For many months now I’ve been warning we were going to have a dollar crisis and that dollar crisis would drive the final leg up in gold’s ongoing two year C-wave advance. We are now on the verge of the panic selling stage of this three year cycle.
On Monday the dollar briefly rallied on the S&P downgrade of US debt (who knew?). That had the potential to mark the bottom of the current dollar cycle. But by this morning the dollar has given back all of those gains and then some.
I’ve noted in the premium report that the dollar’s daily cycle often turns on the employment report at the beginning of each month. The previous cycle bottomed one day after the March report and the current daily cycle topped on the April report.
If this pattern continues then we can probably expect the current dollar cycle to stretch for another 2 1/2 weeks into the May report (give or take a day or two either way).
I seriously doubt gold is going to suffer any meaningful correction as long as the dollar is in free fall, so I expect we are going to see the gold cycle stretch also.
If the dollar does continue lower into the May employment report before putting in the cycle low it would then be set up for a more normal duration decline into the final three year cycle low due on or around the June report.
However with the dollar losing it’s chance to rally here gold and especially silver are now at risk of entering a runaway rally.
Details in last nights subscriber report.
Will there be a chance to add to positions?
Gary,
If one’s financial models indicated a likelihood DXY will bottom around 70, what is the way to compute an approximate and equivalent zone for gold and silver?
Silver went up 5 or more bucks from much less than 1 point in the DXY. Are we potentially going to see $75 silver?
Thanks for the update Gary. This one has kept you hopping!
Gary
With your chart pointing to the 3 yr low in the dollar now arriving in June, I am imagining metals would run until then…However…if they do
Silver cant just go to $50, right? Its been going up .75/day at times.
I would imagine in a run away move, It could hit $50 in 2 wks.
Will you attempt to adjust your metals targets , since we were originally unloading at $50 silver , or just plan on selling near the 3 yr dollar low?
I am up, as well.
does anyone know what the likelihood of a May sell-off would do to our PM and miner investments? Is it probable right now? Is there any reason we would have one.. looking back at 2010 of May silver prices AGQ went down from 66-56.. a 15% drop!
niven,
The dollar rallied from 85 and change to 88 plus during the time period.
Now the dollar is collapsing
Since Gary is expecting a dollar to bottom in May, that means PMs will top then and move into a daily cycle low that we’re expecting. Could be a hard decline to wash out the sentiment before the final move up.
Gary,
Are you still waiting for another day or two to see if we will get a decline, or is that off the table now?
Elaine,
No the dollar has clearly told me that it didn’t bottom. Until it does a correction in gold is unlikely.
Since the S&P downgrade couldn’t force a bottom the next trigger should be the May employment report.
Beksachi,
Following on from our exchange the other day, I cashed in my PSLV position yesterday. With it up 100% since I bought it in November and with a dizzying 25% premium to NAV, I figured it was a good spot to take profits.
With silver powering on there’s more gas in the tank for PSLV, but I’d rather be in another silver vehicle than one trading at such a high premium, which could deflate at any moment once Sprott decides to announce another share issuance.
Gary,
Thank you. It’s strange to see GDXJ and SLW lag while AGQ just powers on. I have some cash still, would it be best to just put it into AGQ for now?
With the Snp roaring up this AM, and both PMs higher, miners should be up strong today(for those of you playing the miners).
Honestly, I could never do that, I just have one lottery play in a junior which I have held for a while (thats my only equity play).
Alex, Jayhawk, SB, and others that do…good luck! I’m seeing green for you guys today 🙂
Aaron,
As I mentioned yesterday, miners were breaking out. That was my signal. And SLW will hold $40. It was accumulated all day long if you look at the volume. Every deep has been bought. But I have a much larger allocation in AGQ due to the obvious reasons.
AARON
Nothing like a good pep talk to boost the early morning spirits !-thank you!
May your baskets overflow too!
(and if the miners go up on light volume and continue to lag, I may jump into…
SD, RAX , or a few others I’ve been eyeballing, because I stayed in my miners , when I should’ve been riding SIFY and REDF! 🙂
Aaron, I hold a number of miner positions, and I bought IAG and GG calls yesterday. AEM had a beautiful reversal, and I beleive the large cap miners will start punishing the shorts very soon.
Hi Alex
Goro is that a cup and handle I see before me ?
I,m tempted again?.
Only kept exk of my junior pin plays 60 % and thanks
it would surprise me if HUI miners would go past 620 and not get sold there.
I’m selling some at 620 no matter what.
mr market is so emotional.. it’s a global up day .. commodity futures are all green practically. USD sunk by a whole percent!
in my opinion gold isn’t runaway unless it closes this week above 1488
we still need some more buyers in this market, 1500 is a pretty significant no.. are you going to be one stepping up? 🙂
I encourage everyone to read turd’s report last night. I follow the Comex, and I agree with his assessment of a few days down. The Comex is closed on Friday and the LME is closed on Monday. Thin markets with options expiring next week could encourage speculators to take profits and/or roll positions.
aligns with a daily cycle and with The Docs view. Last chance to load up for the June Expiry for gold.
FATBOY
GORO does look tempting, if it breaks to all time highs, it has no overhead resistance, and thats a good thing 🙂
little sloppy on the handle, not textbook, but it did recover nicely with some good buying. looks pretty good.
Bob from Hawaii
Did you mean to leave a link to Turds report?
Also, I think you may be right about some of the Large cap miners making a move…some look very good and I noticed your post yesterday on AEM ( I think that was you)
Bob,
I agreed with Turd as well but saw it a little differently.
We’ll see a run up today and tomorrow with a pullback over the long weekend when markets are thin.
I read it as sell tomorrow afternoon, not sell now.
That being said, if we get a big enough run up today and tomorrow we can just ride out the “dip.”
A PORTFOLIO CHANGE HAS BEEN POSTED TO THE PREMIUM WEBSITE
Elaine,
It’s pretty hard to outperform AGQ.
Alex, that was me. I own AEM calls and when I saw that candle I jumped on GG and IAG before they started moving.
Hot Rod, I didn’t mean sell today, but that we will have a dip before we rocket higher.
Gary,
The November, 2009 low for the dollar was 74.23 (stockcharts.com). I don’t think that has been broken yet. We are testing it. Below that there is not much support until the 71 area.
Everyone on this board seems to be jumping in and I suspect that reflects the general market – chasing. It is making me a bit uncomfortable, especially since I too lightened up last week anticipating a daily cycle correction and am tempted to buy more SLV calls and get back into SIL.
So my question is: shouldn’t we be waiting until 74.23 is broken to the downside before assuming the dollar is crashing? Couldn’t this develop into a double bottom and your original thesis of last week will play out (even taking into account the retracement of Monday’s bounce and the unemployment report in 2 weeks)?
Damn, I really wish that us premium subscribers had a private Blog to talk about the content.
Out of respect for Gary, I’ll hold off.
Happy trading this morning on the open.
BTW – I read that “rookies buy the open” and “professionals buy the close”
Is this true in all of your opinion? In the metals as of late, you wanted to buy the open or the dip in the early am and then sell the close (or buy more!).
Beep
Beep
Allenupl,
No one has a crystal ball.
I agree with Gary that there have been too many events the past month to potentially push the dollar into an uptrend but in every case it’s reversed almost immediately.
That being said, don’t f— with the FED. If they really wanted to, they could pull some shenanigans. I’m not betting on that right now, too much momentum.
Going into May options expiration, maybe a lot of traders want the Blythe premium. 😉
Allen,
It’s so late in the cycle even if one miss times the trade and we do get the dollar bounce it will only last a few days and then gold will get back to making new highs.
So is it really worth missing 2 and a half weeks of gains because you might get caught in a 3-6 day correction that will quickly reverse back up anyway.
I will never give up 20% because I might have to weather 2 or 3% first.
What a ride! Kinda regret lightening on the way up.
RA, I agree. A newbie error for me
but I look to add back miners I lightened up on last Friday. Let the party begin…. Always a big thank you to Gary!
I am getting out of EUO this morning with the dollar failing. Got a large pop, so set a break-even stop. Will lose a little due to large gap down this morning. TBT working and should continue if dollar keeps dropping.
Gary,
So, ride until Silver hits 50? Do you have an alternative exit strategy?
Politics. total malarky.
Look at this quote, from a senior KGB assbite who in the last Russian government promoted insane economic arrangements.
He has a right to see the US as adjusting. But he’s frankly too stupid to understand this devaluation of the USD is INTENTIONAL. Well, he’s never had a reason to be honestly a liberal communist; hence, he’s still an apperatchik.
“close window Close
* APRIL 20, 2011, 8:23 A.M. ET
Putin Calls US Monetary Policy “Hooliganism”
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MOSCOW (Dow Jones)–Russian Prime Minister Vladimir Putin Wednesday criticized U.S. monetary policy, calling it “hooliganism.”
“We see that everything is not so good for our friends in the States,” Putin told lawmakers in the lower house of parliament. “Look at their trade balance, their debt, and budget. They turn on the printing press and flood the world with dollars,” he said.
“We don’t have the luxury for such hooliganism,” he added. “
Gary, don’t be doing this at the Matterhorn.
http://www.youtube.com/watch?v=G-dPjDYVKUY&feature=player_embedded
What we closed on 04/18/2001 was not a Half cycle, but maybe a Monthly (Gary calls it “daily”) cycle.
http://www.ellipsetrading.com/?p=239
Gary,
Based on the premium post portfolio change would it be wiser to deploy dry powder to SIL as opposed to chasing AGQ at this level?
DG…
Do you have any plans for the miners or SLW today? Are you still eyeing SLW?
AGQ is up 60 points in 5 days, I just can’t jump back in. And if this corrects it will be more than 2 to 3 %. I think
Haggerty, I agree! Just looking at the miners.
HOTROD
my opinion/personal experience on your question (sorry late, I walked away)
I have bought the open, BUT I usually wait until after 10 a.m., because gap opens often get closed (not always though)
It often depends on market conditions. Some Gap opens do not close…but I’d wait and watch it first.
New York,
Only if you think miners will outperform AGQ going forward.
(I doubt it)
It would be nice if this is our blowoff top?
Couple weeks ago people took issue with me when I said I was going back to 150% leverage and now the exact same people are rushing buying in today chasing this thing after it’s up 6 days in a row & over 10%. I am seeing lots of fresh faces here and lots of newbie questions. Next week options are expiring and we will have very light volume early on as Europe is closed. So personally, I will be lightening up today & tomorrow with the intention of buying back in later next week. Good luck to everyone!
Some fun on this fine morning…
Walking along in the mission in the rain…come again….
Mission in the Rain – Grateful Dead
I turn and walk away then I come ’round again
It looks as though tomorrow I’ll do pretty much the same.
I must turn down your offer but I’d like to ask a break
You know I’m ready to give everything for anything I take.
Someone called my name you know I turned around to see
It was midnight in the Mission and the bells were not for me.
Come again, walking along in the Mission in the rain,
Come again, walking along in the Mission in the rain,
Ten years ago, I walked this street my dreams were riding tall
Tonight I would be thankful Lord, for any dream at all.
Some folks would be happy just to have one dream come true
But everything you gather is just more that you can lose.
Come again, walking along in the Mission in the rain,
Come again, walking along in the Mission in the rain,
All the things I planned to do I only did half way
Tomorrow will be Sunday born of rainy Saturday.
There’s some satisfaction in the San Francisco rain
No matter what comes down the Mission always looks the same.
Come again, walking along in the Mission in the rain
Gary,
Going forward, does SLW have a shot at outperforming AGQ?
Well if you waited on GORO….. Here it is……
Wes,
Can you point me to somewhere on the Federal Reserve website where they talk about the details of QE, or even some other source that explains it as you do, that is, exchange one kind of debt for another and NOT exchanging long term debt for dollars as nearly the whole world believes.
Everything I’m finding on the web, even Wikipedia, says QE is the Fed buying long term treasuries with newly created dollars. If that’s not what QE is, then there are a lot of misinformed people out there.
Wes seems to be more knowledgeable on the subject of QE than even Mohamed El-Erian.
Gary,
I know you talked about this in last night’s report, but am still a little unsure why you took the “scary” correction scenario off the table when the dollar bounces (around the time of the jobs report). I think that you’re probably playing the percentages and assuming it will correct in a magnitude similar to the last pullback, but do you think that a larger pullback is such a remote possibility? I ask this because the sentiment seems a bit frothy now and will likely be extreme if we have another 2 weeks of $1 day moves in silver.
Less: Nope. Missed the buy by a hair. I will add AGQ bits at a time.You just don’t do as well when the low-odds scenario occurs. Forget the past and optimize profits starting now.
100k put into June 200 AGQ calls @ Jan. low would be worth 2 million today! Wow
I’m still not at all impressed with the miners. If they can’t out pace the metals for more than 5 minutes, I might just stick with futures on my next entry (or some DGP and AGQ)
I won’t be buying anything today, but am happy to post when I do.
Dan
What do you get with your claim?
That you are smarter than all those who sold some of its holdings? Dg, Polly, Gary and others..
TZ was also right, but he was wrong several times last fall.
I love it when someone is right and then they try to denigrate people who had an alternate view. The last few days have had “capitulate and buy more” “rush in and buy more” “panic and buy more.” How’s this instead: “The most likely scenario has been aborted and traders are now adjusting to the new set of data.” Where’s the panicky emotion in that? I guess one can feel taller by trying to cut other people’s heads off! Don’t ever panic or rush in or out, but only a fool doesn’t adjust his tactics when presented with new data. Gary will appreciate knowing that he is not “panicking” to redeploy his 15%!
At this point, timing the market is a dangerous game. I’m going Old Turkey until the three-year bottom.
Who’s panicking DG?
Mr. M. Several people who did not lighten up have posted, essentially, “Now you fools have to panic and buy back what you sold.” That’s what I was referring to—those posters.
I capitulated and bought back AGQ. 130% invested now. No doubt AGQ is due to crash any moment now
DG,
Oh, I see, didn’t read the morning posts.
I did lighten up a week ago but bought back in up to yesterday.
I have less of a percentage invested now than before but that’s because there’s more money in my portfolio from the gains.
I am satisfied.
Gary,
Thanks.
Does one wait for any significant pull back or at this point it’s not likely until may?
That being the case just get back in to AGQ now??
movax2,
Yes, M3 is the money supply.
Never a panic here. I simply added some ot miners. Awaiting on AGQ, never chase. I listen to SB, DG, Alex and a few others besides Gary 🙂
Bud & Eamonn, I’m in with you. I pulled out way too much AGQ, all back in now. I swear I’m going to have my wife change the account passwords and not tell me until Gary posts we are at the 3 year cycle low.
NY,
If this turns into a runaway move then there will be no way to time corrections and gold could just as easily rally along with a dollar bounce.
Alright I have to pick up friends from the airport. I’ll check back in later this morning.
I think that a lot of the public will start buying here.
The gold & silver prices have been going up and up, pile-in mentality will start and build up very very fast.
since USD is very imported for PM, tomy c posted his latest USD long term views. He has major lows in 2012 and 2014 as per his cycles. He still has siginificant top in PM this year in may-june and nasty correction too. But he has dollar continue go lower till 2012 (which may become gary next A wave top) and then USD rally later 2012-2013 with re-test of 2012 low in 2014 to end USD bear and PM bull in 2014. After that he predicts USD bull doubling USD value from 2014 low.
Wow look at that, the “amateurish” call on the SLW hammer candle on Tuesday looks pretty good so far.
Gold is still not going up as I would like it.
The 1500$ psychological barrier was taken out, is it just too expensive now? Silver almost at 45$.
DG
Good post. i was alerted to the dollar vs gold action yesterday and took off my aggressive short as the market action and volume was not showing any signs of large selling. I could have flipped my position given the new circumstances but patience persevered. Ill continue to wait. My point is even though i was right i preserved my capital. Capital preservation is much more important than ego.
…Dan does have some valid points..I haven’t been here long enough to see gary’s guru status take fruition yet..but buying today is at the end of 6 up days and after a 2 dollar pull back…I suggested at 41.70 that a pullback at that point of 4-6 bucks seemed unlikely and was shot down…
$45 silver too expensive….heard that at $18 too….
If the USD closes here, it could be up tomorrow due to a BB trade… something to keep an eye on.
Gary,
I see the public opinion is off the charts favorable for silver this morning. Doesn’t count now ?
Man, SLW’s looking like a laggard here. What gives?!
Just a fun perspective: This run in silver—as amazing as it is—is just a fraction of what the Hunt attempt to corner looked like in 1980 (at least if my memory serves). We will get a shot at one of those when the gold bull finally tops (2016-7?). If the financial system survives, that’ll really be something!
BTW, when that bubble popped silver dropped 50% in four days, I believe.
DG that is one short that I wish to take on when time comes!
Wes: Gold sentiment is—incredibly—just neutral. Gary has said it is gold that drive the PM complex, so this is good news. And the COT, even on silver, is neutral as well., thought it is true public sentiment on silver is too hot. And for the first time I am hearing people talk about silver. We are getting late, but for me I’d need to see at least some frothy numbers on gold to start to worry about it.
Alex-
Our favorite miners are setting up again in that triangle consolidation pattern.
AG
EXK
This comment has been removed by the author.
Hi DG,
Have you added anything today?
This comment has been removed by the author.
surely that information would require a premium subscription 😉
Even though JPM has a huge short position, it isn’t just in the near delivery months, right?
So, it is possible that they have changed to the long position in the short months and roll their shorts out to the longer ones, right?
THis way, they mask their long trades because net/net they are short.
Does anyone see what I am trying to explain?
In other words, they are manipulating higher now.
Nike: Not yet, but I expect to. Bits of AGQ each day. If I see something worth noting I will post, otherwise this is just seat-of-the-oants stuff. It’s always harder when my scenario doesn’t play out. Frankly, Gary is probably right to just do it and not worry about the wiggles, but I am a long-time wiggle-watcher!
Wes,
So I believe you are saying that the massive run up in the supply of money in every other measure is not related to the activities of the FED and in part, their purchases of US gov debt? Please correct me if this is not what you are saying.
I’ve been with Gary since May of 2007 and I can tell you that he was always advocating to stay old turkey for the duration of the intermediate cycle. Recently a lot of so called traders joined the blog and steering newbies into a trader’s mind set which causes them to lose a very invaluable opportunity to make a lot of money. Gary has always said that timing the market is a losing proposition and old turkey always wins at the end. And I personally will continue ignoring all the traders out there cuz you just can’t come even close to the returns that old turkey is making.
Take it for what it is worth. I listed some of my silver bars (I will/prefer buying back coins during the D wave) on fleabay at $50 2 days ago. All have sold.
$45
Nice, nitro.
n1tro,
What type of silver bars did you have? 1 oz or the larger 100 oz bars and you got $50 per ounce? I have the 100oz bars and I’m being told the premium I can get is about 8 cents per ounce.
Thanks.
Steven
Jayhawk, I appreciate your charts and sense of humor.
I have just a few ounces of silver, I’m tempted to sell but they are so cute!
There are rumors the Yuan may revalue 10% this weekend (HUGE) and maybe even up to 25% over the next few months. This certainly could be what drives the dollar into a 100 year cycle low! JK But seriously, if China decides to do this they are finally making the decision to export some of the inflation BACK to the US and this should be damaging to the dollar. They also seem to like to do these moves on holiday weeekends. Just some thoughts. The Yuan curve is already beginning to price in these moves but by how much I don’t know.
http://www.bloomberg.com/news/2011-04-20/china-s-shift-in-rhetoric-may-signal-faster-yuan-gains-1-.html
Alright, we’re seeing some slight outperformance by the miners now.
Michael,
My exit last week should not be mistaken for timing the market. I had no choice with the way miners acted in relation to the metals. had I been in metals only I would most definitely still be long them.
Since I only have physical right now, I’d like to redeploy assets. Although this time it could be a runaway move as Gary has pointed out, predicting a runaway ahead of time has rarely been profitable for me. Regardless of the run, I cannot buy an extended market this late in the C-wave. Even after the last few days up, the holdings I sold are just barely above my exit level.
Let’s see what presents.
Steven,
They were all 10oz bars. Pan American, Heraelus, Englehard, and Scotiabank bars. I got one big honking 100oz bar I may get rid of after silver passes $50/ounce because the premium on it would be low compared to coins or bars.
SB,
I recognized that SLW is underperforming and I used the opportunity last tuesday at the panic low to swap out 1/3 of my SLW position that I was holding since 31.5 (intermidiate low in Feb) to the equaivalent dollar amount of AGQ @ 250.98. Looking back it was a very smart move since SLW didn’t even come close to the returns that AGQ is making. However I didn’t reduce my percentage base exposure. I am still holding a basket of 14 juniors that I purchased in March of 2009. I think that miners are behaving just fine. Patience will be rewarded.
Wes,
Can you point me to a page on the Federal Reserve’s website that explains the details of QE? Or even another website that does this?
Everything I’m finding on the web, including Wikipedia, describes QE as the Fed buying long term treasuries with newly created dollars. I have not found a website yet that describes it as you do, that is, exchanging long term treasuries for short term T-bills. If it’s as you say it is, then there are a LOT of uninformed people out there, many of whom should know better.
Where are we in regard to stops?
Angry Hippie,
I do belive that the stops are stopped.
JAYHAWK
I was looking at the same thing…I really want them to break free and run
( I also want a bit more volume so they dont get held back by resistance , in case anyone can grant me these wishes 🙂
Congrats to Bob From Hawaii…wasnt that YOU?? …GORO reminds me of him always saying he was accumulating around $22 or $24
Belive? What the hell?
BeliEve…. damn stubby fingers!
ANgry Hippie
I know Gary pulled the stops recently due to us being late in the daily cycle. I also wonder whether that has changed. On new positions I’m adding, i see the recent low at 1440 as a logical stop although w/o a blowoff top I would be hard pressed to sell on weakness. I much prefer to sell on strength.
f
Yeah. Thats what I see, too. But since we are seeing uncharacteristic low odds behavior I was wondering if that is still the plan.
Helluva run this past week.
Jayhawk
AXU looks like a new high and volume may be right.
What the heck happened to GOld Seek’s “Live” USD chart? As of midnight last night, its not updating…
http://www.goldseek.com/quotes/charts/usdollar/usdollarindex1hour.php
Alright, folks, SLW looks like absolute garbage right now. Outside of just running over to SIL, are there any other solid silver plays you all like? AG? SVM? I’ve played with EXK before but seem to time my entries terribly.
Interesting info Steven!
Thanks!
Jayhawk,
Or anyone,
What HTML code do you use when embedding a link? I tried “a” “/a” (with <>) but it boots my comment right after posting.
Hot Rod,
you are right. I’m using this link this AM.
http://www.marketwatch.com/investing/index/DXY
Alex, that is correct, GORO is a core holding for me. I also am accumulating NGD now, as well.
Looks like SPX futures will not record a DAILY Buy Setup. It has to close below 1310.20 for the 9 to register (1310.20 is the close four bars earlier), and that seems unlikely.
DXY is quickly on the path to 72.5 – crisis? where was the crisis in 2008 – the dollar is flat, folks – lots of wiggles and squiggles in between, mind you, but it is flat, if not a little positive from its lows. We have been at these levels before and the world didn’t blow up. Nothing is more universally despised than the dollar. And this sentiment should set up the contra-trade of this decade!
Anyone buy into that dip at $45.02?
Michael-
You are correct, old turkey hold through intermediates with a turn off the computer and take a vacation strategy is the way to go.
I looked at the move from July to Dec and compared several different portfolio type- a basket of my favorite hand picked juniors,a just SLW one and one with just AGQ. I talked about some strategies over the holidays with folks on the blog. The clear winner was AGQ only portfolio. Most were opposed to the strategy at the time and I decided to not uses it. Hindsight has perfect vision in trading and I have not regrets, but I wanted to say congrats to those who went that route. It took guts and you have been rewarded richly!
I did hold old turkey for the majority of the run, got lucky by selling my AG & EXK close to their highs. I had large positions in SLW and SIL. All sold above current prices so I have not lost on that yet. The thing I’ve noticed is the psychological aspect of trying to get back into a market that looks over extended. DG talks about this and I agree.
My main mistake was selling my AGQ positions last week and waiting for a brief correction. I know others just flipped capital from mining sales into AGQ, perfect move in hindsight. I’m re entered some mining positions this week and will keep adding as things go, but I can’t bring myself to chase AGQ here.
Interesting curve balls…Great ride so far and more upside to capitalize on. I did the best I could so I can’t beat myself up.
I’ve been eyeing EXK as well, what’s preferable here, options or shares?
isn’t this fun !…michael, I have been on the blog since you joined but became a sub in ’08. You are correct in that Gary has always preached old turkey. my returns following that approach are spectacular. I did reduce last week, (42.79), but only a similar percent that Gary did a few days earlier. Still just over 130% and enjoying this ride…makes up for mostly sitting and waiting for the last couple years. And the best part is instead of watching ticks, you go do other stuff.
Thanks for your reflections, Jayhawk. I have chased AGQ a few times since joining Gary. Always have been a little hesitant to get in when he says to, so I’ve missed part of the run-up each time. Surprisingly, AGQ still turned a profit for me every time. I had a little cash left waiting for the correction, so I added to AGQ this morning. Hope it still stays positive.
pima,
Read this :
http://pragcap.com/pomo-flip-matter
Maybe that will convince you.
I bought my July Tulip Bulb calls (SLV) this morning, and now its moving up, up, up. Let the mania begin!
Natanarchist, I remmeber seeing a lot of your posts about accumulating physical gold coins in the earlier days 🙂 Yes it was a very profitable run, looking forward for the end though.
Jayhawk, I was in SLW 100% last year in one account and a basket of juniors in another (that I am still holding) No AGQ. SLW did almost as well as AGQ last year, so no regrets. Then I recognized for the intermidiate run of this year that I’ll be better off with AGQ, so I assigned 100% of my capital to AGQ and 50% to SLW. SLW did well from 31.5 to 47, it had a correction and now it is ready to come back. Not selling nothing, 150% in and holding strong.
This comment has been removed by the author.
pima,
Read the comments to that article, also. Are people arguing that the Fed is funding the US government ? No, because there are a lot of informed people in the world, but they are outnumbered by the misinformed.
TRADERROB
Just wanted to point out that AXU is breaking out from consolidation to new highs.
I like EXK and AG ( AGQ , but buying here is not what I would do)
It seems to me that if gold is going to $1600/oz, then silver is going to go waaaaaay over $50/oz
Or am I insane?
Did someone shred Gold’s party invitation?
Silver up 3%, gold up 0.6%.
Wow, AGQ is blazing…
Question; with the original projection we expected to see AGQ reach 350-400.. right?
With the recent break out scenario is that target being changed? If not, it makes it a little harder to chase this price at this point.
What’s the general thought? All opinions welcomed.
TIA
It looks like Gary made some changes to his portfolio today and has not posted the update on the blog.
Silver pierced the upper channel line on the 60 minute chart. It has respected this channel for the past month. A drop below 45.10 will put it back in the channel. Maybe we cut right through and expand the channel if we have a runaway move in play. Intently watching…
Gary put the notice of portfolio change as a posting this morning in the current thread. I don’t think a twitter alert was sent though.
PST,
I’m a bit burned out on the subject. Plenty of people say the Fed is funding the debt, but nobody I’ve read explains how and for what purpose.
Clearly, the money supply hasn’t expanded.
If you can post an article explaining how QE2 results in the Fed funding anything, I’ll gladly read and comment on it.
Made the leap with AGQ at 313 this morning. Such a “sacrifice”: Portfolio’s up over 3%.
Nice to be back on the train.
