The S&P is currently forming a volatility coil. I’ve noted in the past that the initial move out of a coil tends to be a false move that is quickly reversed and followed by a more powerful and durable move in the opposite direction.

The assumption is that the coil will break to the downside early next week as earnings season begins. Stocks are now in the timing band for a half cycle low which also lends credence to the downside theory. 

Usually the initial move only lasts 2-4 days. So I expect by the end of next week we will see the market start to reverse. Stocks should then enter a powerful uptrend for another 5-7 weeks.

This should push sentiment to levels consistent with bull market tops. By this time oil will have spiked high enough to poison the economy.  I expect by early June will start to see signs that that the economy is rolling over again.

Bernanke in his infinite wisdom will have made the same mistake he did in `08. In the effort to print prosperity all he will have done is spike inflation and collapse the economy again.

My expectation is for the current intermediate cycle to play out as a left translated cycle (top in less than 11 weeks). I think a tag of the upper trend line of the megaphone topping pattern we’ve been watching for the last year would be a reasonable level to establish short positions in preparation for the next leg down in the ongoing secular bear market.

 One caveat: I would not trade a break higher by shorting, expecting a reversal back down. It’s too early in the daily and intermediate cycle to expect a prolonged correction in stocks. If the coil breaks up then I would assume that this will be one of those 30% that the initial move is the correct move.

550 thoughts on “STOCK MARKET COIL

  1. guy


    last time brent oil was it this level we were one month short of an economic collapse.
    does this interfere with a boom in stocks?

  2. Jayhawk

    I had 300 bucks left over in my Vanguard account so I’ve been playing riverboat gambler with options on that thing this year. Up 1100% so far. :^O Using SLV and SLW front month, slightly out of the $.


    What if 50 on silver gets hit way before the timing band for an intermediate top? I’m thinking upper 50’s or maybe even 60 will get hit at this rate.

  3. Gary

    If silver hits 50 I’m out and I could care less if it continues to 60.

    At $50 silver will be stretched almost 100% above the 200 DMA. The first down day could see silver lose 20% of it’s value in that kind of stretched conditions.

    Go back and look at what happened to the coal stocks in 08 when the parabola broke.

    One can’t take a chance on getting caught in that.

    I can tell you right now I’m going to be early getting out and I’m going to be early on purpose.

  4. Poly

    I’m likely leaving some on the table in this daily cycle, but I know we are close enough, so I just closed what I considered my extra SLV leverage and can sleep with the gains again.
    The only positions that were “above desired leverage” were closed, they were always intended to be closed near this daily cycle high. i would never be naked here, still have my core leveraged holding for the duration of this C.

    That leaves plenty of powder to get a little speculative and crazy in the next 10 days, when we find a cycle bottom.

    Look forward to talking “strategy” with the group and hearing some ideas on taking creative positions to really take advantage of a blowout C Wave finale.

    I’m signing out for the weekend, have a good weekend all.

    Cheers Gary, you’re one of a kind.

  5. Francus

    Wow, how’d I get so lucky as to have a friend send me here after two years of just holding SLV and praying? Amazing stuff here, how does one get this good at this as to make it look simple – and then be willing to share it? This advice is gold…er, silver! Thanks a million, really.

  6. CMT

    Was it Alex who made the SHZ call? I bought a small amount just because I was swimming in cash yesterday and the chart looked nice. WOW!

    I’m going to start paying attention to those recommendations.

  7. Jayhawk

    That was Alex and looking at how SHZ behaved in DEC that could be a nice ride.

    It’s a Chinese mining stock, but not a silver or gold miner for the others looking at the stock.

  8. LowTax

    Bosco, sorry I’ve been away from the computer until now. I seem to remember showing TDAmeritrade the following competitor’s margin rates: ETrade and Scottrade. At the time, I had not looked at IB’s rates, which are WAY lower. I will be contacting TDAmeritrade again with IB’s rates AFTER this C-wave peaks. Too much going on in the markets to switch brokers right now…

    Jennifer – you’re an architect? That explains the unemployment 🙁 I have several architects in the family and one of them has been unemployed for 3 years now and another has pretty slow business. Tough market and I think it will stay that way for some time to come.

    at Ease – your dad lives in Mukilteo?? That’s where I live and work! Small world 🙂

  9. Razvan

    i dont understand why people are leaving when there is still 4 hours left in the day. There is still room for some upside.

  10. Mission

    Gary, it looks to me that at around 261’ish on AGQ we’ll reach a level above the 20dma that roughly corresponds to the previous peaks over the past year. I’m thinking of lightening up there and then lightening up further we if gap higher next week as you outlined. Am I selling too early do you think at the ~261 area?

  11. Gary

    I think you are making a mistake looking at AGQ. AGQ will follow silver and silver will follow gold.

    If you are heavily leveraged you might consider selling some of your positions if gold can rise above $1500 next week and then re-enter at the next daily cycle low.

    But that is the only scenario I would use to trim. Anything else and I would just sit still. And I would only advise trimming a little leverage not your entire position.

    You see what happened to the people that jumped the gun yesterday. I suspect most panicked back in today. So all they accomplished was to miss a nice chunk of the move.

  12. LowTax

    SB has it right – the best days are when the general market is flat to down and PMs are soaring. Money if flowing into the only hot sector arround.

  13. MrMiyagi

    discreet s….
    No, I don’t know anything you don’t, I’ve made a few bucks on it and it didn’t jump as I was hoping. I’m probably wrong but I’m looking for something else next week.

  14. New York


    Alex commented on GPL in last post. His call was to watch for a close above 4.25… personally I got out of it a few days ago and am sticking to Gary’s more concrete plan.

    I think i’m going to use those funds to add to AGQ if we get a draw down next week.

    Although, I may be tempted to get a lottery buy if there is one 🙂

  15. Razvan

    there is no way to pick a top on this. It is running through fibo lines and trendlines like they were not even there.

  16. gold silver troll

    Hi Gary,

    I’ve never seen so many people on this board sooo eager to sell before the cycle top..

    Any chance that this becomes a really stretched daily cycle making people chase all the way to the top?

  17. MrMiyagi

    GS troll,
    Please understand that what I sold today was:
    1) April SLV 40 calls. Timeline is short and any drop would have wiped profits.
    2) GPL shares. Made a profit and satisfied.
    NONE of my core holdings are touched. A lot of stock and a lot more very very deep in the money calls on SLV, SLW, GLD, ABX.
    I also have a handful of DIS and LVS puts.

  18. Mission

    Thanks Gary, that’s about what I thought–and was hoping–to hear. I’m very leveraged right now and reducing that will make for a more enjoyable weekend.

  19. Hot Rod

    I don’t typically watch 1 minute tickers all day (between jobs at the moment) and it’s like watching a movie.

    Today’s action is incredible.

    Is it normal (question for skilled traders watching PM’s for quite some time) to see such a powerful, slow and steady climb when price is at 52 week or all time high (taking out the 1980 event)?

    As soon as the steam engine slows, the engineer is hucking in loads and loads of coal.

    4 hours to go (long way). It would be sweet to close at or near the highs for the day. Take out 41?

  20. Hot Rod

    BTW – Is there a “level 2 quotes” site for future contracts?

    I know the one for listed securities, but don’t know if there is one for silver futures….

  21. fubsy_cooter

    I wonder how leveraged people on the board are. One of Gary’s most salient message is that excessive leverage will keep people from enjoying the bull via profits as small tics against their accts will cause them to sell, then buy back higher etc…

    Yes, I know there are a couple folks here who have appropriate risk avoidance measures in place, but man, just sitting and riding is such a joy.

    I don’t know. Am I the only one here who believes that moderation puts one in position to reap great rewards. By moderation, I mean always leaving a little off the table. An offering to the market Gods so to speak.

    Just rambling…lurking more than usual as I’m enjoying the move today.

  22. ease

    I hear what you are saying, I have trimmed back today, taking profits and back to recommended core positions (and my June 25 Calls in GLD) and now have some powder for the daily cycle down. Less is more. 🙂

  23. Sandy101

    It is official. One of my retirement accounts holding AGQ, bought at January IT low is up 100 %. Other accounts are close behind. I am currently invested 100 %, no leverage.

    Thanks Gary. You are amazing:)

  24. pimaCanyon


    Last daily cycle first top was on day 22, second and slightly higher top was on day 25.

    By my count we’re on day 18 of the current cycle. So we could run for another 4 to 7 days, no?

    Are you thinking that because the last cycle was slightly stretched, this one might be shorter?

    In 3 to 4 days, gold could hit 1500. That round number seems like a good place for a pullback and we’d still be in the normal timing band for a daily cycle top.

    Good luck on your reload! I have some dry powder also that I want to put to work, so hopefully we can do that near the upcoming daily cycle low.

    The only fly in the ointment (that makes me nervous) is could it be possible that we top out on this daily cycle? Maybe it run long again and we don’t top for another 7 or 8 days, then down into the daily cycle low, then a very LT daily cycle that may take us back to the highs for a double top and then tankage from there.

    So I guess our fallback position would be to have stops at the next daily cycle low just in case the D wave does begin sooner than expected.

  25. Peter

    I am looking at the next level for the Dollar .. 74.23$ .. probably a good area for a bounce … probably a # we can attain in the next 4 days.

  26. Aaron

    This is the second test of the 75 level for the USD, I guess 75.01 will have to do for today. Next week we break it for sure though.

  27. wingman

    My thoughts on AG are it will be more than fine from here. It has garnered a lot of attention on the NYSE showing up on largest volume increases and largest percentage gainers in the days/weeks leading up to this brief rest. It’s now on everyone’s radar and will be heavily accumulated during the next, euphoric leg up by those who feel they missed it on this previous runup. It’s a great company that will be a strong participant in any upward move in silver.

  28. Poly


    I’m still in with my big core.

    But yes I probably closed a little early this time, but with a weekend ahead and a nice pop today, I’m happy to bank.

    You’re right, $1,500 seems logical and 2 more strong days ahead is more likely than a top right here.

  29. blammo

    I sold most of my AG earlier in the week and moved it into EXK and MVG. This has worked out well.

    I think AG will have a tough time getting past that big red bar on the 3 mos daily (but there are better traders than me on here). That it is down today is pretty telling if you ask me.

    I also pulled out of GPL and moved that into Revett which hasn’t been as successful but this one should move nicely once it gets onto the AMEX.

  30. Gary

    I wouldn’t worry about the C-wave topping during this cycle. Although it will probably seem like it when gold drops into the next daily cycle low. Remember action and reaction.

    This cycle is stretching quite far above the 10 DMA. The correction needs to be scary enough to cause all the late comers to sell at the bottom.

    Then the true parabolic move can begin.

  31. blammo

    fubsy_cooter this is good advice and bears repeating: “I manage my Dad’s retirement accts, and from my experience, conservatism is best. Why? Losing your Dad’s money will feel worse than losing your own. I would go smaller than you think you should, especially near the top of a cycle. If I think I should put 25% to work, then I put 12% to work. i add with small increments. I calculate my stops and potential losses, and what I would be willing to lose and work from there.

    IMO a smidge here, a smidge more when you think the cycle bottom is near, and more at a break out from this cycle’s top. Then, selling near the top of the C-wave (hopefully), and taking advantage of the D-Wave by being short assets that go down during a dollar rise.

    This is not the last oppty to make money. Greed is dangerous when playing with your parent’s retirement money. Of course, i’m making some assumptions here re: risk tolerance etc…”

    I too manage family accounts and I can tell you I am a lot more conservative with their money (it feels 10x worse when they have a draw down).

  32. ALEX

    JAY, I liked the chart of GPL (pointing out the macd too)

    I posted this early this morning and yesterday ,and wanted to re-post for the weekly close.

    Blogger ALEX said…

    I will be away this morning, but I want to go on record and say


    -If it closes over $4.27 today, I think it is a strong buy and will add to my current position.

    (This stock has been ‘hammered’ on this blog as “no good anymore, stupid management” ,etc.) But It could be one of the best charts I’ve seen ,if it closes above $4.27. I still think it will run…(if not this daily cycle,most likely the next)unless this chart changes a LOT.

    *If it closes DOWN today, it retestes $3.50 ,if it closes above $4.27…I say it goes to about $7 by the end of this c-wave. (almost double?? Big words Alex)!

    Time will tell.

    April 8, 2011 4:31 AM

    AS for AG-
    I sold, but am hoping on the next pullback it goes to fill the gap near $22…the 20sma is there for support and another leg up may be spectacular. could be right. could be right. have been right,not trading has been quite successfull too 🙂

  33. Gary

    Looks like we’re going to get the break in the coil a little earlier than I thought. I was expecting next week.

  34. Poly


    C Wave topping never crossed my mind and I defer to Gary on the cycles. Also judging by what the past 2 C-Wave tops look like, this party is only getting started. i do think todays action however is similar to many previous “Daily” cycle tops.

  35. Jayhawk


    Good job. I pulled every retirement account last year, except one that had about 27K in it. I’ve taken a very aggressive approach with that account and am up 125% since Jan with just AGQ, SLW and small amounts of SLW calls from time to time.

    My regular accounts are up nicely, but that strategy has been a winner for the IRA.

  36. Sandy101


    I am a novice investor. Just followed Gary in building the portfolio and timing.

    This was one of my smaller IRAs, hence just went 100 % AGQ at 130 $.

    I was a little slow at getting some other accounts invested, hence they are lagging a bit. Also, I am somehow not comfortable with leverage and possiblly big draw downs, hence did not use any leverage. I though AGQ being 2 times SLV was leverage enough.

    This is the first time I am making such great returns. It is a wonderful feeling.

    Can’t thank Gary enough.

  37. Jayhawk

    This is a trading blog viking, we compare notes on our trades & other ideas. People talk about their returns all the time, sheesh.

    I bet there are many here up way more than me…But having a return like that was fairly easy seeing the move we just had. Regular account is only up 1/2 that %.

  38. Vonda

    Jayhawk, that is an excellent return! (you too, Sandy!)

    I can only imagine the patience that went alongside the due diligence.

    I’m in at 1.4 leverage (less after today) and up around 90% in the same timeframe. Pretty awesome, as far as I’m concerned.

