air. The jap. situation is just perfect fuel for this environment, and a resolution for this kind of deasaster doesnt come fast.
    I bet even Benny and the Inkjets will not be abel to change much this afternoon.
    As Garry advised I am mostly out of stocks just my miners are left, but they will get hit hard today that is for sure. Will I be able to buy more?I guess not, too freaked out here, since more than half of my miners will turn red today for sure.
    (the Alex with no wife in picture)

  228. DG

    Traderlady. Sorry to hear about that late purchase. People usually wait for “price confirmation” to buy. The problem is once things have rallied enough that we feel emotionally comfortable it’s probably late in the game. Generally, you need to buy when you are scared and sell when you get too comfortable. Hopefully you didn’t load up. This is just a step on the way towards “getting” what is a pretty tough game to play. As for myself, I too hate days like today.

  229. Keys

    Just to be clear!!!!!

    I call dibs on Gary’s couch! 🙂 Gary I hope you have HBO.

    (you won’t understand if you are a newbie)

  230. gold silver

    It looks like it’s a better idea to get to cash at the swing high of daily cycle and get back in after the swing low….even if surprises come to the upside in bull markets

  231. basil

    I am beginning to think that ‘Get out!’ was meant to say ‘Get out of silver!’

    Gary is usually up and posting at this time of the day. It’s awfully quiet this morning.

  232. DG

    Traderlady: Perhaps you are a newbie here, but you list your occupation as “trader.” Is that your full time living/work? If so,you knew full well what I said before I said it. [My family lived for decades in Clearwater, BTW]

  233. gold silver

    also…not sure if this has been posted

    but this might be the third/fourth straight time that the miners have been a leading indicator for a fall in metal prices…

    i’m going to add this to my list of things to look at everyday…

  234. DG

    I think perhaps Gary is trying to figure out whether this dollar rally will get legs (if the nuclear situation worsens) or not. We had the Korea/possible war curve ball which lasted just a few days, but this may last longer as the threat is more real. 9/11 selling went on for a whole week and this is arguably much worse, so who knows. I suspect he will post when it gets a little clearer this morning (or at least he ought to, IMO)

  235. Elad9000

    basil,
    I think when Gary is absent from the blog he is busy pouring over the charts to come up with more meaningful insight into the situation. I doubt very much that he is running scared.

  236. gold silver

    as of now, the miners are showing NO relative strength today…

    if this doesnt change by EOD today, I will be all out with a small profit

    I rather protect my capital

    good luck to all

  237. Poly

    In context though, a gold move to $1,390 is WELL within any expectations for a daily cycle low area. Same for Silver, a $2-$2.50 drop after a mammoth run should not be a shock.

    With the daily cycle now into the 30’s, in theory gold is going to need to find its bottom very soon. It’s not unusual to find bottoms after very sharp and sudden drops.

    Certainly not a time to be puking your miners.

  238. Haggerty

    Turning Japenese

    well said

    If we close above 34 on silver that will be a good thing.

    Im also watching the dollar here as long as it doesn’t go above the 77.20 level I think we will be ok

  239. Turning Japanese

    TommyD,

    One sugestion, just open an FX/CFD/Spread betting account with one of the small retail brokers with just a couple hundred in play money and use them for the charts and real-time data. Even the smallest brokers usually have good charting software.

  240. ALEX

    Feels like the last time I was at six flags, sitting on the top of the 450ft drop of KINGDA KA-

    -I usually love that 1st drop, but last time I DIDN’T lose my wallet 🙂

    Good day guys and gals…I am off for most of the day! Time will tell if we need seat belts or airbags on this Bull 😉

  241. Poly

    Judging by the ferocity of blog posts and general “tone”, I suspect today has a strong chance of market the daily cycle low.

  242. Gary

    Just went back to bed. I’m up now.

    The plan stays the same. It’s terribly late in the daily cycle. I don’t sell 30+ days into a daily cycle. Once I’m convinced the cycle low is in I will move stops up.

  243. TZ(4404)

    Added to silver at a support point overnight, but got stopped out.

    I have another add ready at a level closer to 33 (which you will recall was my initial buy zone of 31.50-33 from a while ago).

    You guys in AGQ get to experience the problem of not having a 24hr security with a huge gap down today. People trading the same thing using futures have had access to get in or out all night.

  244. ...at ease

    So glad I pulled my funds out of that annuity, they were out as of yesterday! When Gary said Get out, I decided to take the withdrawl hit as it was lower than the loss would have been. No funds that would survive the downdraft in Annuitys. 🙂

  245. ALEX

    Hey

    Before I go, didnt someone post that they’d like to see a $40 drop??

    Who was that?

    I dont sense panic or doom on this blog,does anyone else? I am looking at stocks opening below Fridays low..and I will personally do my own analysis from there.

    So far, nothing overly concerning, maybe a capitulation day in the metals? I hope my roller coaster analogy didnt make anyone sense ‘fear’…I LOVE roller coasters 🙂

  246. Gary

    Instead of focusing on today focus on what the Fed is going to do and what conditions will be like in two months after this has been forgotten.

  247. basil

    Qe3 announcement please in conjunction with a rapidly approaching dollar crisis and quickly improving news out of Japan.

  248. jabalong

    T.J,

    With NetDania, there’s no need to open multiple windows if you use ChartStation instead of FinanceChart”:

    http://netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/ChartStation.aspx

    This allows you to set up multiple subwindows within one window – I have it with four or six charts at a time. Save your WorkSpace, then next time you open ChartStation, they’re all there in one window so to speak (as long as you don’t delete the cookie I think).

  249. TZ(4404)

    N1TRO,

    >I’m here! Just biding my time until silver hits $47. 12X leverage should give me a nice profit 😛

    You still with us?

  250. pimaCanyon

    FWIW: This morning’s low in gold did not even tagged the 50 percent retracement of the move up from the late January low to the March 7 high. 50 percent retracements are common.

    Silver’s move down this morning didn’t even come close to the 38 percent.

    So the metals are performing pretty much as expected for a daily cycle low.

    Miners are puking to be sure, getting sucked down by the overall stock market. (I almost dumped my SVM yesterday… bleh…)

  251. TZ(4404)

    Added some silver here. Bit of a cowboy play going against my system. My actual math suggests a buy closer to 33.

    We’ll see if it works.

  252. AGQ

    My buys for cde and exk were triggered this morning. I wanted to buy more, but fully loaded. Had to sell agu to make room.

  253. Poly

    Could points Pima.

    We get drunk on the gains but don’t want to experience any of the hangover.

    If these dips frighten you, close the browser and go occupy yourself with something else.

  254. pimaCanyon

    Gary,

    GDX has made a lower low. You were not expecting that to happen if the C wave was still in progress. Does this change your view about the continuation of this C wave?

    The metals are performing as expected IMO. Gold nearly tagged a 50 percent retracement and silver hasn’t even hit 38 percent. But the miners are looking pretty bad.

  255. Gary

    PC,
    The miners are irrelevant at this point. This is an emotional selling climax. The miners are getting dragged down with the rest of the market and have completely disconnected from gold. The same thing happened in 08.

    Now we just watch gold and wait for the cycle bottom to form.

    The fundamentals are still in place. Long after this has been forgotten and the world has gotten back to the business of revolving around the sun the dollar will still be collapsing down into it’s three year cycle low and the market will still need to protect itself from that.

  256. mylifemytrade

    Those trapped will get a chance to get out when Ben speaks later today. He should drive spx to 1280, gold to 1406 (may be 1410) and silver to 34.5 (may be 35).

    Whats happening in the market has NOTHING to do with Japan, btw – I am sure everyone knows that already.

  257. Gary

    Folks it took silver one day to go from current levels today to the recent high. SIL only 11 days and SLW did it in 7 days.

    Once the selling pressure runs it’s course this could easily be recovered in 3 or 4 days and probably will be.

  258. Gary

    The stock market was already heading down into an intermediate cycle low. Japan has just exacerbated the decline.

    Gold was heading down into a daily cycle bottom. Japan has intensified that correction.

    The dollar is still collapsing into the three year cycle low. Ben will just make it worse if he tries to add more liquidity.

    That need to protect purchasing power from that decline will again drive the market once emotions cool.

    That is exactly what’s going on.

  259. DG

    MLMT: Wow. NOTHING to do with Japan. What a coincidence. Amazing! Even the uranium stocks were coincidentally fooled by this irrelevant Japan nonsense!

  260. TZ(4404)

    For days there have been posts from people talking about how the stocks/ETFs are not keeping up with the metal. Comments about how this is worrisome. “Should we change our plans?” Etc.

    I’ll mention my earlier statements again:

    In the FINAL phase of a C blowoff (roughly the last intermediate cycle), the metals lead the stocks and silver leads everything.

    The stocks don’t even have to make a higher high or new highs! Sometimes they make LOWER highs. Often they don’t go much of anywhere.

    What you are seeing in the stocks compared to the straight metal is NORMAL.

    May I suggest that anybody who is interested buy a 1 month’s subscription to stockcharts for about $10 and go back and LOOK at the last C blowoffs historically for yourself.

    Just think of how much more informed you will be and how it will help your investing instead of wondering what is going on and asking others.
    —-
    CAVEATS to my assertion:

    1) It’s a toss up whether SLW will underperform or not. It wasn’t around for some of the early blowoffs and it has special properties.
    2) AGQ will obviously outperform since it *is* silver.
    3) If you wouldn’t put your entire net worth in a security then it doesn’t count for this statement. Of course there are some penny miners somewhere that probably outperformed for each C blowoff. But, you’d be crazy to have substantial funds in them.

