906 thoughts on “NEW TRADE TRIGGER

  1. bamster

    Gary,

    This is what you said:

    “No this C-wave will end probably by early July. Then the D-wave will begin. Once that has run it’s course then the next ABCD cycle will begin.”

    April 27, 2011 9:47 PM

    This is why I think some people here are confused.

  2. T.J. Rand

    Gary-

    Hope you’re feeling better…food poisoning is terrible. Had it from Chinese at the First Wok in Manhattan several years ago. Thought I was going to die.

    If not, take the time to feel better- you’ve been crystal clear about triggers, miners vs. silver, timing, etc.

  3. bamster

    Thanks for clearing that up Gary. I think everyone is back on the same page now.

    Gary, what made you stick to the original plan to exit silver at $50? I ask becasue you had said maybe you were going to stay with it a little longer.

  4. T.J. Rand

    Why would the Comex raise silver margins 2 times in a week?

    The increased price of silver should account for an orderly increase in margin requirements over time, but twice in 1 week means a)they wanted to break a planned increase into smaller increments, b) facts in the market have changed in the past few days, or C) they are raising the margin rates in anticipation of future price increases.

    I’m hoping it’s B/C – but someone who knows more than I about the Comex might be able to shed more light. In any event, I’ve gotts believe it’s bullish for Silver.

  5. Le Fou

    Gary,

    I apologize for asking while you’re still recovering. I hope you’re back in the pink soon.

    Will you post purchases after the trade triggers fire? In the evening report? Or does it just depend on when the triggers fire?

    Best,
    Le Fou

  6. KAL

    I’ve been listening to SB and what everyone is saying about miners leading the C-wave finale. I haven’t discovered any reason not to invest some of my AGQ in NUGT. Anyone else feelin NUGT for the run-up? Any thoughts on SIL? Seems like SIL would allow some moderate exposure to the metal, as of course SLW also does.

  7. basil

    Must be too early for me. I cannot see any ‘New Trade Trigger’ posting on the premium site. The last posting I see is made on May 28 and Gary says there’s no report. That was last night.

  8. DG

    Gary: Hope you are feeling better. I had food poisoning once—nasty!

    A have a precise question and will try to be clear: It seems to me that if silver will has a horrible day it will come after an exhaustion candle or will have a profit-taking day that gets out of hand (a la 2006). Does that make sense? Seems highly unlikely to just gap open down 10% (what kind of news could there be?) IF one is able to watch the market pretty much tick by tick, and is experienced enough to pull the trigger and get out if profit-taking starts getting out of hand (want to guess who I am referring to?), does it make sense to hang tough with AGQ? I am not looking for guarantees, just positive expectancy. Ii think silver is not close to done, so the only risk is aa huge gap down. Thoughts, please.

  9. pimaCanyon

    Anyone have any comments about the dollar here? New low (slightly) early this morning essentially makes a double bottom with low that was made Wednesday after hours. Moving up strongly since this morning’s low.

  10. ALEX

    DG

    Maybe Gary is away, but I thought I heard him say once that if Silver is down big overnight, you will wake up with a huge gap down in AGQ, and then sell on a panic sell-off.

    I say…”BING” , the captain has NOT removed the fasten seat belt sign, but please…feel free to roam about the cabin-just dont cry if you clunk your head during any major turbulence 🙂

  11. Keys

    DG,

    My biggest worry would be for an event during non-market hours to take place. Since silver is so thin, it doesn’t even need to be a logical event. Some guy sells, that triggers other sells, and you are just stuck gapping with your mouth open waiting to sell your AGQ…

    I am out of silver, as an exception to my turkery rule, due to the parabolic move…burnt once, not again…I believe we will re-visit this level in silver again, so I am not too worried about missing the long-term hold idea.

    I find, IMHO, that the risk reward in silver is slowly narrowing. Getting close to a gamble..again IMHO

  12. Gary

    DG,
    I don’t really expect silver to suffer an 06 moment but I just want to prepared if it does.

    At this point we’ve all made so much money that I don’t have a problem underperforming a bit by holding DGP and GLD calls instead of silver.

    Besides if one wants to increase return just go heavier on the GLD calls and less in DGP.

  13. DG

    Keys (and even Alex), thanks much. Fair enough about gap risk. I will probably just put twice the dollar amount into DGP that I had in AGQ. We have a long way to go and i don;t want to miss the best party…but I also don’t want to bump my head in the cabin (cute Alex.) Gold sentiment is unbelievably muted which tells me there is lots more to come.

    [BTW, in case anyone gets the wrong idea, Alex and I needle each other all the time, and my remarks are meant to be taken in that light.]

  14. Driven!

    If Gary is out of Silver, he will do what he posged in 4/21 write up.

    Question: What percentage will be allocated to each of those two new trading vehicles?

    Are percentages posted anywhere?

  15. 86d4life

    DG,
    Your thoughts seem solid, but you see how wild this silver trade is getting. On the one hand I wish I had more agq for the returns but watching it here the last couple days is like a Dr. Seuss nightmare. You posted yesterday how it`s just going to keep getting wilder. If you can hold on and don`t need the Malox, great! Ultimately, it seems higher, maybe much higher, but at what cost?

  16. DG

    Thanks, Gary. I assume you are feeling better by now. My episode lasted about 12 hours, but man what a 12 hours.

  17. Poly

    My fear are those two looming overdue cycle lows, Gold and Dollar. I’m not comfortable just assuming a runaway. What does that mean? We could wake up in a few week times and gold down over $100 over night, Silver down $10?

    I’m really hoping we print clear lows in the next day or two so we can feel comfortable about the final parabolic cycle.
    The metals feel like they want to breakout and run here this morning and today would be an excellent day to push higher and crack $50 comfortably. Then reverse course mid day, for a two day drop into cycle lows. One can wish.

  18. DG

    Just so people can prepare mentally for the next profit-making opportunity: I will be buying a lot of EUO when this PM rally ends and the dollar bottoms. It is the double short euro. The euro may not even exist as a currency after Spain, Italy, etc. eventually blow up. It is only rallying because the dollar is in intensive care. Once the dollar bottoms I expect the euro to really cave in. I of course will be short oil and Q’s, but EUO will be a great one, IMO. I traded it last big euro drop and it was quite kind to me.

  19. DG

    Elaine: There is a lot of split opinion on GDXJ. GLD (or DGP) has to work if gold rallies. GDXJ…? The miners have been dogs, but Gary expects them to play catch up. I myself will not be buying GDXJ.

  20. Poly

    DG,

    What about the Aussie? That puppy is so tied to commodities and one of the best performing, it will take a huge hit. It’s at $1.09 last I looked, the 1:1 parity was always a parity and it blew right by that.

    Looks like Silver wants to really break free.

  21. KAL

    Can anyone recommend a GLD call strike and expiration?

    How far is far enough in the money? Gary likes .80 delta, right? I guess I can go with that, but expiration suggestions from some of you options wizards would be mui appreciated. Thanks!

  22. ALEX

    DG

    DEFINITELY all in fun! 🙂

    So please stop emailing me all those apologies and offers to “Fly me out to Cali for dinner on you”

    Its O.K, man it’s all good!

  23. Felix

    aren’t there likely a whole lot of triggers set around $50 that will make the switch tricky? Might one do something close-of-day or wait till a steady moment over $50?

  24. ALEX

    DG

    I like that EUO idea, and I was planning on looking into DUG too.I wonder if OIL has a double etf, I havent looked into it (yet)

    And as for Garys comment on the DGP, the volume has REALLY been pouring into it lately, a good sign on the upside.

  25. Hot Rod

    All,

    What happens if i set up a conditional sell order based on SLV and then I get nervous and place another trade to sell – do I need to cancel that one or will it see I don’t have the shares and not execute?

    I don’t have margin and should not be approved to short, I think.

  26. pimaCanyon

    KAL,

    I like Wes’s formula, go with a DITM call where the premium is less than .50. Personally, I like less than .30. You generally have to go further into the money to get less and less premium. So each call will cost more. But you can still end up with a LOT of leverage if you want because with each call you’re controlling 100 shares. If you buy the shares outright you’ll spend 15 grand for 100 shares. Do the math and see how many DITM call options you can buy, even with a premium of less than .30. That’s the kind of leverage you can get if you want.

  27. DA

    I guess as a subscriber, this is one of the first times I’ve been a little confused by what we’re doing here.

    Silver is very overstretched but we’re waiting to wring out a few more % points to hit some magic number before we bail on the metal completely to avoid that potential steep drawdown. Is that not quite an unfavorable risk/reward ratio – why not just move to gold now? But we’re still sticking with lately underperforming silver miners.

    It all doesn’t feel right to me (is that why the strategy will work so well? ha ha).

  28. ALEX

    WMP

    I think they look ok here- but it still kind of bothers me that on a day when gold and silver are both up, they are dull.

    AG hit its 50sma on the March pullback and may touch it again, and GPL broke below its 50, and bounced off of it on the way back up.

    Most Miners dont look broken at all, but for days like this and they are in limbo..its a bit frustrating. I’m being patient until they really go one way or another convincingly.

  29. KAL

    Pima, if I’m doing the math right, that’s some really deep in the money call action… Way deep. Sound right to you?

  30. wmp

    Thanks Alex…bought a little of both yesterday looking for breakouts. I’ve just been holding AGQ and thought to venture out..spoiled I guess, not used to the red!

    Appreciate your help!

  31. Jesse

    Miners should be about ready to take off for the great white north. Looking at my emotions, I have just about had it with miners and am ready to dump them and go all into gold.

  32. Driver

    Re. UGL vs. DGP. UGL’s volume is about half that of DGP, but I just feel more comfortable using UGL since it’s not an ETN…and UGL is ProShares. But that’s just me.

  33. traderlady

    A thought today is “end of the month window dressing”. I think miners may do better as usual in May plus earnings soon. We can hope, out of here 🙂

  34. Dave

    Jesse, I am with you. I have had a large SLW position and have been questioning why I shouldn’t just put it in DGP or somewhere else. Another down day today while gold and silver both move higher. I don’t get it. But, for now I’ll go with Gary’s rec and keep it for a while longer. Surely the miners can’t stay down forever if gold keeps pushing higher.

  35. Poly

    KAL,

    What you’re seeing is an example of why you stick to the front months on DIM’s. If you need more time, you just roll them over later.

  36. jabalong

    Driver, I’m with you in preferring UGL over DGP. Feel more secure in an ETF than an ETN, with UGL ProShare’s gold equivalent to their AGQ. I’ve already taken some positions in it and the liquidity seems fine to me.

  37. KAL

    Thanks Pima. I got it. Don’t want to pay for extrinsic value, but intrinsic value. Thanks! There’s actually volume in the front month, too. Learning alot from you and friend Al Gore’s cool “internet” invention. Good hunting to you!

  38. Tudor

    If you need some comic relief, Kudlow and Kohorts are dissecting silver and gold on CNBC right now. The bimbette just said that there’s plenty of silver to go around.

  39. Poly

    @DA

    “I guess as a subscriber, this is one of the first times I’ve been a little confused by what we’re doing here.”

    Well put, I agree, although I’m not trading that play. Either let AGQ run or get out now. But squeezing an extra 5% out of AGQ is like playing chicken on an LA freeway.

  40. DG

    Been out for a while…

    Poly:Shorting the Aussie would be great, but I trade ETF’s so there is not vehicle for it. I like that idea though (Short some for me when the time comes. Alex will send you some money to invest on my behalf.)

    Funmike: ZSL will work, but silver is a bit hairy and the fundamentals are very positive for it. There will be safer things to short.

    Dude: When Gary gives the call that the dollar has bottomed buy EUO.

    Alex: I am happy to pay for a plane ticket for you to CA. I’ll just reimburse you when you get here. Why don’t you come first class?

  41. ALEX

    JAYHAWK

    For a positive spin on GPL

    It broke down from the triangle, but those can be false moves, ‘shake outs’.

    Then it surged up about 75 cents (17%) in 1 day and hit the 50sma. Its currently pulling back about 50% of that move, to HOPEFULLY make another charge up to and thru that 50sma and above the apex of that tri-angle.

    WKLY, it looks like a good reversal (just like FEB off of that 20sma), needing follow thru next wk.

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

    http://www.screencast.com/t/QXCRGza2

    my first chart was Before the move that we just saw…next wk hopefully finishes it.

  42. Jesse

    Just bought a few more lottery calls, SLW June 45’s, I consider these my “Gary gamble” because he has the patience to believe the miners will perform going forward. Me, I am just disgusted with their performance. This is usually a good combination.

  43. Jayhawk

    Alex-

    Thanks. I have some GPL and will just hang on for now. I can see your view too.

    Posted this on Docs for anyone who cares. Miners-

    To me, it looks like a high level consolidation here on the HUI. The daily decline into March was much more severe, dipping just under a 61.8% retrace of the whole first daily cycle move. We got around 50% this time. I was hoping for a close above this “flag” type pattern today. Could still get it. I think that would mean next week things could improve.
    Flag

    This is definitely a “wear you out” phase for the miners. Those who hold decent positions will soon be vindicated or have egg on their faces.

    I noticed when setting up the fibs, that the price is getting support here on 581 where the previous daily cycle topped and bounced of out of the March daily low.
    581

  44. MG

    On trade triggers, do you guys use the “Ask”, the “Bid” or the “Last” price as the trigger?
    Does it even matter which one to use?

  45. Jayhawk

    Both links went to the first chart. Try again on the Fibs.

    581

    NUGT beat GDX & GDXJ out of the March lows. 2x HUI makes more sense if you want to leverage gold miners. GDXJ has a lot of silvers in there (HUI has some silvers too, but I think GDXJ is heavier)

    NUGT

  46. Le Fou

    (Shh. I’m going to say something out loud to get the PMs moving. Don’t pay any attention.)

    WELL, FOLKS. LOOKS LIKE NOTHING IS GOING TO HAPPEN TODAY. I THINK I’M GOING TO SHUT DOWN MY COMPUTER AND TAKE TODAY OFF. SEE YOU ALL ON MONDAY!

    BEST,
    LE FOU

  47. Gary

    Seriously how hard is this to understand? When silver hits $50 sell AGQ and SLV calls. Then put that capital into DGP and GLD calls.

  48. Tudor

    (Good thinking Le Fou. I’ll help.)

    THAT’S IT. I JUST SOLD INTO THE LAST BIT OF STRENGTH LEFT. THIS MARKET IS GOING NOWHERE. CNBC SAID IT’S A BUBBLE.

    (he he)

  49. Jayhawk

    Look at this sweet head and shoulders breakdown and then back test of the neck line! We should put all our money into shorting this thing!

    See if you can figure out the riddle.

    here

  50. Felix

    OH you mean *sell* “AGQ” when silver hits $50 and then *buy* DGP – I get it now, yes I was using Babblefish before

  51. Wes

    Poly,

    I see no reason to get out of silver. I will monitor my silver crash screen closely if and when the time comes.

    Currently, my silver correction screen is giving the all clear, so currently no need to even watch the crash screen.

  52. Jennifer

    I don’t feel so bad for buying some DGP at yesterdays highs anymore (plus I added the same amount at yesterday’s low, so it averaged out ok anyway)

  53. DG

    Guys: just my perspective, but I don’t see why people are beating their heads against the miners wall. With DGP and options on GLD, what’s the advantage? You can go heavily leveraged without them, and the miners may or may not work, whereas GLD is a lock.

  54. ALEX

    If you have Live charts,

    take a look at 3 day , 5 minute w/ volume charts of EGO, NG , HMY, etc

    Buying is coming in , breaking up over downtrend lines in some cases.

  55. KAL

    Hey Felix, Pima (and Wes) have done a great job giving me info on the right calls to get into. Pima gives a recap a little ways up today’s posts…

  56. Rick 4779

    GLD takes the lead!
    GLD up +0.71%
    SLV up +0.32%

    actually, it was Shalom who said that today could be the day that Gold takes over from Silver.

  57. Gary

    My largest position is still AGQ and SLv calls and once $50 is tagged it will convert to Gold equivalents, but I still want to have some exposure to SLW and SIL.

  58. pimaCanyon

    Poly and KAL,

    If you want to do June instead of July, that’s probably good too.

    Yes, you can get DITM calls in GLD with premium of less than .30. You DO have to go very DITM. However, as I said, you can still get massive leverage with those strike prices.

    Example: July 130 call has a bid of 2115/ask of 2140, extrinsic (premium) of .37.

    So for the price of 100 GLD shares, you can buy 6 calls. That’s 5 to 1 leverage, or 3 times the leverage you’re getting on DGP.

    June’s are even better: 130 call has a premium of only 16 cents! price 2100. again 6 times as many shares with the calls than buying the shares outright.

  59. pimaCanyon

    KAL and Poly,

    My bad, I do think June is probably a better expir. month than July. We don’t need that extra month based on when we expect this C wave to top.

  60. Jayhawk

    DG-

    I’m doing GLD calls, DGP and NUGT as my core strategy.

    The more I look at the HUI, the more I think it is poised for a huge run. I’d like to have 2x HUI lined up now.

  61. pimaCanyon

    Thanks for the update on miners, Alex. I have hung in there but was losing patience, and it was pissing me off to see some of my profit from GLD calls being negated by some of the miners being DOWN on the day! So I appreciate your analysis as always!

  62. Wes

    I have just added the spot metals to my charting software feed. This will include many, many years of history in both silver and gold, as well as other metals.

    So far I have designed my screens for silver from measurements estimated from Stockcharts.

    Now I will be able to refine those measurements.

  63. wingman

    Just catching up here, but Poly, we did print clear lows. A 10% correction is clear. Also, according to Gary in a parabolic move all we look for is a $25-$35 correction in gold to confirm it, which is what we got.

    Also, DG, I couldn’t agree more with your GLD take. About a month ago I made a massive shift away from miners and into SLV and GLD calls and it has paid off handsomely.

  64. Shalom Bernanke

    Well, the reason people buy miners over metal is that miners typically move faster than the underlying metal as they are more volatile.

    There is no guarantee, of course, but to assume that just because silver beat silver miners last round that it will always be this way is a mistake.

    Sure this relationship could continue, but beware of recency bias.

  65. Hot Rod

    Dear Mr. Silver,

    This letter is to inform you that there is a gold party today and it would be greatly appreciated if you could attend.

    Ok to be fashionably late.

    Best Regards,

    Middle Class American

  66. KAL

    Pima, you rock!

    I had already thought through the June/July thing and figured June was better based on the dollar cycle. Thanks for confirming. I think I was looking at June 132 and June 134, so looks like I understood you right. Thanks again for taking the time to explain!

    I don’t have a huge taxable account, most of my investments are in my IRA’s. Will start converting to Roth this year, but with all the money Gary is making us, I may never finish! Haha.

    The smaller taxable account keeps me honest with the money (no margin/calls/silly moves in the retirement funds keeps the wifey more relaxed!). So, I will use those good delta, low premium calls for the taxable account to maximize leverage, and stick with DGP, SLW, etc. in the IRA’s.

  67. Edwin

    just watching from the sidelines and seeing the positions rise.

    wow europhoric buying for the metals..

    now the miners, oh man no love
    but you know what that means. it’s time to BUY!

  68. Michael

    Gary,

    Isn’t it risky to put more than half of your portfolio in to options? I realize that you will buy the same $ amount as you would buy calls, but don’t you still get more risk with the options?

  69. Wes

    I’ve given miners some thought and my current plans are to pass on them. I can get all the leverage I’ll ever want from basic options.

    As for mining fundamentals, if your cost of producing gold is $500, you get great leverage when gold goes from $600 to $700. But not much happens when it goes from $1600 to $1700. Seems to me the returns are always diminishing.

    Basic options are much simpler to acquire skill in than are picking miners, IMHO.

  70. Michael

    “who was the poster who said a few weeks back gold was going to 1550 on this move before any pullback. Slumdog? “

    I bilieve TG called a $50 move towards the end of the week. The guy rocks!

  71. pimaCanyon

    You’re welcome, KAL.

    The caveat I should have also posted is that leverage goes both ways. I myself am not comfortable with massive leverage, so I use the calls to give me the exposure I want and still leave cash available in my account. I believe Wes has said that he does this also.

    One way to figure your exposure is take your account balance and figure out how many shares of GLD you could buy. That’s 100 percent with no leverage. Double that number to get how many equivalent shares you would be controlling if you were in a double long etf like DGP.