80% AGQ
9% Gary’s SLV calls
8% AG
New York,
I guess if you think that a 25% return is not good enough (AGQ gets to $400 from here) then don’t buy it. My understanding is that if we get there, it will be by about June – 6 weeks away. 25% is better than I was able to accomplish on my own the entire DECADE from 2000-2010.
:-p
Loaded up with just enough cash to buy if it dips like crazy.
Waiting for 50$+ silver….
Hey Vonda. Me too, same price. Thanks for posting it.
I couldn’t jump in this morning and it just kept on grinding up and I finally just capitulated now and bought in but of course it’s dropping. I have more dry powder so if it goes down more I’m buying more!
Hi,
my apologies to anybody who I have offended in the past!
Just can’t help but come back to this blog. However, I promise that I won’t engage in sarcastic rants of any kind and anything else that’s not proper etiquette. I hope that’s ok and that you guys can let it go too; that would be great!
Thanks!
It was a tough spring to catch that one, eh Kal?!
(aka Kevin)
Good to be riding withya!
When I’m not looking I want somebody to hit me in the head with a bat, and don’t stop till you exhaust yourself!
TIA
“sprint”
(It was Miyagisan’s stubby fingers.)
Wes,
Obviously you have put your faith in believing something that is not true. I can’t say why you have chosen this. I wish you luck with getting past that and seeing what is really happening.
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Hey, Vonda… Yeah, I got out at 275 like a newbie… Cause I am. But, I’m learning and I can chase. I’m like a good lab. I’ll chase any toys you throw ahead of me, I guess.
Basil,
Nice call on 45 silver. If silver breaks this month long channel on the 60 minute, it may just run up to the top of it’s daily channel going back to 1/27. That channel upper trendline hits 50 on 5/3! Although with the volitility that could work it’s way into the PMs I wouldn’t be surprised to see trendlines breaking in both directions.
Movax2,
The Fed has clearly increased everything they could, and none of this has yet resulted in an increase in the money supply, which is what they actually want.
The money base is way up. I used the example of the apple seller who sold 3 apples a day by displaying 10 apples. Increasing the display size to 100 apples still resulted in 3 apples per day sold. (Apple seller= banks, apples= loans, display size= money base).
Now, making more loans would increase the money supply. The Fed would love to find out how to do this.
Ryan, if you were the threshold “sacrifice,” thank you very much! Come on down to the dining car; I’ll buy you lunch. Don’t worry; we won’t even look at the tab until we disembark.
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MrM:
I’m in the same boat. Redeployed cash into SLV calls, but still have enought to double my AGQ position, just in case I get a pullback.
WB basil. The more the merrier. A lot of posters have had rocky starts.
Silverhound;
Linky send to blanky..
I’ve missed you Basil, welcome back to the spice rack. 🙂
Kal,
Hey Newbie, I got out at $270 and I’ve had the benefit of almost a year with Gary, which is still new-ish; obviously new enough to trip over my own paws. (Love the lab analogy.)
Since last summer, I haven’t minded jumping in at any relative price but I really got psyched out this time. It’s been a good lesson which I imagine will keep delivering.
Ultimately, it’s like DG said: One makes the best decision one can for oneself at the time.
Now throw the ball!!!
it would be really awesome if the juniors can start going too..
c’mon mr market suck everyone in..
unfortunately I feel a brief reversal is coming near…
this is too easy.
Edwin, Ryan did it.
Mr M
Try again
clickable links
Cheers
Edwin
Im expecting a short sharp reversal beginning next week. ABX has posted a nice hammer today. Invariably longs would have got sucked in. Aggressive shorts will see inverted hammer and go short (too early). Couple of days more strength will get rid of any stragglers before we see a move down into 1-2 week of may IMHO
Wes,
this is a very interesting discussion and is causing me to think this through.
Lets say, that years ago the US had expenditures that exceeded its revenues and needed cash. Instead of creating the money from nothing, it issued bonds. China bought $1 billion of those US bonds, and those bonds are now coming due. Instead of rolling them over like they usually do, they decide to take the cash instead (US$). No other investors want to buy those bonds either, and the US does not have the cash to pay the Chinese. It does not want to default on the bonds, so the Federal Reserve buys the bonds itself. It pays the Chinese its $1 billion.
So now, the world has $1 billion more in cash than it did before. This causes inflation of the money supply and increased prices. No?
I’m curious about strategy, if anyone has done the math on AGQ options vs. futures options. I have been doing almost exclusively slightly OTM options on /si. That has worked pretty well, especially the last few days. Now I need to roll my May options and I’m wondering if I should try call options on AGQ instead. June 350 calls are $27/ea, so I could buy 5 of those for $13,500 or a July 46 call on /si at $12,250.
Slight bounce happening on this line.
DXY
Thank you!
Let’s see if it works.
Trying clickable links.
Hain-
What do you mean hammer on ABX?
Vonda,
Haha! I like it when a joke or smart comment keeps on going… My buddies and I used to do that via email and in online class chats. Good stuff!
Good that you’re still learning. I of course want to be able to say I know how to invest, but as soon as I admit I don’t, and follow Gary and listen to smarter people, the better I’ll do at this money thing.
Now that you’re on the train, the scenery is alot more fun to watch, huh?
Wes,
Gold, silver, food, energy, even stocks says otherwise. a slight decline in ones man’s estimation of M3 is not conclusive.
I hope you hold in your mind that you may be wrong. I see no point in continuing – you can find out if you are right or wrong with an open mind and continued digging. Good luck.
Jay, ABX had a huge volume selling spike at about 10:30.
Will 1500 hold? The bulls won the battle below 1500 and now this next battle is being fought on the other side of the line, just above 1500.
I hope it doesn’t take another two days for a result here. And of course, I am hoping for the bulls to win, and did my part by adding a little at 1501.
Rick,
The US would just print the money to pay off the bonds. No need for the rest of it.
Bonds, as well as cash, are all part of the money supply at all times. There is nothing special about cash except it is the shortest maturing “bond” there is.
Cash and bonds both represent demands against the US treasury.
To continue my previous question, the /si option is in the money with silver going up 2%. The AGQ option needs to go up almost 10% to be ITM, meaning silver goes up 5%. At that rate the /si option is $1.25 ITM ($6250 in intrinsic value), where the AGQ option would be just getting ITM (still no intrinsic value, only time value). Or, I could just buy 41 shares of AGQ for ~ $13k. If /si goes up the same 5%, they would be worth a whopping $650 more. Or I could use margin and double that, I suppose. I fail to see the reason not to just use futures options? What am I missing? I understand they can fall much faster than just holding AGQ, but if we are betting on a rapid rise, they seem to be the best bang for the buck. I get nervous if I hold too many, so I’ve been at around 25% of my high risk portfolio on options, up to almost 50% today just because of market rising. I am not doing this in my long-term portfolio because I would have a heart attack (just a mix of physical metal and cash, mostly).
Gary, what am I missing?
Of course I’m simplifying here, the full intrinsic value in the options won’t be realized until close to expiration, which definitely skews in favor of holding AGQ, but I still think the options have a much higher payout, and have the added advantage of limited downside in case of a massive gap down due to some black swan event.
Vonda,
You’re welcome, I couldn’t take it anymore. I think the moment my order got filled it started dropping lol. So definitely the correction has started!
Wes, I don’t disagree, but aren’t there more demands against the US Treasury after the Fed buys its own bonds? Isn’t there more US$ after my scenario? Isn’t that inflationary?
Kal,
I think I enjoyed it all better when I didn’t need or want to know so much about investing. At least that’s the mental frame I had when I found Gary.
Since then I’ve come to enjoy the companionship of the blog community, so now I feel the responsibility to learn in order to contribute–and not just ride coattails
But after the last couple weeks, yes, I’m happy to just sit back and enjoy the scenery.
Thanks, Wes.
I read the article at the link you posted, but nowhere do I see anything about the Fed exchanging long term debt for short term. The do talk about the Fed BUYING treasuries. BUY means pay money for them, right? Money as in dollars.
I have read about MMT and I believe I understand it (well, maybe some of it). I get it that things are different now that we are no longer on the gold standard, that we have a true fiat currency.
All I’m asking is to see something in print that describes just what the Fed buys treasuries with. Is is as you say with T-bills? Or is it, as everyone else out there says, with dollars?
This morning I watched a CNBC video that was taped last year in one of the Fed bank buildings. Fed prez Jim Bullard was there. The CNBC moderator explained QE as the Fed buying assets with newly created dollars and used the term “printing money”. He explained that the Fed doesn’t print physical money, they just credit the account of the seller of the asset, but that’s the modern equivalent of printing money.
When he was done, he asked James Bullard if his presentation accurately described QE and Bullard said yes. (He could have said, well we don’t actually print money and we don’t actually use dollars to buy the assets, we use T-Bills. But he did not say that.)
Everywhere I look, all I see is that the Fed prints money (by crediting the account of the seller) when they buy treasuries (or any other asset).
Rick,
Changing bonds into cash (and destroying the bonds) or cash into bonds (and destroying the cash)has no effect on the money supply since it is the sum of both.
The Fed cannot create money. Only Congress can do that, and it does.
Good morning … it’s 1:57 am here in Tokyo.
JamesR or others, is this a blowoff top? Thanks.
John-
Big volume sell at 10:30 on ABX? Not really getting the significance of that.
Also, looked at the chart. Hain are you talking about a possible hanging man? Even then, not quite seeing any warning signs there, IMO.
I absolutely hate gaps.
One point about the ‘ABX’hammer call.
It has to close there to be a “hammer’ or reversal. It may be selling off at lunch and bought up after 3 p.m….cant really tell at this point.
It does look tempted to fill that gap however
Pima,
I guess I don’t see your point. I think the actual transaction takes place by the Fed crediting the Primary Dealer’s account for the long term security and debiting it for the short term.
What was the transaction in ? T-bills, cash or just electrons ? Why does it matter ?
DG/SB, on the 60 min chart, after a gap-up, SLV usually pulls back to the 50 EMA … right now it’s like way above it … I have to think that it will pull back.
But I’m a beginner here … your take sirs?
PST,
My questioning Wes is not an assault. He pointed out yesterday that the Fed does not buy treasuries with dollars, that they are exchanging treasuries for short term debt, t-bills I believe.
I am just asking him where he got that information. I generally take people at their word, but when they say something that is different from what the news media, the trading blogs, the financial blogs, and the Fed itself is saying, then I’d like to see where that information comes from. I have tried researching it myself, but I can’t find it. So I am asking Wes (not assaulting him) for the source of his information.
Wes
It is my understanding that Congress uses the Federal Reserve to create its money. I could be wrong. My money says “Federal Reserve Note” on it.
Does the Fed destroy the bond when it pays it off with newly-created money? I thought they kept it on its balance sheet.
No worries Basil,
James
Wes,
It matters because if it’s just exchanging one form of debt for another, that would not have an impact on the money supply. But if it’s exchanging debt for dollars, then new dollars are now in circulation and they are likely getting spent buying risk assets, stocks and commodities. To me it’s a pretty big difference.
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Bill,
Just read your comment.
I’m hoping this is a blow off top.
I am sitting on the sidelines.
I noticed in the previous cycle AGQ took 28 days to correct. We are now on day 27.
James
Blowoff top?
I hope not. The blowoff top should not happen for at least a few weeks.
Daily cycle top? Maybe. If so, let’s hope that that’s what it is because if it’s the blowoff top, then the D wave is upon us.
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anybody saw something? silver lost a lot of ground in 2 minutes?
Thanks, PST.
(I’m glad you couldn’t take it anymore 🙂
Looks like bulls lost that battle and the fall is sharp.
PST,
The Fed doesn’t publish M3 anymore, but it’s still the best measure of money supply.
pima,
I should have said an intermediate “blowoff top”
James
Pima and PST.
You are both correct!! :))
LMAO @ SLW. Rolling over little a little puppy dog!
SLW to AGQ- “What time is the panic sell off? I’d love to join you for the fun!! I know I sat on my fat butt the past 2 weeks, but that elevator shaft sure looks like a fun ride.”
Grrrr…
Thanks JamesR and pima. My poor choice of using terminology that I don’t fully appreciate here. Just meant a shorter term top, whatever that is called. Is see that SLW, SIL, GDX and GDXJ are all pulling back a little. I’ll keep watching and looking for an entry.
I myself still believe that the dollar cycle will turn up here, based on Gary’s cycle chart. It’s already way late. If cycles skip a beat then I’m sorta back in the mindset of “interesting stuff but can’t use.”
Or could simply be a gap fill.
{shrugs}
Correction underway? It makes sense that it might start today.
If gold and silver conform to the pattern of recent months, then we would expect some kind of low on Tuesday or Wednesday. If the move down starts today, then that gives only about 4 trading days to put in a bottom. Sounds about right.
(Friday’s a US holiday, Monday is a holiday for London)
Correction may be beginning now…
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you guys are so relax! I just saw Silver losing half of its gain in 10 minutes!!
The perfect storm…
Friday is a holiday.
Monday is a holiday for the LBMA.
Tuesday is Options expiration.
The only thing missing here is a margin raise and a dip might…just might appear 🙂
Sophia, for those of us light on HZU/AGQ these days, silver can go ahead and lose all of this week’s gains! My itchy finger awaits… dry powder gettin’ real dry…
pima,
I would agree. Just watching anxiously.
James
James,
No problem. However, the term blow off top is usually used for the top at the end of a parabolic run and this is followed by a violent correction. So there will be only one blow off top in this market in the near future and it will mark the final top of this C wave.
I know it’s just semantics, but I believe that’s what most traders and investors think of when they hear the term “blow off top”.
At last! We have something kinda sorta resembling a correction brewing… : – )
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Wow, sophia, you bring good luck today.
Hoping for a super huge pullback.
Poly didn’t go from 100% invested to 100% cash just for 5 days off did she? She has some 6th sense.
sounds good Kmi
Wow looks like I did pick the exact top to buy in this morning LOL. I’m definitely feeling quite the pain. I guess that’s what I get for panic buying in fear of missing the potential runaway move. I have more dry powder and I think I might even want to jump in more now or should I wait? Any suggestions?
SLV just bounced off the lower channel line that defines its steep rise since last Wednesday. May be just a bounce, but if a real correction has started that will last a few days, it will need to blow right thru that lower channel line.
Bill, it is about time that I participate to this blog! I think that I have more luck than technical skills!!
I say wait.
sophia,
We were expecting a dip last week if you recall. That’s probably why no one is jumping out the window.
Aaron,
I thought the same thing. OPEX and approaching holiday weekend making for low volume doesn’t create an ideal scenario to add positions. Turkey is nice and fat and can easily withstand whiplash, but not getting warm and fuzzy about leveraging here.
wait Ryan
game on ! 😉
Ryan,
If you already bought today, I would wait to deploy your dry powder. Wouldn’t do anything till Tuesday myself.
@Ryan, you may have pulled the trigger too fast on the way up, so don’t pull it too fast on the way down! If this is a correction in the POS, you will have a better opp to average down in the coming sessions, IMHO.
Miyagi-sensei, I KNOW that we were all waiting for the selloff, but on a day like today, it is indeed puzzling? What time is it the NYC? Cleaning before the long w/e at 2PM?
Maybe time for AGQ to take a break….
Thanks, I’ll wait to deploy the rest.
Good test of the runaway move theory. If we don’t go (much lower) than this, we may have more reason to think we are in a runaway move.
The lower channel line I mentioned is at around 43.22 on the next 30 min bar on a 30 min chart. SLV dropping below 43.20, I’d say the correction has begun.
pima,
Turd Ferguson often comes across as perma-bullish on the PMs (for effect, probably) but he thinks a correction will unfold from now until Tuesday-ish.
He’s looking at $42 on silver to back up the truck, fwiw.
PST,
That’s just wrong.
Look at the scale. The monetary base is only just over 2 Trillion.
The US economy couldn’t last 20 minutes on that paltry amount. The money supply is on the order of 13+ trillion.
Tuesday?
It’s 2:25 am here in Japan. What am I doing?
Guess I can watch the moon or something.
To the more experienced cycle guys here, If I understand this correctly, if this is the daily cycle correction then gold should break that trend line at about 1475 area. right?
Ryan,
If you caused this, why don’t you hold off.
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Similar channel on May silver futures using 24 hour data has it’s lower channel line around 43.85 on the next 30 min bar. Note that the price of SLV is running about $1.06 below the May silver futures price.
pima, what does that mean if SLV is running lower than futures?
Hey Shalom,
With gold back below $1500, why not send some of your myrmidons onto CNBS to scare the sheeple?
Bill,
Good to see you in here. Last time I saw you here was when the earthquake and tsunami hit. I hope all is well.
PST,
It’s not the website that’s wrong.
Did you not see my post above explaining what the money base was ?
It’s the post with the “apples” in it.
Banks have never been reserve constrained.
catbird,
That’s interesting about Turd. I used to look at his site regularly, but I’m too busy on this site to look at anything else (well, except for charts!).
It fits though. I think we will see some kind of take down.
However, what would be really funny is now that everyone is expecting a big take down so they can back up the truck, it won’t happen! 🙂
No way to know. That’s why Gary suggested to Bill that he get some kind of position today so he won’t be left in the dust should we just continue higher from here.
We’re fine. We’re 200 miles upwind, and are ready to split if the wind changes.
Pima, I believe this is your chart, which you have got to respect. I had not noticed how neat the channel was. I had an order placed below the channel, but that would make no sense to buy there if the channel gets broken. That would mean I bought at the beginning of a correction.
http://screencast.com/t/GCYIvqGcSiP5
10:30 cali time for whatever reason always seems like a good time to buy. I haven’t looked back at the daily charts but again its here and I just might add the portfolio change now. I’m not going to over think what could be the last daily cycle of the C wave.
PST,
Monetary base is more like “potential money supply”. It is the money in the banking system that the banks can use to loan money on depending on the reserve ratio. Those loans are what really creates the money supply. The potential money supply is insane, but much of it is in the banking system so far.
SIlver went way up, way down and back up right to where it was in the AM.
But…the option prices are higher…
Telling sign.
That takedown might have been a tree shaker for the heavy options volume today.
Price action on daily UUP today (hollow red candle on gap down) looks just as it did 1st week of Nov.
I still think that Gary’s cycle of the $USD prevails. It’s very regular.
pima,
Yeah, I’ve nibbled twice already today because I’m still building back my position after trimming. I’m done for now…I’m just going to roll the dice and hope AGQ can at least get below $300.
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Hot Rod,
Can you elaborate on what you mean by “telling sign”?
thanks
PST/Wes
Looks like you guys are arguing the same point..
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i added to agq on that dip. crazy? maybe, but the bid under silver is crazier.
Wes,
Its been a good discussion, you have an intriguing point of view. Its made me think about the Fed’s transaction cycle. I will try to comment further if I have something more to add.
It’s a good conversation, and an important topic that few people are taught about or think about. I find that most people forget to be open minded and will stick to what they think is right, so it is often pointless. Still fun to debate sometimes if people can avoid getting emotional.
MDSN,
I mean more buyers than sellers. The volatility is helping the bull camp because of the extreme bets on the long side.
In theory, the price should be the same, if not lower due to time decay (however there really isn’t such a thing as intraday time decay to a large degree).
Dude,
Yeah, that’s the chart, thanks for posting.
Tough to know where to place an order, though. If SLV does break the lower channel, there’s no way to know how low it will go. It might go down to your order price and take off again to the upside after your order gets filled. It’s nice when they work out that way.
There is a larger channel on the silver futures that has its lower channel line around 41.50 today, 41.75 tomorrow. That would be a big drop for silver though.
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Thanks Hot Rod
Bill
Maybe you’re looking for a crystal ball. I don’t know of anything that can nail what is going to happen 100% of the time. That’s where being patient and waiting for a good entry and going old turkey when the big picture suits pays the dividends.
SLV on SoS list today. -8 million, but only -1 million in block trades. I don’t see GLD or any of the miners or mining ETF’s on the list though.
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Today is day 26 of the current daily cycle. The last daily cycle peaked on day 25.
Any guesses as to how low we’ll go (if the correction has started)?
Can gold drop all the way to 1440?
How about silver, all the way to 40? How about 38?
that $1 drop was probably due to london market closing and traders taking profits, happens around 1-130pm est from what I notice.
Pima,
if this is the daily cycle correction, we need confirmation by gold breaking the trend line around 1475 area. Is that correct?
In my view, today is just another day up… Going by kitco spot price graphs, the low of today is higher than yesterdays’ high… That’s a correction???
Again Pima, is this your larger silver chart? A pull back to the lower end of the channel would be less than 10%.
http://screencast.com/t/oBdbSDC4s058
We need to create a T chart here….bullish and bearish to evaluate the factors that could help create the correction, or feed the run away bull over the comming days. I heard already today options expiration, holiday Friday…. You have the dollar touching the November 2010 low.
T,
so far your correct, I think some (including me) are wondering out loud if this may be the start of the correction. And if so what signs can we be looking for.
pima = by tony oew counts (i know no one here likes ew) it should find support at 39.72 low and max it can go down is 38.14.
so 40 seems right for now. ma10 is 41.33 and ma20 39.50 right now. last daily cycle low went to ma20 so this time also if same happens ma20 should be around 40.
Bill,
RE: SLV being lower then futures. Futures do not officially close worldwide until 2:15 PM (could be off a bit) PST. For example, Silver futures I believe were in the 44.10 ranger when the 1:00 PM PST close yesterday and officially closed below 44.00 at 2:15 PST. That is why you have a difference. Hopefully that makes sense.
T,
Agree all we done is gap filled.
It quite possible we may not get a correction until the final top is placed in theis C-wave.
James
Roger that… Frankly I’ve also been waiting for the correction to start, sitting in almost 100% cash, and my eyes started to burn, so I bought in on Gary’s move… I don’t mean to squelch any analysis on a delayed/pending correction by any means, just that some people hear talk about corrections and assume that it’s a fact being stated, so wanted to put my 2cents in by stating the fundamental points… Now that I have said all this, I’ve jinxed it, and not silver is 100% guaranteed to go below yesterdays high 🙂
Out of SLW… now watch it run, lol! Actually, last time I bailed on HL, the pig sunk further and still hasn’t stopped. May be a good thing.
Hey folks, send me your arguments for a correction or a run away move. This is what I am working on.
http://screencast.com/t/oZKLWznEnrzJ
Dude,
Close to what I was referring to, but close enough. I have one drawn off the 3/16 low on the 24 hour silver futures, using a 1 hour bar.
It’s way down around 41.5 today, but by Tuesday it will be at 42.5. That’s only a little over $2 below the current price, so that certainly seems doable.
The channel that goes back to the January low will be running at about 41.5 on Tuesday. That also seems doable.
Duuuude,
Run Away:
May options expiration coming up and a delivery month for silver. Futures traders looking for premium to settle in cash.
checked 2006 and 2008 c wave top .. it always came back to ma10 until last just few days (10 days max may be) .. so are we close to 10 days of C wave top? if not i think we will get ma10 test.
Hi Everyone,
I’m a newbie from London who bought in today and got burned, though I still have my position, and am only slightly down. My reading of the Premium is that I should stick around, but obviously the scaredy cat in me wants reassurance. What happened today?
Supermalkie
Run Away: Continued dollar weakness, even when fundamentals (ratings downground/impending increase in interest rates) should have moved USD higher.
Wish I had bought Beanie’s “Trading Manual” last week when he was selling it for only $8 and when he said it would be available at that price until the end of 2012. I could have had myself a ten-bagger now that he changed his mind and raised the price back to $100. LOL
Bought a few shares…
{Blasted Old Turkey}
Dude,
I would put Hot Rod’s comments in the Correction column rather than runaway. In the past we have seen corrections around those monthly dates.
What if Comex raises margin requirements for Silver? Could that give us a significant downdraft?
Supermalc,
We don’t know what happened today. We don’t know whether it’s significant. It might be the start of a correction, or it might be just another day for silver and it continues higher.
If we get a correction, silver could see $40 or even $38. Gold could see $1440. Is your position size small enough that you can handle that much of a drawdown without freaking out and selling at the bottom. (Even better would be to not only not sell at the bottom, but buy more at the bottom.) If you can’t take that big of a drawdown, then figure out how much you can tolerate and reduce your position to that size.
But don’t dump everything because if you do, the risk is that the market continues higher without you.
Anyone ever keep up with this guy’s You Tube Videos?
http://www.youtube.com/user/BrotherJohnF
He was one of the first to say (about 3 months ago) that he felt silver was going straight to $50 without a significant pause).
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Quite intersting strength we’re seeing today..
MDSN,
I believe you’re right about the TL break confirming a daily cycle low, and yeah, it’s in the neighborhood of 1475 on gold.
If you believe in gold, you MUST believe in silver. The gold/silver ration has been compressing relentlessly since August 2010
Gold-Silver Ratio Chart
SLV still on SoS list, at -15 million with -7 million in block trades.
Curious that I can’t find GLD, GDX, GDXJ, SIL, or individual miners on the list, though.
mr T,
At this point, it’s silver that seems to be taking gold by the hand!
DEAR EXK
Did you really just drop down and fill that gap because it was annoying me? Or am I fooling myself??
No reply necessary, I will know at 4 p.m. by your end of the day actions…Thanks
Pima, how about this?
http://screencast.com/t/lYUkYZnp
So far, this is what I have for the T chart.
http://screencast.com/t/lYUkYZnp
Increased margin requirements could also spur on more selling, but I have not seen where that is happening yet. Did you see that somewhere Workfriend?
About an hour left to decide to jump in here to chase. I am feeling more inclined to wait it out at the moment.
PimaCanyon,
Thanks for your reply. In profit again now, but bewildered.
Supermalc
Man, SLW is in the red .. the rest of my screen of silver miners is green.
Sure glad I dumped that dog for AGQ a couple weeks ago!
T,
You’re right. The one thing to note is that the ratio will swing high and fast when this blow off is over as silver will drop like a brick.
To Anyone,
If we do not get a correction in this cycle, would it be less likely to hit $50.00 than if we did get a correction?
I am thinking this may be a possiblity?
James
Alex,
I bought AG and EXK this morning in the pre-market.
AG is looking good.
EXK … WTF?
I should have gone with AXU instead.
Let me know if you think I should dump back out of EXK after the close today.
It seems oil is laying it on pretty thick on the miners?
James
Only SLW doesn’t use oil… it just finances mines in exchange for dirt cheap silver… strange, that one
Supermalc,
The selloff at 1pm est was london traders taking profits at the close like clockwork. hang in there and you’ll be fine.
n1tro,
Why wouldn’t we see a similar profit taking event close to 4:00 today for US traders? I’ve always wondered why we see it at 1:00-1:30, but not usually at 3:45?
Dude,
I read that it is hard to borrow SLV to short (at Goldman?) and the last time that happened, Comex raised the margin requirments. Not sure where I read it as I was perusing a number of sites.
From Chuck Butler and coincides with Gary…
…after the market closes, Apple will announce 1st QTR earnings… if the “risk sentiment” is to remain, and continue to put pressure on the dollar, Apple’s earnings will need to be strong.
LME is a lot bigger than Comex so their profit taking is more visible in silver market which is thinly traded. 2hrs after 1pm sell off, we are about the same level as before the big red bar on the 15 min charts 🙂
James R
what if we shoot to $50 now , SCARY crash sell off , then rocket straight up to high $60’s , then D-Wave crash.
At this point it seems like anything could happen.
GOTTAHAVEIT
Actually, EXK looks good big picture wise. Its in a nice triangle consolidation, and should break out and move up nicely.
AG ran to $26 and pulled all the way back to $20 and formed the same triangle…I bet Ag pulls back and fills that similar gap tomorrow or day end today(same as EXK did today), and AXU never really broke out from That I. head & Shoulders when EXK did…so AXU was the lagger , now catching up.