  261. TZ(4404)

    And Caveat #4:

    Yes, at SOME point the stocks will probably start trading like internets in 1999 and outperform the metal in blowoffs.

    But they haven’t *YET* and until they do (likely later in the bull), I will stick to what I have said.

    Note that the pattern is NOT currently breaking with THIS C blowoff. I would suggest that is all you need to know.

    Buyer beware. Just my comments.

  262. TZ(4404)

    Caveat #5:

    In the C blowoffs historically, there are probably a FEW large gold miners that outperformed gold (but not silver), thus seeming to break my rule a bit.

    However if you check you will find that a stock outperforming metal on ONE C blowoff usually didn’t outperform on previous or following blowoffs.

    So on average it still seemed much better (and without the company risk) to stay in the metal during those times.

    Again, my comments for evaluation. Do your own due diligence.

  263. DG

    I think it is noteworthy that with all this disaster the dollar is lower than where it was two day ago. If Gary is right that the next PM leg will be caused by a weaker dollar, then things do seem on track. One of the biggest disasters in history happening to the worlds 3rd biggest economy, and the dollar does virtually nothing? No one wants to buy it in the face of this. Remarkable.

  264. catbird

    DG,

    You took the words out of my mouth on the USD.

    As for gold, a smart guy I read who does cycles said last Thursday that gold’s swing low should arrive, at the latest, by Tuesday (today) as even a stretched gold daily cycle rarely goes beyond 32 days.

  265. RacerX

    Jayhawk: I’m with you on SLV calls. Made a couple buys of SLV Aprils at the low. Was looking at SLW but don’t like it for a shorter snapback play.

  266. n1tro

    TZ said…

    N1TRO,

    >I’m here! Just biding my time until silver hits $47. 12X leverage should give me a nice profit 😛

    You still with us?

    Yeah I’m still here…a little depressing waking up seeing -$30K down..but I’m still in. 🙂

  267. JReality

    When SPX hit 1300, it was funny how Beanie would say something like “Next stop, 1500!” and he kept implying that we would never even have any kind of real correction! LOL

  268. TZ(4404)

    I added a bit more silver with about 50 cent stop. I’m done and holding.

    Further work by me shows gold likely has bottomed 2hrs ago. Further confirmation I needed to not wait for $33 on silver.

  269. DG

    N1tro: Huh? With 12X leverage and down $30k, you’d be down $2500 with no leverage? (30k/12) And with 12 X leverage, if your positions are down 8% your equity is zero, right?

  270. Rob L.

    Gary,

    If a ton of money is leaving the markets around the world and it’s not going into the dollar or PMs, where is it? What is the flight to safety at the moment, and would you say that the odds are good that it could eventually end up in PMs in the not so distant future?

  271. TZ(4404)

    I’m back to 7x+ on the metals, but close stops on the purchases this morning. If we drop too much back towards the lows this morning those positions will sell out.

  272. TZ(4404)

    Metals back to 1400 and 34.75 resistance points. I think all we have to do is rally over those and the worst is probably behind us.

  273. n1tro

    DG,

    As of today’s prices, I have about $512,200 in play. I have about $45,000 backing it up (about 11X now). This morning woke up to unrealized loss of -$30,xxx. As I type, it’s about -$21.5K unrealized. 😀

  274. TZ(4404)

    Rob,

    >If a ton of money is leaving the markets around the world and it’s not going into the dollar or PMs, where is it?

    Any ‘sell’ goes first and immediately into CASH. That’s how accounts work.

    In a few hours or days or weeks people think it over and likely realize this is just more bad news for fiat, debt, and the world financial system – and resume going back into metals.

  275. basil

    I really feel bad for the Japanese, but to remain positive, today Chernobyl is a tourist attraction, Kiev is a thriving city, and Ukraine is a promising frontier market; so even a nuclear meltdown won’t bring down Japan!

  276. Redwine

    TZ

    Good chart. I’m worried the ratio will work its way back toward 1.0, after switching, but can’t help thinking a sinking global economic situation will hurt the miners even with silver going up.

  277. TZ(4404)

    In other words and as Gary says you need to not confuse a short term emotional reaction to the continuation of existing trends. How people immediately react to these events doesn’t tell you what happens after they have lunch and think it over.

    Of course, I have stops if wrong like a good investor.

  278. daniele

    basil are you joking?Thousands of people, children, women are dying for cancer even now and who knows till when.Radiation effects will contamined generations.They are dead even now.

  279. n1tro

    Well I know I’m a very small fish in this game we are playing. Just let the rest of the small frys like us know before you, $15million dollar AGQ dude, billionaire Gary, et al decide to unload so we have a chance to get out 😉

  280. MrMiyagi

    Just wondering if SLW, SLV & GLD are an add to pile at this point or there might be a lot more downside I see that they’ve all bounced.

  281. Shalom Bernanke

    The whole commodity complex is getting wiped today, and palladium is down 7%.

    Sharp pullbacks like this often take time to get turned around to the upside again. The bull remains intact, but we might need more patience compared to the last few pullbacks where we were higher the next day.

  282. Shalom Bernanke

    I’m not concerned about prices going too much lower. IMO, we could get one more day like this at most, and that might not even happen. Still, I’m not planning on a rip higher as yet. We might just start going higher in small increments again (maybe for a couple weeks), like in the beginning of the C-wave until things catch fire.

  283. Shalom Bernanke

    Pretty impressive around here that subscribers weren’t whining and coughing up shares this morning.

    In the past, you could here the pain in people’s posts. Who knows, maybe it means we haven’t hit bottom yet, but it’s good to see that people have their heads screwed on straight around here.

  284. Vonda

    N1tro,

    How in the world were you down only 2% on 11-12x leverage?

    By the time I woke up–which was past the worst of it–I was down 16% on 1.4x.

  285. Shalom Bernanke

    I still can’t believe how bad people who sold AGQ this morning got ripped off for $12-15/share in the panic.

    Having Gary stay in alongside his subs to avoid that mistake alone is worth 5x the subscription price.

  286. Vonda

    Oops, sorry: I confused 92000 with N1tro.

    Given that, typos, and my own fuzzy math, think I’d best get me a thick slice of bread slathered with butter and almond butter – comfort food.

  287. Sean

    Don’t want to bore you veterans to death, but I’m another Newbie here. Yesterday $ was down and silver was down; today $ is falling but silver does not seem to be responding commensurately. Is this a tell for more downside?

    TIA.

  288. Vonda

    N1tro and Guy,

    Ooh, ouch!

    Been there, done that long ago. Survived it and luckily the memory still lives within.

    Hope you guys will be okay and sending you fresh, unsalted butter (before it escalates in price.)

  289. guy

    if i learned anything it there should be a close below 76.66.

    so maybe today…

    to be sure wait for Gary to confirm this

  290. EricH

    Some of you are simply over leveraged. A 2% correction on gold, 4.65% on Silver and 3.79% on GDX should not in any way give you a 66% draw down. That’s simply poor money management with total disregard to risk.

  291. fat boy

    Sean
    The dollar /gold price will not necessarily correlate by the day hr minute
    Gary said it or something similar gold & silver will not be able to resist the climb as the dollar grinds down to it’s three year low
    If I read the blog right if the left cycle in the dollar is confirmed and gold breaks 1430 all is good
    If it does not then that is what our stops are for

  292. Shalom Bernanke

    Sean,

    I’m not looking too much into the day to day relationship b/t USD and metals.

    As far as more downside potentially, this is the reason I have not yet added. Enough damage was done that we might go a little lower, or at least trade around these levels before resuming the up move. I don’t like it, but call ’em like i see ’em.

    The important thing is not to sell into weakness in a bull market (unless stopped out at your predetermined level), so the only decision for today is whether to buy or not, and how much.

  293. guy

    before anyone pulls my hair and teeth out, this gambling with leveradge (x4) is less than 5% of net assets.
    its not that my life is on the line

  294. Poly

    At the height of the panic I was down 20% this morning. I know I’m extremely leveraged, but already very deep in the money. But I’m out to July calls, so I can sit tight for many months.

    But 67%, wow, hang tough nitro! With futures though wont you need settle up at the close? Do you need to realize losses?

  295. bluebox

    Shalom said “Pretty impressive around here that subscribers weren’t whining and coughing up shares this morning.”

    I’ll start coughing and whining if miner funds fall another 2-3%/day through the week (Van Eck and Franklin are ~flat for over a month). Won’t matter if gold hits the magic $1650 or silver $45-50, I’d only be breaking even at that point if the miners only match gains.

  296. Rob L.

    I’m curious where all of the fans of Great Panther are hiding. A week or ten days ago they thought GPL was the next Barrick or Goldcorp, and today not one post about it….hmmmmmm

  297. Veronica

    Shalom, I agree.There was lots of damage done today, and barring a substantial fed statement induced rally we will probably chop around here for a bit even if today was the low.

  298. n1tro

    its not poor risk management if i am fully aware of the consequences. whats the difference between a old turkey person with 15k in the account and being unrealized +30k and then going to flat as of this morning and me who realized 30k in the last few weeks from my 15k account and having go unrealized -30k this morning? i would say no difference.

    got bet big to win big. i still have physical and silver etfs that arent leveraged 🙂

  299. n1tro

    i will probably get automatically booted out if my balance goes below 5k. awesome thing about forex is i dont have to settle, rather just fund the account some more. silver/gold contracts are automatically rolled over every month.

  300. pimaCanyon

    Josh,

    Treasuries are UP, so that’s where a lot of the money is going.

    And of course, if treasuries are up, then yields must be down, so I don’t know where you getting data that says yields are up??