    For me that double long exposure is enough leverage and I personally don’t want to go deeper than that.

    So if you want the equivalent exposure of being fully invested in your account with DGP, then just buy the correct number of DITM GLD calls to give you the control of that many shares. When you do this, you’ll have cash available in your account which is always a nice thing.

    You can certainly make more if you go with higher leverage, but you also amp up the risk.

    Good luck. I hope you (and all of us!) make a ton of money here!

  72. DG

    SB: That’s fair, but for myself I really hate being right on a prediction and losing out because I chose the wrong vehicle. I do expect the miners to catch up, but by far the bulk of my account is in AGQ and now DGP (I have a little GDX), but I am happy to take the sure bet and eschew the maybe-a-little-better one.

  73. MG

    Gary, on this trade trigger, do you guys use the SLV “Ask”, “Bid” or the “Last” price as the trigger?
    Does it even matter which one to use in this case?

  74. pimaCanyon

    I know there are a lot of EW haters out there, so don’t read this… 🙂

    The move up from the Tuesday morning low on the 30 min chart has the look of a classic 5 wave up EW pattern. We’re in the 5th wave now and it looks like 5 of 5 is playing out.

    EW would say after 5 up, we’ll get a pullback to somewhere around 38 to 50 percent of the move up. That would be into the 1520 – 1525 range, which is also in the range of the 4th of the 3rd, another common retracement area.

    That would give us another buying opp.

    The caveat (and those who hate EW already know this!), is that that possibility is just that–it’s only one of several possibilities. The current wave up could extend before pulling back–that’s another possibility.
    Or, the move down into the 1520-1525 area could happen, but that move down might not stop there.

    However, if we do get that kind of pullback, I plan to pick up a few more GLD calls there.

  75. hantek

    If you haven’t already seen this on IBD:

    “The reason you don’t see miners going up as fast or equal is due to their rising input costs, issues with geopolitical unrest globally and the talk of many nations looking to tax the mining operations in their countries as well as management and environmental setbacks,” says Terry Sacka, chief strategist at Cornerstone Asset Metals. Input costs include fuel for diesel-guzzling hauling trucks, electricity, ammonium nitrate used in explosives, machinery and workers.

    http://bit.ly/lT33dn

  76. pimaCanyon

    MG,

    I always use last, but it probably doesn’t make a whole lot of difference on something that has tight bid/ask spreads (1 cent!) like SLV does.

  77. KAL

    Thanks Pima. I sorta had come to the conclusion after reading your posts, as well as some other more experienced people on the board, that having some cash on hand is nice.

    I figured to do just what you said… Figure out how much DGP I would have held, say x shares, and then use the GLD calls to get an equivalent amount of leverage to match it. Maybe go 3 x GLD (1.5 x DGP), or something like that. But then, I’d also have cash to hold on hand. Great info… Thanks again.

  78. DG

    Interesting quick stat from Jason at sentimenntrader.com:

    This is 4th time in 30 yrs that US Dollar fell 8 days to 52wk low. Others = quick rally, then lower low (10/25/04,4/19/07,3/6/08).

  79. MG

    Thanks primaCanyon
    That was my thought as well, just wanted to double check how you guys use the trigger in this case

  80. YesLetsDiscuss

    pima,

    “the upper channel line on gold has been limiting its advance since Wednesday’s after hours trading”

    How have you drawn that channel? The way I have drawn that upper trend line is connecting highs on Apr 18, 25 and 27. Gold, today, has already broken out, tested it back and then off higher.

  81. Poly

    Just love this gold action, sure getting a sense that sentiment is slowly switching over.
    If we’re in a runaway and just a matter of 3-6 weeks from a C-wave top, then we could expect this action to the top without another real daily cycle low. Fear of losing such a trade has me getting in on some more OTM’s to capture a blow-off, without too much capital.

    Purchased 200 x MAY GLD $160 @ $0.28

    Doubling up from few days ago, another 100 x JUNE GLD $160 $1.08 (now hold 200)

  82. Ryan

    I have a bit of a dilemma here. Do we have any currency experts or Canadians that can answer this question. If I’m planning on switching out my silver for gold. I’ll mainly want to put it in DGP and I know I can use HBU.TO but it’s volume is anemic and if I wanted to get out fast I don’t think that’s going to happen. So that would mean I would have to do a large currency exchange from CAD to USD and I’d hate to lose out if I convert back to CAD when we get out for D WAVE. Right now we’re sitting at around 0.95, any guess how low it can get? I’d just hate it if we went to 1650 gold that’ll be 12% gain in DGP and then I’d lose another 5% on currency exchange if we go to 0.90 USD/CAD. I know I can just keep some of it in USD but I will need to exchange a lot of it back to CAD.

  83. DG

    86d: Not sure what you are referring to. I rarely make day-to-day calls and do not remember saying there would be a quick rally in gold. Sounds more like a TZ thing…?

  84. YesLetsDiscuss

    Ryan,

    I’d say you convert now, ride the C-wave. USD will be at the lowest point at the end of the C-wave.

    However, D-wave will take USD much higher – much beyond what it is right now. You convert back to CAD at the end of the D-wave for a nice bonus.

    You get to play it both ways.

  85. Natanarchist

    YLD…crimex delivery day for Silver…got to keep the price low, its a recurring pattern. No worries. its all good. If Gold stays here, silver will get over 50 next week.

  86. Ryan

    YesLetsDiscuss,

    Thanks I think I’m going to go that route too. I can probably hold out until the d wave is over before I need to exchange a lot of the USD back to CAD.

  87. ...at ease

    Have a question for those who use options frequently. I hold a large amount of DITM GLD July options, how long do you hold them, to the top?… or do you take profits along the way and buy into GLD or DGP to lower the risk level as we get further up. I would sure hate to see these profits gone on a drop or cycle down. Just getting nervous already, so need to know what is best plan to proceed as we go.

  88. MrMiyagi

    Ryan,
    That’s just the way it is my fellow Canuck, however, the US$ will go back up at the D as was pointed out.
    Even if you lose 5% in the conversion, you should be making up more than enough for it on the C ride.
    I will leave all the converted funds into my US margin account and transfer back only when the exchange is favorable or I have to pay CRA, whichever comes first.

  89. Moneyman

    I have 70% silver and 30% gold in my portfolio..Today gold is showing some strenght.

    Will it be like this the last week of the C-wave or will silver soon gain strength?

    Im guessing that gold will move stronger for now but I think that silver soon will move hard and fast. Just a matter of time! I think that 50 in silver will be crushed easy!

  90. pimaCanyon

    YesLets,

    Yeah, gold has seriously blasted thru both upper channel lines of both channels I had drawn (one steeper than the other, the less steep one going back further in time)

    Poly mentioned that if we do indeed go parabolic (seems like we have), then we would expect gold to blow thru its upper channel line.

  91. Moneyman

    Mr Miyagi

    Yes it is but if this will continue theres no reason to be in silver anymore..

    But my main scenario is still that silver will soon move hard upwards..

    But I think it was 2006 when silver didnt move that much after a big correction. Wonder if this will happen again..

  92. pimaCanyon

    atease,

    I’d say it would depend on the amount of leverage you’re carrying. Lots of leverage, you might scale out little by little. I believe Poly has said that he does that.

    But if you’re at a leverage that’s comfortable, you could just hold till we have signs of a top. I believe Gary is looking for something north of 1600.

  93. Moneyman

    But ofc if you switch to gold now and sell your silver..Boom silver will move fast and hit 51-52! 🙂

    Always like that..When you try to get greedy it slaps you in the face.

  94. DG

    I have more in gold than silver now, and while it looks especially good today I believe silver will have one more frantic rally to suck in the last buyers. Just doesn’t feel like we have done enough yet. And gold has quite a bit more to run IMO. It should easily surpass $1650. We need some big headlines for me to even consider the rally close to over. We’ve still got a month before the dollar bottoms!

  95. Tudor

    The gold/silver leapfrog game is fine, but these miners better get their act cleaned up. They are seriously messing with my plan to rule the world.

  96. David

    At some point the buying will become indiscriminate. Probably after the $ breaks to all-time lows.

    Everything will move without rhyme or reason.

    So worrying about underperformance is a waste of time.

    Get long. That’s all you need to know.

  97. Moneyman

    DG

    Yes nice move in gold but I also think that silver have one more gear left..

    Also think the strong move in gold will drag silver towards 50 and beyond. 🙂

  98. pimaCanyon

    Silver:

    50 has been resistance all week. We essentially have a double top, last Sunday night and yesterday during normal trading hours. The next time it bumps up near 50, it should break right thru it.

    Lots of folks are looking at 50 as a possible top. I’m thinking once it hits 50, it could keep on going, maybe just explode higher and end up at 60 in a week or two.

  99. Peter

    Ryan … re Canadians and the exxhange. This is the way I play it … I have a CDN account, full of cash .. i have a USD margin account. I purchase my USD stocks on margin … so, yes, there are the carrying costs, but you dont have to worry about losing on the exchange rates.

    Noted a few comments about miners and input costs … OIL, etc … can someone smarter than me then elborate on how those inputs impact a stock like SLW.

  100. Poly

    Pima, thanks! Even I know I’m just streaking. Plus the OTM’s can turn on a dime, worthless until cashed, but off to a good start.

  101. Trader H

    hey guys,

    i was just wondering if you guys can tell me how I can calculate in percentage terms, the current price relative to the 200 or 50 dma?
    Gary mentions that for ex. silver or gold stretches 100 or 150% from the 200 dma moving average before a top, how does he calculate that?

    thanks

  102. Moneyman

    Pima

    I agree with you.

    When it pass 50 I think it can move very fast to 53-55..Probably to 60..

    How long will you keep you silver?

  103. MrMiyagi

    Trader H,
    On any chart plug in the DMA you want, look at the price and the price that the DMA touches.
    Then, now price divided by DMA price.
    Example, price 48.55$, DMA price 33.22$. 48.55/33.22=1.4614 which is 46.14% over the DMA.

  104. Tudor

    He he. My beard is quite impressive, is it not? Banana Ben has nothing on me, either facially or intellectually.

    My previous avatar was the great libertarian anarchist Murray Rothbard, one of the founders of the Libertarian Party, the Cato Institute, and the Mises Institute, and maybe the greatest economist of the 20th century. (Although I’d not like to have to choose between Rothbard and Mises.)

    This fine fellow is 19th century anarchist Lysander Spooner. Everything you need to now about his views is summed up in this short passage:

    “But this theory of our government is wholly different from the practical fact. The fact is that the government, like a highwayman, says to a man: ‘Your money, or your life.’ And many, if not most, taxes are paid under the compulsion of that threat. The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful. The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a ‘protector,’ and that he takes men’s money against their will, merely to enable him to ‘protect’ those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will; assuming to be your rightful ‘sovereign,’ on account of the ‘protection’ he affords you. He does not keep ‘protecting’ you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villanies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave.”

    If you like that, here’s a page full of good stuff from Lysander: http://tinyurl.com/27g4nko

  105. fubsy_cooter

    Hey Folks
    Getting my first chance to check in this morning..on vacation in AZ with the in laws.

    I shifted for silber to gold last week on the overnight spike in Silver to 49.50. I got out in the premarket.
    Sold SLV at 47.20. Anyway, my experience has been a slow, but staedy uptick in DGP. I also hold GDXJ in mt accounts and GDX for my parents. These have been less steady, but generally up. When last I looked this morning gold was a bit stronger than silver. A one day sample is not significant, but it is the first time in recent memory that this has happened.

    Anyway, I have let go of AGQ expectations of 10 percent moves daily, and am content to ride DGP while this final phase unfolds. I expect that DGP will offer 3 to 5 percent moves with increasing frequency over the next few weeks. That’s sweet in my book.

    DG, EUO will be aparty boat when the D-wave leaves the dock.

    Back to the in laws and desert sun.
    Sorry bout typos in advance. On my bb.
    f

  106. T

    Trader H – to calculate how far above a moving average the price is, follow this formula: take current quote, divide it by the moving average price, subtract by 1, and multiply that by 100. As an example, say the current price is 150, and 10-day is 100. 150/100=1.5. Subtract 1, then multiply 0.5 times 100, and you get 50%. 150 is 50% above the moving average.

  107. Trader H

    ok, so for ex. gold is at $1560, the 200dma touches 1355. when i divide that it comes out to 15%. is that right? seems like a low percentage to me

  108. KAL

    DGP has now caught up to AGQ’s action for the entire week. Quick move there. And USD hit a new yearly low roughly 45 minutes ago.

  109. pimaCanyon

    Moneyman,

    I jumped the gun on Monday morning. I took Sunday night’s print of 49.82 to be close enough, so sold all my SLV premarket Monday morning, and SLV calls at Monday’s open. Put the proceeds into GLD calls.

    If I still had silver, I would probably switch some when it hits 50, but I would hang on to some as well.

    In fact, maybe I should pick up some DITM SLV calls as we speak….

  110. Hot Rod

    I just liquidated all my AGQ and SLV options. I couldn’t take it anymore.

    FOR ALL YOU NEWBIES (including myself) ESPECIALLY THOSE OF YOU THAT WANT TO LEVERAGE WITH OPTIONS….

    Listen very closely to the advise from the experienced traders on the board!!!! I can’t stress this enough.

    I placed my first option trade ever last week and I have been out of my mind. I had no idea what I was doing. It started with an innocent DITM SLV call and I exploded going way out to SLV 60, 55, etc.

    Another bit of advice – make sure you know your broker’s maximum online option trade contract limit. Fidelity is 200. Also, make sure you watch open interest and the volume that sits on the bid side (before buying).

    It was super annoying where I had 350 contracts to place multiple orders and keep editing my order to get filled quickly.

    The only position I held (and have now) are my GLD Jul 150’s – on fire today.

    I’m still trembling.

    Now, time to regroup and figure out what to do (if anything) with the massive dry powder.

    No way in hell I put that big of a percentage into OTM lottery plays. I was extremely stupid and lucky to have still made on them (well I lost about 15% on the last set but more than made up for that with others).

    No way in hell I take a position more than 200 contracts at any given strike.

    Lessons learned. Let’s turn the page.

    P.S. – Just because you buy further OTM doesn’t mean it moves faster as the derivative moves up. Yes, they will have that day where they “pop” but small little moves don’t do crap. The at the money or DITM ones move just fine.

    P.S.S. – Think about it, newbies. GLD 150 July is up 27% today. That is plenty of leverage.

  111. pimaCanyon

    Hot Rod,

    Great story. Good info for newbies and oldies alike. I love the DITM’s but haven’t done volume on OOM or ATM calls yet. I agree with you that (at least for me) DITM’s provide plenty of leverage, especially on something like GLD where the share price is so high.

    Glad to hear you did so well on these guys. AND you learned what’s comfortable and what’s not without having to pay a huge tuition price for that lesson!

  112. T

    Hot Rod – most people new to options learn a lot about them by losing money with them. That’s certainly how I learned… Gary’s use of options is the only way to play them without them becoming lottery tickets. Interesting options fact – 75% of options expire worthless. It takes time, and newbies should be EXTREMELY cautious with them if played outside of Gary’s (or a VERY experienced option trader) instructions. Trade what you consider money that can be completely lost. Also NEVER EVER sell to open PUTS – loss potential is technically INFINITE.

  113. DG

    Hotrod: Boy are you lucky to have gotten out alive! I have seen many accounts blown out that way. To have (hopefully) learned that lesson without blowing your account out is a great gift. (I blew out $600,000 in 1983—what’s that $3 million today?—and it was actually worth the tuition, but nice not to have to!)

  114. Poly

    Hot Rod,

    Good post. OTM’s are worthless and will likely expire worthless, it must be played that way. My open OTM trades are no more than 3%, they must remain a small trade relative to capital. That’s also aggressive for me right now, but only because of a possible blowoff.

  115. Ben

    Hot Rod,

    I decided to execute my first option order this week, but it was just two calls. I’m just getting the feel of options so I can buy a few ditm puts for the D wave, just a very small percentage of my PF. And then in the next A wave perhaps I step in a little further, keeping my overall leverage no higher than 1.5x same as now.

  116. DG

    Eamonn: Yep. A young hotshot in the business. Corner walnut-paneled office, expense account, etc. After getting my Series 7 license I turned my original $30,000 stake into $600,000 in five years. Options, leverage, the whole bit. Basically didn’t make a bad move for five years. Stayed short at the bottom in 1982 and blew out the whole account. Oops.

  117. Hot Rod

    All,

    Thanks a lot (again).

    I got very lucky on the run last week from $44 to $46.50, on my decision to load up just prior to the FED meeting on Wed and then the rebound late this week.

    Seriously, this is like playing in a casino.

  118. ...at ease

    Pima Canyon, I am 75% in GLD DITM Calls.So might need to take some profits off the table today and move to GLD/DGP. Thanks!
    Or any other ideas. I can see now why Gary says, things get scary when you start seeing more in your funds than you ever have.

  119. gold silver troll

    gold is up 1.6% and GDXJ up like 0.5%

    it should be up like 4%. Something wrong here

    I’m going all into metals 🙂

    Like DG says, that’s the guaranteed bet

    good luck all

  120. Poly

    I’m feeling “partly” responsible for possibly fueling some speculative options here. SORRY. Please guys, take it easy. Deep, deep in the money only, with only a portion of funds!

  121. T

    I used to follow Jim Sinclair for years, spoke to him on the phone, even live near him, but as time went on, I came to think he was crazy… crazy like a fox! Although he is crazy… I do think though that one needs unmovable conviction in trading the markets, and Jim has just that…

  122. MrMiyagi

    Gold has been lagging silver for a month now, silver attempted the 50$ range and has gotten a bit shy.
    It is my opinion that it will follow gold and therefore this move is not surprising.

  123. pimaCanyon

    Poly,

    I think you’ve been very clear about which of your options buys you consider lotto plays.

    I have been tempted, but haven’t jumped yet. Not sure I will, but if I ever do, it will be at a clear IT or daily cycle low, AND it will be with no more than 1 percent of my account value.

    Your posts on DITM calls on SLV have been extremely helpful. Because of those posts (and the wheels in my head doing a little turning), I made more $$’s using DITM’s on GLD and SLV than I would have had I traded options.

  124. ddn3f

    The $50 is a huge psychological barrier. We can’t expect $50 to be broken so easily. That’s the all-time high for silver. So give it some time, let silver base a little and gain energy to break out of what is the largest resistance of this bull market.

    But like most people say, when you break these old highs, the sky is the limit and things will move quickly.

  125. mdsn

    What a great educational seminar here today! Thank you very much all who are offering experiences and opinions.
    Would any or all offer your thoughts on futures versus options?

  126. Ryan

    MrMiyagi,

    Thanks, I guess that’s the price we pay to trade on NYSE. Do you trade anything on the TSE? I just wish HBU.TO had more volume and doesn’t flat line so much or I’d be all over it. I’m in HZU.TO and it’s been pretty good compared to HBU.TO.

  127. DG

    YesLets: I wound up leaving the business and moving to CA. I am absolutely delighted how everything turned out, but of course at the time was devastated. My wife of three years and I were close then (still are!) and took the whole thing as an adventure. You can do that when you are 26. I built it back over years, but the lesson has stuck. Hard to say how long it took to recover emotionally as these things happen slowly over time. After a while I could see it was time for me to leave that business and this was the only way I ever would (it was too much fun). As I said, what i have now is a close to perfect as one can get, so all for the best.

  128. chrisb

    Ryan…
    I agree with what the other canadians are saying about CAD & USD. I suspect the CAD will gain a few more % points against the USD, but the USD will come back. you just have to be patient, and exchange your funds when it makes sense to do so.

  129. MrMiyagi

    Ryan,
    I do trade on the TSE although not as much recently.
    My favorite moneymakers are RY, BMO, ATD.B, ECA, ABX mostly day trades or overnight holds (buying at day end low occasions).

  130. Eamonn

    DG: “I am absolutely delighted how everything turned out, but of course at the time was devastated”. I’ve been there too in my life. Strange how things turn out for the better

  131. ALEX

    Blogger DG said…

    YesLets: I wound up leaving the business and moving to CA.

    Did they ever find you yet , Jimmy? OOPS, I mean ‘witness protection person #33867-DG’?

  132. Ryan

    Peter,

    Thanks for the suggestion but I don’t know if I want to do that. TD sucks and I think the margin is 4%. I think I’m leaning on taking my chances with the exchange hit and then sit and wait until it’s a favorable rate and change back to CAD.