Just my opinion, but I think EXK is going to do great when these break out for real.
N1tro,
Thanks. This obviously wasn’t the up-to-$6 correction, is that to come over the Easter weekend? Hmm, halve my position and watch perhaps.
Supermalc
Guys, I use two vehicles for my unlevered plays
PBU.UN – closed end trust that hold gold, silver, platinum.
http://bromptongroup.com/funds/pbu/overview/
and
BMG Bullion Fund – this is open fund, so if there’s more inflow they buy more bullion.
http://www.bmgbullion.com/cgi-bin/qa.cgi?rm=list&category=5&t=
Holding these three metals (bullion) have provided some steady low volatile gains over the course of the year.
Just wanted to bring attention to these securities to the people interested in holding a diversified portfolio of bullion.
Finally finished watching the CNBC interview of Bullard taped last year. Near the end of the clip Bullard was asked about “monetizing the debt” and how this is seen as something evil. His answer: The Fed has always monetized a tiny bit of the debt (his word tiny) and now QE will monetize a little more. (his word little).
So if Bullard himself says QE is monetizing the debt, how can we mere mortals claim it’s not? How can Pragmatic Cap claim it’s not?
Okay, my last post ended with a rhetorical question, now answers needed. Some of us have different opinions about this subject, so maybe best to just leave it at that and get back to: Gold is stuck at 1500!!
T,
I think that a lot hinges on AAPL report later. There is a possibility of missing, I understand that they might have come up a couple of million iPads short of goal.
In any case, it seems that silver/gold hace earplugs in.
GOTTA
I should’ve added that EXK can come back to $11 and still be great. Thats the bottom of that triangle. If you scroll up, Jayhawk posted charts pointing that triangle out.
If you are buying to hold, this EXK looks good, If only the miners will get going!
NO answers needed (not “now answers needed”)
Alex,
Thanks!
I appreciate your feedback… you know WAY more about how to trade these miners than me!
So you recommend holding both AG & EXK?
I got fed up and dumped my miners last Friday and went 100% into AGQ.
I decided to give them a second chance and bought a few hundred shares of each today … but I’ve got them on a short leash. If they don’t perform I’ll dump them again and move the money into AGQ.
supermalc,
You’re welcome. just go back and look at pretty much any trading day for gold or silver from the past couple of months. It’s a volatile sector and on any given day, you’re going to see large price movements.
Gary says the intraday price wiggles are meaningless and tends to look at only the daily charts. Hard to do after buying a position, but unless you’re day trading, that’s probably a good way to do it.
GOTTA
well, like I said, EXK could go to $11 and Ag could drop and fill that gap, but longer term I think they’ll do great if the miners finally break out.
This is Jayhawks EXK chart. Bottom of the triangle consolidation is $11 (ish)
http://content.screencast.com/users/Jayhawk1991/folders/Jing/media/27ba1530-1522-43bf-8ab6-331fa270d57b/2011-04-20_0822.png
Nice job on the AGQ pile-on!
and N1TRO
Nice story of you re silver sales! Lightening up before we hit $50 aye? Congrats on a good investment.
So far as I know, a daily cycle after the current cycle is still due.
I am content to make profits on a 100% position until a correction into the cycle low.
It’s the next cycle that needs to be leveraged.
pimaCanyon – QE2 does not end up monetizing debt, yeah the fed collect the interest from the bonds, but the fed will need to spend it to finance the deficit
they will create more money in the system.
Anyways like any studied economist, inflation will spike, then what comes up must come down. Deflation.. this mean all asset prices will go down. Bye bye stock market, bye bye gold.
take a look at this guys, money supply still expanding..
http://www.federalreserve.gov/releases/h6/current/
Workfriend,
Neither Fidelity nor Etrade have SLV available for shorting. It’s been that way for several days now.
I sometimes short SLV common against my call options for a short term trade.
Since Gary’s out chauffeuring friends, maybe someone else can answer this; how com he still runs the GoldScents blog as TC? Seems like few read or post there.
GS is the marketing blog. All traffic my partner pulls in goes to the GS site and that way I can track his commissions.
pima,
I thought we covered this yesterday.
“Monetizing” has a specific meaning to the Fed that does not include creating more money, but it has an entirely different meaning to the general public.
I think this is at the root of the your question about monetization.
Mr M, I was going to say “Ask Gary” LOL
Ah, thanks Gary, I don’t mean to pry into your personal business, just curious.
ZSL is a double short silver etf you could use when SLV is not available for borrowing. Like any double etf, it will have decay problems if you hold for many days or weeks during sideways consolidation. But for a trade that lasts only a few days, the decay should be negligible.
Good thought pima, I hadn’t considered ZSL.
Vonda and Ryan – oh man oh well so you bought this morning. 1:30pm EST shouldn’t freak you out.
Nothing a sure bet though.
Playing in this market you just go with the higher probability trades. that all you can hope for.
If you’re holding over the course of a month you’re probably going to be okay. Just be prepared to get a bit of drawdown when the USD does make a weak dead cat bounce pretty soon.
Don’t think it just drops 1% overnight, it will just keep dropping like a stone.
Just got back from groceries. Overheard a conversation between two gentlemen about gold and silver. When I asked them if they are invested they said yes, in physical, and then one went on giving me a speech about Fed policies and how we are worse than slaves to the super rich, because slaves don’t have to pay for home and food. He was very smart and also sounded very knowledgeable about PMs. Now, both these gentlemen were supermarket employees and they were putting price tags on merchandise while we had that conversation. According to behavioral market psychology, wouldn’t that be a classic sell signal, if you get silver investment advice from an employee at your local grocery store? Not saying that this will get me to sell, but it sure had me baffled. I’m glad for these guys, but does that mean we entered the mania phase already?
Wes,
It’s hard to believe the Fed governors are so stupid that they wouldn’t realize what monetization means to the public. Oh, I take that back… When Bullard gave his answer he prefaced it with: monetizing the debt strikes fear in the hearts of men. So he does know that John Q Public thinks it’s a bad thing.
But if what he’s talking about and what John Q thinks he’s talking about are two different things, shouldn’t someone tell him? Surely they know by now that the Fed has an image problem, so why don’t they spend the time to explain to the public that monetizing the debt doesn’t really mean monetizing the debt?
I was thinking the lack of SLV for shorting must mean that SLV is heavily shorted currently, and is a reason that the current rally could continue.
basil,
that is scary.
Are you selling? If not now, then when? And at what price?
Can anyone fathom a guess as to what the hell is wrong with SLW? Gary is still a big fan of it, but something must be wrong if it’s down 2% when silver is making an all time high…
More dumping of SLW. Anything we don’t know?
Wes, I hope you’re right about why SLV not available to borrow. Seems weird though because it traded 82 million shares today.
Someone laying the smack down on SLW.
It almost seems vindicative.
pima,
The Fed said that the point of QE2 was to increase asset prices to generate the “wealth effect” so that we would spend more money.
They don’t want to correct anyone, IMHO.
I think they got what they wanted. They didn’t create any more money, but they did get investors to redirect money into more risky assets.
This was their purpose all along.
pima,
Go to your brokerage site, enter an order to sell short 100 SLV at a limit of $100 and see if they accept the order or reject it for no shares available to borrow.
Edwin,
I wasn’t freaking out, I actually wanted to buy more on the dip but it came back up so fast I didn’t get the chance. I still have more dry powder to deploy so if we do get the pullback we’re looking for I’ll add again. It just sucks that I added more AGQ/HZU right at the top this morning but hey if silver goes to $50, this buy in wouldn’t look THAT dumb 🙂
Gary,
I would imagine if Gold goes to 1600 $ + in the current C wave, Silver may be way over 50 $ unless gold starts out performing silver.
Can you comment on your current targets in the premium report.
pimaCanyon,
not yet selling, but contemplating an exit strategy. To me this looks parabolic already, but of course it could get more parabolic than that. Finding the right strategy in a parabolic move, wherever we are in that move, is tough, because either way you could be left in the dust.
For sure the investing public knows about silver, so I am not sure how much more of that public to expect moving our way with their money. So, in other words, when to sell is exactly the answer I am trying to figure out right now.
Looks like I gave SLW the kiss of death selling at breakeven. Don’t let me near your miners, folks. When I buy, the underperform. When I sell, they die.
I think I’m officially done with SLW. That one has been all over the place the past few months.
New poster. Sub since Jan.
Gary said (4/18, 5:16 PM) “When I look at a long term chart every daily cycle is pretty clearly visible. Apr. 12th is not clearly visible as a cycle low”.
This is true; with the exception of the Sep 9, 2010 daily cycle low (noted in the charts section of premium site) which Apr. 12 looks, on many indicators, very similar to. This would make it a 19 day cycle, of which there have already been 2 of in the last year. Also note the dollar gapping down a few days after the Sept cycle low (similar to today). Just a thought; but if Apr 12 was the cycle low and gold behaves anything like it did after the Sep 2010 cycle low it’s time to buy.
HEY GUISE!!!!
Great day for Silver Wheaton!
This ones is for you SLW-
…………………../´./)
………………..,/¯../
………………./…./
…………./´¯/’…’/´¯¯`¸
………./’/…/…./……/¨¯
……..(‘(…´…´…. ¯~/’…’)
……………………..’…../
……………………. _.·´
……………………..(
………………………
………………………..
…………………………
…………………………..
Ryan – cool. just have some cash ready to deploy when it’s time.
I’ll buy SLW if it hits 38. Bring it. But I want a t-shirt with purchase. 🙂
SLW trader – haha good one.
It was a fine, fine day, Edwin. But I did end up lightening up a little at the end — risk aversion and before I’ve always been fully invested at 120-150% and had to just sit and simmer during a daily correction.
I’ve always wanted to have powder to play.
Currently at 64% invested, all AGQ. (And I lucked out and tucked away a tidy sum intraday, which I do NOT want to get in the habit of.)
Good to hear you’re hanging okay too, Ryan – and Kal, CatBird, AtEase, and any others who might have added.
And no panic. Even at full tilt, I would LOVE a swift jolt down to clear the deck.
thanks, basil. we’re all trying to figure that out now, not only when to sell but also when/whether to buy.
good luck!
Apple reports in 20 minutes.
This will make it interesting.
i don’t think trading a parabolic is any different than trading a penny stocks/biotech.
those are voltile SOBs, learned my day trading lessons from there and can apply it to gold/silver which move much more slower and predictable.. no day trading for me. Core position holding all the way.
Pima,
Let me take a shot at this one more time…only this time I won’t be an obnoxious jerk (sorry again Wes). Wes, we may disagree on this, but here is my interpretation.
First, let’s agree what the Fed is and what it does. The Fed is the central bank which is in charge of MONETARY policy (interest rates, QE, bank reserve requirements, etc). The Fed is basically the banker’s bank. The Fed controls interest rate policy, adds/drains reserves from the system, and lends money directly to the banks via the discount window and other liquidity facilities.
On the other hand, the executive branch of the government (administration and treasury) is responsible for FISCAL policy (stimulus spending, tax policy, rebate programs, etc). The printing authority, the US Mint, lies within the Treasury and not with the Fed.
The Fed does not monetize the debt through printing, because again this ability lies at the Mint within the Treasury Department. The Fed, however, has influence over the money supply (by purchasing and selling treasuries) as well as on the cost of money and borrowing activity (raising and lowering interest rate).
Now, what is different this time is that the fed has decided to undertake QE to lower REAL interest rates below zero and to inject additional capital into the banking system. Through QE, the Fed purchases assets (treasuries, agencies and MBS) from banks and broker dealer’s balance sheets. The banks must reallocate this capital into other assets (marketable securities) to generate returns. (this shouldn’t be confused with money that the lend banks which primarily sits as reserves or are invested in riskless assets). It is this reallocation of capital into risk assets (stocks, commodities, etc) that is driving these markets higher. To take it a step further, the Fed has dramatically ramped up their Permanent Open Market Operations (POMO) and are also buying up all the banks treasury holdings, so that they will need to reinvest this capital as well.
Now Cullen is theoretically correct that the Fed is not directly monetizing the debt, they are merely freeing up bank’s capital to redeploy. The banks then need to complete the process by reinvesting that capital in the markets. He is basically arguing a technicality that “the Fed does not monetize the debt” itself. The truth, however, is that are arming the banks with so much additional liquidity, that the banks need to go out and find a home for this new capital, thus the ramp in stocks and commodities.
SLW made 1,900% in two and a half years from its low at 2.50 to it’s high at 47.60.
At this point SLW has to be considered an exhausted bluechip.
In 2008 I bought SLW at 2.50 and sold it at 3.00 because I thought Armageddon is still ahead of us. Then I watched SLW make a phenomenal run. Wasn’t pleasant, as I don’t know any other stock that made that much since the 2008 low.
Vonda – good for you. collect profit when there is some on the table. have yourself a steak dinner/veggie dinner.
it looked too easy of a setup today.
you know when it’s too easy. a smack down is coming. that’s the way the cookie crumbles.
JML,
Sept. 9 broke the trendline, April 12 didn’t. That seems to be a biggie.
Just checking in after taking most the day off, but it looks like miners still can’t hold firm.
Nothing done over here.
SB – you were just loving those miners a week ago. what happened?
Texas Explains Rationale for Delivery (per ZeroHedge)
Over the weekend, University of Texas made headlines after disclosing it was the first major institution to take delivery of $1 billion in gold, although still keeping it in the Comex system. Today, the CEO of the management company Bruce Zimmerman was on Strategy Session providing the rationale for his action to David Faber. First some prehistory: “We began buying gold in September of ’09 at about $950 an ounce. Our average price is at about $1,150. We’ve invested around $750 million in gold over that twelve months and it now has a value around $1 billion.” On what Texas thinks of gold (no surprise here): “The role gold plays in our portfolio is as a hedge against currencies. The concern is that we have excess monetary and fiscal stimulus. I noted a couple of days ago, i think there was a story out about Bernanke mentioning that while they may not increase quantitative easing, they may not necessarily reduce their exposure either. So i think that may be a signal that will continue to have a good deal of monetary stimulus. We read every day what’s going on in DC and across the states. We’ll see what fiscal policies look like. It remains a concern for us.” As to the specific reason for demanding delivery: “We had gotten to a size and our thought was that we probably will have our position for a longer as opposed to shorter term, although we could sell at any time. But rather than continuously roll the futures contracts, it became easier and more economical for us to take possession of the bullion.” So how long before many if not all other public fund managers decide the same logic should apply to them as well?
PST,
I was apparently at lunch when whatever happened, happened, so you’re still a gentleman in good standing with me.
I think you’ve nailed it almost in your latest post. I will add that rather than the banks taking outsized risks, it seems to be the hedge funds who are able to get the freed up money in the overnight auctions as the bond sellers seek return.
Now I have no direct knowledge of this, but in reading various accounts of what is happening, it’s my best guess.
Anyway, good post, and we’re in agreement at last.
BTW, over the past 12 months, we did get the “low” print for the dollar today. Based on Gary’s analysis last night, this seems to confirm the down-trend.
They stunk up the joint, what else? 🙂
I’m not married to any idea. If they couldn’t go up when silver was gaining 2% each and every day, it was an easy decision. In fact, my exit prices were still just above where miners closed.
I’m flexible and can buy miners or metals next round, but miners will have to show me something first. I’m also wondering if the juniors are done compared to the big miners. I’ll have my answer in the next few days.
Drawdown coming very soon, because I got my feet wet again with a 30% position in AGQ, pre market at $314. 🙂
Couldn’t bring myself to do anymore than that and no options, already gone against my word on adding so extended.
I still believe that in both current scenarios, of a daily cycle low or runaway move, a big smack down this extended is to be expected. Most parabolic runs have very wild swings that punish the latecomers and insanely leveraged. We still haven’t seen a nice 4-5% day down that we have seen in the past so often. This extended we could get a whopper 6-8% day. It shouldn’t mean much to the old turkeys or folks who didn’t trade around a potential daily cycle low.
I know I’ve learned a lesson here and in hindsight should not have traded too much around the low. A re position of leveraged and strikes would have been much more appropriate. However I still wont make a 2nd mistake, one I’ve learned before, which is to add my leverage here in such a stretched state. If or when we get a big drawdown, I will be waiting to gobble up calls, maybe not too far off where I sold he last bunch :). One can wish.
Alex, thanks for your words last night. It’s been fun either way and a long profitable run. My 30% AGQ add today will help feel like I’m part of the team still.
Good. Now all we need to do is get Pima, Movax and I think Aaron on board, and we can put this topic to rest and focus on making money in silver.
We could possibly see a 15% down move on the POS by early next week. Selling starts on Thursday and then will pick up Sunday night into Tues…10% drop in one day not out of the realm. This would equal 30-35% drop in AGQ. What is that, around 96 pt drop? Newbies would get roasted!
pimaCanyon,
I think that the intraday drop and then the recovery was a good short term sign, but a day when it would pop like today and then drop into the close and end close to the low of the day, that would probably be my exit.
AAPL report came in; stock up nearly 2% (7$).
We’ll see what that means for us tomorrow.
What is POS?
Anything could happen, and a sharp correction (maybe even just a day or two) is certainly a possibility even in the context of a continuing bull.
The sharpest pullbacks are typically in ripping bull markets. I have no problem riding a pullback in a winning trade, but I did have a problem staying in a weakening group while the underlying metal was making new highs every day. In short, I didn’t exit miners in an attempt to sidestep a correction in silver. As I said earlier, if I was long metal only with no miners, I would still be fully in.
Who the hell is this Toby Connor dude!?
http://www.minyanville.com/businessmarkets/articles/gold-gold-cycle-silver-silver-price/4/20/2011/id/34083
I think he’s been stealing Gary’s work!
Poly,
Good to have you posting. I’ve missed you.
You could get that 30% exposure by risking a lot less money in SLV options, and if they’re chosen correctly, the delta will go below 1 on the retrace.
That will mean that you won’t even lose as much as you might otherwise.
You’ll lose a lot more percent in options but way fewer dollars and still have the 30% upside exposure.
sophia,
POS price of silver POG price of gold.
Bruce,
Toby=Gary
Wes,
Please elaborate on this for those of us who are new to options:
“You could get that 30% exposure by risking a lot less money in SLV options, and if they’re chosen correctly, the delta will go below 1 on the retrace. That will mean that you won’t even lose as much as you might otherwise. You’ll lose a lot more percent in options but way fewer dollars and still have the 30% upside exposure.”
Thanks!
I was thinking he possibly meant “piece of sh*t.”
In fact, I’m currently calculating how to minimize my downside exposure with SLV options while keeping 100% upside.
This would involve selling all AGQ (as well as any other common, if you have any).
oh yeah SB, good to hear you’re on the full metal team. yeah those miners suck wind but i got like a ton of them. they are my friends now.
ok load up man, start up the bernanke presses when the time is right. Which I think is 1465, the risk of going in at this point is high.
WES,
Thanks, appreciate it, missed being active, but having fun in the sun.
The AGQ I purchased was just in self managed 401k’s no options allowed. Main accounts are still all cash, waiting for SLV calls and a nice drawdown.
One of the main reasons I buy the calls is for capital outlay.
Gotta,
I’ll get back to you on that.
Everybody wants this large, sharp drawdown.
Agreed?
Thus, while it makes sense and catches the newbies, imo, it makes sense to get to 1X, 1550, in gold, after the holiday, maybe one day into the work week, when everyone is incredulous that the drawdown didn’t happen, and thus it looks safe to add, after they add, then the sudden pratfall.
I think the timing on this decline may be a bit early. In the scenario I paint, the traders get ’em all, instead of just the few cherries now on the trees.
If I had deep pockets, that’s the way I would play it. Come close of biz on Tues in the USA, I would chop off all their heads, fast and furiously, and then rebound, too.
That would do the necessaries with the greatest amount of pain.
Edwin,
I haven’t yet ruled out miners on the next purchase, either. Sooner or later they will be much higher, it’s just that I did not want to hold when they were telling me something might be wrong.
If they can trade in tandem with the metals, I might even buy ’em into a silver dip, if it ever comes. 🙂
QE2 isn’t the end?
Acting Man’s Write-Up
A must read in my humble opinion
Lately, Federal reserve officials have taken pains to alert the markets to the fact that ‘QE2’ is indeed going to end in June. Alas, that would automatically bring about a shrinking of the Federal Reserve’s balance sheet as time goes on, as securities currently held mature. Moreover, since bank lending to the private sector continues to contract, there would be the prospect of outright monetary deflation taking hold at some point.
Naturally, this prospect can not please the helicopter pilot. Thus there are now the first rumors circulating that a shrinking Fed balance sheet won’t be countenanced. We will apparently get ‘QE Lite’ to forestall this possibility…
Gosh, never thought of that! Thanks Miyagi-san!
Vonda / Kal, riding with you on $313 AGQ. Tried twice to get it at $308 and broker link froze both times, wasn’t meant to Saved some powder to take another shot next time she comes around.
Ryan, Glad to see you got back in. We still have time to finish loading up. I was very pleased with my gameplan and fully back in with powder to spare. Had to go back and forth between accounts tweaking, to stay below the moving ticker. What a game it was! No sleep last night after Gary said get in before the run up, had to plan reentries. Very pleased, very pleased.
Eamonn, So happy you got in with your AGQ. I know you have been patiently waiting.
What a day! busy, busy, busy.
I can now relax and just turn off the computer and ride.
As SB says, can go up, it’s good, can go down, it’s good, everything’s fine. 🙂
Poly, waiting for that 10% pullback to use remaining powder. So much activity today on blog, couldn’t begin to keep up.
seems like a lot of noobs jumped in today. We should have one more up day and then some profit taking.
Folks everyone is looking in the wrong direction. As long as the dollar remains in free fall we aren’t going to get any serious correction in the metals.
The dollar had it’s chance to rally on the debt downgrade and it’s failed miserably.
We are now about to enter the panic selling phase of the dollar’s three year cycle.
Gold and silver will ultimately be driven by the collapse of the currency.
Update on my Japanese stock trade in comparison to GDX:
12/7 GDX High: 64.62, close today 62.10
Loss of 3.9%
12/7 EWJ High: 10.70, close today 10.18
Loss of 4.85%
So, GDX has pulled ahead, but given how GLD has hit new highs, it should be much further ahead than Japanese stocks that had an earthquake, tsunami, and nuclear event to digest and deal with. For those not familiar, I started looking at this comparison based on a DeMark BUY signal for Japanese stocks on a monthly basis in the fall.
I know everybody here has been riding the Silver bull, for which there is no comparison, but just think the above is very interesting!
Gary – I think the dollar is going to sink lower of course the QE plan guarantees it.
But I guess we like to make a stab at what going to happen in the next weeks or so. haha
After QE, what could happen?
After QE the same thing will happen that always happens. The dollar will rally for about a year. Gold will enter a severe D-wave correction. Silver will crash back down to or below the 200 DMA.
Everyone will say “see gold was in a bubble”.
That will clear sentiment and the whole process will start again. Then at the next dollar three year cycle low the next C-wave will make this one look like childs play.
Gotta,
For an account currently valued at $100,000, and you want 100% upside exposure.
I would buy $23,000 of SLV May 34 calls @ the closing price of $10.25.
This is $1,025 for each option which would allow you to purchase 100 shares of SLV anytime before May 21 for $34 per share.
So you would buy $23,000 divided by $1025 equals about 23 options.
Now, your downside total risk is $23,000 or 23% of your $100,000.
You will make $100 per option or $2300 for each one dollar SLV goes up.
If you put the $100,000 in SLV at today’s price of $44.12 you would buy 2300 shares and make $2300 for each one dollar SLV goes up.
For $200,000 do twice as much, for $50,000 do half as much.
Gary, when will this be, what year for the next 3 year cycle low? I need to make sure I have my plans all set for that one. 🙂
“Then at the next dollar three year cycle low the next C-wave will make this one look like childs play.”
Thanks for giving that go ahead to get back in, I can relax now and ride.
i have already lost 60 cents out of the price trying 3 times to catch the top in silver. I think i will just weather the storm if we do get a correction although i will probably not be checking my account balance until we recover and make new high!
Wes,
RE your options suggestion, Given that Gary is now calling for the final three year cycle low in early June, do you think we should look at options with a later expiration date than the May one that you suggested.
All I’m trying to do is get to the next correction as cheaply as possible while guarding against no correction.
It is cheaper to buy May, hold until expiration, and then buy June.
If you buy June or July now, you’ll lose time premium.
@basil…your grocery store clerk story doesn’t provide clues towards the public mania phase. Instead it points to a direction that even regular working folks have been informing themselves. As you said, these guys seemed knowledgeable on gold and the FED policies. I doubt they learned that in the last few weeks. In fact, the way you relate the story, it wouldn’t surprise me if they have owned physical for a long time…perhaps even longer than you. Maybe they are Alex Jones listeners for the past 10 years.
The big bubble will be when folks who have not bothered to buy gold because its a shiny metal, capitulate and buy. When people who have never purchased a gold coin do so, and then tell you that you should as well because gold is going to the moon…then you will be near a bubble. We are few years from that…even with the increased media attention.
@n1tro…I believe London closes at 11:30 AM EST. That is where you see some action near the PM fix, between 10:30 AM and 11:30 AM EST. The 1-1:30 PM EST is the the NY pit session which closes at 1:30 PM EST.
Gary, isn’t today’s low in the dollar the same as the ’09 low? I would expect a decent bounce here…
As a beginner trader, I’m still cautious. Here’s why:
– AGQ 60 min chart shows huge vol spikes ONLY on sells, never on buys
– Same for FXE daily chart, all selling – and UUP, all buying
– SLV/AGQ is way too extended above EMA’s (20, 50) – will snap back – the higher they climb they bigger the snap
– I see neg div on GLD’s 60 min RSI and PPO (MACD)
– Hollow candles on UUP (though today’s dried up) are at cycle bottoms on Gary’s chart
– Gary’s $USD cycle chart shows that blue arrow bottoms (intermediate) are pretty regular, and we are way way overextended. If it bounces, do I get the cycle-rookie-of-the-day award? A chicken burrito perhaps? Supersized?
None of these are slam dunks, but they do warrant caution. I’m not saying that chasing this is wrong, I’m just saying it’s a chase – good for trading, bad for core. I can’t join you all here because I wasn’t w/you to establish a core position when I should have at each major correction along the way. My mistake, not to be repeated I hope.
Francisco,
The option strategy will leave you with $77,000 in cash for every protected $100,000.
This is, of course, for use at the bottom, along with any margin you wish to deploy.
Wes,
Thanks for the explanation!
Gary,
In light of the portfolio change you posted today on the premium site (don’t want to give away the specifics here) could you please respond to Wes’ statement above: “It is cheaper to buy May, hold until expiration, and then buy June. If you buy June or July now, you’ll lose time premium.”
I’m new to options and I’m trying to get a handle on it.
Also, if I understand correctly you took the amount of dollars you raised from selling some of your AGQ and bought an equal number of dollars worth of options, is that correct? Or did you only buy enough options to purchase the number of shares equal to the dollar value of the AGQ you sold?
Again, sorry for the newbie questions, but I’m trying to understand your options strategy.
Good points Bill,
Not to mention AGQ is above the bollinger band.
I still think we will get our correction.
James
Or $77K more to put in AGQ?
Thank you for that.
Bill, how long have you been trading? You play the new guy but your points are very valid and show a long eperience…
I was just telling Jayhawk that my favorite charts today were…
EMC, IL, VMW, GLNG,Simo etc. And Those are TECH stocks. suddenly Beanie is calling me!! 🙂
well, I did buy GORO today a tad higher then it closed at, that chart looks good on a 6 month daily .
the old dog ‘JAG’ perked up too.
Good point on the BB, JamesR.