  301. Bob loves Hawaii

    Rob L. you are funny. GPL(4,000 shares) for those of us holding it for awhile are up hundreds of percent, along with AG, and EXK. These producing silver miners are my bullion bank, and if you beleive the c wave this sell off is a nit. I also encourage you to have a small buying program on GORO on every down day. Highly profitable company with huge silver reserves.

  302. Daniel

    Dollar should be much stronger here! Not good news for the World’s reserve currency!!
    COME ON C WAVE!!!!

    Dollar Index ($DXY)

    76.38 +0.01 (+0.01%)

  303. Aaron

    Between 12:30 central, and up till 3 there might be a further dip since margin calls are based off of the floor close, and with gold being down more than 30, margin calls are going to be a factor.

  304. pimaCanyon

    from this morning’s low, gold and silver rallied and put in a high after 11 EDT. Since then, they’ve pulled back. Gold has gone slightly below 50 percent retrace of that morning rally, silver hit nearly 62 percent. If they go much below these levels, we are likely to see a new low get made later today or tomorrow.

  305. Ryan

    I put in more AGQ/HZU late in the morning and was feeling a bit better when it started catching a bid but now it’s come back down again. I’m assuming if it closes near the low of the day, there will be more pain to come?

  306. Shalom Bernanke

    “I’m assuming if it closes near the low of the day, there will be more pain to come?”

    Could be, but I don’t make decisions mid-trade to exit early. Stops will take me out if I’m wrong, so other than that I let the trade work. We’re all trying to get the bottom on every trade but what is more important is being in, and on the right side for the trend, IMO.

  307. Ben

    I think until something stabilizes in Japan, it’s going to be chaotic. I think some big money is preparing for an outlier black swan event. IF that trade gets unwound, gold will snap back to the upside strongly. But until something’s under control in Japan, I don’t think that will happen. Each day of instability and progressively worse news amplifies the uncertainty in the market and increases the potential for significant long term damage to the markets or a positive feedback loop (or crash). I think a near term hyperinflation scenario in Japan is dramatically more probably now that before the tsunami. How would that impact the world markets?

    I still believe it will be contained… but until we can say “it has been contained” it hasn’t.

  308. Poly

    Twice the DXY went to print a negative and both times it instantly bounced. I predict a 3rd time fail, say at 2.16pm.

  309. marinho

    i feel the pain today, but the $ seems to be attracted to 21 something on UUP instead of 22 something. I will hang on for the hair of my chin.

  310. funmike

    I have bought into the idea that it is necessary to think differently in order to get better results. That is why I am here. When I see action such as this it is easy enough to see the potential gains that could be made but learning how to play it as a trader is beyond my current ability. That is what I have tried to do the last several years and have been met with nominal success. It is evident that there are many experienced traders on board here. When I hear that you don’t play it that way but instead play the trend and hold on during the dips it gives me greater confidence to hold on as well. It sure would be good, however, to learn how to profit from these ‘wiggles’ as you call them.

  311. Shalom Bernanke

    Hippie,

    Depends what time frame you’re trading, longer term implies wider stops.

    Check out the “average true range”, or ATR, for the period you’re looking at and go back several periods to get a figure. That’s a good place to start.

  312. daniele

    “the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011.”
    What is it?QE3?

  313. Gary

    Someone may have already answered this but to confirm a failed cycle the dollar has to drop below 76.12.

    Alright I’m headed out to climb some rocks.

  314. Movax

    I’ve heard talk of natural gas being used as alternative energy supply for Japan. Ship it over in compressed liquid form.

  315. TZ(4404)

    We have sharp downtrend lines last 12hrs from all the selling and the metals have a rough reverse H&S pattern up against those lines; Just a bit higher and the move up should be nice.

    I’m expecting it fully bought in.

  316. DG

    Jay: As you know, I am short some oil. The COT report for oil is off the charts showing dumb money bullish and smart money bearish. The Middle East mess convinced everyone oil was going to $200. It isn’t—at least not yet. If dollar crashes it’ll rally, but less than PM’s IMO

  317. The Angry Hippie

    Thanks Shalom. I was thinking that percentages would be the rule, but using ATRs to calculate stops places more weight on moves outside the expected range and allows an exit strategy based on an individual stocks expected (or unexpected) volatility, huh?

    So if needed am covering SVM @ 11.75 and GLD @ 132.00 (which is closer to 2x 14d ATR. Lets see how that works. I have a lot to learn.

  318. Ryan

    I really hope the bottom is in. I started off pretty conservative near the intermediate low and then as we started heading higher, I bought a lot more into strength. I don’t have strong hand status anymore but really trying to be brave to old turkey it. If we continue to grind down, I can squeeze out my last remaining bit of dry powder.

  319. Keys

    QE2 to continue as planned. QE3 not mentioned probably because Ben is stumped with Japan…we will need to wait until the next meeting.

    This was a no nothing report. However, the change in inflation language suggests perhaps a change in language for the rates in the future….

    Also remember QE doesn’t cause inflation according to the FED.

    But I think this an overall “wait and see report”

    I didn’t get what I wanted out of the report. Continued QE2 was fine, but it didn’t give the test for QE3.

  320. DG

    Ryan: You don’t have to be all in or all out. You can peel off some AGQ you bought late. I often set stops at cost once I get in the black. So if I bought some at 130, 150, and 170 and were worried, I’d sell the 180 stock if it gets there.

  321. Ryan

    DG,

    Thanks for the advice, appreciate it. I actually was thinking about that the other day. I should of took off the chunks I put in late but I guess that’s all in hindsight now. I guess a bit of greed and the old turkey thinking was in my head. We’ll see how it goes, I haven’t gotten shaken off just yet!

  322. Poly

    DXY 76.30 is the 5 day and cycle low…..if that doesn’t hold that will be it. Metals won’t move before then.

  323. Movax

    Any much more significant move lower in the USD and it will be convincingly below the upsloping trend line of higher lows from 2008.

  324. Poly

    Patience Nike, patience. Dollar is collapsing before our eyes, it wont take long for the metals to jump on it, once it’s confirmed.

  325. Techperson

    OK, I’m in – AGQ on very modest margin, first time I’ve owned it. I don’t think it will go below 186. Been in PZG a long time, two pieces of great news coming by the end of March. Also OOO.V and SLX.TO, all three of these due to the quality of the people – my #1 criteria in junior miners.
    Also GPD.TO – successful people, but I don’t know much about them yet. Wanted to start buying because I want to own the Yukon. Maybe should have bought KAM.V, but I don’t know the people there, either. Any thoughts on any of these to take your mind off the market?

  326. DG

    I’d have liked to see a more violent snap back in SLV/AGQ. This drift up feels like the sellers have just become exhausted, rather than real money coming in. If the dollar caves in that won’t matter, of course as they will come in, but for now I am unconvinced and unimpressed (and not doing anything about it). I’m just always reading and feeling the tape—even though there is no “tape” any more. Maybe we just sit near here for a day or two as SB suggested earlier.

  327. MrMiyagi

    Teachperson: CS.TO, they have been going at it pretty good for the last few years, there’s a charter flight 3-4 times a week that goes up there with staff, supplies and food on an Air North HS748.

  328. Poly

    I disagree DG. We’re WAY OFF the lows of the day and closing on higher notes.

    As fort he overall setup, I think its looking very sweet.

    The Gold/Silver smackdown is well within an a acceptable decline and especially in context of preparation for a final big push to C-Wave top. It’s going to let the very few ride it.

    As for the dollar, OMG that 1, 5, 30, 120 day chart looks as sick as you need it to be. Again, in context of external geopolitical events, the dollar is rotten.

  329. T.J. Rand

    Options expiration is Friday, and the following ‘points of maximum pain’ may portend continued pressure on these ETFs/miners until after expiration. Interesting that these are unchanged from early yesterday before the issues in Japan really flared.

    GLD- 134
    SLV – 31
    SLW – 36
    SIL – 24

  330. DG

    Poly: “I disagree. The Gold/Silver smackdown is well within an a acceptable decline and especially in context of preparation for a final big push to C-Wave top. It’s going to let the very few ride it.”

    What I was saying was on a completely different topic. The snapback was weak. That doesn’t mean we aren’t in a C-wave, just that from a tape-reading perspective I am not at all sure the bottom is in in the PM’s. The highest percentage reversals have a violent snap-back not a lame one.

    I sold no PM stock so I obviously agree with your longer term comment, but as for the rest of the week I’d have felt better if we had really panicked down and panicked back up making it clear the selling was done. This close was blah.

  331. Uatatoka

    I made no moves today as the fundamentals have not changed. This action today has the feel that more near term selling is in the works however – if not tomorrow then sometime in the next few days. I’m braced for more pain but a nice gap up would do wonders for my well being however 😉

  332. coolkevs

    hehe – I like the “Get Out!” title – reminds me of the Amityville Horror. And I’m close to being comment 666 🙂
    Well, as you remember I was touting Japanese stocks using Kevin Depew’s DeMark analysis on Minyanville. Well, one tsunami and nuclear disaster later, how is that going for us? 🙂 Using EWJ amid the close today and going back to Dec 7, we are down from 10.57 to 10.03, so -5.1%. Why Dec 7 – well, that’s when GDX hit its high of 64.62, and closed today at 56.68, so -12.3%. I know you guys prefer silver and that has definitely outperformed everything else, but even with all the craziness, Japan has still outperformed GDX over the last 4 months! I don’t think this nuclear problem is over, so its outperformance may be done by tomorrow…

  333. Nike Boy2008

    DG,

    Just got a chance to look at the old posts and glad to hear about your spiritual practices…awesome…I checked out your site as well..looks great!! I live in Socal…please let me know if you ever have a seminar down here – will definitely make it

    I was born into a spiritual family and hence I’ve been doing meditation, yoga and other spiritual practices most of my life. It certainly helps. As you can probably tell, I’m still a work in progress – got a long way to go.