  133. YesLetsDiscuss

    DG,

    Glad to hear that. Thats a great experience building and shaping lesson. Of course, where you are at the moment, it all turned out very good. Great story.

  134. MrMiyagi

    RYan,
    Also, when you sell off at the top of the C-Wave, the US$ will be a lot lower and when you report it on your taxes the conversion rate will be lower, in effect you will make money on the transfer back to C$ which is not reported anywhere…. free money? Just about.

  135. Mike

    I got lucky this week. I decided to implement Gary’s plan earlier on Sunday evening. Sold all silver Monday at the open after it neared $50 in overnight trading (I figured it was close enough to Gary’s mark and DOC’s report scared me off silver too). I switched to the yellow metal 1/2 before the Bernanke speech and 1/2 afterwards when it was clearly skyrocketing back up. I had a weird feeling Tuesday might be all the selling we got for the daily cycle.

    I’m now 50% DGP, 10% GLD calls (June $147), 5% SLV calls (June $42 calls), and 35% cash/dry powder. No more miners for me. I may acquire some if they can prove to me they are really getting into gear. I went a little more agressive with barely ITM GLD calls to get a little more leverage.

    Now I’m officially on the yellow brick road…so far so good!

    Anyway, just wanted to share this as this seems inline with what I interpreted as one way to implement Gary’s plan to reallocate from silver to gold.

  136. pimaCanyon

    Anybody getting nervous that we might be having a blowoff top here? As in TODAY, a blowoff top?

    Not THE top, but a top from which we’ll retrace 30 bucks or so on gold?

  137. pimaCanyon

    To alleviate my own nervousness, I took a look at SoS list for today. NOTHING on there that relates to PM’s. IMO that’s a good sign for continuing UP.

  138. Slumdog

    Jayhawk: “who was the poster who said a few weeks back gold was going to 1550 on this move before any pullback. Slumdog?”

    Yep, front and center.
    The exact target was 1547.10 equal to the 1X monthly high low spread against a repudiation of a monthly DSI reversal pattern. The pattern failed in March. In Feb, I started to call for a major move imminently, up or down, with the high probability of “up”.

    There are more targets. They are lower probability but still way above a 50/50 coin toss.

    The next targets are between 1600 and 1770 top.

    The max rise against this repudiation over say 5 months will be 2050-2100. That’s the max top, as in MAX. Whatever it does in that range is the end. I can’t see how these end, but I can see probable move ranges.

    The lower end would be a foreshortened 1.25X, which I doubt, around 1580, or more likely, 1.8xX which will be 1625 range. So Gary’s 1650 is well within that fib-influenced next target area. Beyond that are all the low to high 2X moves.

    X= 113 pts.

  139. Slumdog

    If today is silver’s response to the MSM pan, then that’s great. Get rid of the newbies and let it make its climactic move.

    As long as SI is below 130, the few oldsters here still holding from 1980 have lost money against their high entry on those last fateful days.

    When SI is at 130, we will be at an equivalent high, and there’s no reason we won’t see serious profit taking there, as in big time.

    And gold still owes us right to that 6X number, 2100, for us to see inflation adjusted value return to gold, back to its 850 prior high.

    Gee, Jim Sinclair must feel a bit more vindicated today. Jim has steadfastly taken more heat and stood up again and again. He’s a smart man when it comes to gold.

  140. pimaCanyon

    yeah, when it rockets higher, you know it will fall back to earth FAST once it tops out.

    BUT… maybe it plunges a bit, then consolidates and then more upside? That’s why it’s tricky as hell to try to play the wiggles.

  141. Hot Rod

    RSI on the 5 minute chart for Gold is now oversold, a technical entry point for Gary.

    Not sure if I am ready to start my deeper gold play or if I will wait until Monday.

  142. Poly

    Pima,

    I guess we are to expect more and more of it. Getting to the top of a c-wave wont be an easy buy and hold 🙂

  143. Matt

    mdsn,

    Futures are not for the faint of heart. Futures provide the ultimate leverage where you can control 100 oz of Gold with one measly contract that costs $6k. Options, although contain leverage; there is much less risk because all you sacrifice is the price you paid. With futures, without tight or reasonable stops, an account blowout is always right around the corner. Like today, Gold gave me a new car on just a few contracts, but my car could have been easily repossessed if Gold decided to go to $1500. Entries and exists play a huge role with futures, not to mention account size. Struggling through a daily cycle low is often difficult. I am not trying to scare you, but it has taken me years to build up the mindset to be successful trading futures. I have had at least three account blowouts before I got my head around it. The good thing is – I don’t have to worry about those miners or any other symbols except DX, GC and SI.

  144. Arun

    Futures are even higher leverage than options. The losses I incurred last 2 yrs paved me a way to be cautious with position size n entries this time around. Really paid off all those loses and a lot more.

  145. Glen

    MDSN,
    With futures, it’s up to you how much leverage you have. You can trade with 1:1 leverage if you want. You are in complete control of leverage.

    Futures have tax advantages, too.

  146. n1tro

    Matt,

    What kind of car could gold futures gotten you today? Hyundai Accent fully loaded or we talking cars with bulls and horses decorating the hood?

  147. KAL

    Jayhawk, guess I haven’t been paying attention! Kinda glad I picked up that SLV call at $47 since I probably would have been afraid to touch it soon after that during the dip.

  148. Matt

    @n1tro,

    LOL. I need one more day like this and I will get myself a big fat solid gold bull as a hood ornament for my fully loaded Hyundai Accent. I can see it now…

  149. Jayhawk

    I think it was Brian who brought up the fact that the dollar is not even sold off to oversold levels yet as it has done in prior years. (On a monthly basis).

    Here’s the monthly RSI 7 for $DXY

    DXY

    Has not even dipped under the 30 line, yet alone plunged into the depths like 2003-2005 & 2008.

  150. Jayhawk

    That chart was RSI 10. You get the drift…Pick your fav RSI and monitor the all time lows on oversold months in other plunges and we may be able to help pick out dollar low.

  151. 86d4life

    Jayhawk,
    Really great chart. Thanks. That really paints a bleak picture for the greenback. It`s like the more I look at it I wonder why gold would stop at 1650.

  152. Poly

    Great charts Jay. From the 10 yr monthly view, you really see how easily it could dip well below that last 3 yr cycle low. The long term cycle trend is down. Throw in that we’re not oversold, rounds of QE and debt concerns, it’s easy to see a coming bloodbath.

    Have a great weekend all. (Interesting gold/silver divergence continuing after hours)

  153. Driver

    N Boy,

    Something is wrong with that # – maybe 1 too many zeros. Also, the Qs are showing up on the BoW list. Doesn’t make sense.

  154. CouldNotResist

    Nike, AAPL OBV did tage the 10 day average, but it is fine now. We really don’t get excited about volume anymore in these days of forever-volumless trading.

  155. mdsn

    Thanks for the futures input guys,
    Matt, congrats on the Hyundai Accent today!
    My first go round with futures BG (before Gary) I lost a Bentley lol What a lesson that was….

  156. Jayhawk

    86-

    Thinkorswim, my broker. They have Prophet Charts too, which I like.

    Here’s the weekly death channel we are in. Notice the MACD histogram is not even that far down yet.

    DXY Weekly

  157. GKC

    Guys I think part of the silver weakness is another CME margin hike, the third this week! and the big money flow in AAPL may be related to the NASDAQ Index rebalancing that occurred on the close today, been a great week I just signed up with gary recently and am darn glad i did!!!

  158. Poly

    Wow Jay, death valley there.

    Notice the 2006-2008 channel? Not as steep, but it eventually broke the channel to the downside on the final collapse.
    We might be due for a quick dead cat bounce, but there is no way this baby is avoiding a 6 handle, IMO.

  159. Poly

    $30 dollar up day on the heels of a $20 day.
    The markets “pack of wild dogs” has found the stench and it’s the dollar, they all now its in free fall.
    Gary could be spot on here with the runaway call. The gold/silver (temporary) divergence lends support to this arguement, IMO.

  160. wmp

    Jayhawk,

    Those really are great charts..I did the same RSI for /SI on the monthly..I’d post it if I knew how. Take a quick look at it? I’m not familiar with RSI but, where the dollar looks like it has a comparetively long drop ahead vs 2008, /SI doesn’t look to have anywhere higher to go. I’d appreciate your read.

    Thanks!

  161. 86d4life

    Jayhawk,
    Thanks again. I use fidelitys active trader pro and their charting packages are definately lacking, so I wind up bouncing around trying to find all the info.

  162. Jayhawk

    I’ll check it out later, I shut down my computer.

    RSI is just a tool…Like any of them, you can still have prices rising even though it’s says over bought on RSI. Matter of fact, often you will get a divergence (Higher price, lower RSI value or MACD value.)

    Back of the envelope math on HUI intermediate comparison last Fall to this one. (Rough numbers)

    First 2 & 1/2 months it did around 100 pts or 23% ish. The last month and a half it added on 100 pts or around 20% or so.

    This cycle’s first 2 & 1/2 months we added on 114 pts or around 20%. Starting from where I think the final month or so will launch from (570 or so), 20% will get us to 684.

    With what Gary’s expecting, I would imagine 25-30% move on the HUI getting us to the 712-742 range. NUGT would do 2x this. Food for thought.

  163. GottaHaveIt

    Poly,

    Do you use stop loss orders on your options?

    The GLD options you bought are skyrocketing, but I’m sure they can go down just as fast.

    How do you protect yourself against taking losses on your options?

  164. Le Fou

    ALEX,

    I still like EXK for a good pop up, perhaps around earnings on my birthday, May 5.

    http://screencast.com/t/ohj9Ho537G

    Tuesday, April 26, 2011

    News Release

    Endeavour Silver to Release First Quarter 2011 Financial Results on May 5, 2011, Conference Call at 1:00 PM EDT on Same Day

    Vancouver, Canada – April 26, 2011 – Endeavour Silver Corp. (NYSE:EXK, TSX:EDR, Frankfurt: EJD) plans to release its First Quarter 2011 financial results on Thursday May 5, 2011 prior to the market open.

    A conference call to discuss the results will be held at 10:00 AM Pacific Time (1:00 PM Eastern Time) on the same day, Thursday May 5, 2011. To participate in the conference call, please dial the following:

    * 1-800-319-4610 Canada and USA (Toll-free)
    * 604-638-5340 Vancouver
    * 1-604-638-5340 Outside of Canada & USA
    * No passcode is necessary

    A replay of the conference call will be available by dialing 1-800-319-6413 in Canada & USA (Toll-free) or 1- 604-638-9010 outside of Canada and USA. The required pass code is 4890 followed by the # sign.

    ENDEAVOUR SILVER CORP.
    Per:

    /s/ “Bradford J. Cooke”

    BRADFORD COOKE
    Chairman and CEO

  165. Aaron

    Im not sure if this has been posted. I dont trade silver, but my broker (rather large brokerage firm) just informed me that they have increased their in house margin requirements to 24k-ish.
    Next week could be lethal for silver.

  166. Shalom Bernanke

    That would be interesting if true, and might explain the recent silver miner performance, as well as gold up big today with silver down.

    Who knows? However, I am sure both metals will let bulls out at prices better than today, even if we have to go lower first.

  167. Poly

    Gottahaveit,

    That’s where Gary is key! That’s why I buy at the cycle lows and them hold e whole cycle, building a bigger and bigger position as the cycle proves itself. By the 2nd half of cycle you have to start scaling out, just as others see the move and start buying in. So no we use the backing of the cycle low to protect us and stay firm during drops. We watch out for failed cycles, which is why we don’t buy e whole position at the low.

    This last purchase is unique in that it was purchased on the back of the “runaway” call. So we need to be careful, but also flexible. If this is a runaway, it will be turbulent. Fortunately, those options are already very deep in the money.

  168. Driver

    Jay,

    I just saw your dollar chart with the downward channel. (Out hitting balls.) You can just as easily slope the lower line to be less steep and have yourself a downward wedge which is bullish.

  169. James

    “Next week could be lethal for silver.”

    That news was out yesterday, and was confirmed this morning, so it’s already priced in.

  170. Slumdog

    This man deserves so much credit for stating a vision that few had the willingness to state, for nearly a score of years.

    To Jim Sinclair, whose humility and quiet strength has guided and rescued probably tens of thousands of people worldwide.

    I am one of those. In 2005, when I was “alone”, the internet provided my first and only access to a man who saw the future as I did. He not only ratified me but continued and still does so to stated repeatedly his simple truth, that fiat would be exposed for what was happening to it by political and economic players who understandably are self-serving.

    And today he posted this:
    “Posted: Apr 29 2011 By: Jim Sinclair Post Edited: April 29, 2011 at 6:55 pm

    Filed under: In The News

    My Dear Extended Family,

    Gold at $1650 is in the basket. Formational breakouts are selectively happening in some precious metals shares.

    I think I will celebrate by taking a nap, wake up and go with the kids to a traditional Italian restaurant for a bowl of wonderful pasta.

    If JSMineset is a tad thin tonight know our hearts are full.

    You are all protected from conditions over which you have no control. Your success is my joy!

    Regards,
    Jim”

  171. n1tro

    I think once these negative on silver articles stop and focus on how gold is parabolic and should be shorted, we will see our silver rise along with gold. Given the cycles, I would guess we see silver move with gold come end of next week or beginning of week after. Gold can’t go to $1650 and silver hover around $50.

  172. GottaHaveIt

    Poly,

    Thanks for the response.

    I’ve copied you on a couple of your option buys and we are doing VERY well!

    I’m watching them like a hawk and I hope you will post when you sell your options so I can follow along with your sell orders as well.

    But as you and others have said, DO NOT just copy somebody else’s option purchases unless you know what you are doing and are willing to accept the risks that go along with them!

    I’m new at options trading, but I know the risks I am taking and I am prepared to lose 100% of the money I have invested in options if they go wrong.

  173. Razvan

    all these margin hikes is seriously cutting into my margin profits!! Good thing i had a gold position today or it would have been a bad day for me. I already have high blood pressure,i dont need any additional stress.

    Once we clear these weak silver longs then we will be off to the races again and adding another $20.

  174. Poly

    Gottahaveit,

    I will try my best to post. But just stay small size and don’t get greedy and add more. Yes you will see double digit down day sooner or later on each of those positions, you need to ignore. If this market unfolds remotely close to what we expect, they will do more than well.

    I’m clocking off for the weekend. Later.

  175. Razvan

    Poly , what i meant was that today was supposed to be a big day for silver as it was for gold.

    I have toned down my leverage alot compared to what i was running last year and i can take a drop to $42 without blowing my account. It is the hardest thing that i had to overcome in my trading.

    It is just frustrating to see gold up 30 dollars and nothing for silver. Silver should have been around $52 if it was to have the same momentum as before.

  176. royboy1979

    Poly, Bob, Jayhawk – all of you option guys (i know i’m missing a few…sorry!) –

    I appreciate all of the information you guys have brought to the board regarding options…very good lesson for a beginner (I have followed Gary’s SLV July’s for my first option and am doing well with it).

    Anyway, just trying to learn more here and have a better understanding of all types of options. For you guys (and gals) that buy OTM options – example, I think Poly talked about June GLD 160’s today as a purchase – can you sell those at any time, even if the strike is not met? So, GLD keeps crusing to 155 next week (or more), can I unload these or do you have to hold until the strike is met then you can sell? Just trying to get a better feel for all of this. If this is a stupid question, my apologies, but I really want to know. Thanks everyone for your considerations here.

  177. jabalong

    I moved out of about half my silver at the beginning of the week on the near tagging of $50 in non-US trading. Have since been staggering into NUGT, which hasn’t done much yet, and UGL, which has worked out nicely with gold. Though I executed the plan early, I dropped the ball on not moving everything over to gold right away. Oh well.

    The question for Gary (or anyone else) is that I still have a bunch of dry powder to move into gold, but after a $65 move in the past couple of days I should wait to buy a pullback. Any thoughts on when we might see a catalyst for one? Still looking for maybe a USD bounce on jobs data or something next week?

  178. ALEX

    April 29, 2011 3:26 PM
    Blogger Le Fou said…

    ALEX,

    I still like EXK for a good pop up, perhaps around earnings on my birthday, May 5.

    Le FOU
    I was born may 10th 😉 I would welcome a POP UP anytime early MAy ( which is my favorite month because LIFE returns to new England with Naked forests restoring their plush foliage!)

    Catching up on the blog…lots of good posts guys! Jayhawk, Poly,razvan, Wes, etc etc etc (
    ALL)!

  179. Matt

    @Tutor,

    I wanted to say that the Lysander quotes were killer! A real eye opener back to what our country was founded upon. I wish more voters watched Schoolhouse Rock when they were younger. The next few years should be interesting. However… there is great opportunity for people like us to make tremendous money!. Thanks to people like Ben and Tim. BYW: Your beard was off the hook!

  180. ALEX

    still browsing the blog

    SLUMDOG

    AGREE! I actually, believe it or not, met Jim Sinclair when Gold broke out from $255 to $325 in one month(Oct 1999) THEN retested the $255 area. As it went above $280- he was INSISTING with all confidence and charts, that Gold was going to $400. I invested.

    THEN a yr later @ $320 Prechter challenged, saying E.W. says it must crash,Get out of Gold!!…So Jim challenge that Gold would break $400 before going below $300, AND, if anyone ELSE in prechters gang wanted to take that bet..he would bet them too!!! I believe he said he bet many thousands.

    Theres more to the story, but he was SOOO conuident and kept posting charts to show why…I was all in with my $8000.00 🙂 ! He made me want to study charts 10 yrs ago. I emailed back and forth ,etc…nicest guy…then his wife died. Very sad. we lost touch while he was in Africa…etc etc etc. Much respect for JIM. I too traded alone ,me and the charts, until I stumbled on the ‘Toby Conner’ article, JULY 2010 & then subscription, then this site. Now I trade with a group of brilliant friends ( and thanks you Gary).

    Thanks for posting SLUMDOG

  181. ALEX

    Hey Brian

    I still get Emails from him, but I think they are automatic.

    He is a bit more enthusiastic and ‘over the top’ now than he was back then. He used to be so humble and yet Resolved..firmly convinced!He used to reason alot and explain with charts, but now he has Trader Dan do the charting, and he sells it 🙂

    He lived in Conn and I near Boston, so i was invited down but his wife passed away. I do not think he would remember me amid all of the myriads of followers he has now? Good guy though, deep down inside.

  182. Brian

    Alex, I read his blog. Interesting guy that has seen the full cycle in the pm mkt. I like people who have lived it and share like he does.

  183. ALEX

    Matt

    Schoolhouse Rock! Wow…like “I’m only a Bill?” & “conjunction junction”?
    Can you say “flash back!” LOL

    GARY

    Seriously, after reading this blog with Wes,Gary,Pima,POLY, etc and the options trades and so on ( I think BOBLOVES HAWAII has his own path paved & does well ) I can see why your cycle analysis is CRITICAL.

    The ‘timing’ provided by an IT low, and knowing where you are in a cycle would be SO HELPFUL to being confident in how much leverage you can take on , and ‘timing’ those positions. Less freaking out when the low is known to be in, I’m sure.

    Have a good wkend everyone

  184. ALEX

    Brian

    Yes, He definitely has been there , done that. You probably know that he is in charge of ‘TRE’ , a mining company in Africa.

    And while I’m here , thanks for posting random stocks as they break out. It seems that EVERY stock you mention and I look up the chart…I say , “Oh yeah, and there it goes” Usually from a former watch list, that I havent checked in a bit.

    Good eye!

  185. jhnewman

    With gold closing today at 1563, we are only $87 from the $1650 target. And, with possibly 5 1/2 weeks to go to the top of this C, I gotta believe we’re blowing through $1650.

    We’ll just have to play it by ear and see how things develop. But I wanted to mention two things I saw today. Over on King World, James Turk, one of the top gold analysts in the world said he has a target for gold of $1800 by June 30th, and that it might reach 1800 before that date.

    And on Jim Sinclair’s site, I haven’t been reading things real carefully there, but I remember, in the past, apart from the $1650 number, he didn’t specify numbers that much.

    But, his illustrations can be revealing. He’s got one showing an angel with a magnet, pulling up gold ingots, and the ingots have prices on them. One has “1650” on it, then the one above it has “1681”, and the one above that has “1764”. So, it’s safe to say those are his targets above 1650. It’ll be interesting to see if we hit one or both of them in this C-wave finale.