    Am trying to think of ways to thank Gary and the blog (none of whom need $!) Maybe cultivate a garden of heirloom pintos and black beans for burritos.

  39. Poly

    Viking mate, that’s a little harsh, people are just excited, these are massive gains even for seasoned traders/investors.

    I agree though when people throw out a monetary number, say like I made $600,000, that’s not cool. That’s just a relative and abstract number, mostly used to gloat and often lie.

    But stating an investment/trading strategy and % returns is fine IMO.

  40. Elaine

    Jayhawk, I agree. Without posting things about positions and potential gains, what’s the point? There may be some that stretch the truth, but like Sandy, I have followed Gary’s advice and it has been very profitable. I think that is the best recommendation possible.

  41. pimaCanyon


    actually you don’t know whether “we” care or not. You obviously don’t care, but you really can’t say whether anybody else cares, can you?

  42. Vonda

    I don’t know — Even when people throw out actual numbers, assuming they’re attempting to be truthful, I find it potentially relevant as trading/investing is also a function of load-size and in context of life, goals, etc.

  43. traderlady

    I LIKE TO HEAR HOW PEOPLE ARE DOING THAT HAVE BEEN WITH GARY LONGER THAN ME. Those who sold AG earlier in the week came out well to maybe rebuy.
    Great timing!

  44. pimaCanyon


    Thanks for that reassurance re the C topping. I ‘ve been a sub only since last summer. I was cautious about riding the late summer/fall rally, so the move up since the January low is the first time I’ve been all in. Just a little nervous about giving back some of these nice juicy profits, AND I want to be in on this last move up after this next daily cycle low.

  45. Sandy101

    My objective of sharing was partly to motivate newcomers that sharing Gary has been extremely rewarding. That is all the more amazing since I am a novice investor who manages to lose money usually. I have mostly bought higher and sold lower!

    This is defintely not bragging. I am the first one to admit that only thing I did this time was follow Gary-no credit to me.

    Viking-I though that was uncalled for.

  46. Wes

    Just a WAG, but I think AGQ will be up more than $15, and probably $17 on turn day.

    I’m actually using BB’s on SLV to time this, and we’re not close yet.

  47. Poly


    It’s also a transformation, coming from earning less than market average returns, to buying and holding Gary’s calls, especially in the face of triple digit gains.
    You deserve credit, many fold them in.

  48. Peter

    trader Lady .. i have been with Gary since gold was a little below 1000$ .. its first pullback below 1000$ , the blog was, lets say animated, as Gold had traditionally never broken 1000$. Well, I guess some of those folks wish they had stayed the course.

    My piece of advice, dont listen to all the noise on this site, follow the plans laid out, and odds are you will finish more than 100% up, as I am.

  49. pimaCanyon


    great post re managing other people’s money (family). I feel the same way, so the only way to do it and feel comfortable with it is like you said, smaller position size at IT or Daily cycle lows and add as you become profitable.

  50. Sandy101


    My biggest lesson is that you just have to buy at the IT lows and then hold your positions through the bull market. Gary is an excellent coach who will help you avoid big drawdowns.

    I remember his call last August to go all in with AGQ at 55 $ odd. I was a new subscriber at that point in time and bought GLD. I was too scared of AGQ volatility. Obviously, my returns last year were good but not spectacular.

    I can imagine the returns of people who bought AGQ at 55 $ and just held it all the way!

    Old Turkey is the way to go through bull market.

  51. Jayhawk

    I highly doubt talking about an IRA account initially worth 27K is bragging. There are many hear making MILLIONS and have informed us so.

    Some of the older posters know what a head case I was (am?) last year. I managed to screw up massively some how and only walk away with peanuts vs. what I could have done. Hard lesson and I was DETERMINED not to get shaken off this run.

    I have a total couldn’t care less attitude with my IRA and bought front month SLW calls, AGQ. So it did well…not recommending that as a strategy but in hindsight it was fun.

  52. Jayhawk

    I wish you could edit post since I’m such a poor speller. Ah well…

    I sold my EKX today. (no not at the top) This one has had a great run and I am happy with the returns. I could be wrong, I could be right. I have a bit more cash now to plow into AGQ for the final run. Also, I’m out of AXU.

  53. Poly

    @WES, Careful what you wish for, AGQ up almost $15 🙂


    100% agree, to identify the bigger trend changes/moves, which are what INT cycles are and what Gary does BEST, is the way to make BIG money. I post here a lost about trades and daily cycles, but in reality my bulk (80%) is locked in from IT bottom back on Feb 2nd.

    July SLV $20’s in @ $8.10 roll higher strike since.
    July SLV $25’s in @ $4.05 now $14.65
    July SLV $30’s in @ $1.70 now $10.10

    That’s the power of buying low and sitting.

  54. Poly


    Talking about a $27k is not bragging, sorry that wasn’t my intention.

    I’m talking about the guys that come on and say “I’m up $4 million” or “I’m up $800,000 this month alone”, almost out of the blue. They don’t offer any background or specifics on the trades.

  55. wingman

    re:AG, it’s just a matter of whether you want to trade in and out of it around the daily cycle correction. I don’t. I’ve been in since $6 and mostly held, even through the intermediate cycle low and it’s worked out quite well. I plan to hold it until I sell all at the D wave.

  56. 86d4life

    Think of people in the general public that would be tripping all over themselves if they could could find 5% in bank accounts or cds or the like and we talk about making that in a day at times. This silver thing is out of control!

  57. Vonda

    Actually, I just crossed 100% ytd today. (400% since signing up with Gary last summer.)

    Am currently in 1.3x with 1.15x AGQ and .15x in June 40 SLW calls. Got in late Jan, but I tinker too much. Every time I get a yoga shirt that says “peace,” I mentally cross it out and write “patience.” (And “surrender” on the mat.)

    Subscribing to Gary has greatly increased my discipline.

    Thanks again, for those who also shared, as I find it nice to hear about and celebrate milestones!

  58. AK

    Gary, new to this site. Wanted to get your take on JPM, HSBC, etc. shorting the silver markets. Do you think shi*t will ever hit the fan?

  59. 86d4life

    That`s fantastic! This old turkey thing along with clear guidance and A PLAN is the real deal.

    I was overtrading, shorting and generally making a nuisance of myself,until I started keeping an eye on Toby Connor.

    Things are definately looking up!

  60. Jayhawk


    UNREAL returns. See viking…I told you there were many out there kicking my butt!

    I don’t use leverage (except for some smallish option plays) but seeing folks talk about eye popping returns makes me wonder why not.

    Congrats all. Hopefully the real fun starts in the next daily cycle.

    Have a good weekend.

  61. Poly

    If this C-Wave blowoff is anything like the last couple (no reason to doubt), these gains will appear like chump change.
    Missing or screwing up a very good INT Cycle like last Summer/Fall is costly, but you don’t want to miss a blowoff C-Wave, only a handful of those in any bull market.

    OK really time to watch the Masters. Have a good weekend all.

  62. Wes


    I think you’re right about the turn coming on the opening or middle of the day. I don’t think what happens in the last few minutes of trading makes any difference.

    If it turns over the weekend, it will be on news, and that’s not timable.

  63. Vonda

    Oh man, I didn’t mean to “brag.” Like Sandy said, I don’t feel as if I did anything other than more-or-less follow Gary: more when I was smart and less when I was “making a nuisance of myself.” (Funny, 86d4life!)

    Not too young, Driver, but trying to learn how to ride the waves–strategically increasing leverage at times and backing off at others.

    Congrats all! Love to hear those champagne corks poppin!!

  64. Vonda

    And Jayhawk, I think you’re doing just great!!

    My goal is to get to a nominal value where I feel comfortable with “normal” returns (whatever those are!), not use leverage, and not pay so much attention to the market.

    Though I would miss all of you! 🙂

  65. ALEX


    And who wouldn’t say that’s a GREAT trade…in Ag at $6…congrats!

    I sold my buy on MNEAF that I posted a few weeks ago…volume is light for that break out and I think it will retest. I am NOT giving the money back 🙂

  66. Poly


    I’ve got to run out, but I would like to hear about your AGQ experience when you’re done. I was thinking this being the vehicle for the last”20%” that gets aggressive, but I’m not sure if it makes sense over SLV.

  67. Steven


    I actually took your lead and took off a bit of leverage and I agree we may be a day or two early. I put the “extra” leverage on at the bottom of the last cycle and I’m still very leveraged. But I sold about 10% of my AGQ.


  68. Slumdog

    Poly, if you’re still here, I’m up between $10,000 and 20,000 for every point silver moves. And a few thousand in gold for every point. I know it’s small potatoes compared to some who move 1/4 million+ a point.

    It’s totally unleveraged. But, I’ve given up about $15,000 in losses so far trying to trade it my way in the futures market. I’ve spent months literally.

    It’s been cheap therapy.

    In the D wave, I’ll buy puts or take commodity options short.

    But the experience of additional position exposure without a scintilla of leverage has escaped me throughout this move, even though I called in Feb the target of 1530 or so, should gold break meaningfully above 1434 prior high.

    Your ability to buy and hold risk assets, options, is both stirring and frightening to me.

    I must protect the rise when it happens. But I can’t dump the pile at one fell swoop as it’s quite large and will take time (I hold one of the largest emphemera American silver collections in the country) and thus need desperately a way to get hedged, which I think will be puts against the total pile in gold and silver.

    My top call, like Gary’s, is in the 50 range, hedging at $47 and higher. The rest belongs to the gods.

    Like with Steven, I ask that when you see the top, you too promise to announce it so folks like me can do what we think is wise to stop the losses in the D wave decline.

  69. Benjamin

    gold silver troll, I sold just excess leverage in the form of APR calls expiring next week… most leverage is still on…

    might sell another bit of the leverage if gold tags ~1,500 since that would touch the channel line where it reversed at the previous top..

    my upper trendline for silver’s similar channel for Monday is at about 42

  70. Gary

    Not a key reversal. Just a break to the downside like I described in the post. The odds are it will last 1-3 more days and then reverse for a big move higher.

  71. 86d4life

    I think some others last night were having the conversation about all the bogus advice floating around in this business. Hey, I pulled the trigger and made the trades. Fair enough. But does that mean I`m a genius now for trading less and making more? I don`t think so, but let`s face it;we all learn somewhere(hopefully lol)and getting into this racket in the last 2 years has been kind of nerve racking. Obviously there are a lot of the pros that can`t get up to speed on what is happening in these markets.

    One of the newsletters that I was subscribed to was just sending out market alerts and messages about about shorting gold this week! Thank God I canceled that subscription!

  72. JD

    Thanks Gary!

    I can’t emphasize that enough.

    I was looking over my returns for the last 4 years, and I was doing OK previous to following Gary. I was actually kinda proud of myself.

    But since August — Geeeeeze!

    I would not have caught the beginning of this run, I would not have stayed the course, without Gary. I would have “diversified”.

    I’m still shaking my head about how unbelievable this stretch has been.

    Thanks again, Gary.

  73. coolkevs

    Just would like to congratulate all of you guys for your tremendous play on the miners and silver!!! Gary knows his stuff! I have been following you for awhile, participating sometimes, but this has been truly an amazing run! Just a little parabolic for my tastes right now. I mentioned the 74.90 level for exhaustion on the Demark dailies and we are right there, right now as the currency markets mop up for the day. This short-term exhaustion looks to correspond to Gary’s coil scenario – ie., we should see a bounce in the dollar the next 2 weeks as the markets roll over, but then the dollar “drubbing” will resume and we will finally hit the fabled DXY 72.5. Hey, it’s only 3.2% away!

  74. fubsy_cooter

    Experience is the greatest teacher, and thus having never experienced a C-wave, I’m watching myself to gauge how I handle it.

    I know that 99 percent of participants will not be able to ride to the top. That gives me stability in my mind, as anything that 99 percent of the people can’t do is likely to be rewarding as it pertains to a bull market.

    Have a great weekend!


  75. I've Eaten Silver

    You know we’re near a daily cycle top and getting closer to a C-wave top when everyone is bragging about all the money they’ve made 🙂

    I suppose it’s going to get even more jubilant come the parabola’s top.

    Cool heads folks 🙂 Have a good weekend.

  76. wingman

    Alex, I just find when I overtrade it does me no good. It takes a lot of discipline for me to sit tight old-turkey as I love to trade.

    By the way, thanks for the headsup on MVG. I checked it out after you posted and pulled the trigger on some May 15 calls, and now up 42% in two days. Thanks, and have a great weekend!

  77. Gary

    Yes I would agree this is typically what we see as we near a daily cycle top.

    Everyone needs to be prepared for one more scary correction and not get shaken off because the best is still to come.

  78. I've Eaten Silver

    It’s funny, I used to play a lot of high stakes limit hold em here in MN, actually the highest you can play is 30/60. Anyways a couple buddies and I whenever we would get such a terrible hand that we even had to fold for $10 to complete the small blind with 4 or 5 callers (something like 7 3 off or something like that), we’d say to one another that must have been a major “shit box”.

    Now every-time I look at the dollar and see its impressive weakness I subconsciously say to myself, “what a shit box.” LOL. Thought I’d share what my subconscious thinks of the dollar. 🙂

  79. Sandy101

    While we are all thrilled with life right now, oil has reached 113 $ +. The common man is going to take a major hit in coming months. It will not be pretty.

  80. Rick 4779

    Ive Eaten Silver,

    Thats funny about your subconscious thought when you look at the dollar. Whenever I have been looking at it lately, I hear that song by the B-52’s…Rock Lobster….when they sing “down, down, down”.

  81. Francisco

    You keep warning about a “scary” correction. I’m just curious and obviously noone is holding you to a number, but what does someone with your experience in the silver market define as scary. Is it silver at 36?

    Other experienced traders care to venture a guess?

  82. Gary

    I have no idea where the next cycle low will take us but I would guess that a move to $36 would knock a whole lot of people off the bull.

    I would call that scary.

  83. ALEX


    I added today , expect a retest of $5 )it was a high volume high).