    I’m glad to see quiet a few spiritual people on this board…

    Also if people want to get started, “Art of Living” might be a great place to start

  334. Le Fou

    Repercussions for US Treasuries and the Dollar

    All major markets including gold are down significantly today as investors become skittish.

    The most important aspect of this entire situation, however, is that the Japanese Government will need to sell a large quantity of its horde of US Treasuries to pay for reconstruction.

    With China not adding to its holdings of US Treasuries, the Arab oil exporters looking more volatile every day and now Japan looking as though it may be an active seller that doesn’t leave many buyers left for US Treasuries except its biggest holder and sole-buyer of nearly all new issuances from November until at least June – the Federal Reserve.

    With the Bank of Japan printing trillions of Yen and the US Treasury market becoming even more of a one-buyer market (the Federal Reserve itself), the investment positions we hold in gold and gold stocks look to be set for further major gains once the short term panic subsides.

    http://preview.tinyurl.com/4apv2co

  335. Darwin

    Hate to spoil the party, but Silver moved up 35% in just over sixs weeks. That’s “parabolic” by any traders definition. Regardless of Japan, fundamentals, sentiment, the Fed, the dollar, etc… Silver is going to take a breather, which is healthy. The bad news is, the breathers are usually scary, violent, and quick. We are 50% (thats FIFTY percent) above the 200dma! IMO i suspect we are going to give up plenty of ground in the next 3 weeks. I am biased as i own SLV puts.

  336. Nike Boy2008

    Hi Gary,

    Can you please explain something to me for education purposes..

    If our thesis is correct about the USD, why didn’t precious metals react today? the USD gave up all it’s gains today, but gold and silver barely moved…

    It seems like gold and the USD have completely decoupled…

    At what point will our thesis about the USD and gold be wrong?

    As you know, we’re just letting all our profits evaporate

  337. David

    Darwin,

    Maybe.

    But silver will follow the dollar, regardless of where it is in relation to the 200dma. Silver was wildly overbought a few weeks ago, and now it’s even higher, courtesy of the dollar. If the dollar tanks, all PMs go higher. So you don’t really own silver puts as much as you are leveraged to the dollar.

  338. Jayhawk

    Darwin-

    These intermediate cycles last for several months and we just launched out of one when the 50 & better yet 90 got tested.

    Last intermediate lasted over 4 months with the 20 MA holding the entire run.

    We are only coming up on 2 months in this one.

    Silver MAs

  339. David

    Paul,

    I think that’s unfair. Darwin stated his position and has valid reasons for it. There is always a bull and bear case.

  340. Shalom Bernanke

    Even if the silver puts work out, that trade will lose you money over time and likely blow out your capital entirely one day.

    At least Darwin recognizes his bias and states it up front along with a time frame (3 weeks), unlike the perm-bears that only shout down every rally in the metals. 🙂

  341. Gold Lion

    Darwin,
    Since you are so much in the minority, you are probably right. I was pricing silver puts yesterday just for a hedge. Good luck with that trade.

  342. Darwin

    Paul, it is the bullish exuberance you, and the herd most likely hold for Silver that creates greater odds for an imminent sharp correction. We could easily retrace to $24-$26 and remain in a Silver Bull market.

  343. David

    Darwin,

    I don’t think there’s a whole lot of exuberance out there for silver, particularly after today.

    Identifying people who disagree with you as “the herd” is kind of self-serving and condescending. Unless you have some crazy bullish sentiment readings to point to, you are just coming off as a troll.

  344. Shalom Bernanke

    I think Darwin could be right that silver will hit 24-26 again, but I’m quite sure it won’t go straight there and it’s even possible it hits 45-50 first, then retraces to 26.

    I also think it’s unlikely we see 26 in just 3 weeks. Trading silver from the short side and with put options is a suicide attempt in my book. Why not sell calls short so even if silver goes sideways or drifts a little lower you might still make money?

  345. Jayhawk

    There’s been pretty good action on gold’s 50 MA the past few years. If not, we have the 144 which has been rock solid coming in around 1353. Last winter’s intermediate move out of Feb back tested the 144 in early March.

    If we start to crawl along the 144 and or get a couple day closes under it…I might start crapping in my pants. 🙂

    Gold

  346. Darwin

    David. Let me clarify “herd”. CNBC, Wall Street Journal, Barrons, Joe investor, message boards, and your average newletter of which Gary’s is not. IMO, expectations for continous gains are nearly universal. Comments of higher and higher near term “price targets” are being echoed every where i look. When stocks fall, as seems to have started, silver tends to fall along UNLESS gold is exceptionally strong. Finally, If traders, as i believe, start dumping their SLV at a faster pace than silver is being sold in the futures markets, the custodians for the ETF will sell their bullion which will intensify the selloff of silver. And yes, i could be totally wrong but it is my current view, amongst toher reasons, for the time being.

  347. james r

    Darwin,

    You would have had credibility if you would have said this last week.

    Remarks like yours is an annoyance to say the least.

    James

  348. DG

    Darwin: What is your evidence for the claim that “the herd” is bullish on silver? I claim the herd is bearish. And Joe over there claims the herd is neutral. And my grandmother says the herd is expecting a correction. If you say something with content we can check it out and have a dialogue back and forth. Otherwise, it’s just blowing smoke.

  349. Avann

    I held on till after the Fed meeting … dollar went down, PM’s went nowhere … I sold 50% around 34.60. Personally I would love to chase it higher but if it goes lower I’ll start to get rid of the rest slowly. When I’m convinced we’re back on track I’ll buy back … no doubt higher. Until then I’m keeping some of these profits!
    And I’m usually wrong since I just go with what I read and how it feels … and I’m reading crap and it feels like crap. FWIW.
    And I know where putting this on the earthquake/tsunami but why did it take 5 days for the reaction?
    There is something wrong here …

  350. DG

    Darwin: we crossed in cyberspace, but listing a bunch of TV stations is not evidence. C’mon, you’ve got to have more data than that!

  351. pimaCanyon

    Not knowing enough about cycles, especially the IT and yearly ones, here are the questions of the day:

    Everyone’s assuming that the IT low came in on January 27. And that that low was also the yearly cycle low.

    Here are the questions:

    1) Is it possible that that low was NOT the IT low and that the IT low is actually ahead of us?

    2) If the Jan 27 low WAS the IT low, is it possible that it was NOT also the yearly cycle? If so, then the yearly low could still be ahead of us.

    If the answer to either of those questions is YES, then the follow-on question is what has to happen in the gold market for us to raise the odds significantly that either the IT low OR the yearly low are not yet in and that they lie dead ahead?

    A week or so ago, Gary suggested using 55.22 on GDX as a stop. He said that if that were to get taken out, then something is wrong. Well today GDX hit 54.75 which is .47 BELOW (nearly 1 percent below) the stop Gary was using last week. Why was this stop something to be honored last week, but today we choose to ignore it?

  352. David

    Darwin,

    I haven’t seen that much bullishness in the mainstream media on silver.

    I did see that Gawker (yes, that Gawker) advised shorting gold yesterday.

    Even if the media were bullish, that would not be a catalyst. I shorted stocks two months ago based on USA Today’s “time to get back into stocks” cover story and stopped out at a small loss. Had I held on I would have been crushed.

    You are right that silver is overbought and due to correct hard. But being right and early is the same thing as being wrong.

    Again, in the short term, your fate is tied to the dollar.

  353. jeff

    someone on hear said “folks, its all about the dollar”

    who can guess who that was

    do i see any hands?
    yes, you over there please answer

  354. jeff

    pima
    what price did yall buy in. was gold at 518 hui? hui hit 518 but where was gold? what was garys original buy in at?

    hui got hit with stocks but where is gold?

  355. pimaCanyon

    Avann,

    Nothing wrong with protecting profits when we’re dealing with this new wild card that was NOT in the cards until Friday. I’m starting to have similar thoughts.

    However, regarding the quake and tsunami: I believe the reason the markets are reacting today, 5 days after the event, instead of Friday is because of what is happening with the nuclear plant and that that situation is still unresolved. The markets hate uncertainty. The risk of a meltdown and release of huge quantities of radioactivity and not knowing the total effect of that should it happen–that is a big cloud hanging over ALL markets right now. Until that gets resolved one way or the other, I believe the markets could just hang in limbo, in a trading range.

  356. DG

    Yes (about the car), so…?

    O.K. enough anecdotal stuff. The url is for sentimentraders silver public opinion gauge and it shows a lot of bullishness, BUT it has been higher right before each ramp up (in ’06, ’08, and ’09) And as Gary has said it is gold that drives the sector. We had this much bullishness before the previous blowoffs. You can;t get to 90% bulls without getting to 80% bulls and continuing to rally. Gold sentiments is neutral. Silver COT data is neutral.

    http://img163.imageshack.us/i/goldpublic.gif/

    http://img864.imageshack.us/i/silverpublicg.gif/

  357. Nike Boy2008

    AG getting some front page coverage on google finance

    it’s been on the list of biggest decliners 2 of that last 4 days…

    $19 to $14 in 4 days…straight out UGLY

  358. pimaCanyon

    Jeff,

    I bought not long after the Jan 27 low and have continued buying on the way up. I have SLV, SLV deep in the money calls, and GLD deep in the money calls.

    My SLV shares and all my SLV calls are profitable at this point. Half of my GLD calls are profitable.

    I also have shares in SIL, GDXJ, and SVM. The SVM shares are at break even, SIL are slightly positive, GDXJ are in the red.

    But overall, I’m in the green since beginning this buying spree after the January 27 low, but I would hate to see what’s left of my profits go up in smoke.