Sophia, I’ve been studying a bit, and have been following a really well educated guru, who never made any money. So my learning is all intellectual, not experience w/the actual beast, like you all have. Make no doubt about it, I’m a beginner.
good afternoon, guys here an interesting ancedote, im an institutional futres broker . i communicate with a large group of profesional traders on a minute to minute basis. heres a quote from the chat today, ” i think its time to short silver, mom and pop are lining up to sell their silverware” my response which met with some derisive comments, ‘tops arent made when mom and pop are selling their silver, they are made when mom and pop are buying and bragging about it” i bought more slv on the dip today.Thanks for pointing that out in your recent radio interview gary!!!
Sophia, that is because Bill stayed at a Holiday Inn last night.
Blogger LowTax said…
Gary, isn’t today’s low in the dollar the same as the ’09 low? I would expect a decent bounce here…
April 20, 2011 2:38 PM
HMM, Good point???
Wes, great analysis.
I have thought of a *possible* reason for SLW’s non-performance. This is pure specualtion, but as it’s my morning and I have all day, I’ll deep dive into this issue, as it’s important to understand.
SLW makes money by contracting w/miners, by entering contracts to purchase silver (eg: $4/oz), which they then can sell at market ($40+/oz today). So what’s the problem? I can think of 2 things: a) perhaps some miners are in Bolivia, and even though contracts exist, if they are nationalized, or are under threat of so, the contracts can be compromises (“acts of God” clause), thus SLW may not realize gains (i.e. reasonable doubt exists), and b) perhaps some silver miners are running out of silver – have a look at HL and PAAS – terrible charts of late.
thanks for posting that, GKC.
(For those of us who have long PM positions it’s nice to know that a futures broker bought today 🙂
Bill, third option is the hedge funds are shorting the heck out of it because they are so long the metal.
Bill, third option is the hedge funds are shorting the heck out of it because they are so long the metal.
I noticed SIL, SLW, GDX sold off at the close, and GDXJ closed about flat.
And I have to wonder is this a prelude of what’s to happen to the PM market in the very near future.
James
misspel – meant “compromized” not “compromises”
Bob in Hawaii – yup, Trader Dan says that as I’m sure you know. He has on the floor experience, so it could be just that. RGLD is a bit to gold what SLW is to silver, and a few yrs back HF’s shorted the life of RGLD – maybe now they do so to SLW
Are there experts on this forum who know?
What’s sticking in my head now is that AGQ is going UP, as in UP. And price trumps everything. I just wish it didn’t gap every friggin day, so that I could get onto an escalator, rather than leaping for a rope across the Grand Canyon.
Bob
Nice echo and that Holiday inn remark really cracked me up!
GKC
Is that the truth? I looked up your blog profile and found that I was the 2nd EVER to look it up. However, If you say its the truth to my face 1 more time… (online ) haha , I will believe you.
HUI also closed lower than the open.
Thanks, PST, for that explanation. So the additional liquidity is being used by the banks to buy stocks and commodities, thus driving up prices. That makes sense to me.
What I still don’t get is why this is not considered monetizing the debt. The Fed is giving the banks dollars in return for their US Treasuries. Seems like monetization to me.
However, maybe it’s because of this that they don’t consider it monetization: The Fed intends to dump the treasuries back into the market at some point in the future. So when they do that, they will reduce the amount of money that’s in circulation, thus canceling the money they added when they bought the treasuries. Is this why it’s not considered monetizing the debt? If so, we could say it’s short term monetization, long term it’s a wash. The only potential problem is if the economy stays in the doldrums for years (or decades!) then it will likely be a LONG time before the Fed dumps the Treasuries. In fact, they could just continue buying them.
Thanks, Bob loves Hawaii
I’m going to tell you more than I know, but I try not to let that stop me.
Isn’t it possible that SLW just went up too far ? From the time it started moving in early 2010 until the first part of December, it outperformed silver by 3:1.
I’ll bet it just priced in the hereafter and quit.
I’ll cover the miners in tonight’s report.
FWIW there’s no way in hell I’m going to lose my position in any of my mining positions.
BoB In Hawaii
If they are shorting the snot out of miners, because they are heavily long the Metals, wouldnt the price shoot up eventually when they have to cover?? Or can they prevent that?
Wes,
I like your options strategy. However, rolling options costs commissions (small change, only $1.50 per option per trade for me) and at least part of the bid/ask spread, both when you sell and again when you buy the next month out. You add up the commissions and the spread and do it for a couple of months and it’s not an insignificant amount. Plus you have this additional job of rolling the options each month.
If it’s likely this thing won’t top until June, then you can avoid rolling by buying June or even July calls, but as you say with those there is time premium built in which you will lose as time passes.
If you go out to June or July, you can just go deeper into the money to reduce the amount of time premium (extrinsic value), but that requires you to spend more dollars to get the equivalent number of shares.
Thanks for your comment on the miners, Gary.
Most of SLW’s contracts are in the $3-4 range. Let’s use $5. Here’s the math:
When $SILVER went from $10 to $20, that was a 100% gain. SLW’s profit went from $5 to $15, a 300% gain.
When $SILVER went from $10 to $30, that was a 200% gain. SLW’s profit went from $5 to $25, a 500% gain.
When $SILVER went from $10 to $40, that was a 400% gain. SLW’s profit went from $5 to $35, a 700% gain.
Did I do that right?
Probably Bob’s right that HF’s are shorting this.
Gary
Maybe we should go back to about Nov/Dec’s Blog… when you used to talk about the dollar diving, A Parabolic move in metals,etc…
I remember you saying many would sell too early afraid to hold on till the top, thinking a crash was coming
-you said many would be afraid to buy dips and afraid to buy rising prices.
I recall you saying at the end price would be going up 7 out of 9 days…and so on.
Bill, for someone who professes to be a newbie, you strike me as anything but. Others seem to be taking you at face value, call me paranoid, but I suspect you are working this board with an agenda.
それは本当です
Now its happening in real time 🙂
Alex is goin Beanie on us!
I don’t blame you, I’d rather be long the USD or some nice treasuries or Beanie’s portfolio at this point than Silver Weaken.
I saw the $DXY just about tag that 2009 low perfectly…Whether or not it bounces is another story. All those blood red candles look like they want to ripe through it.
http://www.screencast.com/users/Jayhawk1991/folders/Jing/media/168f2305-e1e3-41e1-883d-40fbbfccafb9
Posted on Turds blog…This article thinks the PPT is shorting the crap out of our precious miners.
http://www.silverbearcafe.com/private/04.11/occam.html
pima,
This is my strategy until the cycle low. Then I plan to play big ball.
Which do you think is cheaper until the cycle low ?
The July 34 option is $.35 more expensive, or $35 per option.
JAYHAWK
beanie here…buy that EMC at the open, then tell me, if MY hedgefund guys and My plunge Protection Team are shorting your P.M.’s…
wont they bounce when they have to cover??
Wes,
Why play big ball?
Intern,
If we can determine a cycle low with accuracy, that means it won’t go lower unless we have a failed cycle.
Isn’t that where you’d like to buy big ?
I remember, back in ’08, Gold had a $100 rally in one day. Does any one remember the circumstances, as in news and where it was in the cycle terms then?
Pima,
I think you’re going to be confused about the Fed until you start thinking of T-bills, bonds and cash money as equivalent things.
When Etrade or Fidelity shows cash in my account, the money is actually invested in a municipal bond.
Nobody holds cash cash other than drug dealers.
Wes,
This is a possible strategy to reduce risk and still catch a piece of a move that is getting away from you?
Then at cycle low you go back to buying the stock and Old Turkey positions?
Alex, I think the Hedge funds are going to get squeezed big time. I keep adding miner positions. Look what happened with FCX reporting yesterday.
They are playing with fire.
Yes, reload at the cycle low by deploying all the cash you’ve been hoarding by using the option strategy.
According to Gary, the cycle after this one is the big one.
The past is history.
The future is a mystery.
The present is a present.
JohnsMotivation, very good
Nat,
LME Select opening hours will continue to be 7.00am to 7.00pm (London time) until further notice.
7pm London time is 2pm EST
Gary, your comment re. miners eases my mind somewhat. I put back all my positions today in SIL, SWL & AGQ. I already had most of my AGQ and half of the others.
this article explains why the price of slw might be going down.
http://traderdannorcini.blogspot.com/2011/04/hedge-fund-ratio-spread-trades-continue.html
Just got home. I got a sell on GLD today (popped up on my short screen). First one of this year. Last year the sells were May, October, and November—all were tops before tradable corrections, though Oct was early. FWIW. If this is already a true runaway move, the sell isn’t going to be worth much, but if it isn’t I expect to get a chance to buy more AGQ at lower prices before month end.
Wow i think today I’m the winner of the worst entry on AGQ/HZU. I got in HZU at 51.12 which is probably around 322 on AGQ lol. I still have strong hand status on 35% of my position. I added 25% today so still have 40% more to deploy so let’s see if we get that pullback. But I have to say I don’t even know if any pullback will be that steep. It was quite impressive to see that big intraday drop today but end the day at the highs.
DG, did you take the TBT trade? If so, what percentage?
I bought your book. I need to open it.
Ryan, at least you did it; I spent the day wondering! I did manage to add to a couple of my miners – they, I did not sell so much last week.
I will go big HZU. Is tomorrow capituation day? For me or the POS?
James, 僕は本当にnewbieですよ。 If I was experienced like Gary, Poly, DG, SB, etc. I would have bought a position in late Jan when the buy signal was flashing. I didn’t. And yes I have an agenda: to learn from the best here and try to copy so I can move from beginner to advanced-beginner status.
DG, if you don’t mind sharing, what signal do you use that caused GLD to flash a short? And, did you short? Thanks.
Am of to read Gary’s report now!
Johns: No, I actually added to it at 36.35 today. It’s one I would like to hold because I believe Treasurys are a disaster waiting to happen. I am ahead so can’t lose (break-even stop) so why not hold it and go for a kill? I entered it apparently at the low (at least for now), hoping for more than a trade.
Sorry, Bill. I am happy to post trades and often reasons for them, but this screen I can’t. Sorry.
Gary, will you make another report for tonight? Just asking (begging!). And, does the volume stuff I mentioned earlier alter your thinking? I my own limited experience, volume is pretty sketchy, but it really stuck out these past few days. Maybe a comp supercomputer trick by GS, or maybe it’s real – don’t know. But it does stick out. Put another way, what would you need to see in the $USD to cause you to say the cycle was bottoming here? An upside reversal on heavy volume? 2 days’ of those? Thanks.
OK thanks DG. The fact that you had that signal though means I’ll keep screening this blog for your posts so I can learn.
The other night @ work I mentioned gold’s “new high” and if anyone invests in the metal. No one said yes but this guy tells me silver is the better investment b/c it will bring a “better return”. He said with “gold currently at like 2800 dollars” silver is the better investment. Another guy was telling me silver is almost 100 bucks. I still to this day have not met a single person outside the coin shop that has a clue.
DG, What are you thinking percentage wise? 1%, 5%, 10% of your portfolio?
Bill: You won’t really “learn” much from my buy and sell signals as I can’t share the guts of it, but there are a number of very good traders on this blog who do share freely about tactics, thinking, stops, etc. A great education can be had here.
Funny story! The only person who I’ve encountered with any knowledge is the son of a billionaire. His dad, smart money, told him to buy silver bars a few months ago; he did!
Gary, excellent report.
If we get this runaway move, what price could AGQ go to at the top? Any ideas anyone?
Eamonn,
A while ago someone figured 50 dollar silver would be 350 AGQ.
seems to me that if this thing really goes nuts we could have $70 silver. especially if the thing cascades and people & big money get panicky and take money from stocks and plough plough into silver and gold to preserve buying power
@n1tro..I am familiar with those LME times. However the big moves down in Gold happen right around PM fix, which is 11:30 AM (10-11;30 time frame)and the big moves before 1:30 PM est is NY pits…even though the Crimex is open outside those hours. Look at the volumes during those times. Go look at the kitco live gold chart and look at the times gold gets hit…almost always during London Fixing and NY pits. That’s when the big money is playing.
Gary,
GDXJ as been a poor performer recently, do you think it will pick up speed close to the end? I am still holding it, but it is not moving much.
Thank you.
Elaine
Wes, I’ve been accused of being paranoid, but I hold cash. I keep enough to buy a a handgun, a week in a hotel room, and 2 plane tickets to anywhere in about 4 different places around town. And I’m not a drug dealer. 🙂
@n1tro…check this article out..very interesting re AM/PM fix.
http://seekingalpha.com/article/222629-proposing-an-overnight-gold-fund
The Kellie comment was me. Didn’t realize my wife was logged in. Anyone else wondering if the dollar is going to break 74 tonight?
Eamonn,
Gary has said that he doesn’t think silver will get to the norm of 20:1, but if gold is $1600, silver could be $70 and only be ~ 23:1, so we shall see…
Great report, Gary. Will wait for your “hint”, and thanks for addressing the other concerns.
OK, thank you Elaine :o)
Who ever said the dollar might hit -$74 tonight could win a burrito!!!
Silver futures at 45.78! we could hit $46 overnight. China just set their yuan at 6.5228 against the USD which is highest since 2005.
wow….US Dollar taking a nosedive…right through 74.23…I think this opens up the door to 70/71 levels
Eamonn, I’ve been getting a ratio of roughly $14 move in AGQ for 1 silver point since Jan.
(So if you tell me where Ag will end up, I’ll trade and tell you where AGQ will be 🙂
Here are some charts comparing HUI timing in the last couple of c waves.The miners could well follow Garys scenario. http://thetsitrader.blogspot.com/
Vonda, love your dog!
Thanks Eammon!
Her name is Basil (as in SweetBasil, the herb.)
She watches the ticker with me.
Vonda! Thats so sweet. If she is good you have to get her a silver dog tag when the c-wave is done
Futures usd 74.32 not 74.23
It’s just messing with the pivot
Bummed I messed up on the iPhone and sold 10% of my agq only playing with the damn thing, too much work and not enough time to keep up here
So only in 83% in now
47 agq
16 sil
18 slw
19 cash
Comfy I suppose maybe I will wait for dg I don,t do options
fat boy, DG got a sell signal on GLD today, if you didn’t know
Not a bad idea, Eamonn!
(I also have an Holly and a Tallulah.
Good Irish names, as far as can tell.)
dxy at 74.08 http://quotes.ino.com/chart/?s=NYBOT_DX
Unfortunately, I am only about 50% invested. AT this point with the silver rally already gone and left the station, given what Gary said on the premium sight, would you think that the miners would be a better bet?
FatBoy, You accidentally sold 10% mucking about with your i-phone?! What the hell app is that?!! Sorry, but I am laughing!
Hopefully you’ll get the chance to reclaim it at a lower price. You could always call up Apple and ask them to divert some of those earnings your way.
I remember a little while ago someone posted a link to an analysis of the change in price of gold at different hours of the trading day. It showed that the biggest hits to gold comes around 10 AM EST and 1 PM EST. Does anyone still have that link? Or something similar? Thanks.
ddn3f, try:
http://www.sharelynx.com/chartstemp/IntradayGCManipulation.php
Eamonn,
That’s what I needed. Thank you.
Duuuuuuude,
I don’t agree with the premise of your question. Here’s advice Gary gave Allen earlier today:
Gary said…
Allen,
It’s so late in the cycle even if one miss times the trade and we do get the dollar bounce it will only last a few days and then gold will get back to making new highs.
So is it really worth missing 2 and a half weeks of gains because you might get caught in a 3-6 day correction that will quickly reverse back up anyway.
I will never give up 20% because I might have to weather 2 or 3% first.
April 20, 2011 6:11 AM
IMHO you could stick 1/2 and 1/2 AGQ and miners like SLW, AG, EXK or AXU. If you really want to take a flyer take a look at XG.
Best,
Le Fou
Dude, Gary is 35% SLW.
Good info, Le Fou. I have like 10% dry powder almost ready for deployment. I keep hearing about all those miners… Currently I’m 85% AGQ, 5% AXU, 10% cashola. Very weak hand in everything though. The fun thing is I keep hearing that line from Ricky Bobby: “Slingshot. Engage!” Hope we all have a great C-wave finale. Awesome to be here.
Ok guys, along with Gary’s report today and for those of you who love the “manipulation/conspiracy” tales (see link below), I decided to throw in the towel.
http://jessescrossroadscafe.blogspot.com/2011/04/silver-eligible-versus-registered-and.html
Tomorrow morning, I will step back in with remaining powder and will grit my teeth if the OPEX shennigans corrects a little next week.
Nat,
thanks for the article link. First time reading but I had a feeling about it while trading in the past year. I always buy on the dips at 1-2pm est.
Interesting enough we had a bollinger crash on the VIX today.
This occurance does not happen that often. Only happened twice last year.
James
i looks like we will not be able to track silver any longer. It is about to disappear of the
kitco chart
That would be the “lower” bollinger band twice in 2010.
Jan 11, 2010 was the VIX bollinger crash. On that day GLD marked the swing high.
James
So if by tomorrow we do not get a correction, then I am convinced we have a runaway bull and I will deploy my remaining funds.
James
Lefou and Johns Motivation,
Thanks for responding. I knew Gary had said those things several days ago. I guess I am wondering if now, it makes sense to chase or to take a position in a stock that has not bounced yet. I am sure Gary would not know how to answer that. Hell, who knows now.
Again, thank you very much.
This comment has been removed by the author.
“occurrence”
interesting take on gold silver
gold will take off when pairs trade short gold long silver is closed out http://www.gannglobal.com/webinar/2011/04/20-video-01.php
All I can say right now is “There is a big storm coming”
Gold $1500 with no resistance, Dollar just went through 74.24 like a hot knife through butter. This is what Gary predicted in the April 19 report.
The Gann people have been trying to short silver and commodities for months. I tried to warn Flannagan what was coming in the dollar but obviously he ignored me.
Gary,
Am I correct in my thinking that there are two more daily cycles left in gold, since you expect the dollar to bottom in June?
If this turns into a runaway move then we will throw away our cycle tool and trade based solely off the dollar.
Thanks, G-money
From Lance Lewis:
Oddly enough, just when you might think upside speculation in silver would be getting a little silly, the majority of the speculation continues to be on the short side. Stories like this one: ”Time To Short Silver” are literally everywhere. Meanwhile, GS even put SLV on the “hard to borrow” list, meaning that it now costs about 300 bps to borrow the stock in order to short it due to the fact that so many wide-guy hedge funds are short the ETF and have it on borrow already.
Man shorting silver now could really lead to a rocket ride up.
Gary, what’s your take on why the silver miners aren’t following silver? Is it like Trader Dan says, that HF’s are long the metal, short the shares? Seems like a stupid trade to me (if so). Sorry to ask if you already answered somewheres. Thx.
… or pls point me to which daily report I should re-read, as I missed it. Thx.
Sorry I’m not clear – though you touched on miners tonight, I don’t yet get WHY they are lagging. As you know, usually a lagging miners means an imminent correction in the metal. If miners are about to explode, it may be best to split 1/2 metal and 1/2 miners, right?
errr, or if you prefer to save that for tomorrow’s report that’s fine. I know TA isn’t about why’s, just about what’s and when’s. So maybe a better question is best put is what does the divergence between SIL and SLV mean? And again I’m fine waiting for the next report. Sorry for so many posts. Done now.
Hmmmmm Gann Global Financial……I’ve seen some of his peddlings.
No comment.
Gary
that was a good report tonite. Cut through a lot of the noise that bubbles to the surface in the public blog. It’s time like this I tend to steer clear of forums to keep a clear mind.
Crude oil at 112.00 Any higher and it may clip the general market and close today’s gap.
A scenario that could produce a bounce in the dollar and a correction in metals.
James
I got sell on my end for silver, the up moves as of the past week have been crazy fast and furious.
Even if silver does take a breather, the dollar hadn’t finished collapsing down medium term (1 mos) so the price of silver still heading higher.
I don’t think it’s time to dick around and trade in and out at this point though. But if you really wanted to take money off the table..
Since last expiry, Silver has been up 23%!! amazing!!
$46 may be breaking in the next few mins…
I think that TZ(4404) should come out of hiding and take a bow.
$46 is now broken. chasing will continue tomorrow at 9:30am when the market opens
Who is the brave soul who will hold dollars thru the weekend ?
Current Gold/Silver ratio = 32.8
1508 / 46 = 32.8
At $1640 Gold target
1640 / 32.8 = 50.0
gives Silver target of $50
Just twiddling my thumbs.
Silverhound, I wonder for the last $200 rise in gold what the rise in silver was?
silver, if gold reachs 1640 from 1510, it’s nearly 9% up.From 46 in silver up 9% touchs 50.But i thinks it’s unlikely that silver could make the same percentual of gold (9% gld so 9% silver).I do expect double, at least).If we are in a runaway move from now, maybe 60 is the target. i do hope….
daniele, I say $75. If there is a dollar collapse, a LOT of heavy money will flow into gold and silver to preserve capital buying power. Just my feeling. This thing has not even started yet
daniele, is that your bird in the picture? i love nature
much better tha 60 😉 I have much cash to get in silver.I’m waiting for a correction, but it’s a hard way, standing here and watch silver fly away…..
eamon, yes it’s my imperial crown.He’s an year hold age.Simple wonderful and incredible.He’s like a dog, just stick with me, always.
sounds wonderful daniele. what is the species of the bird?
he is an imperial crow (corvus corax).Not common crow.Much more bigger, similar an hawk.
Gary,
Just reviewed a few of your reports from last June and July to refresh my memory about just how good your analysis of the dollar has been. DXY was in the high 80’s, sentiment was super bullish, yet you made the case that the dollar was heading for trouble. Great real time call of a major move that few others saw coming. Happy for having my portfolio prepared (sad as an American for our country).
Daniele, Eamonn
I can’t dispute your figures 🙂
All just idle conjecture.
Wav_ridah, kmisak,
Re: who’s in the know. I was miffed to read here recently that US brokers commonly give 100% leverage which on top of AGQ meant 4x. My UK broker only gives 33%, so I rang 5 others. One piggybacked my broker, and the other four couldn’t offer me AGQ and said they’d have to get back to me. I’m jumping on this bandwagon, but you guys here are driving and riding shotgun.
Supermalc
Big debate on the merits of the miners here this week. My tuppence worth is that the miners seem to be heavily linked to action in the SPY. And we all know Gary’s feelings on stocks. So I sold the last of my SLW yesterday at $43 & just swapped into AGQ.
That said, Gary is the man, so I’ll hold my SIL position, just in case.
Re Eamonn’s query, Silver seems to be moving about 3:1 for rise in Gold price, it seems to me. Based on projected Gold top about $1650, that put silver topping out in $55-$60, which feels about right to novice me. That still leaves 40% upside in AGQ!!
Best of luck all.
daniele
Good to see you sticking to your trading plan. I hope we get a pullback in silver for you early next week. I’m 100% in Oz miners and they are going nowhere as well so I feel your pain.
Cheers
Darren
But, what if this is the “big one”, where the dollar can’t find support and goes lower than 70? Surely its possible. In all the fever and drive to preserve buying power against the dollar a bubble can develop
Bill, I think some of the reason the gold stocks are lagging is due to seasonality.
The goldstocks are statistically seasonal weak during the month of April. Completely flat during the month on average, even if silver and gold makes small rallies, usually this have no effect on the Hui.
Visible on this chart, at bottom left ‘Hui bull seasonals’, and look up the month of April.
However at the end of the month, the Hui regularly explodes. And in 2009 and 2010 the large Hui rallies started earlier than indicated on that seasonal map, namely on 20th of April.. both years after several weak weeks.
(Also check the statistical intraday average gold chart at upper left, for those interested).
http://www.flickr.com/photos/58720171@N08/5632866903/sizes/l/in/photostream/
Supermalc,
The initial margin requirement (Reg T) for equity purchases in the US is 50% where it has been since 1974. FRB Reg T maintenance requirement is 25% but individual brokers may have a higher maintenance requirement.
trond
Interesting chart. All the ducks seem to be lining up for a move in May.
Pima,
don’t know if you’re on yet, but what the fed is doing is considered monetizing the debt by all except apparently Cullen Roche. Not to get too convuluted, but QE1 wasn’t increasing the money supply because the Fed was “sterilizing” its actions. This simply means that for any agency or MBS that they were purchasing, they would then sell a comparable amount of treasuries from their inventory (on their balance sheet) to absorb the reserves.
Think of the whole process this way. The government has $10 is expenses this year and they collect $8 in tax revenues. They need to come up with the remaining $2 (deficit spending) to cover the shortfall. Cullen’s arguement is that the treasury can just print the remaining $2, and that this deficit spending is the only form of monetization. He agrees that the treasury will later issue treasuries to “finance” the debt, but claims that they don’t need to do so first in order to pay their bills first.
So, in the above example, the $2 of the additional deficit spending increases the money supply by that amount. The treasury will then issue $2 in new treasuries to take this same $2 in new money back out of the system, so net net, there will be no change to the money supply.
Now enter the Fed and QE. The Fed now goes out and purchases the new treasuries from banks and broker dealers. They create money out of thin air and purchase (via electronic debit) the $2 in new treasuries. This increases the money supply by $2 again. As you can see, the Fed’s balance sheet has ballooned because they are simply creating new money to buy existing treasuries. In the future, they are expected to either re-sell those treasuries back to the public (sopping up the $2 in the money supply) or let their portfolio mature and run-off (their exit strategy)
Sorry if my description is a bit scattered, but it’s 6 in the morning here.
Goooood Morningggggg.
$46.20 – holy cow.
gogoogogo! Lets see the gold to silver ratio back to 1:16
I want to shoot myself seriously!!
Getting back in this morning and I have to go for the undervalued plays 33%SIL 33%NUGT and 33%SLW. I mentally can’t jump back in AGQ.
Le Fou
Are you back in? If so what?
Good morning all. Silver won’t even pause!
PST,
If you don’t mind me saying, that’s ridiculous. 🙂 How come Fed Reserve notes have lost 95% of their value since 1913? (and it wasn’t all in the last few years)
Even the Fed’s stated 2% inflation “target” is flawed. Compound 2% for a few decades and see what the confetti is worth.
It’s all posturing with smoke and mirrors to shape people’s opinions. Bernanke knows what is going to happen to the USD, but his real job is to pretend Everything is OK.
go for it Haggerty. I jumped back in yesterday
Pima,
Sorry one more thing. Cullen is arguing semantics and its all in the definition of “monetization”. His point is that the monetization needs to occur via the Treasury’s deficit spending. He considers what the Fed is doing as normal Monetary Policy (buying/selling treasuries to affect interest rate changes) and doesn’t want to call it monetization.
Theoretically, he’s right, but it’s still increasing the money supply (when they don’t sterilize their actions). Apparently though, he’s the only one “smart enough” to realize what’s going and the Federal Reserve presidents don’t understand this nuance. It’s all in how you define it.
Ben Bernanke is a VERY VERY intelligent man. Look at his CV. Why does everyone universally think he is stupid? He knows all the different arguments. Surely there must be some value in what he is doing.
Just looking from the outside, in
Eamonn,
True, but the question remains, for who is the “value” of what he’s doing?
Haggerty,
If I were you, I’d go for AGQ. I sold off all of my miners over the past couple of weeks … including selling SLW at a LOSS last week … and moved all the money into AGQ. I didn’t worry about waiting until SLW was in the green to sell to “get my money back.”
Forget about the past!
If you are bullish about the price of silver going up (as I am) AGQ is the place to be. Sure the miners might catch up and maybe even eventually pass AGQ, but why take that chance? Bet on the sure thing. Just admit to yourself that you made a mistake by trying to time the “dip” and look at how much you can make from TODAY forward. You can’t go back in time. Pretend you just learned about silver and today is your very first day in the market. Where would you put your money?