    In a C-wave parabola, I don’t think it will be too hard for gold to move up more than $87 in 5 1/2 weeks. (June 8 would be day 30 of this current cycle.)

  186. jhnewman

    I would think that top number of 1764 is definitely within reach. Gold could certainly move up $200 in 5 1/2 weeks in this finale.

  187. ALEX

    JHNEWMAN

    I was thinking the same thing, because we went up $100+ in April alone. If GOLD accelerates ( as on would expect in a parabolic move) ,I would think $200 in the next 5 wks is reasonable. 🙂

    Goodnight

  188. jhnewman

    Goodnight, Alex. I was reading your stuff about Jim Sinclair. I came across his site back in 2008. He seems to be the nicest guy around. He goes out of his way to help as many people as he can, and that’s my definition of a good man.

  189. Gary

    I think people would probably do better to concentrate on that $87 and how fast the dollar gets to the 08 low rather than fixate on 5 1/2 weeks. This could be over next week.

    The weekend report will be an eye opener.

  190. Razvan

    jay he meant that the dollar could continue falling to the 70 target in a few days instead of few weeks which would mean it is time to exit the market sooner than planned

  191. Jayhawk

    We have a target of exiting at 70 Raz?

    Dan-

    I don’t follow the blees except when Gary mentions it at bottoms. What are you seeing?

  192. Razvan

    we are expecting the dollar to get close to the 08 low maybe even break it by a bit. The low was at 70 something so i figure when we are at that level we will be exiting , but this is how i interpret Garys thinking

  193. Dan

    Jayhawk,
    Suprisingly, I’m seeing the commericals exiting their short contracts and going heavier into long contracts. I’m a beginner to the PM market, so take what I say with a grain of salt, but it looks like they’re expecting silver to skyrocket.

    Check out the delta from 4/19 to 4/26 in commercial shorts:

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

  194. Razvan

    i think he was saying we would be there quicker than 5 weeks so we would need to have our guard up for a possible exhaustion move.

  195. Jayhawk

    Interesting Dan. I’m not as adept at reading those numbers, but it looks like the levels not seen since the start of this intermediate run??

    I’m looking forward to the report and listening to Norcini on KWN in the AM.

  196. Dan

    Right, these numbers almost look like the Jan 25th numbers. Take a look at Jan 25 SLV chart…
    Now the question that Gary will answer is… is this a good thing or a bad thing at this stage in the C-Wave.

    I’m a new sub, but I think the commercials is who he’s referring to when he speaks of “Smart Money”.

  197. Ivan

    Gary,
    Congratulations for last perfect prediction about Gold!!!
    I would never expect such scenario,that Gold will explode higher but Silver will stay at the same level and even come down a bit.

  198. Hot Rod

    Here is some analysis to speculate at Gary’s potential idea for the top.

    Here are 2 charts from 2008, one is gold and the other USD for the 3 1/2 weeks leading up to the C wave top.

    USD:
    http://stockcharts.com/h-sc/ui?s=$USD&p=D&st=2008-02-25&en=2008-03-18&id=p18785295491&a=232098140&listNum=1

    Gold:
    http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&st=2008-02-25&en=2008-03-18&id=p88807126444&a=232098151&listNum=1

    Here is what I see happened in 2008.

    1. On March 6th, 2008 the USD closed just under 73. Gold closed about 978, but had been flirting with $1000 for 2 straight days.
    2. The USD then had a 3 day Dead Cat Bounce, up to almost 73.5 (not huge). At the same time gold had a correction down to $962.
    3. Then in 4 consecutive days, the USD fell from 73.4 to 70.70, with a close low at 71.4. During those 4 days Gold went from 970 to 1035.
    4. The very interesting action of course was on March 17th and 18th. March 17th was the blow-off top. However on the 18th, the USD rallied and gold was extremely volatile. Gold’s open was 1003, it’s low was 977, it’s high was 1013 and it’s close was 1004 (flat gold day with USD starting it’s rally). The 18th was the last day to be able to get out alive.

    Looking at silver during the same period:

    http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&st=2008-02-25&en=2008-03-18&id=p32587736435

    It pretty much did the same thing only rose and fell faster.

    If history is going to repeat, my analysis speculates that we’ll see a dead cat bounce in the dollar as early as Monday and see gold correct (orderly) and silver potentially have another volatile correction (10%). This only lasts for a few days, then we get the violent USD reach for the bottom, Gold reaches for the sky and silver is dragged along behind.

  199. Blake S

    Very interesting analysis, Hot Rod. I was 95% in Gold and Silver bullion at that time in 2008 and I did not even know what a C or D Wave was. Now here we are again near the end of a C Wave and I am glad to have found this Blog. Started reading it about 4 weeks ago, subscribed to the premium site for a year last Saturday. I felt I had got my $200 worth even before I subscribed.

  200. Slumdog

    This is only tangential to what’s happening in the PM’s and the USD, but this is the background, like being in the midst of the tsunami, on an island, watching the buildings rushing by.

    Based on what I’m posting below, the US has 5 years of foreclosure sales in the pipeline from newest-coming to oldest-existing. 5 years! 5 YEARS OF SALES AT THE CURRENT RATE.

    And when interest rates go up, how many years more? Maybe double that?

    Ah yes, an excellent time in the US to buy a home and lose your ass.
    But they’re not making more real estate, right?!

    And what do you think this means to the MBS market values, which means the banks true balance sheets? They’re insolvent and will remain so for a decade!!!

    And as a kicker, this stops new home construction for 5-7 years more, and all the knock on business. So, if thinking that after the backside of this PM parabola is finished in a few months that things will be looking good, this is what will tank the USD and the world who holds MBS, too. Yup, sound as a dollar.

    From Calculated Risk blog, today:
    “According to LPS, 7.78% of mortgages are delinquent (down from 8.80% in February), and a record 4.21% are in the foreclosure process (up from 4.15% in February) for a total of 11.93%. It breaks down as:

    • 2.12 million loans less than 90 days delinquent.
    • 1.99 million loans 90+ days delinquent.
    • 2.22 million loans in foreclosure process.

    For a total of 6.33 million loans delinquent or in foreclosure.

    Delinquency RateThe second graph shows the break down of foreclosures by days delinquent.

    “31% of loans in foreclosure have not made a payment in over 2 years.” So about one third of the 2.22 million loans in the foreclosure process haven’t made a payment in over 2 years.

    The decline in the delinquency rate is partially seasonal, but the sharp decline is a positive. A key problem is all those homes in the foreclosure process. As LPS notes: “Delinquencies have dropped to about 1.8 times the 1995-2005 average, foreclosure inventories are 8 times historical “norms”.” There were only 94,780 foreclosure sales in March and 270,681 foreclosure starts – so the foreclosure inventory just keeps growing.
    Posted by CalculatedRisk on 4/29/2011 04:55:00 PM “

  201. Blake S

    Yes, Jack. Same here. I was going to claim that I joined because I wanted to find out who Old Turkey was, but I found that out before I subscribed.

  202. San Diego Jack

    Slumdog,
    I’m in real estate, and most people have no idea of what we are up against. Although, the lenders are pricing homes to sell here, and on the nicer homes & 2-4 unit properties, there are multiple offers, with most sold at list price, or above.
    Amazingly, there is a ton of money out there held by Investor Pools, scooping them up.
    You know, buying low, holding, and selling high. Typical of So. California.

  203. niven

    Can someone explain why silver has diverged from gold today? Is it b/c traders are liquidizing there silver trades to buy more gold? I thought gold and silver are suppose to move in tandem… if the price of silver gets lower while gold gets higher doesn’t that present another great buying opportunity for silver?

  204. Slumdog

    Niven, you gotta be a newbie. You’re asking the newbie question, “how can SI go down when there’s so much upside for sure that’s gonna materialize?”

    Others know the answer to this riddle, Turd saying it’s the slam down on fist settlement day on the May contract. Others know more.

    I just pass along this heads up. When the parabola is spiking, many will ask that question, too. They’ll ask, “why ever get out?”

    What you’re wishing to blindly accept, which is wrong, is that the markets don’t breathe. They do. Up and down. So, why wish the SI market to hold its breath?

    The next rally up will get us to fair value, after the D wave.

    Be very careful here. The rise to 60-75 is still in the deck; it’s just a matter of when it will be dealt.

  205. Brian

    Good post Hot Rod. When I see one like that, I save it in the comments section of my saved charts.

    I see a top soon due to the almost palpable excitement. We have now come close enough to the original targets of 1550 and 50 to give me pause.

    WSJ yesterday had an article saying US Silver was hedged at 28. No wonder their stock hasn’t moved.

  206. Bob loves Hawaii

    Some food for thought from Harvey Organ.

    “Well that about does it for the week. Next week we will see a lot of action in silver and gold. The COT report shows that in both silver and gold, the commercials are covering and they are covering at higher and higher prices. This is extremely bullish for our camp.
    We should see gold finally break into the 1600 dollar column and silver finally setting a new record high in excess of 50 dollars.
    I wish all of you a grand weekend and I will speak to you on Monday.
    Harvey.”

    Should be a wild week.

  207. Steven

    Aaron,

    Why do you think the hike will be lethal for silver next week. Don’t you think we already saw a reaction. I mean it should have been up 5% given golds rise but instead it was down 1%.

    Also, what is the effective date of the margin increases? I do know this that someone knew something which is why it was acting so bad all day. And when it dropped the way it did I said to myself “they must have raised margin requirements again”!

    Do you know if they did it for other commodities?

    It’s interesting that they do this often right around notice time.

  208. YesLetsDiscuss

    Dan,

    Thanks! What a dramatic difference in the commercials. Its the smallest short position in that chart. I don’t know if it means that they are done covering leading to a stall or if they think silver is done rising and don’t need the short positions or they think silver has a significant rise ahead and are reducing their risk.

    Does anyone know how it played out in 2008?

  209. Aaron

    Steven, this margin raise was only for silver, and only in house, in other words, its not CME sanctioned, a small correction in silver would be devastating for the small guy, and if Im not wrong it takes effect on Monday. Interesting to see what develops.
    The little guy with a few contracts will get margin called in a jiffy.
    If gold were to rally hard this week, I wouldnt be surprised if they do it to gold by week’s end, and cause a correction or an end to golds rise by thursday/Friday (as Gary expects)

  210. YesLetsDiscuss

    Gary,

    Good plan of action if the dollar decline accelerates into new lows. If however, the Dollar bounces up before making new lows, will we still have another cycle in play that will go into June? From what you have said before are your targets will stay the same, right?

    I am looking forward to Doc’s report very eagerly. If that doesn’t show a good reason to hold, I will exit my Silver position at the open Sunday evening.

  211. Gary

    Don’t read something into the report that I didn’t say.

    I don’t “expect” anything. I said if the dollar clips the 08 low next week then the whole picture changes.

  212. Marc

    Gary,
    A while back you said you thought the COT reports had lost their predictive mojo, possibly due to dark pools and off exchange trading. Is that still your thought and what do you make of the COT reports these days?

  213. Gary

    They still work for spotting bottoms in gold but for everything else they are mostly worthless.

    They’ve always been mostly worthless for spotting tops. The pros can’t pick tops any better than anyone else.

  214. Duuuuuude

    A friend of mine wrote this:

    To QE or not to QE: that is the question:
    Whether tis nobler to increase the national debt and suffer
    The spikes of rising inflation and declining dollar,
    or take arms (adjustable rate mortgages) to higher levels,
    Ay, there’s the rub for all indebted;
    And by opposing to end? To die a trillion deaths of national debt,
    Must give us pause, there’s the paradox
    That makes this calamity of so long life.

  215. 86d4life

    Hot Rod& p.k.,
    Swell job on the charts and analysis. Thanks a bunch. Thrown in with Gary`s report, it`s time to snap to, front and center!

  216. torero91

    Gary,
    New all-time highs on small-caps and the mid-caps last week, secular bull market, not cyclical. Plus, we also had a Dow Theory reconfirmation. Using just the large-caps of the heavily-weighted SPX and basically ignoring the “meat” of the market in the mid-caps, I still disagree with your stock market outlook. Tops are a process. Top picking is a fool’s game.

    We have an election year in 2012. QE3 is very likely. There are no lines outside of my local stock market shop. Sentiment is nowhere near euphoric. This bull has another 1-2 years to go. 🙂

  217. jhnewman

    P.S. Anybody who doesn’t spend the money to get Gary’s nightly and weekend reports *****IS CRAZY.***** His cycle analysis and intermarket analysis are EASILY worth 20 times the cost of his premium service.

    Do yourself a HUGE favor and subscribe to his service. I’ve been investing in gold/silver/gold & silver stocks for 4 years now, and Gary’s cycle analysis has improved my trading *****IMMENSELY.***** It’s been a QUANTUM LEAP IMPROVEMENT in my results.

    Thanks, Gary, for sharing your knowledge!

    *****And others: PLEASE do yourself a huge favor and pay the relatively small amount for Gary’s premium service. You’ll be so glad you did.*****

  218. CouldNotResist

    To be or not to be that is the question. Whether it is nobler in the mind to suffer the stings and arrows of outrageous fortune, or take up arms against a sea of troubles, and by opposing them, end them. [Hamlet]

    A key phrase here is “in the mind.” Don’t forget that Hamlet is crazy due to the visitations from his murdered father’s ghost. The play Hamlet is considered thesbian susicide as the entire cast looses there minds and lives. Hamlet may be Shakespeare’s greatest play however.

    To trade or not to trade that is the question.

  219. New York

    Some interesting in site to the recent ‘switch in gold and silver;

    “GOLD today took off and by the time they were turning the key to lock Comex’s doors, gold had risen a massive $25.20 to close at $1,556.  No laggard, silver rose 106.4c to 4858.4c at closing, yielding a gold/silver ratio of 32.027.

        Then something very odd happened.  Silver was rocking along about 4850c — after Comex closed, maybe 1:30 or 2:00 our time — when suddenly it lost about 70 cents, to 4750.  Fell clean through a trap door, & took the ratio to 32.655.  No news story precipitated that, & at the same time gold ROSE, to $1,565-ish, as if somebody were doing a MASSIVE silver to gold swap all at once.”

  220. Steven

    Aaron,

    I understand the silver margin raise was done by MF Global but I thought it was done by the CME at the same time.

    Can anyone verify if this is correct AND when they take effect?

  221. Poly

    Gary,

    Nice report.

    I thought the previous 3yr bottom wasn’t a consideration in cycle analysis? Seems like much of the “tell” here is focused around it.

    Looking at the dollars IT cycle, it’s already getting very stretched, do we even have a whole daily left after this one finds a low?
    I would have for this IT cycle and possibly it can stretch for 2-3 more weeks to mark the end of the 3yr?

  222. Gary

    Sorry beanie this is still a cyclical bull just like I told you last time, which you chose to ignore and eneded up getting caught in the second worst bear market in history.

    BTW you could make those same statements about the last cyclical bull and it still ended up a cyclical bull not secular.

    But hey if you like making the same mistake over and over be my guest.

  223. Steven

    DG,

    What is your plan now given Gary’s EYE OPENING weekend report. Will you sell the rest of your AGQ? If so when? Does it depend on price or just something like “first thing Monday morning”? Thanks so much in advance.

    Anyone else want to chime in?

    P.S. Gary, I am not questioning your analysis. It seems extremely solid. I just want to see what some of the other experienced traders on the board are doing.

  224. hkc

    Gary:

    Thanks for the weekend report. Very thorough as usual. I do have a question about the miners: why would you still hold them if you think they are sniffing out the top with their decoupling action? Thanks much.

  225. Adam

    Gary,

    Great weekend report. I’m sure I speak for everyone when I say I appreciate you putting in the extra time after being under the weather earlier this week. Best of luck with your climbing.

  226. New York

    ’08dollar low was 70.70 I believe.

    Gary, you mention the miners are sniffing out a possible top. Are you still expecting them to reach the stretched levels above the ma as they usually do at a c wave top?

    Or, are you considering the possibility this time may be different, and, if so, how will we prepare for this? Dollar tells all?

  227. Adam

    HKC,

    You have to assume money is going to flow into the undervalued assets. They’re obviously lagging silver. As silver approaches our target it’s time to consider unwinding that position and moving into the next trade. We’re all a little frustrated with the price action from the miners, but that’s no reason to chance performance at this time. Just stick to the plan and keep your stops in place. If the stops get tagged before breaking out to the upside, we can keep an eye on them leading the charge on the next ABCD wave.

  228. Rosabarba

    With the negative divergences in place (particularly with a bellwether like SLW), the situation strikes me as analogous to the end of December, when reducing to a core position in shares with tightened stops and converting option positions to strangles seemed the proper strategy, both at the time and in retrospect.

  229. MrMiyagi

    Heck, I’d be happy if silver tops out at 52$ and SLW goes to 47-48$ although 55$ on SLW would make me giddy.
    Mentally preparing for the D-wave.
    For those of us who got in late on this C-ride (post January 2011), this time we’re right plce right time.

  230. DG

    Steven: Hard to say. I do have an extremely itchy trigger finger though. I will sell my last AGQ if at any time silver is underperforming gold on Monday. I have no miners and sold SLW weeks ago near its high. I already have more in DGP than I have in AGQ and am long some GDX, so I feel pretty good about my position. That night silver futures were up 7% scared me into switching “early.” That kind of rise is nuts and shows the animal spirits are running wild.

  231. PuppyDogFollower

    Any tips on unloading physical? The thought of packing up all that stuff and shipping it to AMPEX gives me major heartburn.

    Find a local dealer? Can they handle a fairly large load?

    Or will people look to hedge? (IE for every ounce of silver or gold owned, take a equal amt of puts in GLD or SLV)

  232. torero91

    Gary,
    Like I’ve said before, I am not beanie. So please don’t use his past posts to reply to my present ones.

    I have now realized that you are a stock market bear. That bias is dangerous. I look at how many attempts you have made at calling a stock market top/new bear market over the last few months. All have failed. To say we are going to just suddenly fall back into a bear market after one the most powerful bull market advances in history is ridiculous and amateurish. There are no signs of significant distribution and recently the stock market had record lows in selling pressure. You really need to get better sources of data before you make these types of calls. I suggest you take your own advice and avoid not only investing in the stock market, but commenting on it.

    On the other hand, your predictions on gold/silver have been fantastic. Since you seem close-minded to bullish points of view in the stock market, maybe you should just stay focused on the metals complex instead. That’s why I subscribe.

  233. Driven!

    Gary, I am a newbie here…IMPORTANT….If we are to enter into DIG, what would be the initial stop loss?

    Catastrophy can happen and without stop loss I feel unprepared…

    Comments…anyone?

  234. DG

    Torero: Gosh, you sound just like Beanie, but you have added insults. Maybe you are Beanie on a bad day? I guess you are just going to post over and over how Gary is a fool and how the market is going to a zillion. Maybe wait to post again until you have something new to say? We really do get the idea. I can cut and paste it onto my desktop so you don’t have to post again if that will help.

  235. CouldNotResist

    Puppy,
    Can you fly to Las Vegas or some large market with your physical. Maybe if you buy Gary a couple of decent borritos, he may show you around a bit.

  236. 86d4life

    Puppy dog,
    Try tulving.com. They cover return shipping and insurance but I don`t know if they`ll honor that if you didn`t purchase from them. Worth a shot.

  237. Rob L.

    If I remember correctly Gary commented that he thought miners could explode higher this coming week. The HUI may not reach 750 but the next two weeks will prove that Gary’s gut instinct was correct, IMO.

  238. YesLetsDiscuss

    Poly,

    That was my question for Gary as well. If the dollar bounces without making new lows, do we have time for an additional daily in this already stretched intermediate? If that happens, the targets would be higher, especially if gold rises with the dollar, even if silver falls during that period.

  239. torero91

    DG,
    Actually, I am insulted that Gary keeps referring to me as beanie (apparently a troll), rather than substantiating his bear market calls. That’s all. I don’t think Gary is a fool. I am open-minded and welcome intelligent points of debate. Nothing personal. I just know of many folks who have blown up their accounts listening to perma bears like Knight, Prechter, Denninger, etc. These guys continue to collect their subscription fees while their followers go belly up. I just expect people who charge $$$ for their ideas and predictions to defend them intelligently, right or wrong.

  240. Richmond

    Gary:

    I have never posted here before.