  359. Avann

    Thanks Pima … I did consider the nuclear plant news but was still not convinced. As I said … I hope I’m wrong because there is nothing I want to see more then $50 silver and WILL NOT have a problem buying back higher. If $50 silver is the target I do not see a problem with buying back at 36 or even 37. I did keep 50% …

  360. jeff

    Pima
    i didnt post but i was a little heavy on the leverage.. shhh

    but i sold at 1435 and bought 1440 calls

    i sold at 1422 and bought 1430 calls

    i flatened out at 1400 and bought1400 calls
    all just to hold my spot in line. i will probably just hold them .

    i have two futures contracts at 1387 im not sure if i would hold them past 1360 though

  361. Nike Boy2008

    all of those followed Gary will probably still be in the green…

    not for too long though…one or two more ugly days and we might all get close to breaking even or even end up red…

    One thing I’ve learnt from last august until now: to sell 30- 50% at the daily cycle top and have some dry powder

    that way we can all lock in profits and can buy more at the swing low..once the swing highs have hit, all miners and AGQ have gone down atleast another 20%

    I rather chase than see all my profits evaporate…

    at the end, holding or chasing, my profits might end up being the same anyways…

    ofcourse, this is everything against Gary has been saying about old turkey

  362. Avann

    And that 50% was purchased at $27 so I have a long way to go down from here … I was 100% HZU … no miners, no gold just 2x silver ETF for me … so even if I’m wrong I can still be happy 🙂

  363. ...at ease

    Nike Boy2008
    I can see where you are coming from since I only began following Gary in Feb and getting positioned. Everything I have added since Feb is in the red. However, with faith it will all come back and more when the C wave crests.

  364. Jon

    DG, when silver hit the upper trend line at $36 last week it also coincided with unusually high and continued high volume in the Ultra Short Silver ETF- ZSL.This, IMO, is a great indication that silver “may” have reached its high….tempoarily. Also, take a look at a 10 year chart on Silver. It has risen on a near vertical path in the past several weeks and is now at its most overbought reading in “history”.

  365. jeff

    at ease

    where you bought is what you have to defend
    if you did not buy when gary did dont defend his spot. defend your spot.
    i screwed up and did not buy when he did . that wont happen again but i will defend my spot and still follow gary

  366. Shalom Bernanke

    Jon,

    I agree silver has had a monster run. In my experience, the stronger a move the less likely it reverses and follows through immediately. In other words, if a trader actually changes his mind about silver he is likely to be let out of the trade favorably if he can keep his patience and cool.

  367. MrMiyagi

    I’m sure I speak for all the latecomers to the party, we aren’t in a position such as the rest of you and need a break to 38$ (in my case) to be in well the green.

  368. Shalom Bernanke

    Jon,

    You’re implication is not that silver will pause, but that it will go lower and possible quite a lot.

    I’m saying it might, but neither you or I know that for sure. What we do know is that strong moves do not break easily.

  369. Visitor

    Hey Poly,
    How’s that major run working for you?

    “All the newbies come on head strong. They question the advice, the following and the money being made, until they see a major run slip right by them.”

    Dollar rolling over and miners/Gold/Silver down. That wasn’t part of the “plan”.

  370. n1tro

    Vistor, you sound like that other dude (Ryan?) that loss huge on a S&P short and started bitching out Gary for his call for the markets go down a few months back. Are you the same person? Doesn’t matter. What’s your point? Rubbing it in that the plan hasn’t made us all millionaires yet?

  371. Vonda

    From my understanding of Gary’s thinking, PMs decoupling from dollar decline due to (temporary) emotional response.

    My simplistic question is, at this juncture what would it take to turn the bull around?

    I don’t have a gut feel if this is just par for the course as I wasn’t around for the ’08/09 action and I don’t recall any “suffering” holding the horn last autumn.

    I appreciate all of the dialogue/wonderings/anxiety as to whether this one is “different.” I’m still 140% in, having bought late-Jan.

  372. n1tro

    does anyone know if Hamster over at kitco or the other people who are more “accurate” than Gary according to Vistor called today’s drop? If so, I’d like to know the gist of their take of current events.

  373. pimaCanyon

    Visitor,

    A 9.0 earthquake, a follow-on tsunami, and 3 nuclear plants in different phases of meltdown–those were not part of the plan either.

    Now we have to modify the plan to include what’s happened and what continues to happen.

    No one has a crystal ball. So we go with the odds. You don’t ALWAYS win when you go with the odds, but over the long run, you do.

  374. n1tro

    I think the bull would turn to a bear if interest rates are raised immediately. Other than that, gold still has demand. I’m sure China is still buying as they set themselves up to be the reserve currency backed by something real vs. I.O.U notes the US has.

  375. pimaCanyon

    Gary’s nightly report is usually early evening. But not always. Sometimes later.

    Today I suspect it will be later. He hung around here till midday and then said he was going out climbing.

  376. Ryan

    I’m trying to follow Gary’s plan and since I didn’t get as great of an entry as him, I’ve added along the way and added on big dips including today. I haven’t taken any profits when we were flying high but seeing all those “profits” disappear in a blink of an eye is pretty gut wrenching. I’m still in the green (not much) but I know it’s going to be really hard for me to hold on if there’s another bloodbath and makes my account red. Since I don’t have as strong of a position as Gary’s, if I followed his plan and his stop is executed, I’d be selling at a loss. What are you guys going to do, especially the ones that are joining in late. Just keep holding on? Sell at BE?

  377. DG

    Visitor: I thought your name sounded familiar. You’re the same guy who was ragging on Gary for contradicting himself though none of the things you quoted made logical sense as contradictory. Now you are ragging on Poly. If you’re just going to bitch and not add anything of value to the blog how about just going away? If you have a point to make (other than criticizing others) just make it…then go away. Differing opinions are always welcome here. Being obnoxious is not. Hamster got run out for being arrogant. MLMT has at least backed off. If you have a point about the PM’s…make it!

  378. Wes

    Interestingly, I think the longer term is more clear than the short term. Just looking at the destruction in Japan tells us that the insurance companies will need to raise cash, probably by selling the bonds they own. This will put the Fed in the position of having to deal with pressure for interest rates to rise as bonds are sold.

    Short term, the emotion associated with the ongoing nuclear disaster makes things really unclear.

    DG, the sentiment numbers you are showing are dated, especially in light of developments in the PM markets over the past week.

  379. 정완

    Anybody listened from Ross Clark that target of silver $42-43 this rally.
    Timeframe second of Mar thru first wk of Apr.
    Is it still vaild?

  380. Poly

    Visitor, if you really want to know, this run is just fine thank you. Unless of course you’re not happy with 100% gains! With 300-400% gains since 09, I’m sure a 20% pullback is not going to break the bank. As for the plan you quote, it’s not a one day plan, but you wouldn’t know that. Good luck.

  381. DG

    Ryan: There really is no right answer to that question. If you suspect you will blow things out at the bottom due to fear if we drop another few days, sell some now. “Sell till you can sleep easily at night.” How confident are you that G is right? Picture different scenarios and make sure you can emotionally deal with each. If you can’t you are too heavy. There is no way to shoot for a big year without taking a decent size risk. You might want to narrow both the upside and the downside. Unfortunately they go together (If you ever figure out a sure way to maximize gains and minimize risks let me know!) I for one will never have my whole nut in PM’s or anything else.

  382. TZ(4404)

    Next 24hrs is critical. I’ve got a pretty solid plan on my part that also includes a (prudent) exit strategy should things continue south.

    I don’t want them to. I don’t THINK they will, but I’m not gonna argue with the digits on my screen.

    I’ll get into it later tonight, but the essense would be to:

    a) dump gold futures if we go below today’s low (and very likely dump silver futures too as a follow on)

    b) if gold holds, but silver drops then only dump if it goes below approx $33 which has been my “should hold” point of late.

    Otherwise I’m still fully leveraged long and holding.

    Like I said, the next 12-24hours will be key and I think the resolution will be EASILY clear to all of us. This thing won’t stay flat – it’s gonna move one way or the other big.

  383. DG

    Wes, Yes they are dated given recent history. My point was that even at the peek they were not that extreme. Less so now I’m sure.

  384. TZ(4404)

    If my plan causes me to exit I’ll make about 60% on my money. Not too bad.

    Afterwards, I’ll just deal with things and continue on as always. It will be what it will be. If we rally I have to get back in. If we drop I have to fish lower.

    That’s how I see things for now.

  385. TZ(4404)

    If I HAD to bet (which I am…with my money 🙂 I would say gold and silver will have a significant recovery by tomorrow’s close.

    I don’t think a collapse lower is in the cards, but I WILL prepare *some* kind of exit and not just watch things crumble if somehow I/we are wrong and japan turns out to be the black swan that takes out the system.

  386. Gary

    Actually to pick today’s low and sell if it is breached is probably just a needless loss. We are now 32 days into a daily cycle.

    It would actually be easier to form the swing if gold could make a slightly lower low tomorrow or the next day with a smaller range.

    As it stands now gold would have to move above $1428 to form the swing.

    I’ve warned about this many times in the past. Just picking a number out of thin air as a stop is mostly just an excellent way to guarantee losses.

    There has to be a reason for a stop. In the gold market that reason is a daily cycle pivot. Until we form that pivot there is no logical stop that has any meaning other than the $1307 intermediate low. If that were to be breached then yes gold has entered a D-wave and it’s time to step aside for a couple of months.

    I doubt that has any chance of happening though because the last time gold was at that level the Blees rating hit a 100.

    I assume it would do so again if that level were even vaguely approached.