    If it goes up there on light volume, I may sell there for the next pullback, get back in if it then retests the break today of that tri angle it broke from…IF that all happens…I’ll post to buy that retest (at the low of the next cycle)

    THAT IS A “PROBABLE” GUESS type scenerio!! I just do that to get in my head, a feel for what may be , mixed with Garys cycles…I really just go with it as it morphs along 🙂 NOW just dont want it back under the 20sma 🙂 good volume today!

  84. Francisco

    I assume that you mean a $30 pullback in AGQ. That’s not all that scary to me, but I can assure you that I won’t be on the board that day if that happens. Poster’s reactions freak me out more than what happens in the market.

  85. Aaron

    If silver corrects to 36, Id say you can kiss 50 dollar silver goodbye for the following cycle, since you would be looking for silver to move up 14 dollars in 2 weeks, thats ridiculous even by silver’s standards.
    Id say the correction will be a lot milder than people think, leaving most people selling at the ‘over sold’ levels chasing this thing into mania.
    Gary always overshoots on his estimates when it comes to corrections, and I’m sure this time is no different 😉

  86. Wes


    There is no doubt about the biggest bang for the buck from what I’ve traded so far.

    The (ever so slightly) OTM April 200 AGQ calls purchased 3/18 have yielded 320% in just less than a month.

    Now, if you do this for the final bit of the C wave, I suggest using a small part of realized profits so far.

  87. W

    Congrats and thank you to Gary. All plus sings for me…and big ones!

    Bob Loves Hawaii
    Thank you to you too. It was your comment that moved me into ZSL puts. My fumbling verifies that if you are on the right side of a market like this, anything works. Even with a less that timely entry my ZSL puts are up 40+% in a week. Cool, very cool. Hope to learn enough now to deal with the d-wave. Thanks again, wish you’d post more often…

  88. ALEX

    Blogger TheBookGuy said…


    Are you still liking AXU?

    Not loving it 🙂 hopeful, the patterns the same as EXK was, and I’m LOVING that!!

  89. Gary

    First off let me be clear I have no idea where the next correction will take us but I do expect it will be hard enough to convince most people the run is over and knock off all the late comers.

    Second a final cycle up is almost always extremely right translated. So this won’t be a two week rally. It will probably be a 4 to 5 week rally. Silver could easily do $14 in 5 weeks especially considering most if not all of the correction losses will be recovered in the first 3-5 days.

    So if you are so heavily leveraged that you have to hope for a mild correction in order to hang on my suggestion is you lighten up a bit.

  90. ALEX


    ANY CHANCE AT ALL, based on your past experience as C-wave tops get closer…that the last cycle low before a blow-off top just goes more sideways/down, and not scary down?

    Not asking for a crystal ball, just is it almost always a real shakeout scare right before the final top? I wasnt involved in cycles when 2006 topped or 2004.


  91. ALEX


    You answered that and posted BEFORE I ASKED,while I was writing.

    You DO have a crystal ball!!

    Thanks and good weekend all

  92. The Angry Hippie

    What are the chances that the final daily cycle doesn’t materialize and that the correction is a bona fide roll over and the beginning of the D wave?

    I don’t mind jumping, as long as I know the odds of not bouncing when i hit the ground. Other than that I live by the stops.

  93. Francisco

    Hey Gary,
    Sorry about opening that can of worms. Just thought it would be a fun discussion point while I had a Friday celebratory beer.

    Noone expects you to be able to call it exactly, but your experience on this topic really is invaluable for us new to PMs.

    Thanks again and have a good weekend. Go get a margarita.

  94. davedimes

    So Gary, help me out.. I’ve been subscribed for a while but confused here. Are we planning on just riding this next cycle low until stops are hit, or will you tell us to sell? and then you’ll tell us when to re-enter. Or do you see that we’ll just ride the cycle low down and back up?

  95. The Angry Hippie


    I think it is pretty difficult if not impossible to time cycles well enough to outperform the bull. Stay long until stops are hit. The exception seems to be for the top of the C wave, which will be exited based a call from Gary when the time as right.

    Its tempting to jump off and back on but those with more experience recommend against it. Buy the dips instead.

  96. viking

    the character of this board has really changed

    there are a lot of newbies on here that trade too much, put stops on

    your stops will get run grasshoppers

    then it will reverse and you will be on the sidelines

    personally I think it corrects down to 38 or so, then we get the last leg

    but as Gary says, surprises in a bull come to the upside

    the more you trade a bull, the less money you make from it

    the newbies won’t listen though and will get their asses handed to them with leverage


    the big money is only for strong hands and brass balls

    the jitterbugs hit the windshield

    same as it ever was

  97. Jayhawk

    I see nothing wrong with moving some funds around. Gary himself said about AG that we may have bled that one dry. I sell some juniors that exploded higher and shifted the capital to SIL. That’s the only trade I’ve done since Jan, besides selling options that are heading into expiration toward the end of the daily cycle. Then I rebuy once the daily low is in. Pretty sure most here are just moving funds around to better performers.

  98. Gary

    This is not my forte so take this with a grain of salt but I expect that during the last leg up the biggest moves will come as hot money looks for laggards.

    So I suspect the big gains will come from buying the underperformers that are ready to make a big move and not in chasing the ones that have already moved.

  99. Gary

    at ease,
    I doubt we will get even close to those stops during the correction but just to be safe this late in the daily cycle one should remove all stops. You don’t want to get stopped out on the last day of the correction.

    Stops are to protect against the possibility of a left translated cycle. That isn’t going to happen at this point.

  100. MrMiyagi

    Too bad it’s the weekend! That was some momentum these past few days. The US$ index fell through the elevator shaft as well.

    Hai… MrMiyagi must relax.
    Wax on. Wax off.

  101. Gary

    What would be the point of stopping out at $1382 on the last day of the daily cycle?

    I seriously doubt we will even get vaguely close to $1382 though. My best guess is maybe something in the $1440-50 range.

  102. ease

    Not for sure, I just collapsed a lot of gains from Options into AGQ SLW and have some more to do at the next cycle low. Not sure on the sell, just that we are watching to sell at $50 spot silver or use SLV to gauge. Any suggestions on how to automate is appreciated. Was thinking of putting contingent sell orders at SLV, however not sure if that is good or not, Haven’t seen that discussed here. So right now, still winging it until I hear something from Gary. But anything to prepare is appreciated.

  103. 86d4life

    At ease,
    How about laddering out of your positions using you contingent orders. If your target is $50, start your laddering at say $46 increasing by say $1 increments. Break them up evenly at 20% or weight them say starting and ending with 5%-10% and your heaviest weighting in the middle. Sure, you`ll leave some money on the table, but look at your gains. Of course there`s alot of leeway to juggle the numbers. Even if you wanted to say leave 2% at $52 or something like that.

  104. ease

    I saw one the other night but it looked obscene… it looked like the bull and man had reversed positions. I had to keep looking at it and still laugh about it. The guy was hanging onto the bulls neck from underneath. So it was hard to say if he was riding or hanging on. 🙂

  105. ease

    That makes good sense. Is that the strategy you use? Or have used?
    I have not used stops or contingency orders until SMT. So it’s all learning here for me. But that is a plan to consider.
    Thanks for sharing it. 🙂

  106. 86d4life

    At Ease,
    No, I haven`t used it before. I was the stupid mope standing at the edge of town watching the parade leave saying `Hey wait, come back,where are you guys going in such a hurry`. Not this time! No NO! I`m going to be home fully tuned in, but at some point I will start laddering out and will probably be using stop loss or trailng stop loss orders. Also thinking the higher things go, I`ll tighten the percentages so eventually if it even flinchs, it`ll get blown right out of the water. Figured you`d like that submariner jargon.

    Ask your husband if he ever knew a MSGT John McGlaughlin. That would have been about 30 yrs ago.

  107. Gary

    One strategy and one I will likely use to prevent getting caught in a violent silver down draft is to convert all silver holdings to gold around $47-48 on silver.

    Then you can hold tight until we get some kind of topping sign from gold without having to worry about a one day $10 drop in silver.

  108. 86d4life

    That`s pretty impressive. Whatever small % gains are still left, we can still realize in gold and hopefully not get our chains jerked too hard. Did you come up with that? Also, what vehicle would think of moving to or is that question better for one of the nightly reports? Thanks a lot.

  109. ease

    We are married hmmm, let me think… 39 years, so he might know you from either, as he retired after 36 years (30 USA)service. He has since been working DOD, with the last 3 years in London… oh that’s right he just got furloughed.

  110. Gary

    I have a small collection of silver eagles that people have used to pay me for subscriptions. Feel free to add to it if you like.

    You’ll have to send me an email as I don’t want to publish my address on the blog.

  111. ease

    Geeesh Gary, I just converted it all to silver! ROFLOL
    You just want to keep me on my toes.

    “convert all silver holdings to gold around $47-48 on silver.”

  112. ease

    Gary, that is a workable plan as long as I know what is the exhaustion sign from Gold.
    I would say save it for the premium report. Thanks! Good to know there is still some playing going on instead of twiddling thumbs. I like it… a good plan and yours always come together.

  113. Casey

    I had a similar thought today for my physical silver. Convert to physical gold to ride through the D-wave. I just can’t stand the thought of parting with my physical stuff at any point. Anyone with thoughts on this?

  114. Arun

    Gary.. You should put up a paypal link or a favorite charity link. I’m sure many would like to contribute for forcing us to be old turkey.

  115. ease

    Yep, ridiculous eh? He gave everyone 59 minutes and turned off his blackberry as no one is to come to work on Monday until they are further notified.

  116. 86d4life

    I remember reading one of the blogs on INO, I think it was last summer, and this guy wrote in about how gold and silver had been the center of his familys wealth for the last 300 yrs and would be for the next 300. They acumulate when it`s cheap and very seldom sell. Personally I think why would I want to sell real money for frog pelts?

  117. Gary

    That ones easy.

    Because there are periods when the price of gold in frog pelts decreases. During those periods you want to own frog pelts.

    Then you can buy a lot more oz. of gold once you get close to the bottom of the correction.

  118. ease

    86d4life said
    ” I was the stupid mope standing at the edge of town watching the parade leave saying `Hey wait, come back,where are you guys going in such a hurry`. Not this time! “

    I hear you! I was like a deer in the headlights, kept waiting for my funds to come back… poof they went to money heaven! Never again!

  119. 86d4life

    At Ease,
    Unbelievable! Did you ever in your life think you would see such a thing?

    What about that thing I saw about the military going on half pay?

  120. ease

    Gary, Yes, I understand the downdraft, stood by as I watched one go right past me. So it’s basically a duel strategy play selling out.

  121. ease

    I heard they weren’t even getting paid, (soldiers deployed) but must show up to work (where else you gonna go?) But the families need their funds to live on, soldiers get theirs at the chow line and sleeping bags. What a life, why wouldn’t more want it?

  122. Greggy_M,

    Gary, I would really like to have your wisdom. Could you put together a list of books and resources you would recommend to help me. I would like to be able to stand on my own two feet someday and not need you to hold my hand. I’ve been at this for 4 years and finally started making money when I followed your advise.
    You’ve been a God send…

  123. 86d4life

    Good point as always, but if my thinking is right on your main theory(PMs will increase because the value of the dollar is going south) we won`t see a higher valued dollar(relatively) until after PMs collapse at the end of the final bubble. True?

  124. xoxo


    As per Arun’s request, please consider set up a paypal link, i really like to pay you back for the 6 months free subscription you gave me back in 2008, when i told you i was unemployed. thank you so much for your kindness!!!!!

  125. Gary

    Yes we absolutely will see a higher valued dollar. During the rally out of the three year cycle low the world will suffer another bout of deflation.

    During deflation the value of currency rises.

  126. 86d4life

    At Ease,
    I wonder how many people realize in the military, you don`t just quit. Almost anybody can walk off a civillian job, but in the service, it`s desertion. What`s that good for these days; 40 yrs in Leavenworth or a firing squad. I think I`d take the firing squad. They probably have Janet Reno running Leavenworth these days.

  127. 86d4life

    Understood,but I started accumulating silver at $16(how cool is that! LOL)and it`s a real thin chance that I`ll be able to replace it for that. So meaning the PMs will have more `real value` until after the final blow off.

  128. ease

    Yeah, I think hubby is finally realizing the institution ain’t what it used to be. He is finally ready to retire now. Fed up with the politics…. Finally. I really would just like to stop moving. Have been doing it all my life, time to settle somewhere for good.
    Sides… I need a place to bury my pile of gold. 😉

  129. Eamonn

    xoxo, that was a very kind thing Gary did you you, when you were unemployed. As well as being smart, he must also be a good person. The kind of thing I respect

  130. ease

    Yep, there’s a special place in heaven for folks like Gary… and faithful old dogs.

    All I can say is someone sure raised him right!

  131. ease

    I got my Trader Vic books packed to go! Along with a few Alex recommended. Thanks, will be checking back. I gotta go finish packing… Yikes! 4 am ride to the airport.

  132. San Diego Jack

    …at ease,

    Have plenty of nice homes here, with diggable dirt, suitable for burying, ahem, certain items of value.

    Anything on the water is no less than a million, and may be sitting on sandstone…

  133. 86d4life

    At Ease,
    How true. It never hurt to be nice to people and give from the heart. We will reap the real profits in this life or the next. That`s the real leverage.

    Some days after working on the pile, do you feel like an old dog? LOL!

  134. Duuuuuude

    Gary, after the three year cycle low, could you not go long UUP or buy some calls on UUP or some other asset that is correlated to the dollar?

    Thanks for all your hard work!

  135. ease

    As long as I get access to the internet, I will be checking in. I couldn’t begin to ride this bull alone. It’s more fun to share the ride!

    Thanks Gary

    … and everyone else who has given me suggestions or answered my newbie questions!

  136. Gary

    We talked about that the other day. You aren’t likely to make that large of a percentage gain by being long the dollar. Maybe 15 to 20%. If stocks enter another bear market you could make 4-50% by being short.