Just my opinion … I know you feel bad but stop beating yourself up. Think about the future … silver is a rocket ship and you are about to climb on board for the blast-off!
P.S. Don’t freak out if/when silver prices come down next week. Just ride it out. Go “Old Turkey” and stop second guessing yourself.
Haggerty,
Why in the world wouldn’t you get into AGQ?
Silver is only at $46. There’s no way this ends or rests before it at least tags $50. That’s still a 17% gain in AGQ from the current price to $50.
Very few people can do 17% in a year. Silver will do it in the next week or two.
Alex,
What are the charts telling you about AXU’s action today? I’m in SIL, SLW and AXU just over 100% invested. I’m hoping the lagging miners are going to play catch up!
SB,
Are you saying what they are doing is ridiculous or that my explanation is ridiculous?
If it’s the former, I completely agree. The Fed was created in 1913through the Federal Reserve act, but the “real” currency debasement started once we officially came off the gold standard.
In terms of the inflation estimates, they are a complete joke. As you know, core excludes food and energy, so none of the increase in commodities is being captured. Also, housing comprises about 40% of the CPI, so with housing plummeting over the last few years, this offsets the increases in other items. They simply change the calculation of CPI every time it suits their needs.
Shalom Bernanke, you tell me. I have no idea. I listen to Marc Faber and Jim Rogers and they seem to think he is both stupid and dishonest. These are all very smart people. I find it quite strange. Maybe I am an innocent
Eamonn,
Bernanke, and the other Fed presidents, are very intelligent men. This is their last resort effort to inflate our debts away and to make up for the shortfall in private spending. QE has also achieved it’s stated goals of lowering real interest rates further and inflating asset prices. The problem most people have is that these guys are “academics” and either didn’t anticipate (or more likely can’t control) the market’s reaction and the unintended consequences.
PST,
Not your interpretation, more the entire process of trying to make it look like there are very few, if any repercussions. There are plenty of people that get confused by the shell game, which is all it is.
It’s really simple, yet painted as something almost nobody could understand so that sheeple will just take the criminals’ word for it. Essentially, the Fed is nothing more than a counterfeiting operation, just that they were granted this power by our “representatives” in Congress.
Eamonn,
Before we bore everybody back to sleep, I’ll just remind you it’s possible to be both intelligent and dishonest. One does not exclude the other. 🙂
Eamonn,
Whether they are considered smart or not, I think it all depends on if you agree with their policies or not. Personally, I agree with Faber and Rogers and think that the system needs to go through a period of debt deleveraging and asset price destruction. The Fed has been reluctant to let this process happen and take the necessary pain and instead have been propping up asset prices through easy money policies which go back to the implosion of Long Term Capital Management in 1998. Faber and Rogers know what’s going and disagree with this approach.
PST, Shalom Bernanke. I’m probably not in your league, both in intellectual and in economic knowledge. But I will say this. If governments don’t allow private institutions to fail, they are introducing socialism by the back door.
volume on slv yesterday was almost 90k….wow
Eamonn,
I’m sure you’re in our leaque intellectually, it’s just that people focus their attention on different things. I happen to know economics, but am a complete dummy when it comes to cycle analysis, technical analysis and short-term trading in general. We all have our own strengths…don’t sell yourself short.
Well, that’s it for me….people are probably bored stiff reading these posts.
Shalom,
Such a shame that people want to audit your operation when, as always, Everything is OK.
YouTube: In the bunker at JP Morgan
http://www.youtube.com/watch?v=cmxE7ydkaI8
Laughs!
Supermalc
It’s quite ironic that I spelled league wrong in the same sentence talking about intellectual prowess. I had a homer simpson “doh” moment when I re-read this post.
I swear, last post. Let’s get back to our shiny metal friends and the best way to trade them. Let the trading masters take the board back now.
That’s right, catbird. The nerve of these people not to believe me when I say Everything is OK and getting better all the time! 🙂
SB, If all is Ok then are buying AGQ today???? 🙂
I hate mutual fund retirement accounts with 3 month holding periods!
I have some Charmin greenbacks for sale.
Gary
Don’t you feel that SIL and SLW are undervalued given the circumstances? Spot has moved up and these haven’t cought up yet. i was thinking if AGQ sells off big during a small correction then I will roll some of these positions in maybe.
Okay Gary and friends,
I mentioned the scenario a little while back, but it seems this scenario will play out.
Silver has moved much faster than gold. We will tag 50 very soon.
Do we stay invested in silver as gold does it thing? Or do we switch to gold, believing that silver will run slower? Or do we sell everything get a beer and some chicken burritos? 🙂
The original plan was to sell at 50, but I believe the plan assumed gold above 1600. 50 is a big number for silver, but will it obey 50 or will it obey gold and its run….50 is not just a number btw, its a a nice round number and the first nice round number above all time highs.
traderlady,
It’s unlikely I’ll step into AGQ or futures today. Same with miners for that matter.
SB, i understand with a long week-end, perhaps there shall be selling at the close. It makes it all interesting just the same. 🙂
SB,
I know you keep saying everything is OK, but you really ought to take to heart what one of your predecessors at the Fed had to say more than fifty years ago:
A sample from former Federal Reserve Bank of Atlanta President Malcolm Bryan in 1957:
“Let us be clear that what is being asked, when we are now urged to a policy of either intentional or connived at inflation, is that we sell our honor…The integrity of our conduct is crucial. Even if we ignore past savers in money forms, which would be a great scandal, we at least have a responsibility…to present and future savers in money forms…we should have the decency to say to the money saver, “Hold still Little Fish! All we intend to do is to gut you!”
Haggerty,
You got the answer from the man, but to answer your question, I am back in
20% AG
54% AGQ
26% SLV Jul 16 2011 40.0 Call
Best,
Le Fou
Good morning!
Gold futures broke thru the lower channel line of steep rise since April 14. Could be start of something on the downside. Or, what is more likely for this market, it just redefines the channel with a slope that’s not as steep. 🙂
Gold has spent a lot of time above 1500 over the past 48 hours. Are we basing here, preparing for a big launch?
Silverhound said
Current Gold/Silver ratio = 32.8
1508 / 46 = 32.8
At $1640 Gold target
1640 / 32.8 = 50.0
gives Silver target of $50
This makes both rise equally from here and thats inlikely. Means either gold dosen’t make 1640 or silver makes more than 50 or silver corrects more now than gold etc etc etc !
Keys,
The mechanical system that I follow is going to top in a 1-1.5 weeks and then prices will begin to decline. That will be a huge resistance to over come and I expect prices to decline sharply then. If and only if we are going to re-buy that resistance after the correction, then it will become a support for the final blow off top run. But if prices just decline from there, then that will be it.
There is also an alternative scenario where if prices decline to lower then yesterday’s close next week, then we might sell sooner with less profit. This week was pretty nerve racking. Everyday we were rising just enough to avoid a sell signal and Monday we bounced off of support which was very bullish.
So I will re-evaluate next week where we are at, but so far everything looks bullish.
Daniele,
You still out there?
I noticed on your profile that you live in Bergamo, Italy.
My dog is a Bergamasco Sheepdog, a breed that I’m sure you know about, it’s named after your city and district. Her name is Letizia, but we call her Zia.
Someday I will visit Bergamo, must be lovely there, very close to the Alps.
Good luck with these markets!
Supermalkie,
Do you feel a little better this morning?
I felt for you yesterday after your living through the afternoon mini-raid.
For superstitious and psyche reasons, I don’t like to get into investment advice so I didn’t want to answer your question.
You have to do what you feel comfortable with.
My recommendation to you is listen to Gary’s every word.
I went against him (unintentionally) and missed a few percent of the move.
As DG has said, you make a decision based on a reason. If it pans out that you were wrong, move on and learn from it.
Hot Rod,
Thanks for your concern. Silver is way more volatile than any equities I’ve traded. I am following Gary to the letter. I’m also prepared to exit sharpish if that $ correction happens today. I see silver was up over 2% earlier today, but is drifting down now…
Supermalc
Thanks Gotta, Le fou ,Gary.
If we are headed north I really shouldn’t lose money. I just feel like I need to get things on sale, just going to get in and read the nightly reports and get out whenever Gary does.
pyma, i know that breed of dog.But it’s difficult to find it here in town or on plain.It’s easier to find it many on mountains behind the city.Orobic pre alps i mean.When will you came here, tell me.I will be glad to help you!!
PST,
Thanks for your explanations!
I think I finally get the part about the Fed not monetizing the debt. I posted re this yesterday and basically said because the intent is to eventually pull the money out of circulation by selling the treasuries, one could say they are not monetizing. The are TEMPORARILY increasing the money supply but at some point in the future they will withdraw that additional money out of circulation.
Makes sense.
(‘course the temporary increase in the money supply has wreaked havoc with asset prices, but that’s another story, and one we at this site hope to benefit from 🙂
Ding, ding, ding, ding, ding, ding, ding.
NY Open for business.
Allright, don’t shoot the messenger.
Interesting piece on ZeroHedge:
Gold and silver have surged to new record nominal highs in dollar terms (all time and 31 year) with the dollar falling sharply on international markets. Silver has continued to surge in all currencies and has surged to a new record nominal high of $46.25/oz (£27.85/oz and €31.54/oz) on growing rumours of a short squeeze involving a billionaire or state interest attempting to corner the silver market. The massive concentrated short positions of some Wall Street banks have incurred serious losses and a desperate attempt to close their futures positions due to the tight physical marketplace may be leading to a short squeeze. This is something that GoldCore and a few other analysts have warned of for some time. We have long said that the very small silver market was ripe for cornering by private or state interests and that appears to be happening on some level. However, there are an increasingly large number of silver buyers who realize the market can be cornered and they are buying in anticipation of this event. The blogosphere has again been ahead of the curve and dismissal of much circumstantial evidence of silver manipulation, a short squeeze etc. as “conspiracy theories” is becoming less easy to do. It looks like many investors internationally and one or a few private individuals and states are cornering the silver market. At one stage the Hunt Brothers cornering of the market was a “conspiracy theory” – it soon became fact.
Posted last night that I got my first sell on GLD for the year (popped up on my sell/short screen). If this is a runaway move it will keep going anyway. Last three sells cam at tops (May, Oct, Nov last year). Oct was early as gold rallied more and then dipped back to where the signal happened so stepping aside cost nothing. The other two were dead on for sharp corrections. We’ll see what happens I would NOT sell on it. It’s crazy to lose a position now.
pima, really they are going to withdraw that money ? And how would that be ? They will not withdraw any money if they do this house of cards falls hard, they will continue QE.
Haggerty, I am with you. No way I would establish a new position in AGQ at this point. Sure, 10-15% is great but I am not putting up half my account now for something thats up 45% in a month. Bad risk management.
Thank you, DG
DG, What kind of Black box system are you using ? or is it your own proprietary
Gary, I would love to hear your comments on one thing that bothers me, is that lately I’ve observed during significant downward moves in silver, the volume is beefier than the average… This would indicate the bigger players are selling rather than accumulating, no? When price increase happen on the way up with high volume the opposite is true, no? We certainly are in a bull market, but I’m wondering if the smart money is handing their positions to the retail players who will end up being the ones remaining with silver…
Matt: Proprietary.
Should say “…one we at this site HAVE benefited from and hope to continue to do so!”
well
As you know I joined Beanies side…so far this morning my EMC, TZOO, IL ,and SWW are all up nicely!
yup,just looking, never did really buy them 🙁
matthew,
They have actually done this several times in the past. Buy treasuries and then sometime later sell them. So the net is the money supply is back to where it was before they started.
Will they do it this time (that is, sell the treasuries at some point in the future)? Time will tell, but at this point in time that is their intent.
Jumping in right now on AGQ takes “GUTS” man,thinking of RYAN. Hope it works!
T or others,
The question of volume goes back to MLMT’s old posts too. Since PM’s trade around the world 24 hours a day, are SLV or SI futures really a true representation of volume? I don’t understand the PM markets enough to answer. But I would imagine you would need to look at volume not only in NY, but also Hong Kong, London, and Syndey no?
Pima/Mathew,
The likely scenario is that they’ll discontinue QE2, but will maintain the size of their balance sheet where it is. This simply means that they won’t keep adding more liquidity above the $600B, but as the debt matures they will keep rolling it over. This way the liquidity stays in the system for now. It’s basically what they referred to as QE lite before. However, once the economy starts to roll over again later in the year, I fear we could see QE3
Gusto,
You are missing the point.
AGQ is not some “hot stock” that zooms up 45% and then crashes back down when investors move on to the next “hot stock.”
It simply tracks the price of silver. If silver goes up, AGQ goes up. Period.
If you think silver is going up (and most of here certainly do) then buy AGQ and get on the band wagon!
pst, I believe continuing qe and qe3 would be the same thing…I guess technically no it wouldn’t be labeled qe2 but yes that is what I was referring to. The other point I was trying to get across is there is no way in hell they are going to pull all of this QE back out once they are done… thats just sillyness
What options right now would be considered a “lottery play” such as the SLV 44’s from a few weeks ago?
This comment has been removed by the author.
“If” we hold here, we got a nice inverse head and shoulders on the 1 minute chart.
This comment has been removed by the author.
Hot Rod,
You have to look as high as May 54 calls for a “true” lottery play but it seems a little far away to me.
It might go to 50 60 cents with SLV at 50$.
Hi James,
I believe that the price has to close BELOW the lower bollinger band…
it didn’t do that yesterday (if it bounces of the lower BB, there is nothing to it)
Gottahaveit,
If you really think that AGQ and commodities themselves are not massively overbought at this point, you are kidding yourself and just blind to the risk.
I get that when you are in a runaway move, you can be overbought a long time. I think Gary is correct that silver most likely is going to hit $50 or close to it by the end of the run but what I am saying is that I would not establish brand new positions in AGQ at this point without a deep pullback. Most people here have been in for awhile but any newbies should beware is all I am saying.
This comment has been removed by the author.
Mr M,
Thanks. I agree. May is a little aggressive right now for an $8 move for strike. I guess July isn’t a lottery play “yet.”
Matthew,
I’m just differentiating between maintaining QE2 (no additional liquidity other than the $600B) versus starting QE3 (a whole new commitment of capital above and beyond the $600B). QE in general is self-liquidating over time as the bonds mature, so the Fed needs to reinvest the proceeds to keep the $600B outstanding.
Nike Boy,
Yesterday, from the YAHOO chart it looked like it close a hair below it.
As for today, I need to wait to see where the VIX closes.
James
Here’s the thing. Silver is so close to $50 that it’s unlikely we will see any kind of significant pullback at this point until it at least tags that level.
And the other thing is that one needs to be honest with themselves. If silver was to suffer a big correction now, one wouldn’t be able to buy anyway because it would look like the parabola has started down.
So you are just kidding yourself if you think you could buy silver on a pullback.
James,
That’s interesting…stockcharts has it has closing above
For lotto play, how about 55 SLW calls. Wasn’t there talk earlier about 65 to 80 dollar top on this when miners wake up again?
Gary,
At what point would you consider SLWs action a crawl along the 50 day SMA?
http://stockcharts.com/h-sc/ui?s=SLW&p=D&b=5&g=0&id=p29543648652
At this point one is better off buying into strength for the next $4 move to $50.
Otis,
SLW would have to base along the 50 for a while and then see a break downward.
Gary, GDXJ has been really lagging, do you think it will pick up steam or is it better to just sell and put funds into AGQ, SLV or SLW (which is also lagging behind SLV)?
I didn’t read all this morning’s postings so forgive me if it’s been asked:
How significant is todays US$ index breaking below 74 in terms of benchmarks?
I have established the all option position I outlined last night.
I’ve sold all my common, including AGQ.
I’m 110% invested.
I’m 60% in cash.
I’m fully in, but if not, think I would only have increased gradually now just before Easter. If the short-covering suddently takes a pause, this could get a nasty dive (only for a short time, but even when brief it hurts).
Gary,
Your initial thinking was that the dollar would break the 2009 low and overshoot a bit to the downside before bouncing. I understand that the jobs report on May 7th is the high probability time for this bounce, but shouldn’t we be leary of a bounce at any time between now and then?
I’m in as much as I want to be in for now. I’ve got some cash left in case of a major dip, it’s the extra cash from selling a bit a couple of weeks ago.
Sitting and waiting… biggest decision this morning is; tea or coffee?
Hey Alex,
Buy XRA…
Gusto,
You are absolutely right, I agree with you.
If you think the silver market is topping and due for a correction, DO NOT buy AGQ because you get double the losses on the way down.
Personally, I think silver is going UP!
Yes, there will be dips and corrections along the way, but I can live with that.
People who have less risk tolerance may want to avoid AGQ because it can and will drop as fast as it went up if/when silver prices fall.
“collapse” dollar, “collapse” – DXY 72.5 – here we come 🙂
Gary, You hinted last night on a $25 drop to deploy final positions. I guess some of us think it may happen around this extended time off.
Elaine,
It’s going to be pretty hard to outperform AGQ but I do think the miners will soon make up for lost time.
Francisco,
Why do you care if the dollar bounces? Do you think that would be the three year cycle low?
If not, are you saying you couldn’t hang on for 3-5 days while a dead cat bounce runs it’s course before continuing back down?
TL,
In a runaway move there is no way to time corrections so you just have to jump on them whenever they occur because they don’t last long.
Absolutely not the three year cycle low!
I could certainly hang on for a 3-5 day correction. I guess just being greedy in trying to time putting the rest of my capital to work. Perhaps the risk of waiting is not worth the potential reward of buying AGQ $20 cheaper…..Point well taken
Whitebear, I just looked at XRA. Looks like lots of potential upside. Why do you recommend it?
nice volume in SLW this morning..
Amazing. Gold seems to be honoring the sell signal (for now at least), and silver is powering ahead anyway. Gary had said runaway moves show 70-80% up days. How about 100%!
I am not invested as much as I’d like to be, but still have a nice load. This is my first year with Gary and trading PM’s and using cycles in my analysis. Quite an educational experience. I am already looking forward to the post-D wave to do more size. I’m amazed so many on the blog went 100%+ as easily as they did. This is a long distance race, and the PM bull has years to go. Gary’ll have 100,000 subscribers by the time it’s all over. (Then he can retire—again)
WB, other than the 21 m oz of gold, 5+ b oz copper, and 48 m oz of silver, of course! 😀
WB, XRA sure is a laggard…Gary thinks the laggards will make up for lost time soon.
Wes,
What options did you buy?
I followed Gary’s lead and bought SLV 40 July calls yesterday. Up 12-14% already, so I’m happy! 🙂
K,
I told him to buy some cause I just did and maybe our SMT team can blast this POS penny stock out of consol and up couple of points…
LOL,
peace
Yash,
My post about the Gold/Silver ratio wasn’t meant to be a prediction. It was merely meant to show that if you believe Gold will rech $1640 then $50 Silver is a shoe in.
On a side note. The Cup n Handle on the gold chart has a target of 1560. It is normal to have a pause / correction when these targets are hit. If silver were to hit 50 at the same time it would be more than just coincidence if they both had some sort of correction at this point.
Once again, I don’t have a crystal ball and this isn’t a prediction so please don’t take it as one. I’m just looking at this through a traders eye’s which is to expect a couple of different outcomes for different reasons so there is no panic when a correction comes.
Cheers
Darren
XRA looks like it’s been smelling out the D-wave correction since April of 2010! Seriously, I’ve heard good things about them, but that chart is not very exciting.
matthew,
Back in the 50’s when the Fed did this very same thing, they did later reduce the size of their balance sheet. That is their intent this time too. When will they do it? Probably not this year. Next year? Depends on the economy.
But to say they won’t ever do it is simply to ignore the many times in the past when they have done the same thing.
Maybe this time is different and everything will come crashing down and they won’t, but it will be pretty much game over at that point anyway, new currency, maybe even new government. But if the economy strengthens, their intent is to eventually reduce the size of their balance sheet. If the past is any guide, then they will do just that. The only thing we can’t say at this point is when.
Jay,
The monthly looks great. I have a buy setup on my system, plus a consolidation at the 50% rtrace. ADX is super tight, when this thing goes…adios!
DG
I’m with you. Trading this bull using Gary’s style and without stops hasn’t been the easiest thing to get my mind around. Kind of defeats a lot of what I’ve drummed into myself. I’ve stuck with it so far. I’d like to be able to get the leverage you guy’s are using before the next run complete’s though.
I bought SLW June calls this morning.
Silverhound-
You are 100% miners, correct? What are you thinking here regarding your plan/investment thesis for the last leg?
Thought about buying LVS (casino) puts this morning but decided I’m fine right where I am.
For those on the edge of your seats, I went with tea this morning, Earl Grey.
Silverhound: Gary does use stops. Only near the end of a cycle will he not us them to avoid getting stopped out at the last minute right near the bottom. The stop is usually the previous daily cycle low, because that low should not be broken if the uptrend is still intact. If it is, something is amiss. I’m just not used to putting everything into PM’s, but can see the value of it and risk control possibilities. I have 1/2 my net worth in now, but easily can do more comfortably after this experience (with stops—just not too tight)
DG, It was not that difficult if you had been here awhile or had read through historic reports. This had been planned for 3 years. Now we reap the rewards. Gary’s message did not ever waver one bit.
Cheers
Brian: I agree. Am looking forward to the next one where I will have that experience under my belt. (Except that it will probably come on the heels of a horrendous U.S. economy.)
Cheers to you too.
DG
XRA pennant looks great but it needs to break that downtrend line. It has been basing since it carved out XG. Those shares are up 500% since they forwarded them to me.
Jay
Yes I’m 100% Australian miners, both gold and silver. They are mainly juniors and some are only thinly traded and expecting anouncements over the coming weeks. I plan to scale out of those ones as the anouncements come in and we approach the timing for a top. The ones with a bit of volume I will wait for Gary’s final call and dump. I have to keep in mind that if an obvious top like a high volume reversal candle comes on gold during the US trading session I’ll be a day late in catching it over here so I may have to try and pre-empt a move and get out early.
Cheers
Darren
WB, what is ADX? I got Adams Express Co?
k,
ADX is just a price indicator that measures expansion and contraction…
The USD is acting weak, but this is nothing like what I expected for a 3 year low… I was and still am expecting a vicious drop at the ‘end’ which is why I think we have more to go.
Bias: I am Short USD.
Thanks, WB. Obviously, I am not v. sophisticated!
This comment has been removed by the author.
When a pennant like that contracts, ADX, Bollinger Bands etc, are going to naturally contract with price. The breakout is what we need.
Sorry, meant to say that I just can’t stomach buying a lot of HZU/AGQ at the moment, so I have been using dry powder today to load up on jr. miners that I think will pop soon. St. Eugene, Everett, and the Panther in particular. Gary’s confidence in the ‘return of the miners’ is giving me the cojones today…
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=tm&bn=23159&tid=139874&mid=139874&tof=2&frt=2
From the yahoo boards regarding SLW and miner share price action. Steady as she goes.
Gary,
When you buy your calls, you said that you look for a delta of .80, and you described how you manage position size, but what are the other criteria that you use? Eg, do you look for the largest open interest, or are there other criteria that you find more important?
Best,
Le Fou
LeFou,
Where did you find that info from Gary? I’ve been trying to learn more about he invests in options.
I followed his lead yesterday and bought SLV July 40 calls … but I have to admit, I did it blindly and don’t really know much about options yet.
Go read the “How I use Options” portion in the premium section.
Pima, It’s pretty sad but I believe your second scenario is more likely. A new currency. The fed could pull some of their QE back, but at what consequence? Deflation, Default on debt, and more importantly banks and most importantly the biggest bank of all the fed, will loose purchasing power. If they keep inflating it is tax on regular people and they continue to profit until death of currency… imho…. I also follow jim sinclair and this is his view as well idk if you are familiar with him but. I would say he probably has more experience than alot of us put together…
Anybody waiting on the miners is backing up.
Is it too late for the miners?
http://etfdailynews.com/blog/2011/04/19/is-it-too-late-for-the-miners-gdx-gdxj-sil-gld/
Hope he’s right
Haggerty,
That’s what Gary’s been repeating over and over.
Holy Cow!!! Look at all those people calling the top in silver…
http://blog.afraidtotrade.com/look-at-these-etf-charts-slv-zsl-before-calling-a-top-in-silver/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+afraidtotrade%2FNRSd+%28Afraid+to+Trade.com+Blog%29&utm_content=Google+Reader
Gary… I’m glad that I took your advice… NEVER EVER SHORT da BULL!
Wes,
Can you please tell us what options you purchased?
Just curious …
I’m trying to learn more about options and like to see what experienced traders are doing.
Gotta,
I already owned a bunch of SLV May 32s, and I used May 35s to replace the AGQ I sold.
I just bought some SLW at 41.85. It has yet to close below its 50 DMA even with all this miner weakness. I will sell if it does, so my stop is tight and would result in a tiny loss. I replaced what I sold at 46.25
Thanks Wes!
That’s what I wanted to know.
Just bought a few SLW 46 calls
DG,
Thanks for the heads up on SLW… hope it works for you… again.
I wonder if every person is doomed to commit the same mistakes before truly internalizing key lessons.
Since I was going on a trip to Spain last weekend, and was anticipating a significant correction this week, I sold all leveraged positions. So here I am, pulling my hair out while watching the bull roar away towards the horizon.
Unbelievable. I actually thought I was being smart. 🙂
Gotta,
Miyagisan answered for me. Also, Gary has talked about the right use of options on the blog, but I couldn’t tell you where.
Best,
Le Fou
Jonas, no one ever went broke taking a profit.
To whoever posted this number for having calls executed at Fidelity:
1-800-786-5156
That’s a wrong number. It’s Fidelity, but not for executing options.
Jonas: Yes, errors need to be made an experienced before they really take hold. The hard part is figuring lout what the error is! Just because something didn’t work doesn’t mean it was wrong. There need to be real theory and philosophical underpinnings to what you do. How compelling was your reason for selling?
CMT: While true, many, many people have gone broke taking small profits that were not large enough to offset their losses. Maximizing gains when in a good position is crucial over time, IMO.
Jonas
I know how you feel, in the past I swore I wouldn’t ever stray from Gary’s plan, and yet I still ended up doing it. I sold all of my AGQ way too early.
I am just looking at miners now(got in today) because they are still pretty much at the same level they were when Silver was at 42 dollars.
So if this keeps on trucking people are going to realize this is for real and flood in to these miners. I have to believe that.
And after this I WILL JUST FOLLOW GARY !!%$#&@
I know, CMT. It’s very true; and I had some very nice gains, so I can’t really complain. But still, the current outcome is very far from what I envisaged for the run up to 50. I wasn’t at all planning to be a bystander.
I was even trying to buy on the small dip today, but it turned out that market closed for Easter at noon here in Sweden, so no luck there.
Anyway, I’m off to crosstraining now…
Jonas,
The party won’t go on forever without a break, just be ready, you will have your chance again I’m certain, but you must not hesitate when it comes!
Gary,
Why the sudden rush to label this a runaway? Last time I looked we were in the “normal” timing band for both gold and dollar cycles to find their bottom.
For those who took the idea of shorting TLT (long TBT). Looks good so far. Decide now if this is a trade or a keeper. My stop is TLT 93.35 or so (for a small loss rather than my usual break even because I have a fundamental opinion on this one). Target on TLT is…lower! Will post when I close it out.
Poly,
I said in last night’s report I would need to see another correction before confirming this as a runaway move.
Micheal thanks for your previous response.
I think 50$ is a shoe in…I doubt any real correction will take place until then or around then… That being said, I would think others are thinking this way, and that $50 will come quick for the for sure thing type play.