  387. ...at ease

    I don’t believe the average US retirement fund investor has noticed the drops yet in the markets. Another day or so, and they may take a second look and say huh? They are busy living their lives and haven’t had time to worry, as nothing has drastically affected them as yet.

  388. Driver

    ae,

    I can tell you my retirement buddies sure know what’s happening to the markets. I’ll be playing golf with them tomorrow and I’m sure they’ll mention it. They might even ask me what I think. hahaha

  389. Avann

    at ease … I had to laugh at that. My brother-in-law called today to ask some advice. I asked him if he’d seen the markets today … “Nope” … not even a clue of what was going on.

  390. ...at ease

    driver… yes those who live off those funds, do know what is happening. My point is those who are working and contributing every month without thinking about it, are probably not, unless they are close to retirement. It’s just another deduction from the paycheck and if they still have time, they have lived through ups and downs and don’t have time to worry about what the govt will do to fix things. 😉 (wink) (wink)

  391. ...at ease

    Avann, I hear yah, I sent out to those who I have discussed investing with a link to Gary’s site. Educated folks mind you. Not a word, not a thank you or no thank you, or thanks for thinking of me. My take is they either don’t believe it, or don’t know what to do about it or it’s the last thing they are worrying about because they are too busy. Even though I just advised them to get their money out of funds and in the money market if nothing else. I told them I just couldn’t go to sleep without passing on the warning on Sunday night. That is about all you can do.

  392. jeff

    ryan

    like i was saying. protect yourself. if you did not follow garys entry then you have to protect your entry. you can lighten up or pick a spot for a stop, make your rule with what you can live with and stick to it. you can buy into the strenghth when this gets rolling. just dont get clobbered. good fortune =)

  393. TZ(4404)

    GARY,

    >I’ve warned about this many times in the past. Just picking a number out of thin air as a stop is mostly just an excellent way to guarantee losses.

    I have a VERY specific system and a VERY good reason to say the low of gold today should hold.

    That system is the one allowing me to be 7x long with very large gains on this rally.

    I’m not picking a number out of thin air – I promise.

    That number has 10yrs of experience behind it. We’ll see.

    Like I said, I expect strong up action from here.

  394. TZ(4404)

    I have NOT implemented the strategy I just discussed for exiting YET.

    It is about an hour old in my head and I’m mulling it around till the evening.

    For now most of my stops are substantially lower.

    My thoughts were simply what I had and I’m mentioning them for what it is worth. Not to scare. Not to cause people to break the ‘plan’, etc.

    There is a valid concern that something could be happening to the financial world that is larger than we expect. I simply want to be ready if it starts to look that way.

  395. Ryan

    Thanks DG and Jeff. I’m just going to mentally prepare myself if there are a few more down days. I just hope it won’t be huge days like today, that’ll make it really hard for me to stay the course.

  396. TZ(4404)

    Over 1400 in gold and 34.75 in silver (quite possible in only a few hours even) would work nicely at clearing up some of the damage today.

  397. jeff

    ryan

    would it help to lighten up a little. just keep a core? just asking so that if answering helps you can. sometimes i come up with more stratagies than obumhead has lies. i confuse myself =)

  398. Ryan

    Jeff,

    I could do that but that would mean taking a loss on some of my late entries. I don’t really want to do that. I mean I held off taking profits when we were flying high I don’t want to start dumping now. I do have my last bit of dry powder left if things go down again but I also know at that point I won’t have strong hand status anymore and it’ll really tough adding.

  399. Josh

    TZ(4404)

    i’d agree. i think it would be wise to have a exit plan.

    and wise to not be overdoing you’re personal comfort level on this precious metals play. gold is volatile it can go up as much as it can go down. silver more so.

    note to beginner metal participants, if you don’t a majority in close to the cycle low you run the risk of having a high average in pricing.

    today’s was a good test bed on what if scenarios. precious metals got smacked upside with fear factor, we saw some negative leverage right there. eek on AGQ or HZU you better be fast on the trigger.

    my cycle count is 14 weeks duration (starting 1/31) for this and we’re on week 7. half way point.

    my crystal ball see gold trading down until May 9th…with a possible high of 1440

    yeah i’m calling it out on paper.

    if i’m right, lets bet on poutine (i’m from canada) french fries, cheese curds and gravy on top. mmmm good tasty!

    much respect to Gary, DG and the rest of the super trader crew on this blog. very intelligent and insightful.

  400. jeff

    ryan
    i just know my first try 2 years ago i got my ass clobbered with monex. over leveraged and was buying on the way down. just figure out the numbers what you can handle and make sure you live to play another day.
    i dont know how i lived through my axx whoppen.
    its all about the leverage like gary says

  401. Robert

    Here is part of an interview a few days ago from RayDalio about gold-a global money manager based in Westport, Conn., specializing in credit and currency markets. With nearly $90 billion under management, Dalio delivered gains of about 40% in 2010 to a coterie of clients that includes governments, central banks, endowments and pension funds.
    We are still long gold. We are also long commodities, and currencies of emerging countries with surpluses, versus the currencies of developed countries with deficits. Gold is a very underowned asset, even though gold has become much more popular. If you ask any central bank, any sovereign wealth fund, any individual what percentage of their portfolio is in gold in relationship to financial assets, you’ll find it to be a very small percentage. It’s an imprudently small percentage, particularly at a time when we’re losing a currency regime.

    Safe used to mean U.S. Treasury bills, safe meant cash in dollars, European currency and yen. Now it is an ugly contest between those three currencies. So where is safe? Where is the least risk? It isn’t going to be in those countries that have too much debt, too many obligations to pay. All debtor countries are going to print more money and will depreciate their money. Creditor countries know that. Historically, in times like this, they will increase their gold reserves.

  402. pimaCanyon

    Gary,

    Great report this evening, just what I (and I suspect most of your subs) needed to hear.

    Earlier (probably you weren’t back from climbing yet), I posted these questions:

    1) Is it possible that the Jan 27 low was NOT the IT low and that the IT low is actually ahead of us?

    2) If the Jan 27 low WAS the IT low, is it possible that it was NOT also the yearly cycle? If so, then the yearly low could still be ahead of us.

    If the answer to either of those questions is YES, then the follow-on question is what has to happen in the gold market for us to raise the odds significantly that either the IT low OR the yearly low are not yet in and that they lie dead ahead?

  403. basil

    Daniele,

    I wasn’t joking. I have been to Ukraine many times and I have been to Chernobyl, too. Even today there are 3,000 people working at the Chernobyl site.
    It was a horrible event with terrible consequences for many. My point was not to belittle the tragedy, but on the contrary my point was to say that even the worst historic events can be overcome by a nation and will be overcome by Japan.

  404. Keiko

    Hi – I missed the buy signal on gold/silver on Feb 1st, so am glad for this pullback here. I’m seeing lower highs and lower lows now on the daily charts across the board – GLD, GDX, GDXJ, SLV, SIL – also on SPY, DBA and MOO as well – I’ll be buying when we break out above the most recent highs, as we’re still in a bull market.

    Gary, are there any cycle scenarios that call for a mini top the other day, and a bottom soon?

  405. Adam

    Gary,

    Do you have an *approximate* target on the downside for the dollar index or do you plan on selling your positions as the dollar index forms a swing low?

  406. Gary

    PC,
    The Jan low was the intermediate low.

    And I’m pretty sure it will also turn out to be the yearly cycle low although there is a possibility that the D-wave might eclipse it later this summer.

  407. MD

    Hi Gary,

    I know you had mentioned that you are as invested as you want to be, but at what price would GLD have to hit for you be adding to your position had you not been fully invested.

    Thanks!

  408. Gary

    MD,
    without being privy to a working crystal ball my plan was to add my final bit when gold touched the 20 DMA. I did, so now I’m done and waiting for a swing and the next daily cycle to begin.

  409. MD

    Hi Gary,

    I understand, but for those of us that missed the entry you took, would you just wait again for GLD to get close to the 20 DMA or is there another number you are looking at.

    Thanks Again!

  410. Gary

    In tonight’s report I went over what it would take to form a swing.

    If you trust the bull will correct a timing mistake, then we are 32 days into the cycle and just saw a panic day. One could take a position anywhere in here and then just wait for the bull to do his thing.

  411. jeff

    james r

    orders are planted there. ive been watching mf globals daily report found on kitco. there enterys are about like garys . very interesting. they bought at 1330 with a target at 1375. then a target at 1450 and now 1550. they were trailing the stops also. 1330 1360 and 1400.
    well they got stomped out at 1400 but they had a conter play to buy at 1380 again still with a 1550 target. i cant wait to see what they say tomarrow. comes out at 8:30 am

  412. Brian

    Ryan, You may benefit from one of Gary’s very best bull market investing strategies. Shut off your computer and find something else to do. He won’t leave us hanging when it is time to get out.

  413. Brian

    Interesting action in the copper stocks today. FCX up 5%. SCCO up 2%. AZC and NAK look like they are forming bottoms.

  414. Natanarchist

    who is serving the Poutine? hmmmm..of course the best Poutine is in Quebec..you can even get Poutine at the Mcdonalds in Quebec..but it is not that good. the rest of the country doesn’t get into it as much.
    There is a great Hot Dog/Poutine place right as you leave the Montreal Airport. Lafleurs..deux Steame all dressed, gros Poutine puis un Coke…and yes Vonda..it goes right to the waist..haha..

    @basil…I went to the USSR 9 days after Chernobyl. Didn’t go to Kiev/or the Ukraine. The sad part was I knew more about the accident than the Russian people who were told mostly lies by their government.

    The above is investment advice…ie.. do something else until its time to take profits in May/June. Watching the daily wiggles is bad for your health. Unless of course you trade the wiggles.

    to the visitor..is that you Plunger?