  137. Tudor

    I’m going to post this for the doubters out there. I’m sure there are a few who post here that have more than one comma in their account balances, and that can be intimidating for people like me. I’m not a trader, or even a very good investor. I’ve committed all the sins – chased the hot stocks, holding too long, selling too early, over-leveraging, day trading crash and burn, OTM options, just about everything but loosing my butt in futures. My investing was messed up, fitting for a guy with OCD, or ADD, as my wife says I have. With me making the calls, her IRA she inhereted from her father plunged from over $130,000 in 2008 to less than $30,000 last summer. I was at my wits end. It sucked – the stress was terrible. Finally, I became a subscriber last fall, and all of that has changed. From a modest start last September when all my accounts, including IRAs and kids’ college funds barely totaled $100,000, to this week, I’m up more than four-fold. Today, my wife’s IRA went back above $100,000. And the reason is simple – Gary’s advice has given me the confidence to not cave to my emotions, and keeps me focused. If I can do this, anybody can. If you are holding off on subscribing, I suggest you sign up for a one month subscription. It’s only $25, and then you can see for yourself.

  138. Tudor

    Thanks, guys. I’m actually looking forward to the D-wave and cashing out for a while. The timing should work great for our second family vacation to Myrtle Beach (four kids – from Ohio)in July. With a bit of the money Gary’s helped me make, we won’t have to cram ourselves into a shoebox of a hotel room (booked a suite!), and we’ll be able do some fun stuff like hang gliding and riding that inflatable banana thingy. I’m even going to surprise the kids with a front row dinner at Medieval Times.

    Thanks, Gary!

  139. ease

    Tudor, that is great! I know they will love it. Gary has no idea how many lives he has changed or is changing for the positive. What’s that saying, play it forward. He is doing it hundred times over and over. I thank God I found his sight and his insight. It’s been a blessing.

  140. San Diego Jack


    I too, went thru that with my accounts, and was at such a low point that if I had double-jointed legs, I would’ve swung one them around and kicked myself in the ass, all the way down the street!

    Those were hard times for many of us, so I feel your pain.

    As for new subs, me being one, I didn’t test with Gary, not finding the need to. Instead, I went thru many of his past postings, studied his charts, and convinced myself that he is competent and has foresight that I was lacking.

    I jumped in with both feet & have no regrets.

  141. San Diego Jack


    I say “Not an iota of difference”

    Unless it was the FED that was being shut down, would it make a difference, otherwise, just another story. The drivers of PM won’t be effected by a shutdown, that looks like may not occur.

  142. Jayhawk


    That’s great, I’m glad things have worked out so well for you.

    Are you the dude I know from Kitco?

    I think you are correct, Gary provides great coaching on the emotions side of the coin.

  143. MarkMarin


    Keep in mind this is a average over many years, so it only gives an indication of what has happened in the past. I wouldn’t hang my hat (or portfolio changes) on an seasonal average. However, the chart timing does rhyme with the general pattern Gary is suggesting for the completion of the C wave, followed by a wicked D wave selloff. To me, it’s just more confirmation that I thought readers would find interesting.

  144. Wav_ridah

    Did anyone else do any selling today? Sold some SLW 50 and 45 today. Going to buy AGQ calls when I feel the low is in. As a kid when my dad whistled for us to come in from the surf we always tried to make sure our last wave was the best of the day. Thats what I’m going for here.

  145. dvparekh

    i am new here, great site. thinking of subscribing soon.

    so quick question, what do you think happens next week as the shutdown is averted? do we get correction, or it will be a non-event.

  146. San Diego Jack


    See comment by Bamster & my response above.

    This is a non-event. The printing presses at the FED, weak dollar, higher oil, inflation etc. etc. etc. are the leading flight to quality in PM’s. Watch what happens to gold & silver when fear kicks in…

    I am recent sub, and have and had no regrets about giving Gary my hard-earned money. Send him an email and ask about joining, and read his stuff about making a jump into positions at this time.

    Only Nervous Nellies nip at his heels, but the rest of us are happy with his guidance.

  147. Wav_ridah

    If you’re thinking of subscribing, stop thinking and do it. By far the best money I’ve spent all year. I have a great teacher in Gary and all the other subs here. As far as the shutdown, I think its a nonevent. Everyone knew it wasn’t going to happen and they weren’t going to come near the dollar amount in cuts they said they wanted. The effect on PM, well TBD. IDK.

  148. San Diego Jack


    Marc Faber, the very straight shooter and harsh critic of Ben Bernake, said this today:

    “So they have to invest in something, and so they look for real estate, they look for equities and of course they come to realize slowly, I have to say very slowly, that gold and silver are not commodities in the sense of industrial commodities, but that they are currencies. Precious metals are basically currencies that are honest because you can’t increase the supply indefinitely. You can’t have QE2, QE3, QE4 in the gold market.” – in

  149. guy

    When i joined Gary last spring i just blew up my account and feeling really miserably. Gary didn’t only improved my account but most importantly my self esteem. Very greatful for it.
    thx Gary.

  150. Brian

    One thing that is notable here is the change in character of the Large Cap:Small Cap miner ratio. I suppose that many mutual and hedge funds can’t, or won’t invest in small caps, so the large cap miners are getting a lot of attention. They are not winning the race yet, but the ratio has flattened and is turning up.

  151. Brian

    Clearly lots of people here are taking out sized risks to make up for lost time. I can here it now when we get thrown one of those curve balls. It is not going to be pretty.

  152. ddn3f


    You are correct. You will hear the pain at the daily cycle low. That’s how we all know it’s the daily cycle low. Someone said it before that if SMT subscribers can’t hang on through the daily cycles without losing it, think of the general investing community. Hopefully everyone knows the hard daily cycle drop that Gary is talking about is coming and prepare themselves mentally.

  153. Power Corrupts


    Now that HUI seems to have broken out, do you have any opinion on potential magnitude of the move as this intermediate cycle plays out? Do you think plus 20% to plus 30% is reasonable? Thanks in advance, and kudos on the accuracy of your dollar analysis. Wow!

  154. Power Corrupts

    Thanks, Gary, that jibes.

    Have fun on the Matterhorn this summer. I was picturing you as Clint Eastwood in the Eiger Sanction, but I looked it up and it’s a different mountain…

  155. Silverman


    Thanks for the large cap:small cap observation. I bought a few May ITM AEM calls yesterday based on a recommendation from Bob LH. AEM is also lagging the other large caps (vs previous highs) so if you are correct there should be a pop in the final leg up. Will probably add at the cycle low.

  156. Silverman

    I initially signed up for a month with Gary. I renewed for a 2nd month just before he offered a discount annual subscription. When I asked him if I could take advantage of that, he said yes – he would would refund my $25 for the month. I must say, I feel pretty stupid about that $25 right about now (OK, actually I felt pretty stupid a few weeks after signing up:). As many have said, best investment I’ve ever made. Thank you Gary!!

  157. Le Fou

    I have a question about options strategy in a parabolic move.

    It’s evident to me that options are not as liquid and not as transparent as stocks. It might be very difficult getting out of options in a big down draft, especially with the underlying stock being bought and sold overnight. If I set a stock trigger with a limit order, I have no idea where to set the limit. If I sell at market, the MMs will take the bid way down.

    Should I get out of options: 1) gradually on the way up, 2) all at once somewhere before the top, 3) when Gary moves over to gold, or 4) some other way/time I haven’t thought of.

    I welcome all ideas,
    Le Fou

  158. notGreedIsGood

    Gary, or anyone

    few questions:

    1. where can we find the numbers for dumb money confidence?

    2. for the dollar cycle, can you explain how a stretched intermediate cycle is in play?



  159. Gary

    Le Fou,
    You need to stay in liquid options. SLW, SLV, GDX & GLD. As long as you stick to these 4 you won’t have any trouble exiting.

  160. Gary


    The normal duration for an intermediate dollar cycle is about 18-20 weeks. This one is already 22 weeks long and I expect it to run about 28-30 weeks before bottoming.

  161. Wav_ridah

    Le Fou,
    I only buy high volume call options on stocks like SLW and AGQ. I have no problems getting out especially on a day like yesterday. I almost always use market orders. With fidelity I see the bid and ask price so I know at what price the market order is going to get filled at.

  162. Gary

    I would stay away from AGQ options. We got a taste of how big the spread can be on this one at the Japan bottom. The spreads on options are already in the $2-$3 range. In a panic situation that will probably increase to $5+

  163. Jayhawk

    Short term top might be in…

    Been talking to my Dad for 3 years about gold & silver. Ignores me.

    Emails me out of the blue in early Dec and asks if he should buy gold. I tell him no, the intermediate cycle is topping. Ignores me and buys in. Correction begins.

    He was out here in Jan and I show him the charts and how the 150 DMA was a good buy point over the past 3 years. Also share the right miners and silver plays to get in. Ignores me.

    Emails me this week. Should I buy more gold? I tell him the game plan and to wait till this summer. Ignores me and buys.

    So, we will see.

  164. catbird

    Gary can mentally prepare us all he likes but I know there are certain commenters on this blog who will be flipping out if silver dips to $38 at the daily cycle low–let alone $36!

  165. Jayhawk

    Listen to this interview with Dan Norcini on King World News. (2nd half of interview). Talks gold, silver, miners, dollar, etc.

    Interesting piggy back to Brian’s comments about the large caps. He goes into the hedge fund long gold/short major miners trade that seems to be unwinding. We could very well see these guys explode higher with that short squeeze coming.

  166. Mission

    Gary, in support of the idea that the market trades higher from here I see that the A/D line is showing positive divergence from the February highs to now.

  167. Chrys

    Gary – I wish I could have been participating in silver miners but my 401k mutual fund only has generic set of miners, most gold. Nonetheless the value of the fund is rising and I would like to know when I cash out where do I deploy those funds? I was thinking of a U.S. Dollar mutual fund (Profunds) since the dollar will be rising (relative to other currencies). How long will the dollar rise while we are in Wave D (for gold)?

  168. Bruce


    Just read your w/e report; are you planning on removing leverage before we head down into the PM daily cycle low and then put it back on at the low?


  169. Redwine

    “What isn’t common sense is the U.S. having the only darn gold hoard in the world that’s valued at the ridiculous price of $42 an ounce, having a Treasury Secretary then talk about selling that asset, and having a Congress that’s about to shut down the government because it can’t find some money.”

    FOFOA talking about monetizing the US gold hoard by marking it to market. Anyone who still believes Tiny Timmy G is smart needs to read this.

  170. Gary

    I’m not so heavily leveraged that I have to worry about it. I am going to convert some AGQ to SLV options though. That’s a topic for Monday’s report.

  171. Greggy_M,


    I understand we should never short a bull market. I’m curious however, would you consider buying puts in SLW or SLV near the C wave top. Maybe even call option in ZSL the sister of AGQ. Help me understand if that would be stupid or not.

  172. Gary

    I might consider buying a few puts. Only buy what you are willing to lose completely though.

    So if you are willing to risk 5% of your portfolio then that’s all I would spend on puts.

    Then you have to be willing to just close your eyes and let the trade work. They will be very hard to hold on to. There will be several violent counter trend rallies that will make it hard to hold on to them.

  173. jeff

    well that was not the best video for me personally to watch. i have been scared to death about the economey since i had two little ones. I always thought i could work harder and longer even if it called for the woods and just serviving. but with a 2 and 4year old…. i just hope i have enough time to follow smt and get through this

    anyone want to go in on a missle silo. i hear they run about 50000 =)

  174. hiptwist

    As promised: Yesterday the GLD-BoS/SoW “system” gave a sell signal.

    This means buying gold (not GLD) on coming Monday 11 AM London time (AM-fixing) and selling 4 working days later on next Friday 11 AM London time on average looses 0.2%. 48% of these trades end with a positive gain -> some weakness ahead expected. Buying and selling at the PM-fixing at 3 PM gives even some better results for a short with a -0.28% loss on average.

    Anyway, it is statistically not very reliable and I would not put money on it. But it fits to the expected cycle low.

    To read more about this “system” look here in the comments 201 – 600 section.

  175. Tudor

    Dude, it’s my belief that the collapse of the dollar could happen very much like that. It’s gong to be one of those “everything’s fine until it isn’t” moments. Remember, the dollar, like all fiat currencies, is a confidence game. Eventually, the U.S. government’s creditors will lose confidence in the USG’s ability to repay. (Keep in mind that paying back in devalued dollars is a form of default.) Once the word reaches the masses, who normally don’t pay much attention to such things, I expect you’d see a “reverse mania” as people attempt to unload their dollars.

    The timing is difficult. I suspect that the USG can keep the game going much longer than expected. But there will be signs. Two key things I will be looking for are, first, the implementation of punative currency controls by the USG to prevent people from getting their wealth out of the U.S., and foreign holders accelerating their divestment of the USD. You can already see this in China’s divestment of UST securities, and their move to purchase natural resources and resource companies around the globe.

  176. jeff


    i saw that a few years ago. somebody was buying them and fixing them up. i think they were makeing condos out of them. i dont have the capital yet. Somehow my father always had the bunker idea in the 70s but never did it. I guess it stuck with me

  177. jeff

    just like fannie and freddie were fine just before they collapsed. liers, but shame on the masses for believing them. grrr .

  178. Kevin

    OK, does some wise person mind sharing an idea on fixing a pre-Gary mistake? I bought VXX some time ago, thinking the market would be tanking soon. I am down 67%. I still expect VXX to come back at least a little when the market corrects. Any ideas for me to sort of plan an exit there? Should I drop it now and reinvest it after the upcoming probable commodities pullback as a way to get my $ back faster, or should I hold it for the S&P correction? Thanks.

  179. Mr.Mom

    Anyone here think it is stupid to buy bullion at these prices? I bought some a while ago, but the price keeps going up! Sure it will correct but from what level?

  180. Duuuuuude

    Tax Implications ETF’s VS Futures

    Your commodity-based ETF may result in a higher tax bill than you might expect. If you are a highly active trader, you are likely to be taxed at short-term capital gains rates for most ETFs. Those backed by gold or silver can be subject to tax treatment as “collectibles” putting them in the 28 percent bracket. You could face even higher rates and/or penalties if investments deemed “collectibles” are included in an IRA or other types of self-directed retirement accounts.