    Just curious, if USD drops to 70.70 ( 08 low according to this blog ), would GOld not be around $2000 based on what happened in the last 2 days?

  241. Steven

    Gary,

    I’m confused. Do you still think silver will hit $50 even if it underperforms gold? If anyone else can answer this from the weekend report I would appreciate it.

    Thanks.

  242. MrMiyagi

    Steven,
    I can’t imagine gold going to 1600$, 1650$ or higher and silver not budging from 48$.
    Gary has said that gold will lead silver and it certainly seems that way.

  243. Rosabarba

    MM,

    Actually, silver has been leading gold and by quite a bit. The decisive breakout above the EOY high took place in mid-Feb for silver, six weeks ahead of gold.

    Gary has also warned about the forces of mean reversion, to which silver is mathematically much more vulnerable. Silver producers have now been in a non-confirmation of the silver run for almost three weeks. Fakeouts can always happen (in both directions), but the sum of the market signals as we sit here today is one of growing caution to longs, imo, and I say this as a long.

  244. GottaHaveIt

    Poly,

    If you are around this weekend, I’d like to hear your comments on why you chose to go shorter with GLD options in June while Gary is going with July.

    Gary, I’d like to hear your comments as well.

    I’m still learning about options trading and like to hear from the experts about WHY you pick certain strike price/expiry contracts.

    Thanks!

  245. fubsy_cooter

    Man, we are definitely near a top. Some of the questions reflect a real inability to read what is clearly stated in the reports.

    Gary lays out his trades and triggers and moves with no question about what he is about to do.

    Also, to Torero..i don;t recall Gary ever definiteively calling a top. he states conditions that are present, and gives possible scenarios. He also always leaves open the possibility of the market proving him wrong, and clearly states that he wouldn’t mess with the stock market while a C-Wave is unfolding. But, with that said, his actionable calls have been uncanny, and highly profitable.

    My view, cyclical or secular, the stock market would be lost if not for the trillions of dollars of intervention holding it up.

    f

  246. fubsy_cooter

    Regarding PMs…all we need to do now is sit and wait for Gold to jump 80 to 100 points in a day. At that point, I say sayonara, take my profits and wait for market tells to take advantage f a strengthening dollar.

    SLV puts and EUo are great places to ride the D-Wave IMO.

    f

  247. Movax2

    CouldNotResist,

    Thank you for your post. Old Sesame Street had more to it than was on the surface. I have never seen the movie, it looks interesting.

  248. Eamonn

    MrMiyagi, interesting that you should say that. Gary said recently
    “Although once the C-wave is finished there will be a fortune to be made in out of the money puts on silver”.

  249. zstock7.com

    hi gary, you know that QE3 in Japan, $300 billion US, yen japan rebuilding program,japan printing presses…I thought it might be possible for the market to add that into the price of gold.
    and…looks like I may have it right
    Z

  250. MrMiyagi

    Eamonn,
    He’s right, there will be in fact his research is the basis of my opinion. Even AGQ might be intersting although I like the regular 1-1 ETFs personally.

  251. MrMiyagi

    Rob L,
    Not too familiar with that, looks like the volume has gone from about an average of 400k shares to over 2M shares/day this last week alone, I guess a lot of Canadians are expecting a downtrend soon!

  252. David

    Gary has warned many times about shorting silver.

    If silver goes to $70, and it could, you are toast.

    Never short a bull market.

  253. David

    I do.

    I haven’t read where Gary said to short silver.

    If he did, he is violating a principle I have heard him repeat literally hundreds of times.

    He has said there will be plenty of shorting opportunities away from PMs.

    In this environment none of us can say if the dollar bottoms at 70 or 64. If it’s the latter, a lot of silver shorts are DOA.

  254. GottaHaveIt

    Mr.Miyagi,

    Since Poly does not appear to be online today and I know you trade options, would you care to give your opinion on buying June calls for GLD (like Poly) vs. July calls for GLD (like Gary)?

    I’m just trying to get an idea of the thought process behind it.

    I have followed both Gary and Poly on their options trades and both have worked out well, but I wonder why Gary generally goes out farther than Poly.

    If you or any of the other experienced options traders care to comment, I would appreciate it.

  255. Nike Boy2008

    Gary’s call makes sense: I was hoping Gary would say something.

    Just wanna add a few points:

    1) Volume in UUP is up last week – happens only at intermediate bottoms..we might have a few weeks to go…we have a warning

    2) weekly volume in ZSL last week increased by like 20 times last week – HUGE VOLUME increase for a -7% drop on ZSL

    I might slowly start liquidating if we keep rising next week

    I don’t have much money. So, every penny makes a difference for me 🙂

    Maybe when I make my first million I can take more risks.

    Good luck every one.

    things may be lining up – we just can’t be stuck to a trade – which is what I love about Gary

  256. Bob loves Hawaii

    Gotta Have it, I am in June calls, as well. Two reasons, one is the C wave is predicted for demise in June, which brings me to my second reason. I do not like to pay the extra time insurance, as I am not DITM. Poly is either at or OTM and therefore you pay a premium for time (intrinsic value).

    So, what you do depends on your strategy.

  257. Bob loves Hawaii

    Anyone consider that people front ran the sellers at $50 crowd. Short interest is still pretty high, and demand is still very strong.

    Also, it is weird that we are going to top when every one says we are. What would shock people more, silver falling or gaining from here?

  258. MrMiyagi

    GottaHaveIt,
    My criteria is close to 90 days out so at this time I’d first look at August calls. However, July would work ok as well but I would not go to June or May.
    Sure, June or May may net you a good gain but I don’t like the timeline.
    I do have May, June, July, August and September calls for various shares/ETF but the May ones I bought near the end of February, June was bought around the same time and the August one, for example, 10 days ago.
    That works for me, hope it gives you an idea.

  259. james r

    Does anyone see anything bearish on silver mining stocks?

    I may indeed be wrong but on the silver stocks I am seeing bullish pennants forming.

    AG, SLW, SVM

    Can someone confirm this?

    James

  260. GottaHaveIt

    BobLovesHawaii,

    Thanks for the response!

    I know you are a big options trader and I would have mentioned you if I saw you online today.

    We have all received a great education from the experienced options traders on this blog and I truly appreciate it.

  261. DG

    BobLH: The Dow had resistance for years at Dow 1,000 even though it was an obvious number. Took many years to break through, though your point is a fair one, people calling a top at Dow 1000 didn’t prevent it from actually being one. Maybe 50 really is it.

  262. CouldNotResist

    whoa, don’t sell short yet. Gary seems to be focusing on the PM area that he feel will outperform. Gold is preforming best now. I would not be surprised to see him shift from bullion to miners at some point.

  263. David

    Miyagi,

    Thank you for pointing this out.

    I may challenge him on this call.

    Repeating something endlessly as a first principle then violating it reeks of overconfidence.

  264. DG

    David: Yeah, I was very struck by this as well. He talked about oil with its impaired fundamentals, and Q’s as over extended in stock bear market, but silver…?

  265. David

    Oh, believe me, I thought of it.

    He’s been asked a hundred times “hey Gary, are we shorting silver in the d-wave?” and the answer has always been “Never short a bull market.”

  266. Rosabarba

    I think Gary makes a distinction between a straight short, in which your risk is uncapped, and using OTM puts, where your capital at risk is clearly defined.

  267. Poly

    Gottahaveit,

    I just don’t like paying more than I have to. There is a 7% premium to buy July, but the d wave will be here before then anyway. Plus with DIM options you can just roll them.

  268. ALEX

    JAMES R

    I think they look very good at this point. ( Yes, everyone,I DID read the wkend report 🙂

    Last week I actually said that I thought SLW’s chart was looking weaker than EXK and some others ,partly because it gave up more of its gains from the last run up and volume on down days was high.

    Today -I thought it held up well Friday , even though Silver sold off fast at days end…SLW’s chart is shaping up, and I think that AG is a great looking chart.

    I am feeling very good about these set ups on the chart, despite Fridays end of day Silver sell off and all the negative ‘feelings’ on Silver.

    ( I originally had a $52.40ish minimum target that never got hit too, but that is a questionable target )

  269. james r

    In Gary’s report it almost seems like a bull flag is forming on the HUI?

    I would think we would have some kind of blow off top like we did in Dec 2009 at the end of this C-wave?

  270. Brad

    James,
    The thing I am seeing is in all 3 cases you mentioned they all closed in the bottom half of the trading range for the week on above average volume and that generally is not a good sign. SLW closed in the upper half last week but volume was below average which is not what you want to see. At this point SLW appears to be forming a cup shaped base and could start up the right side next week. I made good money on SLW this past year but bailed a while back in the mid 40’s and when Gary said that they normally get stretched during C-wave finales I bought back in last Thursday as it broke above the 50 day. I’m underwater now and hoping they catch on this week or I will bail again.

  271. james r

    Alex,

    Thank you for your input. I will be watching the mining stocks closely this Monday. We “should” get an up day.

    James

  272. MarkMarin

    I think Gary has been reading about Poly’s OTM lottery exploits and DEM options, and, figures that may be a good way to limit risk and profit during the silver D wave…:-)

  273. CouldNotResist

    Gary is free to change his mind whenever he wants.

    Does Gary actually call it a principle? Anyways, unitl you read it in a premium site nightly report …

    The SPJ Code of Ethics is voluntarily embraced by thousands of journalists, regardless of place or platform, and is widely used in newsrooms and classrooms as a guide for ethical behavior. The code is intended not as a set of “rules” but as a resource for ethical decision-making. It is not — nor can it be under the First Amendment — legally enforceable.

    Principle (moral rule) is often confused with principal (most important.) Consult both definitions if in doubt.

    The confused may care to remember that ‘The principal alphabetic principle places A before E’ as a reminder of the relative spelling.

  274. Robert

    Alex,
    the reason for silvers sell-off at the end of the day was the third margin increase announced for the week .Silver demand is still strong, supplies are next to zero.silver has a long way to go , sure there will always be corrections along the way ,but $50 will look cheap in a few months .If gold is going to as Gary says at least $1650 do you really think silver will be far behind–don’t think so.With inflation on the rise and Bernanke’s policies the metals have only one way to go –Up-

  275. Jennifer

    Guy’s – Gary has been saying that using options as an alternative to actual shorting would be part of his strategy during the D wave. He just doesn’t want people actually shorting silver shares straight up because of counter rally’s that could kill you. There has been no change in principle. And even if there was, the man is free to change his mind as things unfold.

  276. Sandy101

    Gary,

    If oil peaks just about where we are now, what would be the trigger for secular bear to return at this point in time.

    The S&P profits are at all time highs, economy is doing ok though not great.

    But for bear to return, something has to happen. We thought it would be energy/commodity prices, but these have not yet reached a breaking point in the economy.

    If dollar bottoms here quickly, the falling energy & commodity prices would reduce headwinds on consumer & economy and could help improve corporate profitability levels even further.

    Will appreciate your opinion on this.

  277. Jayhawk

    James-

    Yea, silver miners look very weak. I see most of the stocks stuck in a channel with price moving down. The other day, they looked to break out of the channel, but then got reversed. There was not follow up to the strong surge out of the FED meeting and silver taking a bit EOD Friday had my finger on the sell button…I held them for now. I hold a larger position on the NUGT for a gold mining break out.

    I saw that pattern too…Looks like a possible bull flag and back test of the large triangle. However, the weekend report was a buzz kill for me on the miners making a strong end of cycle move.

    http://screencast.com/t/PnEFJnRfi9E

    If it can’t muster up the power to break up in the first part of the week, I’m bailing on all mining positions. (The other side is a nice break up that turns out to be a bull trap with gold hitting 1650 this week and that’s it for the cycle.)

  278. Brad

    James,
    At least SIL closed the week above the 50 day. It too closed in the lower half of the trading range near the bottom for the week on the heaviest volume since it’s inception. Maybe options expiration in the physical metals caused a lot more volume in the miners/ETF’s and it is nothing to worry about. Sure hope so, but nonetheless something to keep an eye on. Jim Rickards said we need to see Ag take out 50 soon or we could be in trouble of a bigger pullback.

  279. james r

    I agree Jayhawk,

    Gary’s report took me by surpised.

    But this is what need so we can be mentally ready if silver and the mining stocks begin to diverge.

    James

  280. Jayhawk

    Sandy-

    Yes, my thoughts exactly when I saw the the commodities complex possibly topping here, taking oil down which was going to be the thing that “killed” any recovery we had. That was Gary’s bigger picture story on why a bear would return.

  281. Sandy101

    Shorting by buying puts is totally different from shorting silver directly or by buying inverse ETFs like ZSL etc.

    By buying puts, you have put a limit on what you can lose if you were wrong, which is the total amount invested in puts. I am sure Gary will buy out of money puts with a very small percentage of his portfolio.

    By shorting silver through any other option, you are risking whatever capital you invested, which will be huge. If you are wrong, this option would hurt your portfolio very seriously and Gary has always advised against this.

    We will come out great on this as long as we follow Gary and don’t go overboard.

  282. MrMiyagi

    I don’t know if I posted this already but on Saturday’s India market, gold was up to almost 1599 while silver stayed flat.
    As I said Friday, London is closed Monday and if the US market is up I think will see a big gap up Tuesday but please, I am no expert!

  283. ALEX

    ROBERT

    I understand all that, but my reply to the question wasn’t really about the ” Why silver sell-off “,but how SLW faired despite that sell off.

    If you look at the ‘silver’ chart and you look at the ‘slw’ chart, they’re not even close to being the same-

    So if Silver goes to $70 ,can we say SLW would do as well? Not sure the way they’ve been acting…But since silver dropped $1 at days end, and SLW didnt…it was encouraging ( among other things) 🙂

  284. ALEX

    SANDY

    Raising interest rates or raising taxes?? Or as Bernanke has said he’ll need to do…to ‘Try to soak up excess liquidity’?? He’s mentioned the need to do that, but never says how it will be done.

    Maybe that would trigger something?

  285. Bob loves Hawaii

    Alex, Bernanke raising anything will result in one thing, a disaster for his precious bankers. They are happy to suck the life out of the middle and lower classes with this stealth tax to keep the banks liquified.

    When someone tells me who is going to buy a trillion in monthly bonds other than Ben, then we know the party is over.

    Off to the pool on this glorious Saturday afternoon in SoCal.

  286. ALEX

    BOB

    Yes, I imagine thats true! That’s why when banks were collapsing in 2008, they came up with this plan to float the boat long enough too put out the fire, and for the banksters to fill their pockets- then move out of Rome, when it starts burning to the ground again.

    what else could they do? 🙂

  287. Lillie

    Poly/Bob LH and any other options based players:

    When gary says he’s going to allocate X% to an option purchase, and you do the math, it could be ALOT of contracts that control a lot of shares! Is it common for you guys to accumulate 200/500/1000 contracts ( control20,000/50,000/100,000 shares)at a time?

    Thanks for your perspective and your help in supporting my… princip-al (as in money!)

  288. MrMiyagi

    Lillie,
    That’s a lot of contracts! But it all depends on the price.
    It is not uncommon for me to buy 4-7$ options in 10 call/put lots. The ones in the 8$+ range, I’ll start with 7-8 and then if it looks favorable, I’ll double it.
    Only in the case of a lottery play (a la April 40 SLV) will I spring for 100-200 calls but in that particular case it was at 20 cents.

  289. CouldNotResist

    Ben is probably surprised he is still running the Fed. It’s Tim’s problem to buy the bonds back from him, so it must be congress’es problem to raise taxes.

    Ben cannot rasie taxes until the ecomony heals.

  290. Lillie

    Miyagi-san,

    Thanks for the response! I was actually using the July SLV 40 puts when I did that calculation (and assumed your “$7” definition for DOTM)looking ahead a little. At less than 1.50, it’s alot of contracts! Obviously depending on the size of ones portfolio, Gary’s target allocation could easily mirror the 200/500/1000 contracts i mentioned. It’s almost scary!

  291. Poly

    Lillie,

    Yes. All depends if the option can support it. But it’s all relative, right? Position size relative to capital.

  292. Poly

    For example, I’m not going to be touching the same calls the hundreds of SMT subscribers are going to jump onto. The door gets kind of tight in a fire.

  293. MrMiyagi

    Lillie,
    Gold’s rise has been tame and orderly so I concur with Gary’s (and everyone elses) more upside and I believe silver will follow because it is cheaper price-wise for one. Besides, the cycle theory seems to me reality.
    When it reaches a next level, 1650$-ish & 52$-ish, I will glue myself to the screen and decide what to do. I might pop for a bunch of OTM SLV puts, in the 42-43$ range and less than 90 days out, as a form of insurance. I’d rather risk 2K$ and protect some of my calls.
    That’s the way I do it on occasion.
    Most of the time though I get out early and that’s that.
    I can tell you that I’ve felt shitty and angry for a long time on the occasions where I did not get out with a profit expecting to be a millionaire with the next price jump (which never came) but when I got out early and it went up, I forgot about it the next day.
    Makes sense?

  294. Poly

    Got to say, buying calls so close to a parabolic top and waterfall d wave seems backwards and risky. Buying them at the very start of a new IT cycle is the sure and safe way to leverage easy gains. The volatility during the final weeks is going to buck off almost everybody here, guarantee it. These wll move 30-40% a day. You think AGQ was hard, LOL.

  295. funmike

    Thanks Mr M
    I am continually amazed at the information available today at the click of a mouse. At one time a mouse in the house would have caused my mother to elevate herself quickly onto a sofa or chair. My how things have changed.

  296. pimaCanyon

    David,

    I believe the quote from Gary is “Never never never never never short a bull markte”. 🙂

    (But maybe there is an exception? So it becomes “Never never never never never short a bull market, except to catch the start of a D wave.” ??)

  297. pimaCanyon

    MrMiyagi,

    London is closed AGAIN this coming Monday? They were closed last Monday, are you sure they’re closed two Monday’s in a row? What’s the reason for it this time?

  298. JohnsMotivation

    How can I learn options from scratch? How should I get started? I have looked over materials. None seem to focus on the basics like you guys talk about here. Mostly focus on strategies, TA, and other looser stuff.

  299. james r

    Gary and others,

    Since the HUI is clearly diverging from the metals would you expect some retracement of HUI back to it’s high?

    I would think SIL and some other miners would retrace back to their highs to form a double top.

    I would hate to sell into weakness if the miners continue to show weakness.

    James

  300. Steven

    What I’m not understanding is why Gary is keeping SIL and SLW (65% out of 140%) if he thinks silver will struggle to get to $50?

  301. San Diego Jack

    Steven,
    What if Silver charges thru $50.00? Then he takes a profit. If it struggles, then he sells and moves it over to gold holdings…

    James,
    Your last line makes no sense.

  302. DG

    I believe the answer is that Gary said not to SHORT a bull market. The odds are bad since your loss is infinite and the major trend is up. Buying puts limits your risk.

  303. 86d4life

    SDJ,
    Thanks for posting that link. Cool.

    Johns M.,
    Try youtube also on the options ed.(thanks again SDJ!) They have a ton of videos on there. Of course some are crap, some are selling Whatever but there should be something there that fits. Good luck.

  304. Poly

    I’m going to be playing this with “Long Straps.
    Basically that means playing volatility and a big move to either side. That fits this current setup well. I doubt we’re going sideways here.

    A Strap strategy is like a straddle, but it has a bullish bias, so there are 2 calls purchased for every one put. I’m going to play it initially with more than 2:1 because we believe we know which way the market will break first. This protects us on the short side in case a sudden nasty correction/D-Wave comes on, but gives us great profits from a parabolic move higher.

    But as we think we know this will unfold in two BIG MOVES, taking a higher call/put ratio Strap and then cashing in calls at is climbs higher should be rewarding. Towards the top we cash the remaining calls and end up with a pure short position. At that point we could add more to the short.

  305. Poly

    A healthy does of OTM’s at each end will help capture the move with little capital/risk. No time to wait on the long side though, but holding as much as possible for any OTM Put will be all the more rewarding

  306. Glen

    I think a large part of the reason that silver is languishing is the margin increase.

    My broker (MF Global) DOUBLED the initial margin for silver, to $25,398 — that’s huge.

    Maybe after the market digests the new margin rates it can continue on up.

  307. San Diego Jack

    86,
    You are welcome.
    Are you a YouTube junkie now?
    Some of those uploading videos are just for marketing and are basically worthless and a waste of time to watch.