  415. james r

    Nikkei recovering, gold flat.

    makes me wonder if gold would have hit the 50 dma wiutout the crisis in Japan.

    Things that make you go hmmmmm?

  416. Natanarchist

    @ at ease, david. Gary can correct me if I am wrong, but it was my understanding that Intermediate cycles last 20-25 weeks. If Jan 29 was the intermediate low then 20-25 weeks would take us to may/june. (an 8 week time frame) I know he has said so in past reports. I must confess I don’t always read the daily reports, so perhaps the time frame has changed. Either way it doesn’t matter to much as Gary will let us know when we are getting close to the top.

  417. Natanarchist

    David..I don’t think Robert is the Visitor..he hasn’t been on the blog long enough. The Visitor claims he has been on this blog for years. I have been on SMT for 4 years.

  418. ALEX

    Natanarchist

    a cycle is complete from bottom to bottom, right? Not bottom (in January )to top.

    so bottom in Jan to bottom 20 to 25 wks later…the TOP would come in the middle somewhere…I think. I am not a cycle guy by practice 🙂

  419. Natanarchist

    Alex, yes that is probably what I read…that the cycle last 20-25 weeks from bottom to bottom and somehow I just had it in my mind to look for the top between beginning of May or into June.

  420. Edwin

    Natanarchist, Vonda,

    poutine rules, definate candiana favorite. will have to check that place out next time i’m in Montreal. thanks for the tip.

    ah what’s life without a little bit of guilty pleasure. 🙂

    i trade using a weekly chart mainly because the daily and especially intraday are just too nutso volatile. i’m in it to capture the major trends anyways and fortunately the trend in precious metals is up. so as Gary had mentioned, the bull will correct your timing errors.

    i know people don’t want to leave things on the table, greed is not good. despite what Gordon Gecko says… I say greed is not good.

    thought after this correction I’m going into a nice fund for a core position, called BMG gold bullion fund (BMG200). they also have a unique offering called BMG bullion fund (BMG100). they purchase all three metals in equal dollar amounts. (gold, platinum and silver).

    check it out i hadn’t heard it mentioned here and what’s beautiful about it – no premiums. i hate taking that into account on a security..

    http://www.bmgbullion.com/bmg_funds.html

  421. ALEX

    slow night

    At least the NIKKEI was up about 400 pts at one point , nice bounce if it holds.

    I said last week that I.M.O. , this doesnt “FEEL” like the strongest part of a C-Wave…YET ( and it still doesnt).

    CONSIDER FACTS: The July to Nov run of GDX or HUI never came down below its 20sma for the first 2 1/2 months.

    Now we bottom end of Jan , and a 1 1/2 months later , they are below their 50sma. Weakness , no?

    THAT and a few other ‘things’ that I watch say that this is , SO FAR , not the strongest part of an explosive C-Wave.

    I hope to be proven wrong A,S.A.P.

  422. ALEX

    Well

    I have to add to that

    SLW and SLV , exk etc , have had much more verticle runs.

    must just be Gold , which hasnt broken to new highs.

  423. Vonda

    Well, maybe grabbing a poutine and beer–just like a hockey player–might be the way to gear up for these morning market sessions.

    What’s up with the $25 silver-by-Friday “prediction,” David? Geesh, with that I won’t even be able to afford plain chips!

  424. RA

    Hammy,

    I saw your comment.

    When are you going to get it?

    We have no problem with that plan or any other plan. It is the arrogant attitude of jumping to conclusions without all the relevant facts.

    For example, did you know that subs here were waiting for this pullback before you came to “warn” us as if we did not know? If you do not realise we were waiting for it – then you are arrogant!

    What makes you think your ability to call tops is better than Gary’s?
    That is arrogance.

    DG’s reponse to Visitor was not about any trading plan but about Visitor’s remarks about Gary allegedly contradicting himself. This is not the case if you take into account the context. And yet the remarks by visitor was judgemental rather than inquiring.

  425. Sasa

    Owning gold as an european.

    Certainly not as cool as for americans 🙂

    3 year view:
    After an amazing run from 2008 economy crash, gold went from 600eur and touched 1000eur in may 2010. Since then for almost a year now it’s just revolving around 1000eur mark +- 7%.

    2 month view and japan disaster:
    Since january we had a low of 960 eur.
    High of 1040eur.
    In last few days it revisited 1000eur, and so far it looks it bounced off 1000eur mark almost exactly (995), trading at 1002 as i write.

    Bottom to top it was 80eur move (1040-960) and retraced exactly 50%.

    If this C wave into ±may is “parabolic”, it will only be because USD is going down parabollically and it will be only exciting to USA investors. For much of the rest of the world a $1600 target is just another little notch higher on gold price, nothing exciting going on at all. Probably a 1140eur target if dollar doesnt go down and 1100 eur if dollar continues decline. That would make it a pretty pathetic year with 10% appreciation.

    A year ago gold might have been $1230, but it was 1000eur. Today it’s $1400 and it’s still 1000eur. It might be traded in USD by whole world, but perception as an investment is still reviewed in each countries own currencty. And for most of the world, the rise in gold lately is nothing to write home about.

    Which might be bullish. Because if the world catches on to gold as an investment and protection seen through each countries own currencies once again like in early 2009, and thinking of the crapping dollar, it should push it way higher than $1600 to spark much interest.

    If not, gold is just edging slowly higher acting as a real-inflation hedge and not much more.

    Sasha

  426. Sasa

    That was just about gold… Silver is different. Also i personally moved from physical gold after very nice 2 year gains to silver etf and stocks in past 3 months.

    I just wanted to point out how perhaps world sees gold as an investment atm.

  427. guy

    Sasha,

    that the reason why i need to use leveradge.

    how i play it is like this.

    i buy turbo’s at rbs
    they folow the metals in dollars
    and have a leveradge on it.
    but the transactions are done in euro

  428. Sasa

    Yeah, or you could play usd/eur along with gold.

    For me, moving to silver etf/stocks is the ‘leverage’ to gold. But it’s not the same as owning gold. Owning physical gold has a very real meaning and purpose.

    Dunno how it’s in usa, but owning physical silver is a bit of pain in europe because you pay 20% value added tax on purchase. So you’re -20% the instant you buy it if you wanna sell back to dealer.

    Everyone here is trying to get rich fast. Some faster than others, but still very fast. Me too.

    But if people like my dad have enough money to live out their pension days, they need to preserve value no matter what. And holding AGQ, SLV and SLW, leveraged gold efts etc. is soooooo far from ‘no matter what’ that it’s not even funny.

    🙂 When i suggest friends who have no idea about stock market but feel that “things are really wrong in the world and will get worse before better”, i suggest them to buy physical. But lately it’s not really that attractive.

    Apart from whole countries stocking up on gold (like russia, china,…) there’s not that much incentive from common folk on the street to do so – yet. Unlike it was in late 2008.

    Sasha

  429. guy

    sasha,

    i own physical silver too.
    i had to pay vat when i bought it,
    but i assume i’ll be paid vat when i sell it too.

    where are u from?

  430. Gary

    An intermediate cycle lasts 20-25 weeks However the top has to occur before that so gold has time to work it’s way down into the cycle bottom.

    A top around the end of April or early May would still give gold another 8-10 weeks to work it’s way down into the D-wave trough in the normal intermediate duration.
    Don’t make the mistake of thinking that just because gold is correcting that it doesn’t have time to get to $1600 or silver to $50.

    During the final parabolic daily cycle gold can rally 80% of the time and easily rise $150 or more in a month.

  431. ALEX

    Gary said

    ‘During the final parabolic daily cycle gold can rally 80% of the time and easily rise $150 or more in a month.’

    Thats actually a good reminder -even in early Nov 2010,

    When Gold fell and the GLD
    went down to a low of 129, it then shot up & hit a high of 139 in only 5 days during a consolidation period.

  432. Sasa

    guy,

    >i had to pay vat when i bought it,
    >but i assume i’ll be paid vat when i sell it too.

    Not according to my physical PM dealer.

    Silver is like any other metal apart from gold. If you bought 100kg of copper you’d pay VAT, but selling it back to them why would you get VAT back? 🙂

    Out the current price list for 1oz silver Vienna Philharmoniker:
    Selling: 33,97 eur (with tax and fee)
    Buying: 24,511 eur
    At spot: 24,593 eur

    Fee is less if you buy 1kg, 5kg bars of course, but 20% VAT ‘problem’ remains 😉

    Sasha

  433. Redwine

    Sasha

    I don’t understand the reasoning behind charging the VAT tax. VAT is value added tax right? What value has been added to the silver bullion before purchase? Is the VAT added every time the silver is resold in Europe? Do they charge the tax on other items that are used and resold? Socialism is so confusing sometimes.

  434. David

    For all the dollar bears that think the dollar is going to end in short order, I will remind you that speculators are heavily long EURO,AUSSIE, and LOONIE vs the dollar. Not to say it can’t drop further but I trade currencies for a living and that situation does not last. I don’t think Gary believes they have any predictive value, but everytime large specs get that one sided on a trade, it always goes hard the other way at some point. Now I must point out that I am a long term dollar bear, but it is against my nature to short dollar when everyone in the world is short the dollar. Just something to think about.

  435. RA

    David,

    The data on sentiment trader regarding the dollar seems consistent with your assessment.

    But maybe it is not a precise timing tool compared with cycles.

    Gary’s cycle analysis suggests that the dollar will start to rally too, maybe in a few weeks end Apr-May time frame.