    Futures are lumped together and reported on a single Form 1099 at year-end, and any profits in commodity-based futures (regardless of the holding period) are taxed at the “60/40” rate; 60 percent taxed at the favorable long-term rate and 40 percent taxed at the short-term rate. Of course, tax laws change, but this has been the rule.

  181. dvparekh

    this place is just awesome. some more questions, for the dollar collapse.

    would it make sense to convert some of my usd savings to inr or other currencies? how can i easily do that?

    i know the first option is to buy more physical, but i am just thinking of other options too.

    will the collapse of usd, also impact other currencies, where all the other currencies becomes worthless and the new monetary system comes in place?

    am i thinking too much?

  182. Driver


    It’s already started. We’re having to buy our own via QEnth.

    We need to fire bozo and the imposter, then we may have a chance.

  183. Tudor

    Mr. Mom, while a physical buy here would long term be ok, I think you’d be able to get more ounces by waiting for the D-wave this summer. If you’re really itching, at least wait for the daily cycle low later this month. I’m planning on adding to my stack during the D-wave, although I’m always on the lookout for screaming deals on 90% junk.

  184. MrMiyagi

    To all the folks who try to inform others, my own experience has led me to this simple conclusion: why bother?.
    Years ago I tried to help out co-workers and friends by talking about best tax planning, stocks to avoid, paying off mortgages faster and avoiding ball&chain trappings of “modern life”, in other words, new cars every few years, flashy, showy purchases and the like. No one listens, when they ask questions about something in particular, they only want confirmation for what they already are going to do.
    So I stopped. Screw them.

  185. CMT

    MrMiyagi, you are so right. No one wants to hear anything that doesn’t already confirm their existing beliefs. I spend half my time just fighting my own confirmation bias, so I don’t understand why others seem so hell bent on seeing what they want to.

    As an aside, I also no longer work. retired this February at 39. With a lot less money than all my partners told me I would need. We shall see.

  186. MrMiyagi

    You young pup!
    I retired at the age of 41. A buyout helped and we have zero debt. No mortgage, no cars, just got back from Las Vegas and credit cards are already paid off (we aren’t big spenders).
    As for the numbers that “financial planners” talk about for retirement, they are bullshit. I can’t understand why anyone would need 70% of their working income at retirement since expenses SHOULD be nearly basic level; food, property taxes, utilities.

  187. CMT

    MrM, I have way less than even that. I have, assuming a real rate of return of 0%, about enough for 17 years at current spending levels.

    Although, I spend(t?) a lot more than I needed to just because of my job (club memberships, suits, donations to certain “in” causes that my clients liked), so I think that if I spend correctly, I have enough for about 30 years.

    So, assuming I live past 69, I either need to make more than a 0% real rate of return on my nut, or find new outside income.

    But even 10 years is a long time – I’m sure I’ll figure something out. 😉

  188. MrMiyagi

    Sounds like you’ve done just fine, none of my friends will ever be able to stop working until they are nearly dead, most of them are around our ages.
    My dad once told me; “Educate yourself because governments want people to remain stupid”. How right he was, unfortunately he’s been gone 26 years now, cigarettes were his demise.

  189. Haggerty

    I envy you guys who are retired. That’s where I want to be. I am 31 now and I hope I can retire at the end of this bull. Only have around 100k now but if this thing lasts 2 more ABCD cycles and the bubble phase I should be ok.

    Mr M I too tried to convince my brother among others not to buy a new car, after just buying a house with school loans that match his mortgage but he didn’t listen….and he’s getting his PHD in two months.

    I think when I talk I make people nervous and they just want to stick their head back in the sand.

  190. MrMiyagi

    I think when I talk I make people nervous and they just want to stick their head back in the sand.

    The glazed look in the eyes, the brief realization that they are on a treadmill, yes, synapses fire briefly but are quickly crushed.

  191. Kevin

    Mr. Miyagi and friends… Very cool you are retired. I’m 34 and have learned about investing the hard way while being a pastor and not making much. I’m not a pastor anymore for now… But, I’d love to be able to “retire” and work in a community service type capacity someday or do jobs that I think are worth my time and effort. You all give me hope to get there. Unfortunately, I don’t have that $100k yet!

  192. Eamonn

    CMT, I also know the truth of “club memberships, suits, donations to certain “in” causes that my clients liked”. Very true. Also, of course, there is also the stress/cost of working with and “playing the game” with folks that maybe you don’t want to be with

  193. 86d4life

    Mr M,
    I don`t try to convince people any more. That`s pointless. 85-90% of the population wants to have their head in the sand. But I feel it is my responsiblity to `give back`. I spent 2 yrs banging my head against the wall, working my ass off and then still getting my ass handed to me. Then I found Toby Connor. Gary is making a huge difference in most of our lives and for what we are paying him, he`s not doing it just for the money. I`m not trying to drum up more business for Gary but if it goes that far, I`ll definately drop the name. After what he has done for most of us, I think we owe it to other people that might be looking for a way ahead or out. It is supposed to be part of our humanity. The world is turning into a cesspool because of greed and selfishness. I don`t have to participate. It costs me nothing to try to care for another human being.

  194. Wes

    >>>Is this 4 minute video by the National Inflation Association just to scare, or is this actually how the collapse of the dollar will happen?<<<


    Inflation must be alive and well. The 4 minute video was already 7 minutes long by the time I saw it. 🙂

  195. Gary

    You had your chance to get out of VXX at the recent intermediate cycle low. Now you are going to have to wait another 20-25 weeks for the next intermediate bottom.

    VXX is a suckers trade. Don’t ever let anyone talk you into it ever again.

  196. Jayhawk


    I like your idea of swapping out the silver plays for gold as silver approaches 50. Also, looking for to Monday’s report regarding SLV options.

    I was looking at some of the HUI component charts and noticed a number of them breaking out and looking like they want to run. Perhaps those may catch a strong bid coming down the stretch as Brian pointed out.

  197. CMT

    Eammon, working with people you don’t want to certainly takes its toll.

    To get into Hammy’s blog just send him an email asking if you can get in. He’s a good guy, but I think he comes off to some oddly because English is his second language. To those who can see his blog, while it’s not a trading style most can emulate, he does very well.

    To all those who want to retire early, I’ll offer the same advice I used to give my associates in my law practice: Live on half of what you make. If that means you don’t drive a 5 series BMW as soon as your friends do, or don’t have a 4,000 sf house, or can’t have the newest plasma, who gives a rat’s ass? You’ll learn to live on and be content with less, and you’ll save a bundle.

    I know not everyone can get by on half, but paying yourself first is the ONLY thing that really makes sense (unless you’re trying to accumulate a bunch of crap that’s going to wind up in the dump).

    I’m in the process of getting rid of almost everything I own. Plan to move to the coast, buy a sailboat, convince my wife to quit her job, keep only what fits on the boat, and see how long I enjoy sailing to cool ports around the world (you’d be surprised how inexpensive that lifestyle can be).

    Stuff just gets in your way.

    [stepping off soapbox]

  198. MrMiyagi

    I know it’s the volatility index, but how does it trade? It looks like it’s been diving for years now from 450 to 20ish.

  199. Le Fou

    Gary, Wav_ridah,

    Thanks for your advice. My path looks clear now unless some ugly bear comes out of the woods to bite me!

    My best to you both,
    Le Fou

    BTW, my copy McMillan’s Options as a Strategic Investment arrived in the mail today. 😉

  200. Wav_ridah

    Le Fou,
    You’re welcome. Gary’s right about AGQ but if one can time the cycle low and ride to the parabolic top or even close to it the profits would be massive. I would only try this with money I can afford to lose completely.

  201. Kevin

    Thanks Gary for the input. I certainly feel like a sucker for buying that one. I was the fresh meat on the wrong end of that trade.

    I hope I’ve learned my lesson now and I’m certainly humble enough to follow the true experts instead of trying to train myself with stupid mistakes.

    The proof is in the results for you lurkers out there… I’m up almost 10% just since I started following your portfolio on 1 April. Thank you so much for what you do!

  202. Clarkatroid

    gary said

    ” I am going to convert some AGQ to SLV options though. That’s a topic for Monday’s report.”

    is there an alternative action for less sophisticated investors who dont understand options?

    many thanks

  203. CMT

    Jayhawk, I do not have kids. And I recognize that has partially enabled what I have done.

    However, I have 2 friends to tell you about.

    One a former law partner, my age, with around 1.5mm in savings – thinks he needs to keep working to set his daughters off on the right path (paying for grad school). But, he never gets to see them. Don’t you think they might be better off earning their own way and having a dad around when they’re kids?

    No. two retired at 40, with a pregnant wife, bought a sailboat, and now sails around the south pacific; his wife home schools their TWO kids, he teaches the boys to fish and dive and repair the boat and read the weather and which plants on which islands are edible. They’re more or less poor by US standards; but he gets to spend 24/7 with his kids.

  204. MrMiyagi

    I have a bunch of SLW calls, just wondering if you feel that after this cycle low, some ABX or GG or NEM calls would pad the folio. I also hold GLD calls.

  205. Gary

    I would never buy calls on individual stocks other than SLW. Company specific risk makes them too much of a gamble.

  206. bamster


    I know I made a pledge to you I would not trade options and I stuck to it. But I have to tell you that I sold my AGQ shares yesterday and bought an equal amount of SLV july 30 calls. I did this to free up some cash that I can re deploy once this next daily cycle bottoms. I plan to double up as close as possible to the next daily cycle bottom. Do you agree with my strategy? Thanks.

  207. Gary

    Folks I know it’s exciting to try and jump in and out of individual stocks but in the long run all you are going to do is rack up a lot of commissions and ultimately underperform the ETF’s.

    Sure you can boast about this or that stock crushing the ETF’s and you might even out perform during this C-wave if you are lucky. But by the time this bull market is over I will have dwarfed your returns by just sticking to the ETF’s unless you happen to catch the next Dell, took a large position in it and can hold on to it through all the ups and downs.

    Ask yourself if you really think you are going to be that lucky.

  208. Gary

    I think you are probably going to have a hard time hanging on to those calls at the next daily cycle low.

    Remember that sickening feeling you got at the Japan bottom. Now multiple that by 10 and you will get some idea of what you have to look forward to.

  209. ALEX

    Hey guys

    Just popped in for a few minutes to catch up on some blog…I have a question for Mr.M & CMT & even Gary ( all who are ‘retired’ early).

    You say “retired’, but not collecting retirement, right? Are You just indicating that you’ve saved enough to live off of until applying for retirement benefits?

    I ask because I had a good job in an Aerospace co, but I quit to do this…(being stuck in 3 hour co. mtgs and 8 hr classes was hurting my trading 🙂

    Am I retired too? 🙂 I am currently peeling off some of my investing for expenses, and paying taxes on capital gains-its not all in non-taxable accts.


    And Jayhawk…I am seeing the same thing. (separate post coming, this ones long enough)

  210. blammo

    As a Canadian we don’t have a SIL equivalent and I am loathe to convert to USD in order to conduct my trades. Ergo I am forced to pick stocks. I would actually prefer the ETF route if it were available (especially for family accounts).

    On the other hand, catching the odd lightening in a bottle (AG/FR.TO) doesn’t hurt.

  211. bamster

    Fair enough,

    The only other alternative is to sell some this coming week or to buy puts in SLV against the calls to offset the coming cycle low. I am trying to hang on to my position while this takes place. I’ll wait for your monday report to get your point of view.

  212. MrMiyagi

    Gary, okay, nix the AGQ and add GDX.
    Alex, retired as in not working except making investments grow. Not collecting government retirement funds because I’m not 60.
    Blammo, I’m in the same boat, however, I have 80% of my funds in US$, I will wait for better conditions to convert back into CDN$.

  213. Gary

    The time to buy calls is at a daily cycle bottom not the top. Not only are you going to watch the intrinsic value decline as gold moves into the cycle bottom, you are also going to sit by while one or two weeks of time value evaporate.

  214. CMT

    Alex, I resigned my partnership at what is likely the most profitable Texas law firm (measured in profits per partner). I don’t intend to work a square job ever again.

    As I mentioned, I think I have enough $$ for about 30 years assuming a real rate of return of 0%. My assumptions also include no inheritance (my wife should get a couple of 100k), no social security, but some sort of socialized medicine.

    I’d like to think I can live off my investments, but we’ll see. For now it’s moot as I have not yet convinced my wife to quit her job. With her pay, I can still save a good amount each month. So really, I’m just sponging off her – but I think I’ll have her retired in a year. When she sees me spending my days at the gym, the marina, learning to speak french and play the guitar, I suspect her desire to work will wane.

  215. ALEX


    I was going to say that (the golds) are what I noticed 2 wks ago when I looked at NG.

    If you look at it on a 1 yr/ weekly chart, (everyone thinks its a dog, and it IS on a daily 3 month) -it is gaining volume and this week is right at that downtrend line…but its a nice flag pattern consolidation i.m.h.o.

    It ran from $6 to $17 ($11)- so for an A-B-C-D pattern price projection, I add that $11 run to the bottom of the flag near $12…and get a minimum price projection of $23 IF IT BREAKS WITH STRONG VOLUME. If weak volume it could peeter out.

    Maybe worth watching.

    Also, with Garys cycle timing, It may break out now and retest on the daily cycle low/ or just drop back now with the daily cycle low and break out next run? But on a wkly, volume up has increased from the last 3 wks.

  216. ALEX

    THANKS for those answers guys!

    I had to ask because I cant stand it when someone asks what I do now that I left my job.. and I say “I Invest”, then I get 300 questions /person.

    What do you invest in? Are you crazy? Doesnt that take about 3 hrs /wk? can you teach me if I get a day off? etc etc

    Now my answer is…I am retired, and I have a few investments that assist 🙂

    Thanks guys

  217. ALEX


    I love the end of that post. I kind of need my wife to work , because she gets good benefits working at a hospital. She enjoys her job and its only 3 days a wk, so its all good , but what you wrote about the gym, marina, etc

    I’d like to get her to quit early too, esp if I am enjoying those activities while she’s working. Her desire to work will wane too.

  218. CMT

    Alex, if it helps, I usually tell people I’m a philosopher. Most have no idea how to respond to that.