  308. San Diego Jack

    DG,
    You’ve been around the block, so tell us, do you have any insight as to what “might” happen next week, or are you sitting on your hands waiting to see what happens, just like the rest of us?

  309. GottaHaveIt

    Poly,

    You said: “Got to say, buying calls so close to a parabolic top and waterfall d wave seems backwards and risky.”

    Didn’t you just do that yourself with your GLD May/June calls purchased over the past couple of days?

  310. Poly

    “Gotta”

    I’ve been buying them since Day 1 of this entire IT cycle.

    I started with SLV $20’s, when they were single digits.

  311. Rosabarba

    Even though we’re now all well aware of the negative divergences, it does drive the point home to look at the daily SLW:SLV ratio chart going back at least to the 08’s lows.

    A much different beast now than the dips that marked previous pullbacks.

  312. pimaCanyon

    Poly,

    Re your straps: Sounds like a good strategy. Will you be using GLD or SLV or both?

    How far out of the money in each direction will you go? And what expiration month?

    Thanks!

  313. pimaCanyon

    Poly,

    Just did a quick read on straps and they define them as 2 calls and 1 put AT THE MONEY strike.

    Is this how you will implement? If so, then my question re how far out of the money is irrelevant.

  314. 86d4life

    Open to anyone;
    we need to start looking at directions to go at the onset of the D wave. Gary has mentioned shorting energy, maybe the Qs, some have mentioned the inverse euro trade. What about financials? My knee jerk reaction is short `em until their eyes pop, but what am I missing? Big Brother is going to run in with tarpulus, porkulus and how many other bailouts. When this D arrives, what is the upside for the financials that would make this a bad trade? Thanks in advance.

  315. pimaCanyon

    Rosabarba mentioned that he would employ strangles which are a put and a call, both out of the money. I suppose you could do a modified strangle that would have you buying 2 OOM calls for every OOM put.

  316. pvm999

    There has been some discussion on what puts to play during the D wave.

    Below is a chart of some options to consider.

    I did not look to see how much open interest there is…

    Equity–Price—–200 MA–% extended
    UUP—–20.95—–22.75—–8.5%
    FAS—–30.68—–25.89—–18.5%
    SLW—–40.62—–32.38—–25.44
    SLV—–46.88—–37.35—–25.5
    Dig—–63.03—–43.14—–46%
    DUG—–25.61—–43.81—–71%
    ERX—–92.36—–54.23—–70.3
    QQQ—–29.08—–52.60—–80.8

    And then there is this one Double charged Bad Lad

    AGQ—–358.96—-137.34—-161.3%

  317. pimaCanyon

    86d4,

    Gary has mentioned looking for those sectors that are most stretched above the mean. Because financials are already declining, it’s unlikely they will be stretched. However, they could have serious downside potential just due to fundamentals.

    DG mentioned EUO (short Euro etf) as a candidate.

    I will look into UUP (long dollar etf), both shares and call options.

    I’m sure there will be opportunities in other areas and others will post here as they arise.

  318. 86d4life

    PC,
    Good point on how they`re already starting to droop. They`re already losing some snap. Just want to be ready in case this show does an about face sooner than we would like. Thanks again.

  319. San Diego Jack

    86,
    Since Gary mentions and graphs the Banking Index, you may want to consider a 3x Financial Bear; FAZ
    Has options, but one has to be careful of overleveraging…

  320. Poly

    Pima,

    Still thinking all through. I like GLD only for long now, but both for short. I’m already long OTM’s and will definitely go short them too? But probably will be a more timed thing, so meaning not open both long/short OTM at the same time. So many strategies.

  321. DG

    SDJ: I really don’t know about next week. My gut tells me silver could have a nasty day Monday as those who have been stewing all weekend about its recent under-performance think “I have a huge profit. Let me nail it down. Maybe the party is over.” We are not the only ones who have noticed this! The question is the dollar. If the dollar tanks Monday silver won’t. But I will be trading the last of my AGQ for DGP first thing, unless silver gaps down hard, in which case i will try to play it. I am mostly DGP and no miners already so I’ll be fine either way, I suppose. We’ll at least get a clue from the futures Sunday night.

  322. Brian

    Poly, Thanks for finally saying this…

    Poly said…
    Got to say, buying calls so close to a parabolic top and waterfall d wave seems backwards and risky. Buying them at the very start of a new IT cycle is the sure and safe way to leverage easy gains. The volatility during the final weeks is going to buck off almost everybody here, guarantee it. These wll move 30-40% a day. You think AGQ was hard, LOL.

    Me Again,

    One of the sure signs we are near a top is for people who have never traded an option or future in their life to suddenly start going in with gusto. This blog seems to have more than it’s share. They don’t understand how you or others are doing this in real time and are going to get killed. They take tidbits that are put out there and jump onboard thinking it is a sure thing. If this was easy we would all be wealthy beyond belief.

    I guess it is just part of the topping enthusiasm we have to have to make it a top.

  323. San Diego Jack

    Thanks DG,
    Appreciate your straight answers.

    86,
    FAZ, at 3x, you have to be very careful. I read once that these types of etf’s should not be held more than a few days with options(because of the whipsawing effect, and pummeling of one’s account). As core holding maybe, but keep a constant vigil on it.

  324. DG

    WARNING: All the leveraged ETFs (like FAZ) erode terribly when you are wrong. Even if the underlying item rallies for a month and then drops for a month, when it is back to exactly the same price you can be 20% in the hole! Even some of the non-leveraged ones do this (like UNG) which has dropped a ton when NatGas has done nothing. AGQ is going to drop much more than 2X silver during the D-wave. Know what you are buying! And never stay in the leveraged ETF’s through an entire cycle

  325. ALEX

    JAMES R

    Earlier you asked about AG and other silvers…so I studied the charts to see if anything has changed recently.

    I am still ( as of Fridays close) seeing AG as really BULLISH, until that changes.

    See this chart, and click on it to enlarge. I would normally Buy this set up 🙂

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

    (other charts here are a bit older)

  326. 86d4life

    SDJ,
    Thanks again for the advise. No sweat here on the leverage. I don`t do options. I see many others here that use them and I`m really glad it`s workin`, but I`m not there yet. When I`m ready, fine. I`m in re-build right now and that`s going really good, thanks to Gary and pretty much everybody here that contributes in a meaningful way(Thanks Everybody!!) so I really don`t want to put that in jeapordy to get some extra juice. I`ve heard numerous times that really good gains can be made just on stock and I`m believing it. JUST DON`T GET GREEDY!!! Lol.

  327. San Diego Jack

    Great Explanation DG,
    I couldn’t have said it better, if I could’ve said it at all!
    Many etf’s don’t track the underlying sector or index very well at all. VXX for the VIX is a prime example, and I stay far away from it.

  328. Gary

    Torreo,
    In case in haven’t noticed no one is ever going to go broke by following my advice because I have never advised shorting the stock market. As a matter of fact I’ve strenuously advised to just stay away from the general stock market.

    The upside potential isn’t worth the risk of getting caught when the next bear leg down begins. But on the other hand trying to catch the top of a cyclical bull is pretty tough to do.

    All I’ve done is tell people to get out of stocks and into precious metals. And if they don’t have a precious metal fund in their IRA’s then go to cash and wait for the next four year cycle low.

  329. 86d4life

    The only way you make out on the leveraged etfs is when they`re going the direction they`re designed to go. UNG was a horrid nightmare before birth. Like Rosemarys baby…..

  330. Steven

    Gary,

    Can you just say whether you think the move in silver is over because I noticed you are keeping some SIL & SLW. In other words do you think if the events of this week happen the way you think they might do you expect silver to tage $50 (or beyond)? It wasn’t clear from the weekend report and the confusing part was that you kept a meaningful portion of silver holdings. Thank you and I greatly appreciate an answer.

  331. JohnsMotivation

    Gary has said that he would look to short equities after they dead-cat bounce from their big fall. He said something like it doesn’t matter if you miss the first fall from 100 to 50, you can still catch the refall from 80 to 40.

    Oil is still flying high and is both commodity and industrail. Financials are leading down. Kind of like gold leads, but SILVER was out performing.

    As a economist like Ben might say, “the marginal rate is higher,” or increasing at a faster rate.

  332. DG

    Steven: If I may…Gary does not think the move is over, but he does think the risk of a serious hit before the final top is high, or at least high enough that hanging around for the last drip is not the best idea. Gold is steadier and still has a ways to go itself, without the steadier of waking up one morning to see it down 20%! My thought: spend more time looking at possible loss rather than just possible gain. most people look up without ever looking down.

  333. JohnsMotivation

    Steven,

    http://www.tradingeconomics.com/united-states/gdp-growth

    GDP is not like a HIV test. Silver did not test negative or anything.

    I don’t know myself how much silver’s industrialness is factored into the price. I think it is just catching up with gold.

    Kind of like the Yankess missed a couple of World Series Championships. Now, will they just win every other year, or are they the Red Sox and might not win a third?

  334. Gary

    Let me just clarify a few misconceptions. I would never short a bull market. I will however buy puts on a parabolic rally. no parabola in history has ever been sustainable. The silver parabola will collapse at some point and drop back to and probably below the 200 DMA.

    With out of the money puts you can risk a small portion of ones portfolio and achieve returns in the neighborhood of 1000% or better. Think of what 5% of your total portfolio X 1000% is. Then ask yourself is 5% of your portfolio worth the risk of a potential 1000% return? Of course it is.

    In the world of investing there is rarely ever a sure thing but the collapse of a parabola is one of them. That is a trade I’m willing to take with 5% of my portfolio.

    The other thing: For those who read the report the minute it came out SIL should have been SLV calls. I’ve corrected the report if you want to read it again.

  335. Moneyman

    Gary

    Do you think that the dollar can go lower than the 2008 three year cycle low?

    Like 68-69? Even lower than that?

  336. Hot Rod

    Sorry guys but I’m going to think out loud here for a second because I am rather confused on the USD direction and cycles, which is ever so important and really our only key leading indicator.

    From Gary’s charts, it looks like we are due for a daily cycle, intermediate cycle and 3 year cycle bottom (all in one). Is this correct? THis current daily cycle is running 28 days so far, right?

    So….

    Obviously, if we do continue the downward trend, odds are we bottom the end of this week with the jobs report and only god knows exactly where gold and silver will top out at.

    However, what if we do get bounce starting on Monday? That will make Friday the daily cycle bottom, correct? If Friday was the bottom then wouldn’t it also be the IT and yearly low? THat would be the 5th daily cycle and wouldn’t it be unusual to have another full daily cycle (6 in total) to the IT and yearly bottom? If we did have another full daily cycle until the IT and yearly bottom then Monday is day one and assuming we get another left translated cycle, it could rise for 5 days and then drop for 20, similar to the last one.

    Something is telling me that we are not that close to this being “over.” But this is only a foresight hunch.

    Something is telling me we may get the scenario that Gary was originally playing out, where we get the violent correction to shake everyone off once and for all and make everyone think that it is over, only to come roaring back for the blowoff top.

    Monday is a huge day to determine where we are going. I can see stats pointing to both directions.

    In 2008, there was a dead cat bounce (after an 11 day straight USD decline) which shook up gold and silver and primed for the top.

    Based on the bollinger band for gold, it is highly unlikely for gold to stay above it on Monday. IT is showing $1546 at the top, so the close shot way past it. In 2008, gold never closed above it, even at the C wave top. In 2006, gold closed over the BB right before the dead cat bounce in the USD, then after the correction made the run for the top without closing over.

    Scary stuff.

    Thoughts?

  337. JohnsMotivation

    OTM puts are basic portfolio insurance.

    After the 2008 stock drop, someone published an article claiming that one 10% drop in a single day(not sure of exact number) would break you even for carrying OTM puts for any entire year; and, the odds of getting at least one 10% drop per year were … (decent).

    Two 10% drops in one year, and you run into some good money. He said just keep picking up a couple of OTM puts when you see them cheap.

  338. Hot Rod

    Ok, now to the options discussion.

    With my lessons learned with options this past week, with the huge uncertainty forthcoming this upcoming week and with reviewing the % movements of the options contracts in GLD I have a potential strategy.

    #1 – It seems to me that options at this point should be quick strikes. Meaning, if the calls are bought on weakness and then you get the trend reversal and make a sizable % then you close them out. If you don’t and still believe reversal is coming then you can buy more and average down. Of course if D wave starts your f-ed.
    #2 – the at the money near term expiration move the quickest.

    The May 150 GLD call on Friday moved 86%.

    EXAMPLE:

    $1540 gold could be a potential point for correction in this runaway move, which gives up 2/3 of the gains from Friday. The May GLD 151 Call closed at 3.15, up 1.49 (89%).

    So, if GLD comes down a couple of points, the 151’s will correct significantly and will appreciate again very fast on a snap back rally.

    As a chartist, wouldn’t this make a very highly leveraged, very risky but potentially very profitable short term call purchase? Of course, it is predicated that GLD will turn and move in your direction quickly.

    In the event that it keeps dropping, there is still time to May 20th for GLD to come back.

  339. JohnsMotivation

    OK, so you have a inverse BB crash trade.

    I think the BBs stretch so that they cannot ever really stay above upper BB. Look at beginning of April for just the last three months.

    I hate BBs. The only reason I use them is for the 10 DMA.

    Have you ever read how to lie with statistics. My college professor rewrote the book.

    Have you ever overlaid the 20,2.0 over the 10,1.9 on the same chart?

  340. JohnsMotivation

    Don’t you watch survivor?

    If someone gave you the winner of a 1000:1 horse racing bet, would you put a couple of bucks on it that day? Especially, since you are already betting on other 1000:1 horses here-and-there.

    I am not sure about the DITM calls.

  341. 86d4life

    No I don`t watch survivor and I don`t bet on horses but I do try to learn things and one way is to ask questions of people that know things I don`t. Or didn`t you learn that on survivor? Or maybe at the horse track?

  342. Blake

    @86
    DITM Calls have a high delta (.75 or higher), which means that for every dollar move in the underlying security, the option will gain 75 cents). Great leverage for parabolic blow off!

  343. Bob loves Hawaii

    86D, the reason to be ITM on calls and OTM on puts is volatiity. When stocks rise, volatility/fear fades subduing the volatility thus muting a gain. Think of running up a down escalator, you work harder for the distance traveled, some call it a vol crush.

    When stocks go down, panic ensues, and volatility rises, so you are now running down the down escalator, thus turbo-charging your gains.

    There is a truism that stocks go up an escalator but down an elevator.

    This is why one buys puts and sells calls. You get an edge.

    DG already addressed the mathematical decay in leveraged positions, that is why AGQ, UCO, SKF puts are going to be so yummy when this party breaks.

    I hope this helps.

  344. Gary

    JohnM,
    The bollinger band trade only works on the downside. Again markets go up differently than they go down.

  345. David

    Gary,

    That seems a bit like semantics to me. Buying a put and shorting with a hard stop in place are substantively the same thing. And if anything on Earth is in a bull market, it’s silver.

    It’s your call to make, obviously. But just as some people took your call to lighten up by 15% as a call to sell everything, some people are going to go all-in on AGQ puts.

    I’ll say it again, for those playing at home: if Gary is early, and he often is, and silver goes to $70, you’re toast.

  346. notGreedIsGood

    question for all you option traders, as I have no clue about options and like to learn

    i’m tinkering with the options section of my online brokerage, and got the following quote for July 147 GLD call options:

    last traded: 8.10
    bid: 8.25
    ask: 8.40
    volume: 98
    open interest: 1483

    does this mean the current asking price is 8.40 for 1 call option? So if I want 100 call options, it costs $840 ??

  347. Gary

    There is no volume in AGQ options. If you have any kind of size at all and need to get out you are going to take a huge hit. Better stick with SLV.

  348. Rosabarba

    NGG,

    Option price quotes, somewhat confusingly, are per share of the underlying. The standard option contract is for 100 shares, so to get the price you pay for an option, you have to multiply by 100.

    To buy the GLD contract you quote, you have to pay $840 for a market order, or you can sell it for $825.

  349. Gary

    David,
    I very clearly said 5% of one’s total portfolio. I say that for the very reason you mention. Silver is in a bull market and it could go further than anyone expects.

    A 5% loss if you completely mistime the trade is an easily recoverable loss. If someone ignores me and goes all in on puts and loses everything then they did this to themselves.

    I’ve given people a very profitable plan to make huge profits during this entire C-wave without having to get stupid leveraged. Some people have listened and done great. Others have ignored and underperformed. Some did the exact opposite and blew out their account.

    Just goes to show you can lead people to the pot of gold but many will still get lost on the journey.

  350. Gary

    BTW shorting a parabolic move with stops is an almost sure fire way to lose money. Your stops will just take you out time after time after time. When you do finally catch the top you will be so shell shocked you won’t be able to hold the position anyway.

    The only way to realistically catch the down side of a parabola is to buy puts far enough out and then just sit still with them until they either reap the big reward or they go to zero.

  351. davedimes

    Thanks to the PM bull and Gary, I’ll have to dispose of a good six figures of AGQ. I’m not bragging AT ALL, I’ve never tried to piece that size out in limit orders. I assume market orders will not be the beset and limits will still be the best way to exit a large position. Any advice would be welcome.

  352. david

    Gary,
    I trust you’re feeling better. One question:
    Why hold SLW while selling all other silver positions? I’ve seen how SLW has reacted. It seems contradictory to me. Can you clarify?
    Thanks. Forjan

  353. Gary

    David,
    That one is easy. Unless this is different than every other C-wave for the last 10 years the miners will eventually get in gear and start rocketing higher.

    SLW has one of the best business models of any company on the planet. It looks to me like it’s just consolidating the 60% move out of the Jan. intermediate bottom.

    I’m not prepared to fall victim to recency bias and think the SLW is going lower simply because it’s drifted down the last three weeks. It hasn’t even made a lower low or lower high yet.

    So I’m going to stick with the odds and bet on this being like every other C-wave and the miners will kick in at some point soon.

    Now if you happen to have a crystal ball and can guarantee that this time is going to be different than the last 6 C-waves then yes I will sell on Monday. But if you can’t give me that guarantee I’ll just hold tight.

  354. Gary

    David dimes,
    You should be able to unload 6 figures worth of AGQ relatively easy as a market order provided you don’t try to do it right at the open. Let the market settle for a half hour at least, unless it gaps up big then you could probably unload at the open.

  355. fubsy_cooter

    @ Eammon 1227pm
    I’m going to use OTM puts. Probably July 44 or thereabouts.

    With that said, I’m playing the D-Wave for a low exposure (thus, low risk) low return trade. For example, I will probably allot appx the following amounts of my portfolio during the D-Wave, and really just bide my time until the A-Wave becomes a cyclical probablity, at which point I will get much more aggressive.

    So,
    1-2% SLV OTM Puts.
    15-20% EUO
    10-15% total shorts spread between a couple sectors. If things go as we expect, I stand to make 5 to 8% return during the D-Wave. I intend to make in the neighborhood of 50% during the A-Wave, so gambling on shorts during the D-Wave with the fed pumping money into the system isn’t going to be my priority. The D-Wave plays will be more of a way to hone some skills and not get bored.

    f

  356. Driver

    dd,

    I think you could easily sell them in 200 or 300 share chunks through the day at the market and be fine.

  357. Blake S

    Gary,

    If appropriate, would you recommend a retail broker and supplemental data resources for executing the portfolio moves you make? Some here have recommended IB and TOS. I would welcome other opinions as well. Thanks.

  358. Rosabarba

    I’m also not sure about SLW benignly consolidating the gains from earlier in the year. Call me a nervous nellie, but I don’t like to see consolidation take place below the 10, 20 and 50 moving averages, the first two of which are sloping down, and the 20dsma has held SLW down since April 11. The 50dsma was also never tested from above at the March low.

    This would be less of a concern (though still concerning) if either silver or the broader market were also selling down. While I understand miners lag and lead at times, I don’t think it’s cherrypicking to note that SLW is up less then 3% from where it opened the year while SPY is up 8% and silver is up 50%.

    Color me concerned. 😉

  359. DG

    Fubsy: You and I often think alike, but I think there is quite a bit more to be made in the D-wave and that the Fed risk is modest. (I kind of like shorting because stocks go down a heck of a lot faster than they go up). Once people start heading for the exits on some of the overblown sectors it’s going to be something, IMO. I am going to have a lot of EUO and watch as the news on Spain, etc. takes the headlines. See you there!