As a Turkey, these are dangerous times. Thanksgiving type dangerous. At least for myself in my views…There is a nice crash in metals coming…Old Turkey is great, but call this an exception to the rule…something tremendous on the down side is coming. With silver so thin, it might get really ugly.
All that to say…long-winded and boring as I am…I will most likely hedge or sell positions once silver hits $50. I am reasonably sure that $50 will be revisited again during this bull, so not to get greedy.
Gary, if I may ask, what is your furthest out guess to when the D-wave completes? I won’t sell me pot(wrongly or rightly), but I plan on buying put protection against it.
Thanks Coach!
Thanks Gary.
Just catching up on reports and the blog comments. See so many new posts about people buying OTM calls, this stretched and late, wow that’s asking for a wipeout!
Keys,
The intermediate cycle usually lasts about 20-25 weeks. The D-wave should bottom when the current intermediate cycle bottoms.
The 2010 yearly cycle low came in late July. I expect the D-wave will bottom about the same time this year.
Gary many thanks!
Seems the consensus now is for a straight run to $50, few weeks ago $50 was the final get out no matter what number! How a $5 dollar 5 day run changes the tune 🙂
Even if true, a straight run to $50 from here will almost certainly include a correction back to at least today’s levels, that would be only 8%. Of course anything could happen, but history would suggest a pullback of greater magnitude. That shouldn’t be construed as a negative, just expectations to guide strategy.
Gold needs to get going here….
Gary:
We were pretty profitable from March to July of last year. Am I misunderstanding, or are you saying that we went through a D wave from may-summer 2010?
Poly,
What’s wrong with OTM calls?
Hot Rod,
They’re being purchased at the wrong time, IMO. The INT low or at least daily low was the time. The premiums are stiff and we’re at the point where a drawdown is becoming likely which will virtually make them worthless. Holding worthless OTM’s for weeks through a new daily cycle praying for a new surge to make them whole is no easy feat or a nice feeling.
My view on 50 is because, I believe, everyone thinks that everyone else thinks that 50 is a big number. Now if everyone thinks the way everyone else thinks, we get a self-fulfilling prophesy of events to get close to 50.
Now the point of 50 or close to 50 becomes. If everyone thinks they are smarter than everyone else and they think that everyone is going to tag 50, then some will tag out sooner than 50.
The question between 48 and 50 will be the battle between greed and risk..the closer we get to 50 the higher the chance of a correction, but the more one makes.
Of course we can blow right through 50…and all my he said she said could be a bunch of nonsense!
What has changed in recent weeks is silver’s surge, and the fact that it is so close to 50 now, it might as well tag it for the reasons I mentioned above. With the support of the dying dollar the story gets even stronger.
Michael,
Last summer was just an intermediate cycle correction.
A D-wave is something else altogether. It is a severe regression to the mean, profit taking event brought on by a final C-wave parabolic advance.
traderlady,
Thanks for the thoughts! It sure didn’t feel that great adding at the top yesterday especially then soon we had the intraday sell off. I’m not going to add anymore at this point since I put in a decent chunk yesterday. We’ll see if we do get a pullback next week.
Gary,
Generally speaking, how volent a move is a D-Wave? I’ve read here somewhere in the magnitude of dollars a day to more than 50% retrace.
Alex no b.s. those comments were true, i tried to cop/past them from the chat history but my company internet filters didnt let me log in to google to post. and PimaC was that a shot at my chosen profession?;)
A D-wave will usually retrace at least 50% of the entire C-wave advance.
This C-wave began at $860 in April 09.
Thank you Gary. I think a D-wave retraces 50% of the c-wave.
Poly,
I thought Gary said that the daily cycle correction (if we’re not in a runaway) was only a week or so.
Also, if we haven’t topped yet, then there “may” be upside before the drop.
If they are used more as a lottery play with some “winnings” then I would agree, one would accept them becoming worthless.
On the other hand, if we are on a collision course with $50 (and likely higher) then they are a very attractive leverage play.
Keys,
I do not have a price target in mind, but once the resistance is reached, we’ll have our daily cycle top. Two weeks ago, on Friday, we reached that resistance and that caused a huge sell off in the PMs.
This may be a very stupid thought, but I wonder how we could only have a minor correction at this point as this momentum continues to develop? Every pullback here seems to be met with intense buying by those who fear that they are being left behind. You would think that at this point we would need to have either a scary correction to shake people out of their positions or a runaway move to the upside.
DG,
What will have to happen for your gold short signal to get canceled?
The 7 EMA on /SI has held since mid-March.
http://www.screencast.com/users/Jayhawk1991/folders/Jing/media/eac3c264-018d-4689-9562-0c6cb60857d4
jonas,
>>>I wonder if every person is doomed to commit the same mistakes before truly internalizing key lessons.<<<
Yes, and people who don’t read fiction are doomed to repeat the mistakes of the nonexistant. 🙂
Hey guys I don’t have any experience with options and am trying to figure out what to expect with the SLV July 40 call. What could you sell the call at if silver rises to $50?
Have been a sub for about 8 months and have really enjoyed reading everyone’s comments.
Gary,
Am getting worried about SLW. All these analyst upgrades!
I got out my old book of gold stocks I invested in yrs ago
I cannot believe these charts…when did this happen!!
MFN
DROOY
RGLD
HMY
All my old African miners that got stale…are taking off (HMY,DROOY,GFI).
and GKC…I will believe you now 🙂
Pima: It behaves kind of like an oversold signal, so down movement for sure, sideways might do it, and even a slowing advance can sometimes work it off. It works best with major ETFs (TLT, FXE, GLD, etc.) and is quite accurate. Given this nut run in silver, though, I a,m much less confident in it, which is why I bought SLW this morning at support rather than more AGQ. It’s the same signal that caught the exact high on TLT two days ago. With GLD I’m just hoping it pulls back now.
Pima: oops—meant “overbought” not “oversold” in the case of GLD right now, of course.
A POLL..
Do you have a strong urge to take profits?
or
Do you feel like you couldn’t possibly sell now?
The reason I ask is that I am learning that my gut is the best contrary indicator I have. Every time I have the urge to sell, it would serve me better to add to positions. Whenever I feel that I don;t want to lose any of my positions because I might miss out on profits, I should sell.
I’d love to get a read on what others are feeling.
I’m leaning toward not wanting to miss profits.
f
BTW, a word about catching “the bottom”—Gary and many others here have said “It’s basically impossible to catch the bottom” of a move. That’s a straw man. The point of tight-stop trading is N OT to catch a bottom. It’s to not have a drawdown after your entry. If a stock bottoms at 40 and rallies to 80, you do not need to catch it at 40. You can buy it at 50 so long as once you buy it it does not go much below 50. Buying it at 40 is irrelevant. I just bought SLW this morning and have not been in the hole since. I don’t care at all whether I caught “the bottom” Same with the TLT short. Just a clarification that particular style of trading.
fubsy_cooter,
People are afraid to buy AGQ here and settle for laggards. This tells me we have ways to go.
Fubsy: I like your posts (just lose the Dodgers cap—go Giants!) I’m not sure people here are the best indicator, though, having been so strongly trained to expect more PM rally. Good question, though. My general read is that most people think silver is way overdone on the upside. My wife just did a Google search to try to find an article anywhere today on silver in major media. There was only one she could fine, and it said almost nothing. Amazing!
Michael,
Huge sell off? So far the largest correction in gold in the last month has been $40 (less than 3%).
I’m DIM 110% options, with lots of cash (60%). I see no reason to sell before silver gets to $50.
If there’s a correction in the meantime, so much the better.
DG,
People here is the best indicator here judging by last week’s selling.
I’m fighting an almost uncontrollable urge to buy at this point – which in itself leads me to believe that it’s wrong to cave in. Plus I have promised myself to at see what happens at options expiration next week before I do anything.
(But I’m rapidly balding looking at the constant grind upwards).
Michael: Not so. People sold because a daily cycle top was due, not because they were bearish or worried about PM’s. Had there not been a cycle drop due no one would have sold anything. The motivation was not sentiment, but an expected dollar rally. Gary sold some as well, but I don’t think he was being emotional about it. I believe Fubsy’s question was to gauge emotion, not cycle expectations.
Timestamps on this blog are in Pacific time. Is there anyway to display them in local time? Just wondering. No biggie.
Gary,
I thought that the recent sell off we had was quite scary. Slw went from 47 to 40. Same magnitude as going from the March daily cycle top.
We do not sell daily cycle tops. We buy the dips.
DG is correct. I would not have sold except miners were lagging terribly and that was where I had invested. As far as the metal, still long with no concerns even if we get a pullback. I’m keeping the metal for many years, riding through pullbacks including the expected D-wave.
Miners worked well, but had I stayed focused on AGQ or SLV, I;m 100% sure I’d still be in. There has been no valid reason to sell silver, IMO.
I have the strong urge to sell so I am going to sit.
Thanks, DG.
Exactly,
I’m gauging emotion as my trading/investing tactics are becoming more influenced by it.
I’ve learned so much trhough this super cycle in Gold and as a member of this blog and Gary’s premium site. My greatest lesson is what I stated above, when my gut screams “Take profits! Protect your winnings!” I should be adding to positions. When my gut begs me not to sell because the upside is so beautiful from here, I should be scaling down.
That’s it. I do think many around here were more emotional than you DG at the prospect of an upcoming daily cycle bottom. My suspicion is that greed and fear were heavily in play…fear of losing what had been made so far, and greed at wanting to maximize gains by avoiding a drawdown. I know that was true for me.
F
Even today, the silver miners I owned are weak compared to SLV.
SLV +3%
while SVM -1.4%
SIL +.70%
EXK -.5%
And believe it or not, having grown up a Dodger fan, the Giants are still one of favorite teams.
Usually pretty likable fellows on the squad. Except B Bonds. Never cared for him.
I would like to see $HUI making a higher high before a daily cycle top. That would be great for the future.
Shalom,
I know SLV is not popular for some reason on the board, but it has really performed well for me.
GDXJ is STILL off it’s high, and gold has done nothing but go up.
Well said Fubsy …
I fell victim to those same emotions …
Miners have been a real drag for me – their general sluggishness exacerbated by the dollar’s plunge in my own currency (SEK), so those were easy to sell and good riddance.
But I’ve told everyone I know that silver will surely hit 50. My plan was to ride from wherever the expected correction turned (36 to 38-ish) fully loaded in minilong futures with 3-5 times leverage.
So no lack of conviction here, just making a horrible mistake in trying to outsmart the market.
3 day weekend coming up, then a week of fireworks in the PM markets (or not). Early next week should tell the tale regarding whether we’re going to get something that resembles a daily cycle low or whether PM’s just thumb their noses at everyone waiting to buy and continue to grind higher. Should be a fun week.
Have a great weekend everyone!
Fubsy,
my comment pertained to trading … not baseball
Yeah, the miners are bugging. Hey, the bull is bucking, and messing with as many riders, as possible, true to form.
I’m just waiting for a spike day and I’ll be out. Silver rising 3-4bucks or so on extreme volume is going to be my signal to get out of dodge.
I can be comfy in a move like that b/c I’m confident the tools I’ve gained will let me get into the A-wave at an early stage, and my goal will be to outshine my gains from this super cycle.
f
dg
also we dont sell daily cycles, but there was a rummor out there that there might be a 3 to 6 dollar correction in silver and well. i think it was closer to 30 to 60 cents =)
Moondoggie…lol
Elaine: SLV is fine, it’s just that AGQ is 2 X SLV, so why not buy half as many dollars worth of AGQ and keep the cash aside? Also AGQ is actually a little more than 2 X in a strong uptrend.
DG, I have both SLV and AGQ. When we get a minor correction, it has barely budged, as compared to AGQ. But, for the next A – C waves I will be in AGQ much more heavily, unless Gary says not to.
Lightening up at the end of the day. Reduced to no margin.
Le Fou
Elaine,
One of the reasons I moved from SLV to AGQ is that JPM manages the SLV ETF. That spooked me a little. Maybe Gary can comment on that concern.
By the rate silver is going up, and with the dollar 3 year cycle low not due that soon, the target for silver should be raised.
Also, if silver is ever to reach 200, 250, 300 $ in the next cycle, it actually makes sense that we would end this current cycle with a higher silver price of say $60 or $70.
A top at $50 would bring us back to perhaps 25 in a D wave. It would then have to ten bag in say 3 years (2012 to 2015) to get to 250. That’s a stretch. Let’s say silver tops at $70 early this summer, and the D wave bottoms at $40 (so not quite a 50% draw down, silver would only have to run up six times in the next cycle, which would be round about what it would have done during the current cycle.
PS: That’s not a call, that’s just contemplating the C wave top.
Driver, I think that is the reason others have steered clear of it, but Gary has held it in his own portfolio through the course of the C wave, so, I feel comfortable with his recommendation. But, nothing beats AGQ, especially on a day like today. What a monster.
Have a great Easter weekend everybody. What a week.
Finally got in this morning with SLV $44 calls @ 3.20. Ended the day at $3.75. A 17% return.
Have a great long weekend everyone!
Congratulations to all the PM bull riders, regardless of position size. This was one heck of a week! Enjoy your weekend.
Have a great weekend Gary!
That was FUN!
– says one who made the mistake of hopping of the train last week. Seems they overhauled the line and replaced that train with the Express!!
Good weekend, All!!
(p.s., Ryan, I trust you’re feeling better about your own leap…)
Gary,
If USD has few more weeks to hit the 3 year cycle low, how do you see PMs acting in that period.
Gold could hit 1600 or so during that period, what do you anticipate silver will do.
Will be great if you can address this in the weekend letter.
Have a great Easter guys.
Monday will see a rally in the USD…its officially a BB trade now… a little bounce before it resumes its down fall
OK guys, I keep hearing people here giving broad statements with absolutely no facts or proof to back their position. Without offering valid reasons for your point, I see no reason to even bother posting.
One thing that would help is to show what you are talking about. A picture is worth a thousand words as they say. If you have not done so already, go to this link and download Jing. It is free and very simple to use. You can take screen charts of your charts or what ever and post it for everybody to see.
Here is the link. http://www.techsmith.com/jing/free/
Thank you. (sheeeezzzeeeee)
Have a good long weekend everyone. Looking forward to getting some sleep. I can’t be the only one obsessively checking the Comex price every time I roll-over in bed.
Sold at the close today. It was a great week and I’m sitting out the 3 day weekend. We’re getting close to the end IMHO.
Basil,
Nice calls recently. Glad you are around for the C-wave.
I am a complete newbie when it comes to options, but it seems like the returns that people are generating are outrageous (ex. duuuuuude’s 17% daily return). On this board, I’ve repeatedly read about people being 150% in AGQ, but much less about people using options strategies to signicantly juice their returns. My question is why were people just buying and holding positions in AGQ, and not using a “conservative” options strategy as well during this whole ride?
As an example, Gary, why were you invested in your 3 positions and chose to wait until this late in the cycle to buy calls. I’m not questioning anyones investment strategies, I’m just trying to learn more.
Thanks.
Blammo, you are so right. I get up in the middle of the night, check comex, then can’t sleep. Looking forward to getting some shut eye.
On another note, check out Fast Money. They will be talking about silver. Guy Adami and Beekes have been high on silver for a while now. Adami keeps saying silver is going to have a one day pop of $7-8 one day soon. Hope he is right.
Francisco,
If used correctly options are a great way to increase ones return on invested capital. But don’t fool yourself, there’s nothing easy about this.
There are going to be many many traders here that are going to get complacent as this progresses, leverage way too heavily into options and then lose everything when the C-wave tops. Or even if they just get caught in a daily cycle correction.
One has to know what they are doing when buying options.
Thanks Gary. I don’t think that using options are easy at all. It just appears to an observer that if you use a conservative options strategy (a small percentage of your capital at risk, deep in the money calls, etc), that you could generate some additional returns in excess of just buying and holding the underlying security. All I’m talking about is hitting for singles…not swinging for the fences.
Wav-ridah,
thank you! It’s an exiting finale 🙂
Jonas-
Totally feel your pain. Very disappointing week for those pinning their hopes on the miners trade & with no leverage to the price of silver (AGQ, SLV calls, futures, etc.)
Francisco, I’m using options pretty heavily, but I’m being very cautious regarding entries, strike selection, and position sizing. I’ve already been down the road that ends up in a blown out account because of excessive leverage.
Basil,
Thanks for your post regarding the silver target in this C-wave. I was just thinking the same thing.
Would you also consider that a parabolic move becomes steeper and steeper towards the end ?
If so then it would seem to me that because of the parabola and the amount of time before the dollar 3 year cycle low, we could easily see $60 plus before the D-wave arrives …
Tudor,
That seems to be a common theme, so perhaps I’m underestimating these things. I’ve had education in options, but have always been a bit intimidated about actually trading them. I’m going to use optionsxpress simulation for awhile until I’m more comfortable so I’ll definately miss the remainder of this C-wave.
I appreciate the feedback though, because I’m curious as to other people’s experience.
Dude,
The jing program won’t set up on my new Vista 7 laptop. Says I’m missing a .dll file.
Is this really worth pursuing ?
F,
One of the keys to options is to only control the same amount of shares as if you were going to buy actual shares.
So if you would buy 200 shares of SLW then you would only buy 2 call options.
DG, re: your earlier comment re: my response to Jonas re: taking a profit (I really wanted to use re: again, but couldn’t figure out how),
True, but a lot more people went broke because they didn’t close a trade in the black when they had the chance.
Jonas needs to learn to be patient and let his trades work for him, but I’d rather he have to learn that lesson, then learn the lesson of holding positions too long for that little extra upside. After all, you’re more commonly in that position than in a C-Wave.
Having said that, Jonas, listen to Gary, DG, Poly, Alex and the many other excellent traders on here. Not me – if I had smashed my computer with a club on September 1 of last year and not taken so much “profit” in the interim, I’d be up about 5x what I am.
Dude,
Nevermind. My bad. I think it’s O.K. after all.
Gary,
Will there be a report tonight or do we wait for saturday. Thanks.
Gary,
“So if you would buy 200 shares of SLW then you would only buy 2 call options.”
In yesterdays portfolio change report you said you’d go ahead and purchase as many DIM call options as you could with the cash you got out of selling AGQ previously.
I’m confused as to whether you purchased enough options to cover the amount of shares you ‘would’ have bought or if you purchased all the options that cash could buy.
Gary,
I appreciate all your help and advice. I’m not a gambler at heart, and am more conscious about risk management and capital preservation than most on this board. I only make aggressive bets when either I have a knowledge advantage or it’s an asymetric trade. I plan on using options in very small amounts to just supplement returns or tohedge other positions and not to be core positions in my portfolio.
Thanks again for everything.
Per the Dow Jones Newswire:
“Volume in the silver ETFs put options jumped to a two-day record thanks in part to that big move on April 11 and another the following day to guard against a drop of about 21% from current levels. Then, this week, on Wednesday and Thursday, volume reached another two-day record.
The trading has pushed the number of bearish silver ETF options in the market almost equal with the number of bullish calls to buy the ETF. Trading in those bullish silver options routinely outpaces bearish puts.”
Dumb or Smart Money buying protection, here? Thoughts?
Tudor,
Is there a book or other source of guidance that you follow, or do you follow a plan that you’ve devised by trial and error?
Best,
Le Fou
@ Redwine,
I too am confused. I thought Gary purchased as many DITM calls on SLV as cash would afford, not how many calls equivalent to the amount of shares he could have purchased with that cash. Gary, would you mind clarifying? 🙂
Well CMT, hindsight is always easier than trying to predict. I think my major mistake was not to take some leveraged positions off the table, it was going overboard and trying to optimize for an unknowable future.
I sat through the big summer 2010 correction with a highly levered position. That left me a bit scarred. Then I exited with almost perfect timing during the early 2011 correction. I just wanted to repeat that again for maximum profits.
Blake and Redwine,
Gary can speak for himself, but I believe he uses calls to control the with less money the amount of shares he would otherwise purchase for a position.
Best,
Le Fou
Le Fou,
I’m just confused because he does say in yesterdays report that he’d buy all the options he could with the cash from AGQ.
@Redwine
That is where my confusion lies as well. It seems to imply the opposite of what you’re saying Le Fou? Am I missing something?
Francisco,
In addition to Gary’s warning, there are things unique to DIM options that don’t come up ordinarily.
When it is time to sell a DIM option, you will rarely get a fair price as the bid. The market makers know that they can screw you and they will try.
To combat this, I usually just short the common and execute the option to cover the short. If you’ve never done this before, it can be time consuming, so if you have many positions it’s easy to make mistakes.
If you’re in SLV options, for example, you will find there are no shares available to short, so the method outlined above is useless.
I could go on, but you get the general idea.
And before anyone asks, of course you can execute first and then sell. But you cannot do this in a timely manner, and if the security is rapidly falling in price you are likely toast.
In any event, you need to get your training in a less volatile security than silver IMHO.
Francisco, there are many ways to use options with great risk control. I encourage you to find a good options book.
Gary is right, if you are directionally betting with options you betta be nimble. The daily cycles will suck the premium out of OTM calls and you may not have enough time to recover them.
Yes I am buying as many calls as I can with that 15%. In this case I’m not using options to control risk. I’m adding to leverage.
I’ve said this many times in the past and let me repeat it again. Everyone needs to determine for themselves what their risk levels are. No one should just blindly copy my portfolio. My situation is probably considerably different than most people.
I could lose half my portfolio and it wouldn’t materially affect my lifestyle. 99% of the people that read this blog or subscribe to the newsletter can’t make that same statement.
Someone with a family and responsibilities and/or in their 40’s or 50’s really has no business being as leveraged as my portfolio.
For the vast majority of people options just aren’t appropriate. For one most people don’t understand them. If you don’t understand them then don’t trade them.
Second if used to massively leverage ones portfolio most peoples emotions prevent them from thinking clearly.
So if you are going to use these financial instruments know what you are doing and be honest with yourself as to how much downside risk you are willing to take.
Read it and weep. SLV vs SIL and SLW the past 30 days. For some reason, the complete disconnect happens. Hats off to TZ for calling this one. I wish I listened.
SLV
Stupid things fascinate me…That’s probably why I suck at trading. Twin Towers of massive (89M), almost identical volume bars on SLV.
Volume
Le Fou,
The info needed to use options they way I’m using them here is easily available on the web. Since I’m using only the most liquid options (SLV and SLW), I don’t bother with the pricing models. And I’m buying straight calls, not spreads, so the profit/loss calculations are uncomplicated.
My method is pretty simple and follows Gary’s timing. I only buy on a half-cycle dip. At the intermediate lows I’ll take a decent position closer at the strike that’s close to ATM or even very slightly OTM. I choose a strike that’s 30-60 days out from the expected peak. I don’t like to hold contracts with less than 30 days to expiration. I’ll add at a daily cycle low, or on significant dips within an intermediate cycle, but only DITM, again with a strike beyond the expected intermediate peak, but with a smaller position. I usually don’t try to get cute and sell during the daily cycle peaks.
This last cycle I tried something a little different, for me anyway. On some of my positions that were really DITM I cashed out 1/3 and rolled them up to ATM in the same expiration month to juice the returns a bit. Good in theory, but my timing was a bit off and those positions were negative for awhile. But I was able to tough it out because a)Gary’s analysis, and b)my expiration month was far enough out (July) that theta didn’t eat me alive.
Regarding forward month OTM calls (“lottery tickets”): WARNING! If I go there, it’s only with a VERY SMALL position. Like 0.5% or less of my portfolio. I’ve tried it a half dozen times and it’s yet to pay off. So take that for what it’s worth.
SLV is trading heavily after hours to the upside. It looks like the Fast Money people were jumping on board today. Adami again re- itereated his call for a $7-8 day spike coming soon. Anyone catch the show?
Thanks Wes and BLH. Great Advice.
I’m taking this real slow and am doing my homework first. I have several textbooks on the topic that I have owned for over 15 years, but they are not user friendly at all. I think using a practice account and actually trading (ie making mistakes with no money on the line) is my best course of action.
I’ll definately save your posts though and reference them as needed. Thanks again.
Thanks Tudor and thanks Gary,
I appreciate your discussion of Options. It helps. Cut my options holdings today by about 40%. I didn’t like holding over a three day weekend after the talk that I’d heard on this blog. Plus looking at that SLV chart, it looks more and more like we’re playing Thelma and Louise at this point. 😉
Best,
Le Fou
Le Fou
Thanks for the answer Gary. I couldn’t man up enough to buy that many options anyway. My hands started to shake just before confirming the buy so I cut the order in half.
Still have roughly 7% waiting for a good entry in either AGQ or SLW. Thanks for the guidance and have a great weekend.
I think that gold is probably building a base above $1500 before moving on to $1544 which could be the first place we see some short term profit taking. The real tell tale sign imo is that $1500 gold was not hard to slice through. Gold is actually acting very powerfully when one thinks of the violence that usually happens at round numbers. Folks need to digest that move before we can move on. Friday just might be that day.
Wes, It sounds like you have it, but here is another link to try if the last one did not work.
http://softluv.com/jing/
The markets are closed tomorrow.
Interesting, some of the guys on Fast Money are talking much bigger numbers. Adami says we could have a $7-$8 24 hour up period. Here is the video. You can go about 10 minutes in if you just want the gold/silver discussion:
http://video.cnbc.com/gallery/?video=3000017983
Sounds like Guy is trying to drum up a big gap so he can sell his position. 🙂
BTW, I asked my broker (Etrade) if I can borrow shares of SLV to short “in size” and he said you can’t borrrow ANYTHING! They have zero shares to lend out to short.
Gary,
do you reckon you will be able to see/call a top so people can buy some Puts on SLV?
How far out from the top should the Put expiry date be?
Gary,
Not picking here, just an observation, but this SLV call trade seems really out of character for you. So very late in a C- wave and daily cycle, does it not go against everything you have preached for so long? Why not in Jan or Feb when Silver was $28?
Just seems very risky adding 15% of a whole portfolio now at $46 Silver, which is stretched so far and in the timing band for a nice drawdown any day now. If we get another 17% smack down before $50 do you hold that big losing position for another go at $50? Nobody here seems to question it but it feels like a chase to me.
Poly,
I wasn’t able to call the intermediate bottom in real time in January because gold never suffered the normal second leg down like it has every other time.
The recent call purchase is purely a play on a continued move up to $50.
I have plenty of time for those to work, they are deep in the money with little time value, so once silver tags $50 those positions will return a hefty profit even if I had to weather a daily cycle low first.
Ok, so if we get a 10% drawdown on Monday, a reasonable drop for a cycle low here you will just hold these calls regardless and wait for the next cycle to take them to $50? If that were true, wouldn’t it make sense to hold them well beyond $50 if you have a new cycle in hand? Wouldn’t you need a failed cycle and start of the d-wave to not get much more than $50 in a fresh new daily cycle?
I don’t sell into cycle lows so yes I would hold them. I don’t want to hold them past $50 for the reasons I explained in tonight’s report.
Gary, thank you for your comment about options, folks with families, etc. So for us, should we start setting stops for AGQ and SLV again? If so, can you give us some advice in the nightly report? I would hate to have 17% down day. I have to start a new job on May 2nd, so I will not be able to monitor my holdings except early morning, lunch time and after work.
Thank you.
Elaine
Gary
In the 06 and 08 rally’s were the miners slow to react to the spot prices?
Gary,
An image is not showing on my screen titled “silver 17% correction” from the nightly report. Anyone else having this issue?
That’s not what I’m asking. If we get the drawdown you fear and it marks the cycle low and you didn’t get to sell because it occured before your $50 exit, wouldnt this fresh new cycle in hand and let’s say $43 Silver bottom give you all the confidence to then hold these calls well beyond $50?