    Occasionally, I’ll rip-off Arthur and say something along the lines of “I drink scotch, dabble with oil paints and fondle women, but I have weekends off and I am my own boss.”

    Sometimes, I’ll say that I’m searching for immortality – that usually generates a discussion that lets me know who I’m dealing with.

    Finally, I find telling people that I’m just planning to “loaf” works as well. They either turn away in disgust or tell me how much they loved The Razor’s Edge.

  219. n1tro


    I sold out before the wiggle down and got right back in fully loaded afterwards. Made an extra 5K. Gary says to stay away from trading wiggles because most people are too scared to go back in full but I’m not and I trade wiggles when I can, keeping a core position along the way.

  220. ALEX




    I think I can work with some of those-and maybe get a little creative and adjust for my audience


    GARY, I KNOW you do not trade at this point, for the sake of not losing ‘position’, surprises to the upside , and so on.
    BUT after reading this wkend report, I am surprised that you dont just lighten up a TAD BIT ,and have MORE ‘position’ by buying a greater number of shares in just a couple of days.

    Anyways, I read your post 3:46p.m. today, so I know your feelings, but your wkend report cries trade 🙂 J/K to each his own, I sell a tad and try to get more shares lower…I am NEVER afraid to buy a sell off or a break out if its a bull mkt.

    The parabolic fireworks to come would ensure more gains anyways, but I do understand your “hold until the top” method.

    Good wkend guys, and I do miss DG’s POSTS!!

  221. blammo

    Thanks Rob L.

    HZU is already my biggest holding but I will have a look at some of BMO’s ETFs – looks promising (if they have enough volume).

    I too miss DG and Vuvvy.

  222. Tudor

    “Sometimes, I’ll say that I’m searching for immortality…”

    When I retire (early) I’m going to search for immorality.

  223. blammo

    Rob L., I was leaning towards moving my funds into USD, likely a 2x vehicle like HDU or perhaps a low beta index short.

    I’m not a good shorter. I made some money with SRS during 2008 but overall I was down that year and I don’t want to make that mistake again (though I don’t expect the same volatility this cycle).

    Gary says he could make 40-50% shorting (oil?) so if he has a plan I am all ears.

  224. Rob L.


    Isn’t HDU bought and sold in Canadian dollars?

    I think Gary mentioned the other day that shorting energy might be a good idea since it will be seriously stretch above its 200 DMA, during the D-wave decline in gold. In that case HED, a capped-energy bear plus ETF might be a good vehicle for Canadians. That is the one I am looking into right now.

  225. pimaCanyon


    The decay on VXX is horrible. I played with a VXX position last summer/fall and gave back some of my PM gains because of it. I am just glad I decided to take my lumps and get out when I did, otherwise the loss would have been much worse.

    No one can tell you what the market’s gonna do with 100 percent certainty, but it sure looks like it’s going to continue up or at least sideways for a few more weeks. VXX tanks in in strong market and dies a slow death in a sideways market.

    You just have to make your best guess and go with that. And if you decide to sell and VXX goes UP right after that, don’t let that get to you. You make your decision, take whatever action you need to, and get on with the next trade or investment.

    Good luck!

  226. San Diego Jack

    The correlation of VXX to the VIX is truly horrible.

    Overlay them, and you get valleys and peaks in the VIX, but only rolling hills on with VXX.

    It seems as though it has a muted response to moves in the VIX. The only major winners are those that sell calls and puts, not buyers, and the Market Makers.

    Better to use Short Bias ETF’s for Dow, S&P & Russell index.

    But, get in, and get out quickly (no long positions).

  227. Gary

    The energy stocks are stretched further above the 200 DMA than at any other time in the last 11 years. plus oil is getting late in its intermediate timing band and the CRB is late in it’s three year cycle.

    Probably not the best time to be buying energy. The upside is probably limited.

    One will make much bigger gains in mining stocks which aren’t overextended.

    However if this can continue into the dollar three year cycle low then the energy sector will be a great short trade as the regression to the mean trade will be extremely violent in an asset class that is this overextended.

    I made quite a lot of money shorting this sector during the last bear market. I will probably do it again once the next bear begins.

  228. San Diego Jack

    Thanks for the head’s up Gary.

    I am long USO, and up about 60%, and figured to blow out once it hit $110.00, but it blew past that, and since the Dollar is dropping, I figured to hang a bit longer.

    Let us know when you consider shorting.

    Think I should pull the pull on my energy positions then?

  229. Beanie

    Oil, like precious metals, are moving higher because the dollar is moving lower. It doesn’t make much sense to long pm’s but short oil, unless one wants to hedge. PM’s are just as stretched above the 200dayMA as oil, if not more.

  230. Beanie

    For the foreseeable future, it is very likely oils will have more strength to move higher than pm’s. There are two reasons for this. One being the lower dollar, of course. The other reason is the Middle East crisis. Gadaffi and his men blew up their own oil pipelines. That won’t be fixed anytime soon. If the crisis moves to Saudi Arabia, it’s game over (for mr. market) and the oils take off like a rocket to $200.

    So oil is actually running on two engines right now, versus one (mainly lower dollar) for precious metals.

  231. Gary

    On the contrary gold is only 11% above the 200 DMA.

    Gold is the cyclical driver of the sector. Until it tops silver and miners will continue to rise. At a final C-wave top miners can stretch 40-60% above the 200 DMA.

    At the moment they are a measly 17%.

    The percentage gain in the mining sector is potentially much larger than what one can expect in energy after its already gone so far.

    Not to mention energy will ultimately be the commodity that poisons the global economy just like it did in 08.

    Gas is already well over $4.00 in CA and it’s just a bit under that in Vegas and most of the rest of the country.

    In 07/08 $4.00 gasoline collapsed the economy and at that time unemployment was much much lower than it is today.

    Now with gas approaching those same critical levels and with the economy in a much weaker state it won’t be long before we start to see signs that the next recession is beginning.

    This is the natural check valve that prevents the Fed from printing prosperity. Too much money and you get severe commodity inflation. A weakened economy just can’t survive that kind of pressure for very long.

  232. Gary

    Oh and BTW I didn’t say to short oil yet. The time to short it will be once the dollar puts in it’s three year cycle low..

  233. Ohio Rob

    Good for all of you retired 30/40 somethings. Bastards! Gary, that was a term of endearment, not profanity. I will look forward to being able to retire early in my next 30 years I suppose. Anyone have a list of silver miners they’d be willing to share, I would like to so some screening this weekend. Just need the symbols. Cheers!

  234. San Diego Jack


    Pretty smart for a Zonie.

    Gary was saying that XLE is overstretched, and it sure looks like too.

    Your argument is sound & has been my argument for a long time, hence my gain in USO (which I just checked, and is up 105%). I am just tempted sometimes to sell, so I have money to put into PM’s.

    I think I’ll keep it, staying on the rocket ride, and get rid of other energy positions in my IRA.

    Keep in mind that Gary’s observastions are starting to influence me…

  235. San Diego Jack


    I assumed you are a subscriber.

    Whichever brokerage you use, or stock screener, one trick to find them is to go to your symbol box, and type in “silver” and you should get more than you need.

  236. Gary

    BTW there is no way to be up 105% in USO. If you bought at the exact bottom in 09 USO still isn’t up 100% yet.

    Silver on the other hand is up over 300%.

  237. San Diego Jack

    Sorry Gary,

    Should’ve said that it was a Call Option, or LEAP rather.

    I’ll hold it, and dump my other energy positions, and balance out my portfolio somewhat.

    Any suggestions?

  238. Gary

    You might be up 105% if you managed to catch the exact bottom in XLE. But then again SLW is up 18 fold.

    PAAS a little over 300%.

    SSRI 6 fold

    CDE a little over 6 fold.

    HL 10 fold.

  239. Gary

    Energy stocks are already starting diverge from oil.

    Oil has gone on to make much higher highs but neither XLE or OIH have managed to break out to new highs.

    The same thing happened at the 08 top. The energy stocks started to struggle in May and couldn’t follow oil higher.

  240. Gary

    I do expect the energy stocks to recover if the market can break to new highs, but this is one thing to watch if oil continues to rise.

    If the energy stocks seriously start to diverge from the price of oil that would be a big clue that this is a sector one wants to sell short during the next bear market.

  241. Natanarchist

    @N1tro…got ya..I was thinking you dumped all your positions. I have done that as well a few times over the years. Usually just taking some profit on leverage at daily tops. Might do it again tomorrow, this week, on silver. I like to stay minimum 125% through whole IT cycles though.

    On retiring young…I suppose if I didn’t have 4 boys I could be retired as well. But we are not a “stuff” family. Lived in the same 2400 sg ft home since ’95. Own 3 vehicles with newest being a 2003. If needed, the wife and I could work pretty much minimum wage and still pay all our bills with money left over.

    Anyway, one more ABCD and that should have us more than covered for the rest of my life. Gary makes this easy. I was doing 30-40% a year for the 3 years before being SMT sub…except when I screwed up in fall of 08 and gave back 7 months of profit. Too mush risk, wrong position sizes..all the stupid mistakes from being overconfident/smarter than the market..etc… I have done this whole large cycle with Gary. I don’t know the exact amount, but my trading account in 3 years is up huge.

    @Alex…I don’t keep the kids money in the bank anymore. birthday money, grass cutting summer job savings. I have had it all in PM’s since December ’08…mostly ETF’s, CEF, GDXJ, SIL….but at the last IT low we jumped on 3 of your suggestions with about 20% of the account. GPL, EXK and AXU..all up kids thank you…you rock.

    as someone who has been on this blog for a long time, I enjoy all the new posters and the discussions, investing or otherwise. Even and perhaps especially Beanie… is what makes a “market”.

  242. San Diego Jack


    Excellent advise, as usual. I will keep an eye on the divergence, and act accordingly. Not interested in getting burned, but appreciate any small gains. If USO goes orbital, then I will sell that too, taking the money & running.

    Went to my feeds, and noticed that I’ve only been following you since Feb. 10, via Toby Conner, so I didn’t get your valued advice until I went thru your postings & charts. Still, I am happy with the recent run-up, with more to come.

    Just need to see my options become more profitable, sell them & then invest in a more sane manner, as you suggest.

  243. NJ


    Isn’t Bernanke up for renomination in 2013? What happens if we get a new Vockler in 2013 instead of renominating Bernanke? End of Gold Bull sooner than we are expecting?

    In some ways, it looks like more than the Presedential election of 2012, the Fd Chairman of 2013 will impact the gold bull more…

  244. TheBookGuy

    No way that will happen. Volker was hired by the President on his economic panel team. They didn’t listen to him so he resigned. They would never hire another Volker, too much pain for politicians and for Bankers.

  245. Bruce


    certain energy stocks have done as well as certain mining stocks in the last few years


    CLR +500% fm Nov 08
    WLL +700% fm Jan 09
    HAL +1000% fm Dec 01
    COP +500% fm Jun 02

  246. Wav_ridah

    You’re absolutely right. Gas here in Northern California is about 4.15 for regular unleaded. I make very good money and I was blown away when the pump stopped at 80 bucks for my 4runner, Then I had to fill up my Ram diesel (I get about 19mpg with this beast) and it clicked off at 99 bucks and my tank wasn’t even full. Look at USO or OIL vs SPY back in 08 and 09.

    FWIW…The last time I saw Beanie post it was near the daily cycle top, We may have confirmation.

  247. Brian

    Did Beanie really just say game over for Mr. Market? Never thought those word could be typed by him! High oil prices lead to recessions about, oh say 100% of the time. Good catch Beanie.

  248. jeff


    if we see the coil break to the down side, could i tell the wife to turn lose her 401 back to vangaurd? and no she wont do the pm’s .
    I know you have told me to keep it out until the fall of 2012, but i was wondering if she could throw it back in for 5 weeks?

  249. jeff

    i dont know if we can put a stop in. she would be giveing them the money back to manage the fund. her old boss is one of the top dogs there ( john somebody )
    he was calling gold a bubble at 1000, but im still not right. granted i havent made anything until i found you. im still trying to get her onto smt.
    the only thing i might be able to do is get her to eleminate any bond exposer.

  250. Gary

    If she’s going to be trapped in the funds then don’t go back in. It’s too late in the cyclical bull and getting too close to the next 4 year cycle low to be stuck in a stock fund.

    Absolutely get her out of bonds. Bonds are now in a long term bear market.

  251. Mr.Mom

    Assayed or not? I bought generic buffalo rounds and stopped to consider, what if I want to sell these or use them for currency(doomsday)?
    Although silver eagles carry a $3.80 premium perhaps it is worth the price of admission in the end.
    Thoughts? Even for just selling them back should I buy rounds from a known mint/miner and not generic rounds?

  252. CMT

    Dan Norcini’s comments on KWN this weekend were interesting with regard to the coming parabolic rise in metals. The thing I really took out of it was once the shorts are all out, get ready for the violent correction (D-Wave) that Gary has talked about.

  253. Silverhound


    Your cycle work comes across as being a relatively simple technique but I’m sure it took you many years to perfect. Have you used it on individual stocks with any success? I ask this with a view to trying it out on some of our local market here in oz.


  254. Gary

    Cycles won’t work on individual stocks. Cycles are the big emotional swings of very large groups of investors.

    The investor pool in a single stock just isn’t large enough to make cycles effective.

    That being said the vast majority of stocks will follow the cycle trends in the general stock market or precious metals market.

    So if the general market is correcting into an intermediate cycle low then 80-90% of the stocks in the NYSE and Nasdaq will also correct at that time.

  255. Intern


    To finish up, your cycle strategy means to find a secular bull(pm’s, not SPY), buy in intermediate corrections within that bull market, NOT within Intermediate corrections with a secular bear market?

    Sinking in.

  256. Silverhound

    ok so they are more of a big picture tool. Reason I asked is because we don’t have the ETF’s that you guy’s have in the US so I have to focus on individual stocks or in the case of PM’s, the producers and junior miners.


  257. Gary

    One can use cycles in bear markets also although they don’t work as good because cycles aren’t a great tool for spotting tops.

    Sentiment is better for that in bear markets, and then cycles are used to tell one when to cover shorts at intermediate bottoms.