  360. torero91

    Gary,
    Calling tops is indeed very challenging and you have not recommended shorting the stock market. If you choose not to trade the stock market, I have no problem with that whatsoever. However, you do post your thoughts on the SPX and I do choose to trade it. If I disagree with a comment in your report, the blog is the ideal place for us to discuss it. If I could be wrong, I want to confirm it and learn why. If you could be wrong, I assume you would like to learn why also. That’s all, really. I pay for access to data and trading techniques that have been successfully used for over 60+ years. I make money in bulls and bears and trade the tape, period. I do realize that the blog is almost exclusively about gold/silver and do not intend to change the focus. However, it is difficult for me not to post when I have real concerns about something I disagree with in your report. I assume other readers that trade the stock market also find the discussion useful.

  361. jeff

    torero

    i believe gary will short the spx when the time comes. he does not like to trade it because helicoptor ben has streached the cycles in the market and has been crazy. when the dollar bounces out of the 3 year cycle low, he as said he will try to find something streached the most over the 200 day moveing average to short.
    he doesnt short the pm bull because the suprises are always on the upside on the bull.
    also he sais if we were to buy a put on the c wave, only buy what you are willing to totally lose.
    we all like to hear tradeing ideas and nobody, particularly gary will be upset. if he really disagrees, he will give a counter argument and we all still learn.
    gary puts up with beanie who seems to always be shorting precious metals.
    so its no problem, post away =)

    also we like it if you post real time trades. it helps validate your ideas

  362. GGuy

    Boys,

    before ever thinking of shorting a bull market that, at the moment,you absolutely do not know has ened, take a look at the other commodities, there are some of them that are less dollar driven or oil driven, nad will continue to rise when money will flow out of stock market or reciouses.

    There are some industrial metals, sugar, coffee, cocoa, whos cyclical situation at the moment is very interesting (particularly sugar).

    By the way Gary, i marked the last low a week ago on S&P as a daily cycle low (i call it M cycle). Yes it lasted a little less, but the push up we have had after it is not compatible with an half cycle that is the last of a daily cycle.

    Have a nice trading all.

    G.
    http://www.ellipsetrading.com

  363. david

    Gary
    Thanks for the reply. And I’m sorry if it seems I’m belaboring this point. I know by now the potential of SLW. It is this contradiction I’m asking about: You feel there is a not insignificant probability of a sudden precipitous drop in the price of silver. Hence, you sell all other silver positions. However, you feel confident enough to hold SLW. I sm confident that SLW will drop like a lead balloon in the event of a precipitous drop in silver. Holding SLW implies, to me anyway, you aren’t worried about a significant drop in silver price. Ergo, a seeming contradiction in your assessment of the probabilities of a drop in the price of silver.
    I’m sorry if I’m slow on the take. And I’m sorry for prevailing on your very limited time to bear with me here. You have amazing patience dealing with us all.
    Thank you. Forjan

  364. Gary

    David,
    A large drop in silver before the C=wave ends is a low probability event but one I’m going to protect against by converting my AGQ and SLV positions to gold. I’m going to let my much smaller mining positions ride because it is a low probability chance.

  365. david

    Gary,
    Thanks for that. That does indeed explain things. I had a feeling it was due to a relatively small amount at stake with SLW. But, I wasn’t sure.
    Thanks again for taking the time for me.
    Be well.
    Forjan

  366. P.K.

    I just found this on another blog and I do not know what to make of it………………………………….

    “COT report:

    Gold: 8,312 contracts covered. Bullish.
    Silver: 8438 contracts covered. Bullish.

    Interesting. Thats a large amount of contracts to be covered in Silver especially at these prices. Now if I was JPM and I knew where the price of silver (or anything is going since THEY are the market) WHY WOULD YOU COVER AT ALL TIME HIGHS?
    If silver was truly in bubble territory they would have added to the shorts and covered at a much lower price. Something BIG is about to happen.”

    …………. any comments on this would be appreciated.

  367. notGreedIsGood

    Gary, or any one experienced with options:

    You said, that you will dabble with out of the money puts on SLV in preparation for the D wave, which might yield 1000%.

    My question is why would the writer of the put be willing to sustain a loss of 1000% on their put premium? (eg. why would they be willing to put themselves in a situation to buy SLV for much more than what it is worth?? )

  368. Gary

    Most option writers will cover their downside risk with spreads or they will buy the option back if it starts to go against them.

    Not,
    The only time I’ve found the COT reports to be predictive is at bottoms when the Blees rating is above 90. I see where many bloggers like to parse every little move in the report as having some meaning but they simply don’t.

    At the bottom of the D-wave we should see a blees rating of 100. That will be the time to pay attention to the COT. Until then you’re just wasting your time.

  369. Gary

    Hot Rod,
    The blees rating formula is programed into the COT spreadsheets on the premium site.

    You can get sentiment stats at sentimentrader.com

  370. Brad

    I have a question. I have a Schwab account and a 401K with a brokerage link with Fidelity. I have to wait 3 days for a trade to “settle”. When I read you guys will be rolling out of one investment into another on a certain day does that mean you don’t have to wait for the sell to settle before you buy something else with that money?

  371. MrMiyagi

    Brad,
    Generally, with a margin account you don’t have to wait for the dust to settle as you are advanced the money.

  372. MrMiyagi

    Brad,
    In Canada, registered retirement accounts that are somewhat similar the Roth/401k (as far as I know) don’t have margin.

  373. Driver

    Brad,

    I have Fido, so when I make a trade with an ETF/stock, I can immediately use that money for another trade. Where I run into problems is when I then try to sell that bought item within the 3 days, UNLESS I have enough cash in the account to have not needed the money from the first sell to make the buy.

  374. W

    I have had ocassions when Schwab acceped an order without “settled” funds in the IRA/Roth. Have no idea what the exact perameters are for this, but actual “magine autourization” is not always required.

  375. 86d4life

    W,
    Right, but the catch is when you try to sell the product you bought without unsettled funds. That`s when you get the good faith violation and 3 of those in one rolling calendar year and they cut off your trading account for 90 days. So much easier in a margin acount, but it seems that doesn`t apply to an IRA. Or maybe just the IRA with fidelity.

    On that subject, has anybody here done the shopping around and really decided which brokerage has the best overall package. Or I suppose they all have strengths and weakness`.

  376. W

    Lillie
    Hope you are still reading. In catching up on the posts here, I was surprised by the responses to your number-of-options-to-buy question. Just taking an equivalent dollar position in stock/account % is not what Gary has done in the past. He only buys as many options as control the number of shares in what would be a % of account stock position. Note he is using ITM positions. And yes that means you have cash in your account, but do have the same exposure as a share position.

    I get the feeling that you are reading his move as a massive increase in exposure…is that right? From what I can see, that is just inconsistant with how Gary operates.

    Anyone…Gary? Please correct me if I am mistken…

  377. W

    btw: I made no attempt to adjust my previous for the effects of delta. It appears Gary does not, but do so if inclined.

  378. W

    86d4life
    OK, you must be trading more and with a high % of available funds. I’ve found that with using options AND only the number of them appropraite for my desired exposure, I been carrying more cash in all of my accounts. So, unsettled funds has almost been a non-player in even non-margin accounts.

  379. Shalom Bernanke

    I’m not going to take part in shorting silver. I’ll stick with Gary’s time-tested “do NOT short a bull market” advice.

    Especially the strongest bull market there is. Even if it works the risk/reward is unfavorable, IMO.

  380. W

    SB,
    Agreed, however (seems there’s always a “however”), is the bull market you refer to the secular bull, including d-waves, up to, say, 2015-16, give or take? Also does you “shorting” include measured option activity timed to ABCD wave activity?
    Thanks…

  381. abc

    Hi everyone!
    This is my first post here, so please be understanding.
    I follow Gary’s reports for about a month and a half. During that time instead of earning some money I lost about 10% of my portfolio. Now, I own SLW, SIL and AG (so only miners). Although they underperformed recently I was quite calm. But today I’m totally confused… What do you advise to do? Should I sell all and buy some gold ETF? Gary is not going to sell his miners, but it’s only half of his portfolio. Any advice would be appreciated!

  382. pimaCanyon

    re settlement of funds in 401k and IRA: I have the same problem. However, with TOS all I have to do is contact them via a live chat, ask them to release the funds and then I can place a trade with those funds. Usually takes a minute or two to get someone on the chat.

    The only restriction then is that I cannot day trade with those funds. In other words, I cannot buy something and then try to sell it the same day. So if you’re broker can release the funds, just be very careful when placing your new trade. You don’t want to mess it up because you won’t be able to get out of it till the next day.

  383. pimaCanyon

    FWIW (and stating the obvious here), I know Gary has said 5 percent of his account for the SLV put (NOT now!, but at the appropriate time). He has also mentioned in the past that “full position” means whatever you are comfortable with. For Gary that is 100 percent invested. For someone else it might be 50 percent or 70 percent.

    So the same rule would apply if/when buying OOM puts. Gary is comfortable with 5 percent. For me I would not be comfortable with the idea of losing 5 percent of my account. So I will very likely take the trade, but using only 1 or maybe 2 percent of my account.

    The point is that you trade only an amount that you are comfortable losing, because with options, especially out of the money options, losing the entire amount is a real possibility. Think of the trade as a lotto play, to use Poly’s lingo.

  384. notGreedIsGood

    @abc

    history suggests that miners have always ezxploded higher with a c wave finale, but this time it may be different, and itt is possible that we hasve alrerady seen the top with moiners. If u swqitch to etfs then you can preolly recoiver the 10% u loss, at the end of the c wave, but in case miners shoot higher, you lose out on those gains.

    If i were u i porolly switch to etfs, i dont trust the miners.

  385. Brian

    Abc, Joining the service at this stage I would say to take your time and learn what is going on. Then once we reach a good entry point for the next stage of this bull you will be informed and ready.

  386. Jesse

    OPINION FOR NEW OPTIONS TRADERS

    In my opinion, talking about buying hundreds of option contracts is INSANE, unless you have a 7 figure portfolio and it is just a few percent of the portfolio value. If you haven’t realized it yet, options are like dynamite, and if you don’t know what you are doing you will get blown up.

    Also, I would add that when Poly talks about buying hundreds of lottery tickets he does this because he is playing with house money. After riding slv options from the intermediate low you can bet he has 6 figure capital gains he is working with. So if a trade goes bad no sleep will be lost. In fact, nearly half of that house money he is playing with is just taxes he would have to pay the government because any losses can be used to offset some of the massive gains.

    My advice is to start small, there is plenty of time to get rich from this bull. Maybe follow Gary into a FEW slv puts for the D wave. Then try a few more when it looks like the A wave is underway. Study, learn and watch the pros, then by the time the next C wave comes around be ready to place some bets near an intermediate low and you will be on the road to riches.

    Personally, I will not be posting anymore of my option trades, I now see why Danno was cautioning me on talking about the merits of options. It is crazy that people are blindly following trades that are posted without understanding options. Not that anyone is probably following my trades, but just to clarify my recent post about my “Gary gamble” of buying a FEW SLW June 45 calls. To me, this is a good example of a reasonable lottery play. I bought 5 contracts for a cost of about $800. If Gary is right and the miners start to move up strongly, then a price of $60 for SLW seems reasonable. That would be about a 1000% gain and $8000 would pay for a nice vacation. If not, I lose $800 and have a loss to use to offset some of my earlier gains. Won’t hurt me if I lose, but a nice gain if it happens.

    Until you know what you are doing with options it is best to treat any investment as money that you are completely prepared to lose it all, because it can happen in the blink of an eye.

    With all that said, I still hope Poly and others will post their trades, it is very educational. I would just caution people about following their trades, I am sure it only makes sense for their specific circumstances.

  387. Hot Rod

    I have a stock charts membership but didn’t pay the extra $10 for live quotes. During the day the $silver, $usd, $gold do not update.

    If I pay the $10 will these show real time data?

    I also noticed that the charts won’t let you go to intraday, like a 30 min one.

    Thanks

  388. W

    pimaCanyon
    Enjoy your posts, but it seems you are mixing apples and oranges in the that last one. To me, Gary is obviously comfortable with more than 100% invested because he is using margin…or do you mean 100% is fully margined? ie. For me currently I am using no margin, but am levered through options to well more than 100%, effectively, as Gary (and I) calculate that investment. Also He has used ITM calls lately, it remains to be seen if a posibble put play will actually be in or out. For me that would make a difference in a % commitment. Anyway the point is I try to limit the application of Gary’s comments/recco’s to what he is actually doing, not what some other system might dictate.

  389. Poly

    Jessie,

    That is correct.
    I’ve also said I have no more than 3% in OTM calls (currently) and I view them as worthless, until cashed out. They really are hard to profit from, even if you’re right on the underlying move, you’re often beaten by time or the massive gains when it’s going your way buck you right off.

  390. Wes

    The miners have underperformed in both gold and silver for this entire intermediate cycle. You can try to sugarcoat it if you want, but HUI and GDX and GDXJ have underperformed gold and SIL and even SLW have underperformed silver.

    This has been going on since the first of December, and if the miners are sniffing out anything, they must have record long noses.

    If miners usually outperform in the final part of a C wave, somebody needs to tell them to get on with it. Frankly, I’m glad that those investing in miners aren’t using my money.

    I plan to have no part of them.

  391. Wes

    I’m a bit confused over the seemingly total acceptance that gold is outperforming silver.

    That has happened for exactly one day in a row. The gold/silver ratio closed at a low for this intermediate cycle on Thursday.

    I’m unconvinced of this sudden outperformance of gold.

  392. KAL

    Wes, just out of curiosity, what would it require to convince you of the “switch” from silver outperforming gold, to the opposite? Thanks.

  393. Dan

    Part of the argument isn’t just the outperformance, it’s the volatility that Silver has shown that Gold hasn’t been quite so susceptible to.

    But Wes, I do see your argument, everybody is still yelling at the top of their lungs that the ratio should be 16:1 and we’re nowhere near there yet.

  394. Haggerty

    Gary

    Just want to throw something at you. Big Bob who loves Hawaii, mentioned that a lot of the silver miners report earnings around the May 7th to 10th area. Do you think that could be a point when the market starts to take notice of how undervalued these miners are?

  395. Slumdog

    Wes, to what do you attribute the obvious and quite large, on a daily basis, divergence between SI and GC?

    This divergence is more surprising than the outperformance divergence shown by SI when SI rose much more than GC.

    BTW, my own opinion of Trader Dan’s views is that he has nothing of positionable predictive value to say, rarely anticipates the future dependably, save the secular rise in the PM’s, and thus long ago I stopped reading; so his thought about Commercials covering and thus leading to an exhaustion in short covering is untested palaver.

    The huge shorts being taken, probably this time now as a second wave, failed the first time, and while Friday was closing day for some types of contracts and thus drives down were expected. The only thing I see in their favor is the after hours drop, creating a gap if NYPit opens at the overnight close, but nonetheless, a unique break in a trend, thus showing “weakness”.

    Most here talk about 2008 and 2006. I don’t. I reference 1980. There was a steep, short, sharp drop that occurred. I eyeball that as occurring in the 60-75 range.

    Yes, I’m concerned about that drop. So, the question is when that fear, which now permeates the market, here and in the MSM, will shift to greed, moving the number to 60-75. In that range, I’ll be looking at SLV puts to cover my physical, and a few more to benefit from the then much higher probability drop.

    Even there, one has to be very quick, with a clear drop target, my guess being back to 49-50, just where it’s experiencing upside resistance.

  396. Bob loves Hawaii

    I am on the board of a classical school, in classical education our children learn logic and logic fallacies.

    One of those fallacies is looking at a small sample and then extrapolating a general conclusion.

    Ergo, SLW is under performing therefore the miners are under performing. This is patently false. Go overlay SLV on GORO, GOLD, EXK, AXU for example. There is no under performance.

    They matched silvers rise, and look like rectangles or bull flags to me lately.

    I know a lot of people like indexes to not have company risk, but nothing beats a little homework and chart work to find great companies, and selecting a basket of them and adjust as necessary.

    I am not saying they are not a canary going forward, but they have not broke down yet either.

  397. Shalom Bernanke

    Miyagi,

    Had I been long metals instead of miners, yes I would still be long it all and also intended to keep some (at least 25%) even through the D-wave. Since I had focused on silver miners and they haven’t participated the last month +, I not only didn’t want to keep them through the D-wave, but couldn’t justify staying with them when silver was exploding. in short, if I were in metals only I’d keep a good portion of them and shut off the computer.

    W,

    Good question about the definition of “bull market”. Rather than label it, I suppose it’s more accurate to say I’ll no longer short any market with moving averages accelerating to the upside, regardless of where we are in the secular move.

    This approach has also kept me away from shorting the S&P even though I feel it should decline.

  398. Shalom Bernanke

    My bet is that some who short silver will make money but that it will not be much, while most will lose even if a decline materializes.

    One consideration is how a trader will act once a short side trade in silver begins to work out. It will not be long before they’re convinced to take profits by covering the short. Fear will grip them at the first sign of silver strength.

    There are far easier ways to make money, IMO.

  399. Slumdog

    Slightly OT: The missiles that hit the Quadaffi house destroyed it completely (big crater says an obscure news source). Assume it killed Moammar. Would that not cause oil to drop and thus lead off a “peace is here now” shunning of the safety PM’s?

    In simple words, the news here still unelaborated, may lead to a short sharp drop. And yes, I know this and a dime will get me 10 cents.

  400. Wes

    Kal,

    I’m playing this leg exclusively with options, so switching will not be necessary unless silver started going down.

    I’d say a week of underperformance by silver would convince me, but I was planning to add gold options exposure anyway.

  401. abc

    Brian & CouldNotResist

    It may sound weird, but I think I know more of less what’s going on…
    Anyway I’ve taken a hit during previous silver dip. On that Monday, when dollar peaked I’ve sold my PSLV (I’m a foreigner and that seem like an opportunity). Few days later Gary said that waiting is to ‘risky’, so I bought AG. And I sit and wait since then. But vistas in yesterday’s report are quire bleak for me. And that is the reason I’ve posted my previous question. I’m confused and don’t know if I should dump my miners stocks and buy some gold ETFs.
    Thanks in advance for any of advice!

  402. Silverman

    abc

    Welcome aboard. You’re late to the party but there’s still time to profit from the remaining C wave. The higher percentage play is now outlined in the weekend report. Suggest you use additional cash, if you have it, to start rebalancing your portfolio or consider swapping some of your silver miner investment for Gary’s gold plays. Good luck!

  403. Brad

    AgApe47 posted this on Turd’s blog:
    Looks like next week will be interesting as physical buying from India will hit BIG TIME for the MAY 6th holiday….as well as everyone else on the planet.

    Akshaya Tritiya falls on May 6 this year. It is considered an auspicious day, the golden day of eternal success. Many bullion houses are offering their customers an advance booking on the white metal to neutralise the impact of rising prices.

    INDIA 2011 DEMAND = 3,300-3,450 tonnes

    US SILVER PRODUCTION 2010 = 1,200 tonnes
    WORLD SILVER PRODUCTION 2010 = 22,800 tonnes

    India’s 2011 demand will be three times US total silver production.

    India’s 2011 demand will be 15% of World Global silver production.

    From http://silvergoldsilver.blogspot.com/2011/04/blythewhy-are-you-covering-your-shorts.html#comments

  404. Wes

    Slumdog,

    Some markets were closed Friday. I think at least some of gold’s outperformance that day was caused by the unexpected 2nd rise in margin requirements on silver in a week.

    In addition, people switching from silver to gold because of volatility fears also contributed.

    Both effects are probably fleeting.

  405. pimaCanyon

    W,

    Maybe my post was confusing, sorry about that. My point was that when Gary talks about a full position during rallies (C wave or A wave) for him that is 100 percent. He also goes ABOVE a full position when he considers the risk/reward is favorable, so he uses margin at time to give him for than 100 percent exposure.

    BUT he also states that that is HIS comfort level. He doesn’t recommend that everyone go 100 percent and then margin above that when he does. He recommends that you invest to the level you’re comfortable with.

    So the same thing applies if/when he takes a 5 percent put position to attempt to profit from the D wave. 5 percent is a number he’s comfortable with, but each person here needs to pick a number that he or she is comfortable. I know that for me, 5 percent is more than I’m willing to risk on an option play where I could lose the entire amount. So I will go with 1 or maybe 2 percent.

    Position sizing works both ways–during rally mode (A or C wave) and during severe correction mode (D wave).