You’re in a risky short term trade with a goal of $50, to me you get out at $50 as planned and buy them all back towards the bottom of the next drawdown (cycle low) and ride the next set of calls to the C top!
Gary,
You mentioned earlier today that you expect the next Intermediate cycle low to be the bottom of the D wave. So the top of THIS intermediate cycle will be the top of the C wave.
Because it’s likely that the D wave will bottom at a lower price than the January Intermediate term (IT) low, wouldn’t we expect this IT low to be LEFT translated?
Question for those who have a stockcharts membership,
Does anyone pay the extra $10 for real time data? Is it worth it? Do the charts really update in real time, like $USD, etc? How about options?
Miners followed gold up during both C-waves. They did suffer volatile corrections though.
I suspect the answer to this question is “who knows?” but I’m going to ask it anyway. Is there much risk that the eventual D-Wave correction begins in the overseas market leaving us with a giant gap down? That fear alone is preventing me from deploying more capital (into silver). I’m up handsomely and could add, but I’m made nervous by the huge stretch above the moving averages. Thanks.
Poly,
This isn’t a short term trade. I have till July for the trade to work.
Again I don’t want to hold past $50 no matter where we are in a daily cycle because of the risk of a 06 type event.
Once $50 is tagged then I will swap out silver positions for gold positions and avoid the risk of a surprise.
Gary,
Do you get a credit if I use you as referral for stockcharts? I’m signing up now and can do it. Let me know quickly if you can, I’m itching to put it thru.
Steven: I use E*trade and there are lots of items you can’t borrow. As an active shorter it happens to me all the time, so the inability isn’t saying anything in particular about SLV IMO. I often can’t borrow SMH (the semiconductor ETF) even though it trades many millions of shares a day.
Pima,
A right translated cycle can still drop below the previous cycle bottom. It’s not a 100% rule.
The last four year cycle in stocks turned out to be extremely right translated but still moved below the 02 bottom.
D-waves are regression to the mean events. They correct a C-wave advance. The further the C-wave rallies the harder the D-wave corrects.
Action and reaction.
Yes I will get a free month or two. Thanks.
So you would sell the calls on say day 8 of a brand new cycle at $50 but hold them continue holding on day 34 at $49?
Poly,
correct. This trade has nothing do do with cycles. It’s about a psychological level and regression risk.
DG,
I had the same trouble shorting with Scottrade and was always getting bought-in. I moved to Interactive Brokers and haven’t been bought-in yet.
Hot Rod,
I think live data is worth the money. Once I did not renew it, I could not stand it without, so I have never dropped it since. I thin you may not get $USD (it is end of day data, not intra-day). I do not think they do option.
Gary,
If you’re going through Portland and need anything, let me know
I,
One of my best friends lives in Portland. He’s picking me up at the airport and then we’re heading to Bend.
I might have time for a burrito Sunday night though. Shoot me an email.
Gary,
My question re this IT cycle being left translated is due to the concern that if it does end up being left translated, then it could top any day now as this week was week 13 of the current cycle.
I know we’re keying off the dollar here as well, but now that it’s dropped below the 09 low, it could bottom any day now as well (even without going below its all time low).
So what is giving you the confidence to stay in this trade at this point?
Well first off week 12 is already a right translated cycle.
But mostly I just don’t believe Bernanke is going to get away with QE without causing a dollar crisis.
That means new lows for the dollar.
BTW if we get a swing low on the dollar index next week and an obvious cycle bottom then I would look for the May employment report to mark the top of the cycle instead of the bottom.
Rob L.,
I encountered the same problem. First two Gold graphs are blank. I re-entered the website but they are still blank.
Try using firefox as your browser.
Gary: I’m worried about you. Do you ever eat anything but burritos? Do you know what vegetables are? Have you ever seen a piece of fruit? You need to stay alive until 2016, right? Can I hire on on-call nutritionist for you? (BTW, margaritas are not a food group).
Yes it’s something to do with internet explorer as they don’t show up for me either in IE.
IE is a piece of crap. I always use Firefox exclusively.
DG,
LOL actually I love veggies. I hit Sweet Tomatos probably three times as often as Frank and Fina’s.
I’m actually heading there tonight
http://www.souplantation.com/
Thanks Gary.
You should consider taking the exact same trade again, at the next cycle low 🙂
I use Google Chrome. Those two charts don’t show up there either – just Firefox.
Poly,
Once silver hits $50 I’m done with silver for the rest of this C-wave. But I would take it on GLD.
Gary,
I used your e-mail (one on premium site) when signing up for SC, you should get a free month.
The least I could do for you.
Thanks again for everything.
Gary,
Will placing a stop market order a solution to reduce most of the 17% price drop impact?
Gary,
Regarding your point that if we get a cycle bottom on the dollar next week, then the May employment report would mark the cycle top, this would put the dollar correction in the long end of the expected range (5-7 days). Does the length of the correction imply anything about the magnitude of the correction?
Would it be prudent to get out of SLW and silver miners as well when silver hits $50?
Rob L.
I installed Firefox.
I compared the two documents. The two big blank boxes in I.E. simply does not appear in the original document. So, we didn’t miss any information.
Gary,
Regarding the IE/Firefox issues. Firefox is simply hiding the broken links. There is a broken link in the page source pointing to:
http://smartmoneytrackerpremium.com/wp-content/uploads/2011/04/silver-17%-correction.png
Which doesn’t exist.
Gary,
When you say you will be swapping out of silver positions at $50, does that include SLW and SIL?
Will you be entirely in GLD, or will you also have some exposure to gold miners via the GDXJ or GDX?
Sentiment (or expectation?) is starting to go crazy through the roof.
There are a lot of silver buyers expecting the price to go to 100-150$ this year.
I think that’s nuts.
Gary,
From looking at the last 2 C wave tops in 2008 and 2006, in both instances there was an initial violent sell off after touching the upper Bollinger Band, then a 2nd rally up to and touching the upper BB before a final selloff into D wave.
If we liquidate close to the first “top” and then another run up comes after the first selloff, would we want to jump in with stops and profit on that last final move or are we just waiting to D wave to end?
Bosco,
Not if it comes premarket. And if everyone is panicking you will get a terrible fill anyway.
Gary,
Do you know of Ueli Steck? The guy speed climbed the Eiger North Face in under 3 hours!
Here’s a video clip:
http://www.youtube.com/watch?v=G-dPjDYVKUY
Hot Rod,
Don’t make the mistake of thinking this top will be exactly like any other and even if it is in real time you won’t be able to hang on to positions on the hopes of a bounce that may or may not come this time.
Pima,
I have seen that clip. Incredible.
I’ll never know why people take such risks. That video made me nervous just watching it
Gary: “Once silver hits $50 I’m done with silver for the rest of this C-wave. But I would take it on GLD.”
does that include silver miners (SIL, SLW, etc)? I’m still only 2% on SLW…
Blog post from George Rahal
Monday, April 18, 2011
How to Spot a Market Top
Mark Hulbert has written an excellent, concise article on four factors to consider in determining a topping market cycle. These are:
* Valuation
* Sentiment
* Market Breadth
* Interest Rates
Assessing these four factors, the conditions for a top have yet to be met. Here is a link to the article: Monday, April 18, 2011
How to Spot a Market Top
Mark Hulbert has written an excellent, concise article on four factors to consider in determining a topping market cycle. These are:
* Valuation
* Sentiment
* Market Breadth
* Interest Rates
Assessing these four factors, the conditions for a top have yet to be met. Here is a link to the article. http://preview.tinyurl.com/6kufrxg
I’m not selling my miners I’m just protecting against a surprise in the silver trade.
Gary,
Doesn’t being so far away from the dollar’s bottom (early June) give you confidence that silver still has quite a bit more room to run?
Sure, but you missing the point of why I’m doing what I’m doing.
I don’t want to get caught in a surprise like what happened in 2006. That can come out of the blue when something is in a very stretched parabolic move.
There was no reason for it in 06 other than a lot of nervous bulls all hit the sell button.
Gary,
do you reckon you will be able to see/call a top so people can buy some Puts on SLV/GLD?
How far out from the top should the Put expiry date be? The d-wave seems to last about a month. Thanks
OK so I’m pretty much all in AGQ. I have learned quickly to trust Gary and do what he says. Missed out on some profit when I didn’t listen to Gary. But, I’d like to still be in something aggressive when we get out of AGQ. Any ideas? Sit on cash and wait seems counterproductive since the big 17%ish drop may or may not come. Any ideas? The usual miners? Give em a chance to catch up? AG, EXK, SLW?
Calling tops is almost impossible.
I’m almost always early getting out and I suspect I will be this time too.
So if you think you will be able to short the top of the silver parabola and not have to endure a very painful draw down you’re probably kidding yourself.
Gary, thank you
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Gary,
I know you like SLW. Do you anticipate that being a wise harbor to pull my AGQ ship into when silver hits $50? I honestly am not too interested in doing the work on finding and investing in a large basket of miners. Maybe 1/2 SLW and 1/2 SIL? or maybe put it in 1/3’s and add DGP to that mix? Thanks for your hard work on helping us make money!
Moondoggie,
… the sudden run for the door will be terribly crowded up there. One moment will be wonderful and the next will be sheer horror. Where to sell to not get stuck in that panic moment and going from winner to sucker, that’s the big question.
Gary,
what are in your humble opinion the chances of SLW MAY $50 calls ending up being in the money?
thank you
Gary,
and if this is indeed a runaway move will it finish earlier than the beginning of june?
thnks
Gary, while anything is possible, what are the odds of a massive 1 day drop in Silver before the 3 year cycle low in the $$$? In other words, why sell any silver before the $$$ makes new lows, if Silver will correct violently after the $$$ makes it lows?
Thanks!
Here is the answer, and a solution, as to why Gary’s web sites don’t show pics (charts, etc.) in IT.
Symtom: Each time you open the web site, a little rectangular Security Warning message box (msgbox) opens up, asking you if you ONLY want to see the bit of the web page that WAS delivered securely. Most say Yes, as this is best for security. However, this blog and Gary’s Premium site post content (pictures, charts) that are not secure. So you can’t and won’t see them.
Solution: If you want to see ALL content (meaning, pictures too), just click NO to the msgbox question, and you’ll see it all.
Note: As long as you use Windows with the firewall on, and have an antivirus program running, you should be protected against intrustions and viruses.
Hope this helps.
er, meant IE, not IT
noise, i think that as gary many times said, gold and silver will continue to go higher if dollar goes down tohis 3 year bottom.Dollar is hte driver.So dollar is the key, runaway move or not.
Noiser,
May 50 calls are pure gambling. If you want to gamble the action will be quicker down at your local casino.
OTM options are usually a suckers bet.
Great report Gary. That drop in silver would be terrifying to witness whil in AGQ. Imagine watching 30% or more wiped off your portfolio in one day!
When you compare the charts of Gold and SIlver across that same period, you see that gold suffered a 4% correction, while Silver was enduring a 17% crash.
That’s a wise plan Gary, and well worth the subs fee.
I will have made almost 100% on my levergaed ETF by the time we enact your plan. So I am only too happy to protect those gains and move into something more sedate.
Happy Easter everyone.
Goldseek is showing Silver at 47.62! Where’s that quote coming from? Anyone?
The spot market is open today. Silver is up 7 cents.
Gary,
Is there any likelyhood that the C wave top is at the May jobs report?
Gold in some aspects is looking like it was in 2006 2 weeks before the “end.” If this repeats, is it possible we see the USD continue to fall off a cliff for 2 weeks, silver and gold blow out and then at the May employment it’s over?
Or does this cross the cycle analysis or other thinking you might be on to?
CMT, hmm… I see silver at 47.62 on one website, and 46.68 on another!
Hot Rod,
If the dollar were to push below the 08 lows in the next two weeks it would be possible but I doubt it’s going to go down that fast.
Gary,
Why don’t you buy puts at least on your SLV long position. This way you can still ride up your long position. Once we have the blow off top you can sell your long position and keep your puts on the way down. Personally, I’m mapping out a strategy for that this weekend.
Also, if anyone wants to hear what the panel on Fast Money had to say about silver yesterday, listen to the program below.
http://video.cnbc.com/gallery/?video=3000017953
http://gyazo.com/3055cb2998734684f4444235b01eb733.png
Here is a chart of Gary’s plan if it could have been implemented in 2006.
Sell $SILVER (early) at $14.
Buy $GOLD at $620.
Silver had a crash and then only made it back up to $15 (about a 6% increase)
Gold went up 16% in the same time period without the huge crash.
I am definitely going to be following Gary on this trade in 2011.
Great report Gary last night. Really re assuring for the less ballsy subscribers like myself.
I’m fighting my emotions to over react to your reports as this has cost me bigtime in the past.
Ie my knee jerk reaction to last nights post is to jump the gun and swap my silver for gold now……. But I won’t . I’m learning, slowly but learning nonetheless
Notice the FastMoney guys bashing silver miners… ugh
http://gyazo.com/3055cb2998734684f4444235b01eb733
Based on this chart in 2006 one would have had 3 days of topping candles to get out of gold at the top.
(20/20 vision is great :>)
That 16% increase could have been 32% with UGL 2x gold.
Gary: I have seen so many predictions for silver at $50, might it just top at 49 or so, so that many are left holding the bag? The past two days have had huge volume in slv and it is starting to look parabolic. Is you confidence high that it really ought to hit 50?
Gary,
Yesterday I asked if you would be putting stop loss recommendations back into the newsletter. Sorry to repeat the question. After 25 years of working for myself I have a full-time job that starts on May 2. I won’t be able to follow the markets and will have to set my stops each morning before work.
Thank you.
Bam,
I don’t waste money on hedges. If silver doesn’t surprise then one would just throw away money of the puts.
Throwing away money isn’t a high priority for me, unfortunately most of the time that is exact what a hedge accomplishes.
Anybody who’s looking for extra leverage into the C-wave top might consider NUGT. It’s basically GDX x 2. It’s a new ETF from Direxion that started last December. It’s not hugely liquid at this point (93,700 shares traded on Friday), but it does seem to track GDX pretty closely.
DG,
I kind of think at this point the buyers will continue to step up at least until $50 is hit even if smart money starts to scale out. So I’m pretty confident we will see $50. Actually I’m pretty confident silver will go significantly above that level.
That’s not what I’m worried about. I just don’t want to ride silver all the way to $55 and then wake up one morning to $45 silver.
Elaine,
Once we get something that looks like either a daily cycle low, or another runaway pivot I will post a stop.
Gary,
Thank you. I’m worried about being at work and missing a huge correction that wipes out my recent gains.
Elaine,
As long as you convert to gold when I do you aren’t going to get caught in any portfolio wrecking correction.
Gary,
If silver is likely to continue past $50 but we are cautious about a over night drop or panic type selling; Would switching to silver futures which trade 24 hours work? At that point stops can be used in case of any sharp panic drop. We would still be exposed to a sharp drop and gap down across a weekend I suppose but most of the risk you are cautioning about would be controlled?
I notice that in that 2006 silver wipeout, SLW wasn’t hugely affected. It did come down roughly 8% that day. But it topped about 3 weeks earlier, and then bumped up against that top 2 more times as the C-wave topped.
I trade spot silver and this is a message I got from my broker that explains the wierd silver prices…
“We would like to inform you that COMEX is closed today which will have a significant impact on spot metal trading today. Pricing will be very wide or at times not available at all and execution of existing orders might take significantly longer than usual. Happy Easter!”
Hi Clarkatroid
I think Gary had an experience similar to yours.
On the radio interview [the one before last, I think] his voice went a bit wobbly when he recalls getting into the end of the tech bubble and losing most of his position.
So he has the pain too – and will be cautious… even though it was a little different to your rollercoaster ride.
Speaking of which [Blackpool’s got the biggest roller in the world, hasn’t it?], I live in Skelmersdale, about an hour south of you – near Liverpool.
I even buy bullion up at Chard! 🙂
You know me by now, Gary. I don’t want to wake up to that either! One other thought I have is that without a reversal candle it is very unlikely silver will simply open down a ton. There should be some red during the day (like 2006) that gets out of hand as the selling intensifies. Thus an alternate strategy would be to sell on a big reversal or the first showing of red once 50 is breached, as they sometimes just tick up day after day with no decline after a key level is bested.
I’m not a big believer in the whole futures, overnight trading, get in and out anytime thing.
99% of the time trading based on overnight action will just cause you to make a mistake that you wouldn’t have made if you waited till the US markets opened.
Gary,
just to be sure, for the slow people like me:
we get out of silver at +/-50
and convert to gold until you tell us the top has arrived.
Hi, can anyone recommend a good site to post some charts/images?
DG,
I remember that day in 06. It came out of the blue and before anyone could even react silver was down 17%.
I will be happy to make my final gains in gold even if it means I will underperform a bit.
Hell I think we’ve all had a truly incredible 9 months. I doubt anyone is going to complain too much about giving up 5 or 10% of outperformance at the final top to possibly avoid getting trapped in an 06 type event.
guy,
Don’t worry I will walk everyone through the process in the nightly reports as this progresses.
Gary,
You are correct about the overnight futures trading and I agree with your statement. The variation here is, using the example of silver hitting $55, that $5 move is huge with the leverage in futures. If a trailing stop was set even a full $1 below one would catch that 3 to 4 dollar move.
I usually do not use trailing stops because the whipsaw in futures kills you and slippage is larger overnight…but an extra $3 or $4 buck move is hard to resist. Then again, I can be to aggressive at times and pay the price…
This comment has been removed by the author.
DG,
I have been living with that exact plan for the past week or so. The problem is that so often (maybe 3 out of 5 days this week?) it looked like silver topped only to come back and end up at the highs of the day. Will this make a difference above $50? To this question I’m not sure.
I am personally nervous holding until $50. This isn’t just old highs, round numbers, etc. This has got to be one of the most FAMOUS numbers in all of the markets, especially considering it came on the heals of the soap opera of the Hunt Brothers.
I’ve also thought well yes everyone knows it will be tough to pierce so maybe it will stop at $49. But then probably so many people think that then it will stop at $48.
And then I think perhaps this is the exact type of thinking that will cause it to just run right past $50 as Gary suggests, perhaps even sharply. Maybe it goes right to $52 from $49 in one day and then backtests it.
I also think this will get as much press as any market-related number has ever received and THAT will bring in the public so, again, perhaps Gary is right and that will be what pushes silver even higher.
As Adami said, barely anyone is in this trade although it’s hard to know that when you’re reading posts on Gary’s site all day long. But personally I barely know of anyone who owns gold. I know of nobody (other than a couple I practically forced to buy some time ago) who owns pure silver bars, coins, SLV, etc.
I’m thinking about scaling out a bit each 25 cents or so from here to $50 and then perhaps converting whatever is left (maybe 50%) at that point to a gold-related vehicle.
Not really sure but I was caught more than anyone can imagine in the tech bubble and remember is so vividly it’s crazy. It is what caused me to go compeltely to cash (even selling my real estate and my business) in 2008. I BARELY made it out of that one alive. I don’t want to come that close again!
Gary’s plan sounds like the most sound and I’ve got as much in terms of letting it ride as anyone but even now I’m nervous to hold until $50, which brings me full circle.
If I’M nervous then probably most people are terrified because I don’t get nervous that easily and so perhaps Gary will be right…imagine that, Gary being right! LOL Seriously, as most know, his track record is just unreal so I’ll probably stick with him mostly with a little selling on the way up to control my emotions.
The lowest ask before close 1 hour ago for xag/usd is listed as 47,90 and the bid 46,60, so 47,25$ at brokers balance tableau is probably the medium-mark between those 2, and possibly not an actual trade. Anyway, something strange hs happened, the spread at close is huge.
+ In addition the last development at that fx quote.
Steven/DG,
I think you guys are on to something (with Gary of course). Keep up the dialog.
This 7 day gold and silver straight incline is unprecedented at least for the 2006 and 2008 tops.
Steven,
Nice comment, just a quick question. Were you nervous on Friday two weeks ago as you are now?
Steven, all I can say is great post. It was very insightful to me, especially about the media coverage aspect and creating wide-spread positive sentiment. I still have arguments with extremely intelligent people in the business about why gold and silver are not some flim-flam commodity that will trade like pork bellies… The Tech-bubble was created by a huge herd, and that hasn’t been created yet with the PM’s…
http://www.silver-prices.net/silver-wheaton-corporation-lackluster-performance-of-late/#more-1214
My bad….
In 2008, there was an 11 day silver positive run before the drop. I overlooked it with a black positive candle at the middle.
Another observation I am looking into is the behavior of the MACD.
Right now, as of the last close we are in a sharp incline. Looking back over the 06, 08 and current 11 tops, the MACD does not reverse to a “mountain peak” It looks like the MACD has a tendency to at least “flatten” or “pause” “before” the drop (not the day of the drop – of course that is too late).
Still got some work to do and am going to watch this closely. When the rate of ascent starts to flatten, might be an early sign.
Damn, I’m wrong again. In 2006, the rapid ascent from MACD immediately spiked lower on that monstrous move.
That’s what we pay Gary for – he’ll do better in real time than us for sure.
🙂
Steven,
I hold 90% in physical gold and silver and will try to hold them untill 2016 when Gary calls the whissle.
probably indefinatly.
because i grew up not regarding them as investment but as real money when times get tough.
I’ll know if it was wise to do so when my hair is grey or gone.
Don’t need it anyway, keeping it for the offspring.
Hi Everyone!
New as a subscriber and just trying to wrap my head around this market. Wondering if most of you hold physical metals as well. I rarely see it talked about and was wondering if capital is better invested in the market for gains/liquidity rather than holding the metal.
My initial thought is that most here already have a core holding of physical (for longer term) and are just investing more capital in the market to maximize gains or hedge.
Problem with that theory is the opposite, where most of you “professionals” hold minimal physical, and put most of your capital in the market to ride this bull.
Appreciate any insight from the veterans here.
If ebay is any indication of Joe Monster Box investors, we should blow right through 50. Single SAE coins are fetching 58 w/o shipping.
But at the same time, like Gary says, there should be an avalanche of supply coming on line at 50.
Who knows for sure…but it does seem like 50 is a massive magnet for retail. Gold and silver are probably the only commodities where increased price ends up temporarily increasing demand.
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On to the USD….
Both times in 2006 and 2008, the USD had an embedded SLOW STO (both under 20) for 3 full weeks. It was when the USD started to rise up from there that the Top ended (1 day late, though).
Now, in 2011, the USD as of yesterday is not embedded yet but very close.
I do believe the USD will get much lower, into the 70 to 72 range and believe that it would be embedded for a large part of that run – essentially duplicating what happened in 2006 and 2008 (but maybe not for 3 weeks).
In either case, this would mean silver and gold have a lot more legs from where they are today (but doesn’t mean there can’t be a cycle low or some runaway corrections).
That being said, with $50 silver a stones throw away, wouldn’t it be pertinent to re-evaluate the situation when silver gets to $50 (or very, very close)?
Let’s say the USD has been embedded for only a few days? Wouldn’t that point to a potential blowoff top in progress but only in its early stages?
If silver gets to $50 with the USD at 73, that would mean leaving more than a few percent rise on the table (as in 2006 and 2008)?
What’s different between now and any previous time, including 2006, is that we are in a currency crisis. It’s not just words anymore, it’s quite real. The US is in default with probably little chance of being able to regain control of its debt and save the $. Is a complete dollar crash imminent in the short term? Probably not, but the market is making it clear that it would rather place its bets on precious metals as a store of value. The market is beginning to view G & S more like currencies and less like commodities. Every recent attempt to short silver has been met by buying. Will there be corrections to lock in profits at some point? Sure. The problem is that those profits will be in the form of fiat currencies which continue to lose value. It won’t take long for those profits to find their way back to PMs. I’m not confident that the round number of $50 is going to have much significance this time around. Any weakness is likely to be bought, at least until the dollar can muster a significant rally which likely won’t happen for several weeks. At the current rate of silver’s rise, $50 will be barely visible in the rear view mirror by that time. JMO.
Tyler at ZH and the global market price is reporting/indicating silver is trading at $47.60:
http://silverprice.org/index.html
Is this for real?
You guys looking for something to do on a holiday, I encourage you to go back and read Gary’s old posts from way back at the old blog. There are many gems there like Old Turkey, but this one blew me away.
http://garyscommonsense.blogspot.com/2009/04/moe-ronn-john-i-que.html
Michael,
Not even close in terms of being nervous. I started to become nervous at the beginning of this week.
Great discussion and potential game plan.
PK, interesting charts. The silver market is a much different ball game than it was in 2006…There’s a growing global awareness of it as monetary metal in addition to it’s scarceness as a industrial commodity. Tough call here…Will it be the pure FEAR trade with the dollar putting in the lows or the FEAR of inflation trade which would have silver winning.
For those looking to add more exposure to the metals vs. miners, at this stage the UGL might be a safer bet. Maybe control some SLV via calls, NUGT sounds interesting too if one wants to avoid a -17% down day in silver. Trying to figure out what a -17% day would do to AGQ as that one runs hot in reverse. Could it go down 40% in one morning?
Some good stuff I read the past 2 days (Courtesy of Rosabara on Blue Chip). Carl Swenlin’s take on silver. This is much different from 1980-
Swenlin
Some thoughts on the miners-
here
Gary – I haven’t seen this discussed, but though about buying some puts against getting caught off guard on a rapid decline or D wave?
Steve –
That was a great Blast from the Past!
Boy, if only I had found Gary earlier!
I’m considering just taking an amount that I am willing to lose 1/2 on, say 5 or 10% of my portfolio and just letting it ride in either DTM calls on SLV or in SLV shares. This way if silver does happen to run to $60 I won’t feel bad for missing it, but if we get the big down day this will only sacrifice a small portion of the gains made through this run. If the dumb money really does jump in here at $50 silver could go up quite a bit more. I’m happy sacrificing some of the gain for the chance of another $5-10 in silver.
T,
IMO there were fundamental reasons behind the tech bubble and this potential PMs bubble. I was not only heavily invested in the tech bubble I ran a fairly sizable company in Silicon Valley from 1998-2003 so I saw it all first-hand.
Most people have it confused and say the bubble was all hype. This is compltely incorrect. It was real and what happened in the 1990s and early 2000s has set the stage for changing our lives completely. And effectively one could argue that the money invested (by VCs, anyway) has been more than made up. Just look at the revenue and profits from the leaders. Many have surpassed the biggest companies on the planet within 10-15 years (or less).
No, the real issue is simply that many of the offerings were not realy businesses. Add to this the fact that ALL of the ones that were real businesses were just simply mispriced.
I think the same thing is happening with the PM bull market. It has fundamental legs and will continue but at some point the valuations will just outpace the fundamentals.
Guy,
I compeltely agree and have posted many times on this board that I consider my physical stash no different than if I had converted it to another currency. Although I will likely sell some of it. I do not trade around daily cycles and even very little around IT. But a D wave is something I will take seriously.
But all I am doing (in my mind, anyway) is converting (not selling) my gold into dollars. I will likely convert back at some point within the next 6-12 months.
However, I find absolutely NOTHING wrong with your strategy and it was the one I had planned on myself. So I keep arguing with myself about which one to go with. I will definitely “convert” some to dollars but how much I do not know.
All I know is that being Old Turkey since August has served me well. But then again we didn’t experience a D wave in the middle of that period!
For the Canadians on the board, if we use HZU.to for AGQ. I’m guessing we can use HBU.TO for DGP? Unfortunately the volume is so low for HBU.TO. I’m worried the spreads would be really bad. Are there any other alternative gold ETF’s we can use on the TSX with decent volume?
Steven,
Based on my personal experience, when I am nervous and want to sell, 99% of the time it is the wrong time. But when I am happy and feel invincibly, that’s when the bull gets me.