  258. Gallo


    Any concern at this point or in the near future that the government does something to gold or the US currency such that our paper gold holdings loose a substantial amount of their value? Some say we should be accumulating the metals themselves (gold and silver) as the only real mode of protection because the dollar will become essentially worthless. Just a question of when.

    I ask because if memory serves you indicated you won’t be buying the metal anytime in the future. How do you think this whole dollar gold thing gets played out? Thanks as always.

  259. Jayhawk


    I think you shared your portfolio several months back. Would you mind sharing your picks again & the % breakdown you weigh each miner/security?

  260. Gary

    If we get into a hyperinflationary scenario then we would want to buy physical, but that isn’t going to happen right now.

  261. dvparekh

    So if I am reading this correctly, currently we are in c-wave till june, followed by d-wave in summer (big correction) and then followed by very bullish a-wave up? Is that correct?

    I have GDX-june calls, SLW-may calls, GPL-stock, SLV-may calls and have been adding and trading around it. Is this good, do I need to add anything or remove?

    I have been slowly buying physical gold/silver, when do I add again during d-wave?

    Am I missing anything? thanks in advance.

  262. Jayhawk


    Not a lot of folks here who are into the physical. Have you tried the message boards at Kitco? Good info there on what to buy. Here’s the silver board-

    I took a shot gun approach-mostly Eagles, some Maples, Sunshine rounds-Eagles & Bufs, 100 Oz bars, 90% bags. You may want to average in or just wait for a large scale dip to buy in bulk?

  263. Shalom Bernanke

    “‘Your cycle work comes across as being a relatively simple technique but I’m sure it took you many years to perfect.”- Silverhound

    That’s what defines a professional, they make the difficult look easy. 🙂

  264. Gary

    The spreads on physical are pretty large. This close to the C-wave top isn’t the best time to buy.

    Much better timing would be at a D-wave bottom, then hold till the next C-wave top.

    I’m expecting the D-wave to end sometime later this summer.

  265. Brian

    Jay, Percentage wise my portfolio mimics Gary’s. The difference is when he switched to the miner EFT’s, I did not. So given my AGQ and SLW is the same %, the rest is divided equal dollar (in January) among most of the silver juniors and a couple gold juniors. I also have SSRI and will probaby gett PAAS on a pullback. It broke out Friday. If I find some cash.

    Teeny tiny options positions compared to lots of folks here (call me coward) on anv, cde, exk, goro, hl, mvg, slw, svm.

    The one thing I will say is if the lg cap ratio breaks out it may be a call to action of some sort.

    Haven’t done much trading lately. Don’t want to lose these positions now!

  266. TZ(4404)

    WES, JAYHAWK, Others…

    I want to ask a favor of those of you trading (and ribbing me) on options.

    You probably believe you are mostly on the same page, but I suspect many of you are *widely* divergent in what you are actually playing in size, risk, and style. (Which also makes it hard for me or anybody to discuss ‘options’ since there is no firm basis for what that thing may be.)

    Please take moment to settle my curiosity and tell me:

    1) what % of your net worth is in various option trades.

    2) whether your options positions are primarily in/at/or out of the money;

    3) the expiration month of most of your options;

    I’m assuming everybody is pretty much just playing straight calls. I’m also assuming any cash NOT in options is in the various gary-mix of stocks. If you are mostly ONLY playing options please let me know.

    WES or JAY, for example, you earlier touted 2 or 3 options showing me/others how much they had gone up; 30%, 90% whatever. Great. How much of your net worth is in those? What about the rest of your portfolio.

    I think the responses to the board will be illustrative and also surprising to many of you as to how divergent.

  267. TZ(4404)

    The questions are not limited to JAY or WES. LOTS of you guys are swinging around “I’m loaded up in options and KILLIN it!” lately.

    How much are you loaded?
    What % of your net worth?
    What months and style.

    Everybody jump in, please.

  268. Rob L.


    Must give you props on your Thurs & Fri call on gold you made on Wednesday ( I think)- it was spot on. Well done!

    What did you base your call on?

  269. Brian

    Jay, Wes put up a post about creating your own leveraged ETF with deep ITM options. Since I don’t have much free cash, I am going to study that to cover the large caps space via GDX.

  270. Natanarchist

    @Alex in Montana…yes that is Banff Ave. I put that picture up because while Gary and other SMT subs will be in Swiss, I will be in Banff. My eldest son is presently living there until end of June.

  271. fubsy_cooter

    The drumbeat in my mind keeps getting louder…Should I sell a portion (1/4) of my holdings if Silver continues its rise to the 42.50-43.00 range, on a gap up or interday spike during this daily cycle? If it starts dropping immediately, I don;t have to worry about this decision b/c i won’t sell into weaknes at this point, but I am tempted to sell into strength.

    The internal dialogue just continues to get louder.

    Why would I do this? Well, if I get it right, and there is a drop into a daily cycle low, I would be much more likely to load up at a swing low then if I was holding on to all positions. So, I could be better positioned for the final spike up.

    But, what if silver just continues higher? Then I miss out on 25% of my profits.

    Man, I get itchy right about now…With imminent corrections coming near tops.


  272. Brian

    TZ, In January I opened most all of the options positions listed above. Highest return is EXK up 450%. Lowest is HL at @ 25%, but it is the exception. Largest position is SLW and it is up 300%. In January I used approximately 2% of portfolio for options.

    At the last cycle low, I bought options on GORO, SLW, and SSRI. GORO are down 25%, SLW up 50%, SSRI up 125%. These purchases were 1% of portfolio (approximate).

    I will post the final tally in regards to % of portfolio and return when I sell.

  273. fubsy_cooter

    Oh, and of course another motivating factor is not wanting to watch gains obtained thus far to dwindle into a daily cycle low.

    I’m weak. I’m weak. lol

  274. Gary

    If used properly options are an excellent tool to not only control risk but to magnify returns on invested capital.

    Where people get in trouble is using them for massive leverage.

    Leverage is leverage. It doesn’t matter whether one is using options or futures the risk with leverage is that any slight wiggles can and often will cause one to make an emotional mistake and severely damage ones account.

    Here’s what is going to happen, sometime in the next week or two. We are going to get another scary correction in the metals.

    Anyone who maxed out their account in options or futures at the recent high is going to see the value of their account probably drop by 75% or more during that correction. If you can’t control your emotions then you will freak out and sell when that massive draw down hits.

    You will have destroyed most of the value of your portfolio.

    Then invariably what happens is you go all in again (revenge trade). If you don’t time this one perfectly you will watch what little you have left evaporate overnight also.

    All this because of emotions. You will be on the right side of the trade but any little nothing wiggle will trigger a draw down so large that you won’t be able to think straight. All you will be able to see is that you are losing everything. Self preservation will kick in and you will sell at the bottom trying to salvage what little you have left.

    If you are going to take this kind of risk then you have to be willing to accept that it is an all or nothing trade. Take your position and then ignore it till it either goes to zero or your target is hit.

  275. Natanarchist

    @fubsy..having the same conversation with myself. my positions are solidly in the green that I am not going to worry about the coming daily low..however, I too was thinking about trimming part of my leverage in the same price area and add it back at the low. I think I will just see how things go as the week starts. I won’t lose any seep over this matter what happens.

    TZ..I am like you..futures, no options…I don’t really understand them very well, so I take Gary’s advice and leave that to the pro’s.

  276. fubsy_cooter

    Just to clarify my position. I am not in options. Strictly ETFs and 92% invested. only 12% AGQ.

    As you can see, I’m a bit risk averse compared to most around here.


  277. Brian

    Gary, I agree with your thoughts. I was fully prepared to lose it all, because quite frankly I was not at all convinced that was an intermediate bottom we were lookIng at. I also figured I would hold to expiry, because that bottom would come and the bull would take care of my error.

    TZ, One more thing. They are all June expiration except MVG which are May and I think EXK are Aug.

  278. Ryan

    I’ve been thinking about lightening up like some of you if we get a pop next week. The thing is, I’m not even leveraged (unless you count AGQ) and I don’t have options. I didn’t go all in at the IT low but I’m still up nicely at around 38%. I know Gary has been saying we’re probably going to get a pretty scary correction and I know it’s not going to feel good if it goes down to half of that at 19%. Ahh what to do, what to do.

  279. Natanarchist

    Ryan, since your not 100% invested, you could just do nothing, add at the daily low to 100%. the decrease in the paper profits you would see into the low won’t mean anything when you sell close to C wave top. If the correction is “scary”, you might chicken out on adding back. Only you know how you will react.

  280. Eamonn

    I’m going to try to sidestep the correction and trade the stock market, and then jump back into the metals. I’m not saying I will be able to time it, but I’m gonna try. I know if you have big money its wiser to be conservative and sit through the correction. But I dont have big money but I do WANT to have big money so if I see a chance to make more I’m gonna try it. I’m not saying I am going to be successful, but I am going to try. Maybe when I have millions I will be more conservative. I am not using much leverage.

  281. Ryan


    I’m at 100% now, I’ve been adding on the way up and on pullbacks. I added big chunks when we had those -10% days and just finished using the rest of my dry powder a couple of weeks ago. I guess you’re right I can just try to sit on my hands when we do get our correction. I technically COULD get cute and sell out what I added a couple of weeks ago but I already know what Gary thinks about the wiggles.

  282. Brian

    Eamonn you have it backwards. The conservative approach is to ride it out. The aggressive and most dangerous is to try to trade it. IMO

  283. Le Fou


    I’m not a big options player. In fact, I’m a novice, but I’m trying to make the best use of the C wave. I currently have 11% margin on my account. I’m holding

    11% in AG
    69% in AGQ
    7% in May ITM call
    9% in Aug ITM call

    I’ve been scaling out of the Aug calls because I didn’t want to get caught in a downdraft. I’ll finish scaling out of the Aug call this week. I’ll hold on to the May calls.

    If we get a nice correction I’ll buy some June ITM calls on SLV/SLW. Following Gary’s advice I’ll look for a Delta of around .80. Right now I’d be looking at SLW JUN 40 CALLS. The open interest his highest on SLW JUN 50 CALLS, so I might take a nibble there, but I won’t decide that until I see what’s cooking when the correction happens.

    I have a couple of books on options that I’ve been reading, but I believe that the real learning comes from actual skin in the game.

    Le Fou

  284. Eamonn

    I am a relative novice, but I get the sense and feeling that you really need to understand options, and study in detail and thoroughly and KNOW how you could lose money before jumping into them.

  285. Jayhawk


    Similar to Brian. Between 2-4% of my portfolio. I use SLV and SLW. Buy some slightly out of the money 1 month out calls at the intermediate bottom and daily bottoms. Had some of those SLW June ITM calls too. I closed all out last week. Will reenter for the final push higher…Keep it around 2-3% of my capital.

  286. Romeo Bravo


    In mid February, went in with slightly out of the money options on SLW, AGQ, SLV. Bought about 20% of my trading accounts worth. This was close enough to the cycle bottom for me. Am willing to risk a drawn down of 50% on them, which so far has not happened. This would mean I would take an overall hit of 10% on my portfolio, that is my max.

    I also trade iron condors and other time decay options devices.

  287. Brian

    Eamonn, The point was that you stated a fact and then used a correlation to somebody else’s portfolio to justify the dangerous approach. It’s yours though. Always do what you think is best for your account.

  288. ALEX


    You included an ‘Alex’ comment in your April 9 post-If you were talking to me -Thanks a lot! That is why I post and that made me pretty happy to read 🙂

    – Making kids happy…priceless!

  289. fubsy_cooter

    I’m not leveraged either. Similar weighting to yours. If I sell, and I likely will if we spike early in the week, it will only be 25 percent of my holdings. I guess I need less to sleep better at night. The risk as I see it is that we don,t get a correction qnd I forego a portion of my profits. But I am having an amzing year thus far, and tend to lighten up a bit as things get hot.

    My potential reward is that I have locked in gains if there is a correction, which will make it easier for me to buy the dip.


  290. Wes


    I think your option question shows a lack of knowledge on your part about options. The whole point of DIM options is to minimize investment dollars while increasing leverage.

    I’m not sure what % of my net worth is in DIM options, but I’ll guess it’s 20-30%, mostly May SLV calls, but with hundreds of April SLV calls as well.

    I even own DIM AGQ calls that were purchased OTM.

    Now, I’ll point out that a substantial portion of what’s currently invested in options is unrealized profits.

    But, what’s your point ? Options are not good or bad depending on how much you’ve got in them. They are good or bad depending on how well you time the entries and exits.

    That’s why I think they are a great investment vehicle with Gary’s help in timing.

    Show me where I’m wrong if you can.

  291. Wes

    I probably need to add that I’m long options to increase leverage, while at the same time holding margin exposure low.

    I’m leveraged about 3:1, but I’m only at about 125% of my account.

    Now this leverage is built on previous profits, not “my” dollars, and I think that’s a biggie when it comes to peace of mind. I sleep good.

  292. MarkMarin

    I have a blend of silver/gold futures (20%), AGQ (25%), SLW ITM June options (10%) that I’ll lighten up on next week, and the remainder in a slew of miners, many I’ve held for years (SIL, SLW, AG, ANV, PAAS, SSRI, AUMN, AGU, NG, GTU, EXK and several others. I also have have 5% in REE miners and other holding.

  293. NPC

    Hi Gary

    I, like probably everyone else, is getting a bit edgy at the prospect of an impending 10 buck crash in silver before the final leg up. I think I will therefore lighten up before the next daily cycle top. Just to recap your thoughts on this: you think the metals will correct once Gold hits 1500 and that that correction could happen on Wednesday of this week (using your cystal ball tech).

    You can save your reply for sub report if you want.


  294. pimaCanyon


    I currently have positions in SLV, both shares and deep in the money calls. I have enough in my account to convert the calls to shares, so I’m not using the SLV calls for leverage at this time.

    I also have deep in the money GLD calls. I am using the calls on GLD in order to keep cash available in my account (some of which I will likely deploy when the daily cycle low comes in).

    If I converted all my GLD calls to shares, I would essentially be 100 invested. However, because neither GLD nor SLV are leveraged etf’s, I am essentially not leveraged even as much as those who are 100 percent invested with part of their account in AGQ.