  406. pimaCanyon

    SB,

    Good point re the silver short, how will you know when the bottom is in?

    However, if the decline is a for-real D wave, then we would expect AT LEAST a 50 percent retracement of the entire C wave, so that would be a likely target to exit the trade, no?

  407. Alex in Montana

    D Wave Idea:

    GMO – Jeremy Grantham’s company – in their quarterly report said,

    “One group that we refuse to hold,however, is global small cap stocks and in particular, U.S. small caps. On our data, small cap stocks are now as expensive as we have ever seen them”.

    These guys caught the tech bubble, so if you are thinking of shorting stocks, foreign or domestic, try shorting the Russell 2000 domestically and small cap foreign stocks.

  408. abc

    Silverman,

    At this point I don’t want to put more money in PM. What’s more my broker doesn’t provide me with options, so I can’t use leverage (the only way I can leverage are CFDs or Globex). That’s why I cannot follow directly Gary’s “movements”. Anyway thanks for your advice – I think I swap sth to PHYS (I trust it more than GLD).

  409. pimaCanyon

    holy crap, silver down to 43.80! Down 10 percent! Gold also falling hard.

    Any news that might be a trigger here?

    (Maybe there’s something to be said for trading futures, eh? Those of us with etf’s have to wait till tomorrow morning to do anything.)

  410. pimaCanyon

    silver’s drop so far hit the lower channel line of the rising channel from the 1/28 low. If that channel line gets busted, look out below!

  411. Poly

    Well, this is way overdue. For those holding Silver, don’t panic and sell at the lows.

    We hopefully will print our way over daily cycle here and we can enter BIG for a final parabolic run.

  412. Poly

    Dollar index down too, so this looks to be just a sharp profit taking. Although anything can happen between now and NY open.

  413. St. Deluise

    looks like silver’s D wave should should be over in the next few hours at this rate.

    can you imagine how many people are going to go all in shorting it first thing monday?

  414. pimaCanyon

    Poly,

    So far this is not affecting gold. Since gold is the metal we chart, then we’ll need gold to start tanking in order to see something that looks like a daily cycle low, right?

    It may happen–the dollar is getting a serious bid here!

  415. notGreedIsGood

    who is planning on buying more silver? if this mirrors 2006, silver will likely make another stab at 50, while gold keeps going parabolic…

    perhaps it’s safer to be in gold then? last week i thought switched too much AGQ to DGP, but after seeing this, I don’t think I switched enough 😛

  416. pimaCanyon

    hkc,

    Most who have AGQ and other etf’s cannot trade them today, so they have no choice but to wait.

    Can you trade this evening? If so, it’s a tough call to make. If you sell now, you could be selling near the lows. But with the dollar in rally mode, PM’s are going to have a hard time rallying.

    I believe Gary does all of his trading during regular trading hours.

  417. Poly

    Pima that’s right. But let’s just hope they can both print, wecan reset the clock.

    I sold my April 11th at that top sound $42. I think that will provide all the support. But if this continues into trading hours, don think I want to wait for a bottom or swing. Get right in there and buy it up.

  418. Jerred

    Money is flowing out of SI and into GC. If GC rolls then all of that new money will have to sell.

    Just a thought

  419. pimaCanyon

    Poly,

    How can you be sure that this drop is not the start of the D wave?

    We had massive volume on SLV and UUP late last week. Higher than normal volume on GLD also. And we saw SLV and AGQ appear on SoS list on Friday.

    The volume on the charts looks like major reversals to me.

    What will be your indication that the D wave has begun?

  420. hkc

    Pima:

    Unfortunately, I can only trade right before Market opens, or during regular hours on Fidelity. I had a feeling this would happen after the moves last Th/Fr. Transferred some to DGP last week, but still have a chunk in AGQ/SLW (no margin or anything). Was waiting for Gary’s signal to move them all. So, I guess I should just ride this through at this point. I hope Gary will give us some pointers before market opens tomorrow.

  421. Vonda

    This is exciting…Kudos to those who will hopefully be able to pick up some bargains.

    Who would be trading this tonight? As opposed to last Sunday, when prices were driven up, what’s the advantage to create a potential panic during a time when most people don’t have access to trading?

  422. Wes

    Even if silver recovers some overnight, I think we can look forward to further silver weakness as people move from silver to gold in N.Y.

    In fact, if we’re lucky, that could be the retest.

  423. pimaCanyon

    Well, –IF– silver does not trade below 42.20, then we have a beautiful channel that silver price has respected going all the way back to the January low.

    We’ll see where it is tomorrow morning. If it’s close to the lower channel line, that would be a low risk buy.

  424. Vish

    TheBookGuy,

    Not really. Garry was waiting for $50 to switch. He was convinced it would tag $50 before tanking. So far it looks like to teased his target.

    Could still happen… but at the moment, the turn that Gary was looking for looks like it already happened

    I’m glad I already switched completely to gold. thedocument along with gary’s thoughts helped me come to that decision last week

  425. Poly

    Pima,

    No sure things I guess:)

    But you have to expect one of these up to a parabolic rise. Plus gold is the driver, it hasn’t exactly gone parabolic. It’s not a dollar influenced drop. Plus were stretched and it’s natural to drop, which is why gold doing better in relation.

    I hope this holds, I think its the correction before the final run. Going to buy it like nothing else. Worse case we had to bounce out of a cycle low drop and at least come back to test. We could add our puts then for protection.

  426. Wes

    pima,

    Channels and trading levels are old school. They almost always are broken these days.

    It’s the new normal.

  427. Wes

    Think about the new margin requirements in silver. A bunch of folks are probably going to be sold out tomorrow.

    If all we get is a double top in silver, that’s all we need to make a fortune.

  428. Hot Rod

    If Gold does hold at $1543, we have a perfect almost $45 correction right in line with the runaway move.

    Poly, I’m with you and think this does pose a huge buying opportunity for gold.

  429. funmike

    The dollar is not moving that much, gold is still up, and who knows what the volume on silver is. Tomorrow morning will be more telling. London is still closed. Maybe that is a factor tonight. I don’t see how the D wave can start if gold is still moving up. Gary keeps telling us that gold is the driver.

  430. pimaCanyon

    thanks, Poly.

    So if we do get a significant drop in gold, you saying that this would be a daily cycle low and because we’re so late in the cycle, we should bounce out of that in a day or two.

    If the D wave has started, we would expect that bounce to only retest the highs, not make new highs, so if we rally for a few days, tag the highs, and then head south again, that would start to look ominous–the new daily cycle would be left translated.

    So maybe some puts for protection on the retest of the highs would be prudent.

  431. Wes

    pima,

    I have no idea. It’s really not all that important.

    The big money will be made from wherever silver bottoms, so just play what you see.

  432. Vonda

    Vish,

    I realize BigMoney isn’t sitting with my little brokerage account 🙂 What I meant was: If the idea is to create a panic RETAIL sell off, wouldn’t it be more advantageous to do so during retail hours? (If that IS the idea.)

    I was just curious.

  433. hkc

    Vonda:

    Psychologically, this “can’t do anything” will push people to get into the “fear” mode, and act without logic thinking! I can’t even imagine how the people who are in options are feeling right now!! Unless they can participate in this waterfall trading!

  434. pimaCanyon

    Vonda,

    Because volume is usually low during after hours trading, big money can move price more severely then, no?

    I’m also wondering how much the recent margin hikes in silver are contributing to tonight’s panic.

  435. Vonda

    Thanks, hkc.

    I’m in options and I’m thinking “Well at least my ultimate loss is limited and KNOWN.” My biggest decision will be whether to and/or where to deploy remaining cash. Glad I have the night to think/sleep on it!

  436. Wes

    If we get a gradual improvement overnight and then the bottom falls out again in the morning, I’m planning on buying the retest.

    If it turns out to be the D wave, I’ll give some back, but I think it’s certainly worth the risk.

    A pleasant thought, the government will be footing 40% of the loss and they don’t even get a say.

  437. Vish

    Idea? Whose idea Sounds like you buy into the whole manipulation cuckoo talk

    This is just buying & selling. i.e more sellers than buyers.

    Maybe there is a big seller and no buyers just yet, since yes this is likely to be a lower volume part of the day

  438. Vonda

    Wes!

    Ha ha!! Now that IS a pleasant thought!!! I only lost 60% of the 30% drop in portfolio. Gov’t taking the rest!!!

  439. Jerred

    Vish,

    there is no such thing as more sellers then buyers or more buyers then sellers.

    How can you make a transaction if you don’t have the other side.

    What you are witnessing is price discovery. Buyers are not enticed with the price of the asset so they stand aside.

    The buying that you see is short covering, not accumulation

  440. W

    pimaCanyon
    Thanks for the clarification, that makes sense for me now.

    Wes
    Excellent point about the likely margin calls last week and into Mon/Tues. May well be a dip that sets up a double top…I’d like to think so…expect to have some skin in that game.

  441. St. Deluise

    /SI, i figured we’d hit this blue MA (it’s an aggregate of several key MAs) eventually but i didn’t think it’d do it in 30 minutes.

    http://i53.tinypic.com/2556nfc.png

    same severity correction as march. if we’re “lucky” and we see more weakness below $42 or so it gets down to the next one in the high $38s, as we saw in january. i also think we see a $50-52 print sooner rather than later but below $38 and i’m out.

  442. Tudor

    Well, I bought a single mini-silver contract (1,000 oz.) last week as my first foray into the futures market and this is causing some discomfort, but my leverage is very low, so I’m cool, I’m cool. I’m elated I resisted the temptation to mess around with a full size futures contract (5,000) oz.). Yikes!

    If I like what I see tomorrow, I’m a buyer here. Nothing else is tanking, just silver. BTFD.

  443. funmike

    More sellers than buyers would to me mean that a seller or group of sellers have more shares to offer than buyers are willing to take unless they are offered at a substantial discount. Whether or not the verbiage is technically correct does not affect the outcome–a temporarily lower price.

  444. catbird

    Shalom Bernanke,

    You’re a man who likes buying a good puke out. Well, I’d say this qualifies.

    Are you going shopping for white metal in the morning if the 43ish area holds?

  445. Wes

    For those wanting to see where we are on their charts, I think the silver low corresponds to a SLV price of $41.17, well below the 20 dma.

  446. funmike

    Silver trying to head up. Maybe the market has absorbed the excess shares and this aberration will soon be over. Still no major demand for the dollar. Its headed back down.

  447. Dan

    Ouch there goes a nice chunk of my account! No point in panicking at this point. Curious what Gary has to say about all this.

  448. St. Deluise

    charting /SI and SLV have given me wildly different interpretations at times. when in doubt i side with /SI.

    as to how i’m playing this.. i think i may buy a june lotto call or two for SLV, $49 maybe- just a little over the old high. hopefully should open cheap as hell. either this thing makes a quick new high or that’s it.

  449. pimaCanyon

    Bob Loves Hawaii,

    What are “naked” sell orders in the futures markets? Futures, you’re either short or long, neither is naked, both have to be supported by enough dollars in your account to cover the margin.

    “Naked” shorting applies to shorting shares of a stock where you don’t have to borrow the shares. (Is that even still legal?) I don’t see how naked shorting can take place in futures markets.

  450. Moneyman

    Nah..No reason to be worried..Silver will soon be over 45-46 again..

    This drop was kind of expected..I dont feel bad..Dont wanna puke or somethink like that..This will be a volatile tripp and here we go..

    Dollar is weak..Oil and gold is holding up well..

    The only think I regret is that I didnt swift more silver to gold..

    Take Care!

  451. Dan

    Bottom line is its all about the dollar. If the dollar isnt done its move down then silver will rebound to previous highs and gold will keep making new highs. If the dollar correction is over then this is the start of the D-Wave.

  452. Tudor

    Naked shorting in commodities occurs when you sell a futures contract and you don’t own the underlying commodity (obviously), and you don’t borrow it either. That’s my understanding.

  453. Shalom Bernanke

    catbird,

    I just checked silver. 🙂

    Yes, this drop has me very interested in silver as a long. Let’s see how things trade tomorrow, but it’s possible I buy late morning weakness.

    If I were long like some here, there is no way I’d consider selling this puke-out into the best bull market going. As much as it hurts, this is exactly what they want to see.

  454. David

    The silver stocks have been pricing in this drop for weeks now.

    Now that we’ve had it, we should see some buying on them soon.

  455. Shalom Bernanke

    This is how a true bull market acts. I have zero doubt that longs will have higher prices to sell into, even if they have to wait a bit.

    Silver miners told us to beware short term, but nothing has changed in the bigger picture.

  456. gold silver troll

    maybe the miners were foreshadowing just this and will rally into june now

    If I see weakness tomorrow (silver down more than 20%) I am thinking of going in at 150%…any thoughts?

  457. n1tro

    Pretty sure what Bob is referring to is the fact that a market maker like JPM or HSBC can’t short without having the metal to back it up. Market makers have to be on both sides of the trade given their status but it has been implied that JPM and others short on their own and not as a response to customer orders.

  458. David

    Keep in mind that EVERYBODY has been anticipating exactly this scenario: a 2006-style plunge, then a rise to a double top.

    Don’t be surprised if there are a lot of buyers waiting in the wings tomorrow morning.

  459. fubsy_cooter

    Fwwling for noobs that have been piling on over the past couple weeks. Ouch! Just strenghtens my core belief that its more important to consider what you will lose in a new trade than what you may gain. Keep the losses small and the wins steady and a bull will make you wealthy. Risk control is job #1.

  460. Hot Rod

    Moneyman,

    That was the scenario I was pondering in a prior post this weekend. “If” we do get a USD bounce into the jobs report then it marks Friday as the cycle low for USD. That would mean that we have another full cycle for the USD and for the C wave top, correct?

    THis would also mean that the next cycle low would be the intermediate low and 3 year low, correct?

    It would also mean that it would be 6 full cycles in this IT, which is very abnormal, right?

    I am new to the cycle thing.

  461. David

    Moneyman,

    As I said earlier, I think the final phase will see indiscriminate buying.

    Silver, gold, stocks — it’s all going to move, and I’m not sure it’s going to matter what you’re holding.

    Now if only we knew exactly when that dollar rally is coming…

  462. Moneyman

    Hotrod

    I remember your post..:-)

    Maybe it will turn that way..

    But I dont think the dollar will bounce that much..Its doomed!

    Friday can be the turning point and we go down again in the dollar..Full cycle left both in the dollar and in PM:s…

    I dont think silver will fall further..

  463. Aaron

    Wow. Im really glad I gave up trading silver, that last margin raise totally killed the small guys holding. The margin calls will come at the close tomorrow, so be careful guys!
    At these prices, it can be lethal as it could be a bloodbath.

  464. Shalom Bernanke

    I’ll be a buyer at some point, but can’t say for sure it’ll be on the open or even at all tomorrow.

    However, if I was already long the metal or AGQ, there is absolutely no way I’d sell.

  465. niven

    Hot Rod,

    You were dead on right about today’s silver price drop. Do you see a surge in silver prices from here on?

  466. David

    This is a holiday in Asia, apparently, so trading is very thin.

    Somebody clearly took advantage of that and ran the stops on silver, so that we would have a rout in NY on Monday morning.

    Is it manipulation? Of course. But it’s hedge fund manipulation, not gov’t manipulation.

  467. hkc

    David:

    So holiday in Asia, and London also closed due to royal wedding, should we expect an explosion up/down on Tu then?

  468. Tudor

    PC, it’s not my definition. It is what it is. The sellers of the contracts in a naked short sale don’t possess the underlying commodity. This also happens to be at the heart of the manipulation debate.

  469. David

    Presumably all the action will be in NY tomorrow morning at the open. There may be some forced liquidations, but you can bet there’s going to be somebody waiting to scoop up those shares.

    Although at the rate silver is recovering — it’s pared half its losses — it could be no big deal by the time we open.

    If you’re in London, you may miss the whole thing, which is not a bad thing at all.

  470. E

    CME Raised Margins by 75% Friday Afternoon:

    In what could be a precursor to much higher margins at the Chicago Mercantile Exchange, MF Global on Friday raised its margins on one contract of silver from $14,513 to $25,397, an increase of 75 percent.

    http://www.cnbc.com/id/42828370

    this could be the reason.

  471. Shalom Bernanke

    To be honest, this presages more pain for the bulls.

    If silver doesn’t snap back tonight or in the first hour trading on Monday, it’s broken temporarily.

    Still, bulls will make huge money if they have the stones (and proper position size) to hang on.

  472. gold silver troll

    I was the sacrificial lamb last week when I kept buying a lot because I couldn’t stay out…got impatient

    you are welcome everyone who was waiting for a dip 🙂

  473. GottaHaveIt

    This is starting to look like last weekend all over again, but in reverse. Lots of wild action in Asia, then back to “normal” during NY market hours.

  474. niven

    man that price drop scared me!! lol I hope this is the starting of the final leg up. Do you guys think Gary will change his mind when he sees this price drop? Maybe he will hold onto silver until it tags the 50 dollar line this time.

  475. pimaCanyon

    Thanks, Tudor. I didn’t know that that term was used in the futures markets. But because there are so many speculators out there, all doing “naked” shorting when they go short–why should the banks get criticized when they do the same thing? If the speculators can do it, then why not the providers of the commodity?

  476. DG

    Gary: You there? Probably worth commenting on a possibly revised plan to sell AGQ tomorrow given the drop.

  477. gold silver troll

    can someone educate me on this?

    To send something down 15% in a matter of a few mins how many shares needed to have been sold? I’m guessing that this what Gary means when he says silver is a “thin market”

    Also someone mentioned this:

    “It appears that the sudden drop was due to the forced liquidation of the accounts that did not post enough fiat on their accounts from Friday’s latest margin increase. Because they didn’t cover the increase in margin requirement, the Comex liquidated these positions on the open of the Globex. Most likely this was planned well ahead of time knowing that the markets would be thinnly traded and a holiday for many parts of the world.”

  478. Gary

    One would have to be nuts to sell into this kind of correction. This isn’t the end of the C-wave yet. This may be the long sought daily cycle low but it’s not the end of the C-wave. This will probably be the last buying opportunity for those smart enough to take it.

    For those controlled by their emotions this will be a perfect opportunity for you to make a huge mistake.

  479. Tudor

    PC, the contention is that the big banks (read JPMorgan) manipulate the silver market by selling large quantities of futures contracts without possessing the physical metal in an effort to drive the price down. As I understand the story (I’m not saying I believe it), after a run up in price, they will sell massive quantities of contracts to shake the longs out of their positions and cover their shorts at a lower price.

    I don’t know if I’d consider the producers who sell contracts as going naked. Although, as miners, they may not hold 1000 oz. good delivery bars, they would supposedly have the metal in the production pipeline to cover their short positions. I’d consider that more of a hedged, not a speculative, position.

    Anyway, that’s my take. Fascinating stuff.

  480. TZ(8155)

    Added gold futures about an hour ago around 1548. Stop near the low.

    Also added gold futures on fri before the runup. (Google locked my account and I couldn’t post. Finally got a login now.)

    I’m about 5x gold futures in account. No silver trading (I think we can see why 🙂

  481. Steven

    So Gary then what is the plan? When do you think you will sell AGQ? Will you wait for $50 now? Or are you just not sure yet? Thanks.

  482. hkc

    Gary:

    Would you still recommend buying Silver with this drop for those of us who might still have cash in hands? or go straight to Gold? Thanks.

  483. funmike

    Gary, silver is down, not gold so what do you think about buying some more agq if this holds in the morning? Or would you just stick to gold as you had planned and ignore the silver drop?

  484. gold silver troll

    HKC,

    Re: question about silver

    If I may…

    It comes down to this: if you can take (have the mental capital) 20-25% drops in AGQ overnight, then by all means take the AGQ play

    If not, DGP is the best play

  485. Keys

    We should get a bounce from this, but I wouldn’t be buying…I would plan exits…Silver $25 here we come…of course silver in a decade will at some point go over $100, but for now dangerous times. Too much for me! Either a pure pure pure Turkey play or stay out of Dodge. IMHO….
    Price action at this point is meaningless…we go higher, we go lower, we bounce…this thing is over…for now, I mean…
    Of course many may see better than I, but this isn’t my type of market, even if we get a 20% gain from here. My best to all going long!
    Good and careful hunting all!

  486. David

    Gold silver troll,

    The next big drop in silver is going to be the D-wave, IMO. And we’ll hopefully be long gone by then.