  436. David

    RA, you are right, it is not a precise timing tool and I don’t use it for that. I use it as a precautionary measure, meaning, when the numbers are that one sided I will not get aggressive on positions. Case in point, a year or so ago when the euro was making lows, a record number of short euro positions existed in the market for about a month or so. Banks started lowering their targets to parity within six months, Dennis Gartman was calling for euro parity. In fact, when Goldman Sachs called for euro parity, the rate bottomed that week, and a massive short covering rally ensued. The truth is, more people are long euro now than when the euro was trading at 1.50 in late 2009. Whether the dollar bottoms soon or in April is anyones guess, I myself am starting to build long dollar positions in small amounts, so whenever the time comes, I will be positioned properly.

  437. Shalom Bernanke

    Good morning all,

    Two things I have great confidence in are the bull market and Gary’s work. If for some reason the bull doesn’t conform to Gary’s analysis, he won’t be wrong for long. So what’s the worst case, maybe the C-wave takes a few more months to materialize? All of us are trying to time entries and exits perfectly, but it’s more important to be on the bull with size that lets us sleep at night. Sooner or later the bull get’s it’s energy back.

    I don’t want to ride silver to $26, but if it should happen, then that’s the way it goes. I sure wouldn’t bet on it, though, and anybody that has sold silver (short, or from long to flat), is looking to buy back (or get long again), and this creates the floor. I suspect we might get more weakness, AND not get to $26, making both bulls and bears uncomfortable. Isn’t that how it usually works?

  438. Shalom Bernanke

    One good sign is the number of new visitors here with a bearish view already claiming victory. My only concern is that none of the regulars have turned negative, which typically happens during shakeouts. Perhaps we’ll get downside capitulation after another day like yesterday?

  439. RA

    David,

    Once the time comes to cash out of PMs at the top of the C-wave, I too would like to follow your lead and go long the dollar.

    Of course there are a number of ways to do it but would love to hear your suggestions e.g. which currency pairs might be most profitable.

  440. David

    RA, Any long pair vs the dollar will do fine, I prefer not trade usd vs canadian dollar, it can be very difficult. So the pound, euro, and aussie vs the dollar are fine to trade with. The only thing with the aussie is the negative carry you that incur is high, but if risk aversion hits the fan, that pair will get whacked real hard, so the % gain you make will be greater than the interest you pay. usd/jpy will make a great trade one day. Talk about printing money the Japanese have injected 3 times the money the us did relative to GDP. But for now, you can stick with long dollar vs the pound, euro, and aussie and you will be fine.

  441. RA

    Many thanks David.

    Yes I was considering AUD/USD. When inflation hits hard, China, Australia will tank.

    I am concerned about the carrying cost for the Aussie but maybe the relative appreciation in the USD will more than make up for it.

    Thanks again.

  442. David

    RA, another thing to consider with the Aussie, is that the central bank could actually cut rates if growth in the Asia region slows down considerably, in fact a story came across my wire yesterday that interest rate traders in Aussie bonds are starting to price in a small chance of a rate cut sometime in 2011.

  443. Gary

    David,
    If you want to see just how successful following the COT is during a final 3 year cycle low just go back and take a look at 07 and early 08.

    Large specs were very heavily short for almost an entire year as the dollar was collapsing down into that final low. Like I said the COT reports are basically worthless when it comes to the dollar.

    You will have much more success by following cycles than you will the COT.

  444. Gary

    David,
    I think you can probably time a much better entry than just building a long position. The current daily cycle is threatening to roll over and after only 3 days. That is an incredibly bearish sign for the dollar and not the kind of conditions one wants to add long dollar exposure into.

    Just wait patiently for the next daily cycle low and if it is powerful enough to form a weekly swing then you have a chance of catching the bottom of the three year cycle low.

    If not then there is probably one more daily cycle lower before the final bottom.

  445. Sasa

    Redwine,

    VAT is a bit complicated. But in essence when company 1 sells to company 2, the VAT is not added each time. It’s deducted when sold between companies, so that only end-customer pays VAT.

    Value added tax on silver is well… value of silver. If i dig out in back yard 100oz of silver, i produced 100oz of silver of value. That 100oz can be bought and sold between companies for xy times, and only the end customer will pay 20% VAT. The companies doing reselling pay 20% on their margin – difference between their buying and selling price.

    … blah 🙂

  446. David

    Gary, if I get stopped out, that is exactly what I will do. I am just thinking we get one more flush down in the euro, maybe to the 1.35/36 handle, before the up move resumes. Besides, this trade has a positive expectation, based on my stop placement and my assessment of the probabilities.

  447. Gary

    Based on cycles it has a negative expectancy. Most of the time charts vs cycles, cycles win. As long as it’s just a small loss though give it a try.

  448. David

    Gary, agreed, the impetus for euro bulls is obviously the ECB is going to start an aggressive round of rate hike and a positive outcome to the EFSF(european financial stability facility). If either one does not live up to expectations, I think it is highly probable euro bulls throw in the towel, near term. In my trading I only win 55-60% of the time, but I pull $1.8-$2.00 for every $1 I lose. So for me it is usually small, contained losses, break-even trades most of the time, and the occasional big win that puts me on the right side of the probability matrix.

  449. DG

    It’s early and things change BUT if we can close down modestly (50 or less?) I will probably get a buy! That would be great both for itself and because it may imply the dollar finally breaking. I will post later and near the close. This is a system buy, so I will buy thousands of SSO/SPY if we get it.

  450. DG

    As of last night, the “public opinion” readings in silver have cooled off. It is now showing only slightly too many bulls. No shock given the recent whipping, but good to see regardless. Someone posted yesterday that there were way too many silver bulls. Not so. And gold—the PM driver—is dead neutral which is impressive given it’s a day or two’s rally from its all-time high.

  451. pimaCanyon

    silver and gold at critical juncture. both have come very close to tagging 50 percent retrace of move down from Sunday evening’s high to yesterday’s low. Until they can go above 62 percent, the chance remains that this move up is corrective and another move down will begin, possibly going below yesterday’s low.

    The good news is that PM’s and miners are both up even though the dollar is basically going sideways.

  452. Wes

    DG,

    I think those public opinion polls are as of last Friday. The events of this week are not included, and those should lower the bullishness even more.

  453. Brian

    DG, I thought the statement about sentiment towards gold being the least optimistic in 2 years was striking to say the least.

  454. Brian

    Great Panther Silver’s Q4 profit dips on higher costs 03/16 09:35 AM

    * Q4 EPS $0.01 vs $0.01 yr ago
    * Q4 rev up 40 pct to $13.8 mln
    * Q4 silver production 385,022 ounces
    * Sees 2011 silver production at 1.94 mln ounces
    March 16 (Reuters) – Great Panther Silver (GPL:$4.1795,$0.3895,10.28%) posted a 25 percent decline in net income, hit by higher mining costs and production below forecast, but said it expects to ramp up output this year.
    In 2011, the miner expects to produce 1.94 million ounces of silver, up from the 1.5 million ounces it produced in 2010.
    In the fourth quarter, it earned $800,000, or a cent per share, on revenue of $13.8 million.
    Great Panther said it produced 385,022 ounces of silver in the quarter at a total cash cost of $8.41 an ounce, which was 75 percent more than last year.
    Shares of the company opened up over 5 percent at C$3.94 on Wednesday on the Toronto Stock Exchange. (Reporting by Abhiram Nandakumar; Editing by Joyjeet Das) ([email protected]; [email protected]; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: [email protected])

  455. Shalom Bernanke

    Although I don’t expect the rip snortin’ bull to resume immediately off yesterday’s lows, if I were one of those boastful shorts in the metals I’d definitely cover on the next little move down. We might not rocket higher yet, but the bottom is close if not already in.

  456. DG

    fat boy: sentimentrader.com

    Wes: You are right (last Friday) My error. Thanks. Should be even better now.

  457. DG

    I am concerned about the miners. If oil goes to $125 or so it will impact them. I will probably lighten up or eliminate the juniors and SIL and switch to AGQ over time (and keep SLW). Thoughts anyone?

  458. Shalom Bernanke

    My thought is that as costs rise for miners, so will the price they sell the metals for, thus maintaining margins (probably expanding margins).

    Miners own the metal in the ground and if it becomes cost prohibitive they can leave it there until prices adjust.

  459. Jayhawk

    I’m not sure that rising oil will impact our time frame (2 months) on the miners. That being said, just looking at the first phase, AGQ out performed my core of AG, AXU, EXK, SVM, SLW.

    I’m thinking of shifting around some things too DG…This move doesn’t have much time left, so why mess with under performers?

  460. Shalom Bernanke

    I’m not betting on everything financial imploding, but if that scenario ever occurs, miners are only 2nd to physical holdings.

    Etf’s backed by supposed physical (if it’s there) will be ok too, but the ETN’s like DGP might vaporize along with the banks that issue them.

    All of these possibilities are a way off, and shouldn’t be a factor to consider for the rest of this C-wave, IMO.

  461. Shalom Bernanke

    Jay,

    Not telling you what to do, but I’d just stick with what you have rather than try to fine tune it. Yesterday people whined about miner underperformance, today they’re up more than metals (albeit slightly).

    The bigger pic is for us to stay focused on being in on the long side, whether metals, miners, futures, etfs, etc.

    Just my opinion.

  462. DG

    Thanks SB and all. I am much more short-term than you, SB, and am just looking at the next 1-2m months of C-wave completion. Their margins may hold, but if people see oil zooming the buyers for the juniors may back off at least some. I may keep some as a toy but expect to switch. Today’s slight out-performance is probably that they got crushed yesterday. Interesting.

  463. ...at ease

    bumpity bump bump, waiting for the uphill climb on this coaster ride.
    Don’t really enjoy the ride down (have to keep my eyes closed on that part of this ride).

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