About that Gary’s tax article. We sell intermediate cycles and they last less than 52 weeks, so getting a 15% tax break cannot be done on the whole account, only on your core. For that reason I’ve created a separate account a while back where I only hold juniors and I named it “old turkey”. It reminds everyday that I cannot touch it.
Dave,
I commented on hedges earlier.
I don’t waste capital on hedging. It’s a suckers trade foisted on the public by Wall Street to drum up lots of commissions.
I have been slowly phasing out of AGQ.
On Monday I think I will blow out of what remains and buy UGL, the gold equivalent of AGQ.
The silver miners have been persistently awful during this latest run. Their performance seems to foretell a big one-day shakeout along the lines of 2006.
At this point, silver is 75% over the 200-day and gold is only %13. There is very little downside to gold, and massive potential downside to silver.
If gold follows Gary’s projections, we can still expect a 20% gain in gold, which is equivalent to a 40% gain in UGL, with limited risk.
I am buying UGL because I expect the gold miners to underperform as we approach a top, just as the silver miners are underperforming now.
David-
I may join you on that trade.
Poly-
please post your strategy for the end game.
DGP is a lot more liquid than UGL.
FWIW during the final rally I expect the HUI will massively outperform gold. The gold:XAU ratio is still way too cheap.
Unfortunately everyone is making the age old mistake of projecting the past into the future. Since the miners have been underperforming lately you assume it will continue.
I assume it will change because liquidity is going to eventually find it’s way into the undervalued miners.
Didn’t the last 2 weeks just demonstrate in silver that the metal was were liquidity went. I wonder if silver investors dumped miners and jumped into SLV and AGQ chasing momentum too.
Silver miners the past few weeks-
HL-mining accident
PAAS, CDE-Bolivia threats of nationalization
SLW-CEO leaves out of nowhere.
From the looks of it, silver is trading around 47.60$ overseas, gold still around 1508$.
Gary, thanks for the tip on DGP.
I particularly like the symbol DGP because UGL is a little too close to UGLY, which I consider a bad omen.
I am basing my aversion to the miners only on their predictive behavior — they tend to stall out in anticipation of a top. That may not happen this time, but based on how happy we’ve all been with AGQ for this entire C-wave, I have no problem owning DGP. If I can make 30 or 40% in the next month, I will be very very happy.
I actually think that the XAU/HUI will work off its undervaluation over the course of the entire bull market, not in this C-wave. There just isn’t enough time in the next month to get to XAU/AU 4.5:1 or anywhere close.
I think the place to own the miners will be at the bottom of the D-wave. The last A-wave was where the serious outperformance by miners took place, and that may be the case again here.
I think we may get to XAU/AU 6:1 at the top of this C-wave, then hit 8:1 at the bottom of the A-wave. We will gradually reach 4.5:1 by the end of the next C-wave, and then the bubble will really begin, taking miners to 3:1 or even lower.
At any rate, it’s hard to see where we can go wrong in DGP/UGL in the short term, particularly with stops in place.
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Gary,
Case in point:
If I’d told you last October that the XAU/AU ratio would be 7:1 right now — at the parabolic end of the C-wave — you’d have called me crazy or stupid.
But that’s where we are.
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GARY
I just read the report and I just want to say 50% AGQ- Congrats!! In a big way you had a great week (too bad it wasnt a 5 day!) I had just enough % of my portfolio in AGQ to offset the ups and downs of my miners 🙂
Very nice report. The Chart of april 2006 speaks volumes, I wish it was compared to the same day 2006 gold chart. As a non-member of ‘stockcharts’, I can only go back 3 yrs. I like your future plan and I also think that Miners will make up for lost time.
Again, Very nice week with your AGQ,seriously – $210 to $340 in 1 month ! 65%
Jayhawk
Enjoyed the article on miners,thanks for posting!
Open question to forum:
Can anyone provide any good PM Juniors to look into during the D wave? Looking to start a core position and hold old turkey during the next ABCD Wave 🙂
Or would GDXJ be the way to go? Any comments would be much appreciated, thanks!
William,
Sorta thinking the same thing… Maybe sell 75% of my AGQ (e.g. my traditional IRA) and get it in a gold vehicle, and then let the other 25% (Roth and taxable investments) ride in SLV to see what happens at $50. I can live with that risk/reward scenario I think. I’ve been leaving $ on the table, so maybe I need to man up (just a little!).
Blake-
That’s my strategy as well and the blog talked about how this summer we can all put our head together to pick some winners…I have my short list ready, but there are very talented folks who will provide great insight. Good couple of threads on Kitco looking into those (Penny stock one and the Miners DD threads)
https://www.kitcomm.com/forumdisplay.php?f=28
Hi Jayhawk,
Thanks for those links, scary 30 yr chart! Get the feeling now that $50 might not be the end of is wave, although a big drawdown should come between $50 and solid new all time high’s. I just don’t think gold has moved enough to top out and so I don’t see Silver sitting idle while gold tops.
I picked up a lot of SLV May $38’s late Friday, about 25% stake so I should get a little more than 100% exposure to Silver move. In hindsight that was my biggest mistake, dropping my last “core” 30% stake. Don’t regret any other sale.
I have some ideas on playing the finale, hopefully get a chance to formulate some on Sunday when I get back home.
But like 2006, I believe we see a shocking drop, almost certainly next week IMO, which will setup a final move higher that will shock everybody as gold and the miners final make real moves. Having Silver reach these levels so soon suggests we could be seeing high $50’s possibly for the top of the final cycle?
Lot to think about and obviously this will be a moving target. I’m interested in what DOC has to say, I’m in a similar position to him having been caught lightly invested into this massive run from around $42.
Thanks for the info, Jayhawk!
Regarding silver, I feel I am in the movie clash of the titans. It appears that the sovereigns are waging war on each other. China’s inflation is starting to bite and they are dumping dollars for commodities; Russia is buying gold again, and dumping dollars.
Tuesday is when the airplane takes off and the oversold airplane must payoff or scare off the extra passengers. Also on Wednesday we will certainly hear some hawkish statements from the Bernank.
For me, I am and haved rolled most silver positions to June; and still accumulating miner options, I expect them to blow out earnings and should shake out some shorts.
Finally, I am glad Gary said to model your portfolio to your risk tolerances, I think many are beating themselves up for not being as leveraged or modelled like Gary, I for one am happy to forgo some upside to avoid a devastating drawdown. After all it is my money. I doubled up since November and that is nothing to sneeze at, and will enjoy some sweet gains to $50. $50 is less than 10% away.
Last week was tough for those holding Ag or EXK and others…maybe feeling like they were missing the party.
I own them too, so I saw silver blowing off its top with AGQ, and read of everyones ‘miners’ disappointment and ‘I get it’ , BUT-
F.W.I.W.-
Heres what I am looking at…PERCEPTION -WISE
THREE Month Charts:
1) AG up 160% (low to high, now 140%)
2) EXK up 140%
3) SILVER up Less than 80%!!
( and we expected AGQ to be a better multiple of that).
It looks to me like Silver stocks took off FIRST, with LARGER % gains that the Metal even up to now. They are now consolidating FIRST, while SILVER tacked on its gains, still only 80% total 3 months. (AGQ reflected a multiple of silver gains far better than expected).
I am thinking miners were merely consolidating there recent gains (normal) and will join (LEAD AGAIN) the next run in a blow off top way. (AGQ may consolidate here with Silver,but These miners SHOULDN’T drop much now ( he said hopefully 🙂
I have a folder of charts prepared for myself, and anyone who wants to see what I’m looking at. NOTHING is guaranteed-but what if we get a repeat? Miners lead soon, then I jump into AGQ when it resumes its end run…then follow Garys plan in his report as the top approaches.
I’m still hopeful-the best is yet to come, and MINERS acted fine! 🙂 see charts for EXK and AG,(sorry some cluttered,its for my reference later)
http://www.screencast.com/t/DhltHQ42
If silver would fail to take out the old closing high at $48 and the old intraday high at $50 during this C wave finale, it would not bode well for the next cycle in silver, because in a bull market I expect old tops to be taken out (higher highs).
I understand, TA of chart patterns, drawn out over 30+ years, is somewhat flawed, but I am talking mainly market psychology here, and this parabola will better take out the 1980 one, or I might have to reassess my future investments in silver.
Comparing sentiment and technicals then and now, I am convinced this current C wave still got what it takes. Some one here posted a great link to fast money. The fast money take on silver could, of course be considered a sell signal, but I think it will rather contribute to an extended parabolic rise.
Also, this current C wave is already different from the past C waves of this current bull market, so far as it has increased a lot more in price % than all the others. I therefore would rather compare it to the 1980 C wave more than I would compare it to the C waves of the past ten years.
This year we have been in a congestion zone around $28, which possibly could be compared to a congestion zone around $18 in 1980. In 1980 silver had a x 2.67 % increase from that level, which would bring us to a just north of $74 during this wave if we would apply the same multiple to $28.
A more conservate projection (comparing another congestion zone of $28 then to $35 now) brings me to just north of $64, which is a number I like better.
I know, of course, that these things don’t work like math, but my point is that our parabolia is of a much younger age than the 1980 parabolia, and unless it dies prematurely, I think this has the juice to run up to these targets.
Hitting these higher targets would also imply that the D wave bottom would too end up on a higher level, from which it would seem less harder to imagine a run up to popular price targets for the next cycle of $200 to $300. From a D wave bottom in the 40s it would take silver a percentage increase similar to the percentage increase it will have accomplished during the current cycle once it’s done.
Now, would I bet on $64 or $74? A small bet on $60, perhaps. But I am a terrible day trader, and I am in my 40s and do have family, so I think Gary’s plan is a good one, only I might follow this plan in a few steps, starting right here and ending at perhaps $60.
Michael,
I couldn’t agree more. What tax article are you talking about?
Thanks.
My opinions
A) Gold races forward
Silver slows down
Miners race forward
Likelihood – 4/5
B) Gold has a minor drop
Silver has a quick, but huge drop
Miners have a mid level drop
After this, all race forward
Likelihood – 4/5
C) Gold drops
Silver drops
Miners drop
D-wave begins soon
Likelihood – 2/5
D) Silver continues to run
Gold continues to drag up
Miners drag up slowly
Likelihood – 3/5
E) Silver continues to run
Gold continues to drag up
Miners continue to drag down
Likelihood – 1/5
F) Silver drags down
Gold goes up big
Miners go up big
Likelihood – 2/5
Yes,
how about G) silver continues up (with the occasional drop); Gold, coming late to the party joins silver and gets its act together; miners do more of what they’ve done over the past weeks; some move up, some move down, and others tread water?
Gary,
You recommend DGP (Powershares) over UGL (Proshares) because of its liquidity. But DGP is an ETN, and I assume that UGL is an ETF. I’ve heard some bad things about ETNs in general. Something about how they’re structured. Is that a bothersome thing?
Lets Discuss
How about…
First we see “F”,
then we get “D”
then we get OUT, because we get “C”
🙂
BASIL
I liked that, I actually got Silver $64 too, but using another method! Cool. But IF we pause/consolidate here and then have one last run….since I think it ‘blows off’ big next time (because EVERYONE and their grandmother who missed this run will jump in at the end)…I’d say $70+ area
Alex,
I have 2 1/2 questions for you… 😉
You think possible pause/consolidation next, and then past your price target of $64 straight to 70+? All of that before the employment report May 9?
What’s your timing for the dollar then, parallel to your silver price scenario?
Im sure nobody will be interested anyway thought i would post some of the outputs from my model that i use for directional and timing purposes
Couple of outputs from my seasonal model the first is the roadmap until the end of July in BHP and the second is ABX
http://postimage.org/image/46vr11ic/
http://postimage.org/image/30eaqnfk4/
Happy easter all.:)
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David/Gary,
UGL versus DGP:
UGL is an etf.
DGP is an etn.
Any concerns about owning an etn versus etf? I know this will likely be a short term trade lasting at most a few weeks, but etn’s carry default risk that etf’s do not, if I’m understanding the difference correctly.
BASIL
No , not all before May 9.
You are going to think this is a crappy answer…but I just follow Gary on “Dollar timing”.
To HIS credit, he noticed the dollar timing /jobs report correlation…how THAT plays out in May, I AM now interested in watching.
I think I am clearer shorterm,but have my longterm targets…but it often gets there on a slightly different path than I envisioned.
Both Silver and the Dollar havent done what I thought ,when I thought ( I thought Silver would turn at $44, and the dollar would bounce).
But short term, miners pausing did made sense…just not as I saw the silver run (until looking back today). Silver /Dollar threw me off.
So I have a morphing long-term chart in my head, short term more accurate. Step by step,I guess
Thats 5 answers for your 2 1/2 questions 🙂
I am gobsmacked at how far silver has run in such a short time. There is more than dollar weakness going on here. Fear of U.S. default, debt piled upon debt, Euro debt, Big papa Bernanke…
Blogger ahain1223 said…
“Im sure nobody will be interested anyway thought i would post some …”
Yes we are! we are all sponges here, absorbing and learning. Thanks!
Basil,
I think that 1980 is the wrong point of reference for this stage of the bull market. 1980 was a final parabolic top where silver returned 700% in one year. As good as this year’s been, it’s only 300%.
Unless you think this is the absolute, end-of-bull-market top, 1980 should not be your model.
I also think the air above $50 per ounce is too thin for anyone but the most expert climbers to manage.
Everybody else is going to find themselves joining all the bodies that are still frozen at the summit for the past 31 years.
Does anyone have any suggestions on unloading physical silver when it hits $50? I don’t think swapping into physical gold would be effective. This is what I’m dealing with at the local coin dealers…
buy back silver = $.50 below spot
buy their gold = $75 over spot
I remember Gary’s suggestion was to sell everything (including physical) when silver hits $50 and then buy back at the bottom of D-Wave.
Alex,
Nice chart of AG! Great analysis! Maybe I buy some this week.
I think a smackdown is coming on Monday or Tuesday, so I may wait till the dust settles before doing anything.
Have a great weekend!
whats going on with the silver price today, interwebs is reporting a live price of 47.73?
i thought it was closed
Hi jon, thought i was the only lancastrian here so its nice to have company.Which broker are you using and where do you buy your physical from?
i use HL and TDW. hl has no fx charge but the system is basic, td charges 1.5% conversion to dollars and same the other way but is a much better trading platform
Less,
Personally I am not going to sell any of my physical silver for YEARS.
Selling at the “top” and buying back and the “bottom” sounds good in theory, but what if the bottom you expect doesn’t come?
Then you will just have “Less” ;=)
IMO physical should be held as a long-term investment and insurance against a total collapse, i.e., SHTF scenario.
Gary, do you hold any physical silver or gold or are you strictly a “paper” guy?
Alex,
I understand; a constantly morphing chart and morphing timing makes sense and just means that you keep being flexible, which all of us should.
I also follow Gary’s dollar timing, and btw. have re-subscribed to the service, which I guess speaks for itself.
David,
I agree that there is somewhat of a difference between a final parabolia (1980) to an intermediate parabolia (which we hopefully have now). To me the difference is that the drop that follows this time, will be much less brutal and consolidate at a much higher level from which the next cycle run up will launch.
I think however, that the comparison is between the spike up then and now is absolutely valid. Everyone is looking now at the old top established in 1980; so this is what our top will be measured against.
Also, and more importantly to your point, the 1980 top was preluded by a rise from $5 to $48 over 2.5 years (960%). The 2011 top will be preluded by a rise from roughly 9 to …? We are currently at about 520%; to me that’s already the same realm of price appreciation over that same time frame.
$64 price targetwould get us to 710%; $74 would get us to 820%. And if we were to achieve 960% like in 1980, it would get us to $86.4 – I am not expecting that.
In any case, silver is very volatile and can apparently have crazy spikes of several hundred %, not just at the end of the bull; when I look at the long term charts of silver I wouldn’t know what else to compare our current run to, but to 1980.
Thanks PIMA
I actually put the wrong link up,it was supposed to be a folder of different miners I looked into this morning,to show that they are still looking good (despite disappointment last week)
You may have only been able to see AG, but I had GORO, EXK, HMY, and so on.
If interested..
http://www.screencast.com/t/nDaRubjqLG
Have a great wkend everyone!
Ok, I’ll add
G) Gold starts to run
Silver continues to run
Miners drag up
Likelihood – 3/5
One of the reasons I think the movement of Miners from here on will mirror Gold’s, perhaps a little exaggerated, is that the interpretation of the action so far is there is a huge proportion of big traders/hedge funds that are Long Silver and Short Miners OR Long Silver and Short Gold.
So far they have made a lot of money while keeping risk low and causing Silver to go on this crazy ramp up while leaving Gold and Miners in the dust.
At some point in the near future, they will unwind these trades. That will generate much better returns for Gold and Miners. I am not saying Silver is going to go down drastically while Gold is going up huge, but rather pace of Gold will be higher than the pace of Silver.
Of course, this could all happen further down the road, but it has to happen at some point.
David,
During the final cycle up in 06 miners rallied 45%. The final leg in 08 the HUI gained 39% (and this was during a period when oil was going through the roof).
A 40% gain from the current level would take the HUI to 840. If gold makes it to $1650 (my best guess target) that would drive the gold:XAU ratio to a little over 5.
So I’m not sure why you think it’s impossible for the miners to outperform. They have at every C-wave finale so far and are set up to do so again.
ALEX,
Those charts are pretty good and encouraging. Thanks.
basil,
I think you are right. All comparisons from here will be about 1980 as we are approcaching that magic number of 50.
Of course, how it plays out may be different.
Hot Rod,
Nice to see a fellow “embedded watcher”! Silver and Gold are embedded and now the next piece of the puzzle is for the dollar to embed under 20. Could be this week?
Yes,
thanks for adding G 😉 I feel better now
Alex
You do not have to be a member of stockchart to go back 3 years.
I used the date range option from 2006-04-01 – 2006-05-30 to see how spot gold traded.
James
On that day gold had a high of 646 and a low of 607.
Gotta,
Thanks for the tip… I’m leaning toward selling 1/2 to cash and hold the rest thru PM Bull. Hopefully I can buy back at the bottom of D-Wave.
Gary mentioned once that he doesn’t trade physical, only paper.
James R,
I didn’t realize Stockcharts would give out old ranges. It didn’t work, however, when I tried to bring it up to today. It appears that we can get any 3 year range, but only 3 years.
Thanks for your enterprising experiment. That’s very useful information.
Best,
Le Fou
I thought this was a funny comment.
We are in a contest for the ugliest currency. – Marc Faber in CNBC Asia
Best,
Le Fou
Gary,
From your lips to God’s ears.
Even by my own logic, the greatest risk/reward profile right now is in the gold miners, since they’re so undervalued relative to gold.
And the sentiment on this board (including my own) has always been a contrary indicator for the miners. I remember arguing with you about the silver miners back in August last year — I hated them — and we all know how that turned out.
So I will probably pick up GDXJ, ANV, GORO, etc. and hold on to all my silver miners.
BTW guys, I am a stockcharts member. If I can get something for the active posters out there (you know who you are Alex, Poly, etc.) I am happy to. I’d like to do it for whomever wants, but it takes a while create, download, and post here, and I don’t want a ton of requests. 🙂
David,
re: miners, don’t forget NUGT for your shopping list.
I’ve been really torn about how to top off my portfolio.
After I trimmed (and I trimmed much more than Gary because I hold all AGQ) I started slowly wading back into AGQ this week.
In hindsight I should have bought more, but it’s been roaring, and it is just hard to make myself chase. The darn thing never corrected!
But then I realized, hey, why not just hold the AGQ you’ve got, and instead of adding more, add NUGT instead.
The gold miners are so much less frothy than silver that it would seem NUGT is a much safer place for new capital than AGQ, yes?
JAMES R
I have been using Stockcharts for 8 years and DID NOT KNOW THAT!!
I was able to look gold,silver,HL,GG,PAAS etc on that month.
You are my hero for a while, you added to the way I can look at things!!
Thanks!
I am going to share with you my AGQ put trade. I am going to buy 20 September 160 puts for $10,000.
At a 20% retracement of SLV, puts AGQ around 206 (personally, if we are in a D wave, I expect AGQ in the low 100’s). This gives me a potential for $30K in profits.
Another approach I will consider is SLV 30/25 October puts, 160 of them for around the same price, and about the same potential profit.
This will change incrementally as we peak the wave.
Catbird,
I had the same reasoning, so I bought some NUGT a few weeks ago.
My only problem with it is that the volume is absurdly low — lower even than SIL, which trades like a micro cap. I was astounded to find that I had actually moved SIL against myself when selling at one point. You actually have to break your trades up into blocks in order to avoid that.
I don’t want to have to struggle to unload a large position in NUGT if the tide turns against me. So I might buy a little, but I don’t think I can go all-in on NUGT.
Thank You DG
Honestly I ‘m not sure what the benefits are ( what I’m missing).
Do they give you $Gold and $Silver charts w/ volume?
Going out for the evening- but thanks, I ‘ll look into the site tomorrow and see if it can tell me exactly what I’m missing.
Catbird —
I just checked and NUGT’s net assets are $14M. That’s million, not billion.
So if you’re investing a reasonably substantial amount you could find the exits very crowded when you try to get out.
Has anyone seen this?
http://silverdoctors.blogspot.com/2011/04/burn-jp-morgue-burn-silver-hits-4790-on.html?showComment=1303494848024#c8800364704101064557
Alex: If you are a member and you put in the right info, stockcharts will post charts up to six months in the future. Very useful for knowing when to sell AGQ Works especially well with FCX. (you probably wondered how I did it.)
Here’s a link to Asian silver:
http://news.silverseek.com/asian.php
Here’s another (look to the left)
http://www.goldseek.com/
David,
Thanks. Duly noted.
Unfortunately, I’m not throwing around enough Bernanke Bux to really worry about moving the trade against me with my order size.
Im getting a bit nervous..My plan is to sell at 50 but the market is closed here in Sweden at monday..Jesus!
Cant sell anything before tuesday morning..
What if the market get to 49 on monday and Gary will tell us to sell and I cant do anything..
Then on tuesday the silver market fall apart..
I think I will go and have a whisky or something..A big one!
DAVID
Your conversation just got me thinking…I have avoided NUGT for its low volume too…but if GOLD really starts doing what silver did , NUGT’s volume may swell over time and it could really take off price wise as a result. Easier to push it up.
Then you could unload maybe a tad early.
look at the volume on SLV for an example.NUGT may do that too. HHMMM
DG
LOL , Tell me what to plug in!!! I will subscribe myself if thats the case!!
Gotta run,
Goodnight all
Another thing: I suppose it’s still early for people with a nice chunk of dry powder left to deploy to despair over not yet seeing a healthy pullback. No reason it can’t come Monday.
Alex,
I doubt it’s going to gain that kind of volume in the next month, but it may get there over the course of the bull.
DG, Isn’t that what stockcharts refers to as their “Xtra” membership program?
NUGT has formed a cup w/handle. I know Alex likes those.
David,
As a group, aren’t the gold miners doing as bad, or worse, than the silver miners ?
That’s what it looks like to me.
Alex,
As a non-member of stockcharts, you can only do 3 years, but they can be any 3 years.
I was able to get Gary’s silver plot in 2006 as a non-member.
Bob Loves Hawaii,
So do I! My inlaws lived on Oahu for 12 years..spoiled my wife and kids.. and maybe me alittle too! Have you looked at ZSL calls as opposed to AGQ puts? Just curious what your thought process is.
Wes, The thinking goes that they start playing catch up.
WMP, I like the volatility that puts generate over calls, and the decay works in the favor of lower prices over rising prices.
Anyone know what the spreads and liquidity are like in GDP? Are 5,000-10,000 shares going to be no problem for an order? GLD trades much more. DGP can trade down to a few hundred thousand shares in a day.
Wes,
The gold miners should be doing worse than the silver miners, because gold is doing worse than silver.
The only way of explaining this underperformance is that the market is anticipating a big selloff. That’s what happened at the beginning of the year when the miners (even royalty players like SLW) didn’t confirm the breakout in silver.
That seems to be what’s happening here. In that scenario, you’d rather own miners than the metal because any impending correction is already priced in.
SLW tacked on 43% in 13 trading days last Nov, towards the end of that impressive INT cycle, so don’t discount the miners too soon, especially if you’ve been holding them the entire intermediate cycle.
I think you’re right David. Expectations of a sell off and also because gold is really not moving with any real urgency and is not confirming the traditional gold silver correlations. I think all the miners will benefit and show their leverage capability once and only when gold begins a parabolic like top. Do we expect that for the next and final daily?
NEW POST
Forlorn Hope? Great to have forums, such as this one with many, seemingly knowledgeable, articulate members willing to share and even respond. So thanks to you Gary, and all the awesome members for that, first of all!
Gary, one of the key issues to analyze and evaluate in my newbie opinion, is the potential impact of the high likelihood that at the April 27 FOMC meeting, or shortly thereafter, when Helicoter Ben speaks at a rare press conference, the suspension or radical reduction of QE is announced.
Seems to me that if in three days QE became known to be effectively suspended, ended / status in question, that the impact would be enormous & override or overwhelm the cycle! Gold and silver would come crashing down without a rebound anytime soon. Is this Forlorn Hope or have I missed a lot? Would we still get the rebound and hyperbolic ascent in the next 1-5 weeks? Of course QE suspension or minimilization may not happen until June, but why wouldn’t the impact now be huge? Read the great piece, Forlorn Hope, by Casey Research posted today. Thank you very much for an answer to this important question!
Matrix,
The damage has already been done. It doesn’t matter whether the Fed stops QE now or not (Unlikely since they’ve clearly stated they will run QE2 to completion).
It’s not the meager 7-8 billion a day that is driving this. It is the 2-3 trillion that has been printed over the last two years.
The only way to stop this train at this point would be for the Fed to go on a massive selling spree and unload a trillion dollars worth of treasuries in the next month.
Anyone want to take a guess at the odds of that happening.
Uhhh YEAH!! Thanks Gary …now I know better why you’re a rock star!
Gary. Is it too late to buy the SLV 40 July calls Up 12-14% already? Can you give any other option play suggestions?
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Clark:
Oh good – glad you found my post…,
I use TDW only – always have.
But this month I sold about 1/2 the stuff that’s not tax protected in ISAs.
I’m pretty used to using IG Index [spread bet] and with the right control will continue there = tax free [I hope!]. I don’t trust the inland revenue to stop the capital gains tax hikes in the future.
Rather than using huge leverage on a small pile of money, I’m having a good sized hill of money with careful leverage. That way I maximise my sleepful nights and still make more than with TDWaterhouse brokers.
I buy physical from Chard & Co in your town!
Also ebay, thegoldbullion.co.uk [I think] and Baird & Co [London].
I reckon there’s a good chance that the middle east trouble will continue to escalate – causing supply problems to oil. Therefore I think I’ll hang on to the physical till end of next year rather than sell soon.
Also with the 20% tax on silver it’s not worth selling yet….
This blog is the best I’ve come across … and Gary’s some kind of superman character!! Brilliant!
John
“The final leg in 08 the HUI gained 39% (and this was during a period when oil was going through the roof).”
I hadn’t read that, Gary.
I wrote the previous post with the partial view that the continuing rise in the price of oil would be a headwind for the miners.
Indicators are good on silver. It could very well shoot right past fifty to its new stop of eighty five. Getting back in Monday and watch for a couple of days and take some more profits this week or next………
Indicators are good on silver. It could very well shoot right past fifty to its new stop of eighty five. Getting back in Monday and watch for a couple of days and take some more profits this week or next………
I was afraid things would get harder as soon as Beanie announced $36,000 gold. Heavy sigh….
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This comment has been removed by the author.