  295. Tudor

    I’m trying to figure out the schedule for options expiration. For instance, when the April SLV options expire, which month will get added? Is there a methodology to which month gets added? Thanks!

  296. Shalom Bernanke

    I’m not selling a thing until we get near the top of the C-wave. If you like money, stay long metals and miners.

    And if for some reason we’ve run out of gas, I can always sell at the top of the next C-wave.

  297. San Diego Jack

    Life & Jeff,

    Gary mentioned that the Bull would be bucking soon, knocking off the weak riders, that the correction could be as high as $10.00, say from $50.00 to $40.00.

    Then, it will take off on the C wave to much higher highs.

    I am pretty sure my paraphrasing is correct, or at least, my interpretation.

  298. Shalom Bernanke

    And even when Gary gives the green light to unload, I’ll still keep some.

    I’ll keep a 25-50% of my holdings so you guys can laugh at me and tell me how I should’ve sold it all. So what if I have to wait a few months for the bull to recharge?

    I like big unrealized gains, makes it easy to LOAD UP again.

  299. Eamonn

    Shalom Bernanke, I have a question that I would like you to consider. For this final c-wave top, what ratio of AGQ to NUGT would you recommend (assuming I am only using these two securities in my portfolio). Thank you for any advise

  300. 86d4life

    Thanks. Your speaking from the blog? I guess I was referencing the week end report. Was kind of thinking of the scenario when G made a guess and then the ball starts rolling, next thing we know it`s 1929 all over again. Now is when we all need to keep cool heads.

  301. San Diego Jack

    1929? Hell! People have no idea how close we are to a depression, if not really in one (hard to tell with the Gov lying about all the facts & figures).

    1930’s Great Depression = 25% Unemployment
    2010’s Great Recession = 19% Unemployment (best estimates)

    We are not that far off.

    As for corrections, waves & cycles, I find that reading Gary’s commentary, studying his charts, and then taking a step back to see the bigger picture, helps me to focus in on where to make my moves.

    Gary did mention that he would exit when Silver hits either $47-48, or $48-49 (can’t remember which), and put his money into gold, since it will continue on since it is a slower mover & more easily exited.

    Again, that is my interpretation of his comments made on this blog, (unless he or another Sub confirms it) take it with a grain of salt.

  302. jeff

    sd jack
    no.. 50 dollar silver and gary is selling everything and calling it quits on this c wave. he was looking for 1500 plus before this correction.
    we need to scroll through the blog and quote better.. anyway its his best guess…

  303. jeff

    gary said
    If silver hits 50 I’m out and I could care less if it continues to 60.

    At $50 silver will be stretched almost 100% above the 200 DMA. The first down day could see silver lose 20% of it’s value in that kind of stretched conditions.

    Go back and look at what happened to the coal stocks in 08 when the parabola broke.

    One can’t take a chance on getting caught in that.

    I can tell you right now I’m going to be early getting out and I’m going to be early on purpose.

    April 8, 2011 9:04 AM

  304. jeff

    Gary said…
    I think you are making a mistake looking at AGQ. AGQ will follow silver and silver will follow gold.

    If you are heavily leveraged you might consider selling some of your positions if gold can rise above $1500 next week and then re-enter at the next daily cycle low.

    But that is the only scenario I would use to trim. Anything else and I would just sit still. And I would only advise trimming a little leverage not your entire position.

    You see what happened to the people that jumped the gun yesterday. I suspect most panicked back in today. So all they accomplished was to miss a nice chunk of the move.

    April 8, 2011 10:24 AM

  305. San Diego Jack

    Thanks for looking all that up and posting.

    I still remember him making a comment about $48 – $49 though.

    And, I quoted to the best of my recollection, stating that repeatedly.

  306. 86d4life

    Jeff& SDJ,
    That`s where it came from; G had mentioned on the blog that we could have a $10 drop in one day at the final c wave top, not the upcoming daily cycle low. This is how riots get started!

    SDJ; couldn`t agree with you more on the state of things. The Man lies to us a million times a day and they wonder why there`s a loss of faith? Any body that doesn`t endorse PMs has an agenda or they just don`t get it.

  307. San Diego Jack


    You know, I sometimes wonder when the over-the-top lying to the population started. Was it like this a 100 years ago? During the Depression?

    I think it started during WWII with counter-intelligence & electronic tranmission of information, but with the especially secretive Manhattan Project, and subsequent Cold War.

  308. Shalom Bernanke


    AGQ and NUGT are roughly the same, although my money is on NUGT to outperform AGQ from here.

    Of all my holdings, the 2x etfs are not the ones to hold through the D-wave. When I say I’ll keep some of my miners, I mean individual names only. The leveraged etfs will wipe anybody that wants to hold long term, and in extreme pullbacks they won’t even hold 2x the loss on the underlying. We saw this a few weeks ago when AGQ was down 3x SLV in the first few minutes of trading that day. Even a 20% pullback in the underlying is a 40% drawdown in AGQ or NUGT, enough for most people to lose all their profits.

    I can’t tell you what percent to own in AGQ vs. NUGT, just that it will be very unpleasant to exit late. Either one is probably fine, but I’m only long miners and NUGT this round.

  309. MrMiyagi

    I wonder what effect the US government’s budget and Libya’s potential ceasfire will have on the markets.
    The US futures have already gone into the green.

  310. 86d4life

    Interesting you mention that. I just read an interview this morning from the Daily Crux. It was with Richard Maybury and dealt with the downfall of the American Empire and the timing you mention is closer than you think. It also went into history further back. I wish I was more computer literate and I would post the link. It`s pretty much a must read for everyone and I don`t mind telling you that all those we thought were crazies even not too long ago will probably be better off than most.

  311. DG

    Hi everyone: Four cities and five flights in four days, so was too hectic to post (but not so hectic thsat I couldn’t watch AGQ skyrocket!)

    Got a buy on the dollar and a sell on the euro Friday. Last time this happened (two weeks ago) it caught the tick low for the dollar. As my signal is short term, it fits with Gary’s “near a daily cycle top” call, and the dollar is up overnight so far, on cue. I’ve also been short OIH and am in the black a bit. Looking forward to when the kid gloves are off on shorting. It’s not as hard as Gary says—sorry Gary— 🙂 In the meantime I have some AGQ money to spend at the coming cycle low.

    Re shorting: You can gain strong hand status on a short just like on a long. Let’s say you short something at 175 in a stock/oil bear market (that is, not now as we have probably not topped out yet). It drops to 140. You now don’t have to worry about sharp rallies. Cover when the sentimnent is black and people are talking “end of the world” stuff, and don’t worry about drawdowns just like you don’t worry about them in a bull market. The only difference is that I cover at breakeven if it gets all the way back to 175. No harm, and you try again. If it really is a bear market something should go down and not rally back to your cost especially if you short into strength just like you buy into weakness in bulls. We’ll see what happens when we get there.

  312. Gary

    Shorting a bear market isn’t that hard. the trend is in your favor. Any timing mistake will be corrected by the bear. It’s shorting bull markets that are tough.

    Even if one manages to time a perfect entry if they hold it too long the bull makes you pay for bucking the trend.

    Almost every single short that you have taken lately if one held too long they would be underwater.

    The entry isn’t the hard part it’s the exit that is damn near impossible to time.

  313. 86d4life

    I`ve never tried it in this aplication(to the blog). I`m screwing around with it and eventually I`ll do enough things wrong that I`ll get it right by accident. Lol.

    Thanks for the info.

  314. DG

    Fair enough, Gary. I may have been taking your “the math is against you” point (which is of course correct) as a more general discouragement of shorting. I look forward to what you post when the bear resumes.

  315. DG

    Hey Alex! I bought some SHZ at 5.15 Friday. Nice close at 5.71 [though 6.50 was better 😉 ] Yahoo says it mines copper zinc etc. and not gold/silver. Is that right??

  316. DG

    traderlady: My hectic travel is done and I missed the people here too. This is a great blog with some excellent traders/investors and people on it. I plan to become active again.

  317. Razvan

    i think we need to reconsider the target for silver. I just dont see how silver doesnt go way past $50 if gold goes to $1600. Wouldnt it be a better strategy to exit silver once gold approaches $1600?

  318. hkc

    Gary and the board:

    I committed one of Gary’s no no last week: I was chasing AG with some of my fund, so got in the Friday before last, and got partially out last week. My questions at this point:
    1. I would like to sell the remaining at hopefully spot silver at 42, what would be an equivalent SLV for that conditional trade? Is 42 spot a good trigger for this sell?
    2. I immediately bought SLW back, so by end of day, I am slightly on the (-). Should I only sell these at this time, and buy in during the daily low grind? I’d like to at least get back the position that I had before the chase.

    I am totally a novice, and have been holding steady with Gary’s mix. Got greedy and started chasing, and learned my lesson a la Gary: can’t beat it!!!

    So, any advice from the board is welcome. I really value all of your knowledge. Been following Gary for less than a year, but just found this board during the Egypt event! I have learned so much! Thanks to all!!

  319. trond56

    Gold and silver forming a bearing rising wedge on the 5 minutes. Margin-calls in Usa on silver and gold shorts are probably causing todays huge pop. When Usa goes to bed in a short time, the asians will probably start to take profit..

  320. DG

    Thanks. Eamonn. I don’t want to be too cynical here, but it is just as likely that the major brokers put stuff on their buy list so they can offload it to the public. If you track their buy suggestions, they are generally not at all impressive, so I never pay any attention to them.I well knew Paine Webber’s when I worked for them and was just as happy to short them as soon as I was allowed to! I do appreciate your warning me though. Thanks.

  321. DG

    Jeff, those sorts of short term calls are almost impossible to make accurately. I’d lighten up some of your “extra” on the next gap up opening (tomorrow?) Sell a little each up day until you are back where you want to be. “Sell some and hope you are wrong.”

  322. San Diego Jack

    Go to page where article is located, then;
    Place cursor inside box,
    Right click in the “Address Bar”
    Select “Copy”
    Come back to this blog
    Place cursor in Comment Box
    Right click, choose “Paste”


  323. jeff

    dg i got futures and i am selling now =) going back to where i should be. which isnt much going old turkey. . so i am up alot more than what i should be and got away with cheating.. so ill just back off and just buy at the next daily low…

  324. Kevin

    Thanks PimaCanyon… Totally thought I understood the time effects on VXX when I bought it, but now I think alot of brokers don’t understand it either.

    One other question that I’m struggling with. I have my tax return deposited in my taxable account, uninvested. It’s part of my dry powder. Trying to figure out if I should drop it in the Roth IRA after the pullback for the rocket ride or trade it in the taxable account. I’m thinking that there’s no real reason to trade in the taxable account when you can trade tax-free in the Roth, except for the ability to use margin in the taxable account? I’m definitely not ready for margin in the near future.

    Thanks all.

  325. Rob L.


    One of the key reasons for this parabolic move in gold and silver is due to the 3 year low that is about to occur in the U.S. dollar.

    Why can’t we exit our PM positions when the dollar forms its intermediate swing-low? Are the odds high that gold will peak before the US dollar actually hits its 3 year low?

  326. DG

    Jeff: Sounds good to me. Please don’t get greedy. Too much leverage will kill you. You’ll work for years building up an account, something ugly will happen, and you’ll trash it out in no time. Focus on what you might lose not how much you are going to make and it’ll keep you sober.

  327. DG

    Jeff: Our emails crossed… It’s GOOD they went up after you sold. You still have a ton, right? Would you prefer they caved in now? “Sell some and hope you are wrong” remember?

  328. Ohio Rob


    I did some homework this weekend, there are a few miners I added to my watch list hoping for a pullback. Any thoughts on these…

  329. Jayhawk

    Comparing the silver move off the summer intermediate cycle low to the move here starting in late Jan.

    I noticed the trend line held firm the whole run up and didn’t break until late December when silver made a higher high. Also, the 20 EMA was rock solid the whole move up and we didn’t get a confirmed close under it until 1/5. Notice how the metal gave traders a chance to get out on the trend line back test and the test of the 20.

    This time, notice the more extreme elevation on the move compared to the fall rally. The 20 EMA is right there catching our first move down mid March. The bounce and air under the trend line and 20 MA is impressive. The last month or so of our intermediate cycle last Fall/Winter saw the 20 start to elevate up away from the trend line and it provided support to the finish line.

    Silver comparison

    Not that I’m saying we will get a similar chance to exit with a nice back test, but I’m favoring the trend line and 20 to hold for the final push. With the rate of accent, force behind the move and dollar three year low in front of us, this move may leave traders in the dust and now give an ample opportunity to get back on the train. The 10 EMA may be the best zone to add positions. I could see silver hitting upper 50’s in the next month or so.

    Just food for thought.

  330. trond56

    Hedged 1/2 of silver future position at 41.41. Hedged another 1/4 at 41.52 = 3/4.. But gold probably on way to 1500 on this daily cycle(?) thus will possibly dehedge very soon.

  331. Jayhawk


    NG, I’ve been studying the charts…Not really a flag as it’s been consolidating for a long time, but more like a falling wedge. According to the book “Trade Like An O’Neil Disciple”, it looked like a “pocket pivot” buy point on April 5th That would be a surge on strong volume (greater than the previous 7 days) right at the 10 and 20 MAs. NG looks to have broken above the pattern and has now back tested it, also catching support on the 50 MA.


    It was one of those red hot stock last year that has been consolidating for a long time. Seems way overdue for a surge. I added some and think it may go.

  332. Jayhawk

    I’m still working my way through it, but so far I’ve really enjoyed it and learned some very good stuff.

    They like buying break outs and stocks that have have meaningful consolidations…Also they like to add at pocket pivots during a stocks run up. Different from the style here where we catch bottoms so to speak, but the book has helped me to let my stocks runs and understand when a normal backing and filling action is taking place and not to sell until key MAs are violated.

    Much more there…I’d recommend it.

  333. San Diego Jack

    You have to be on the page you want to link to, then c & p.

    Thanks for the head’s up. I’ve seen the book, but wasn’t sure if I’d be relearning from other books I’ve read.
    Currently, I am reading “Generating Thousands” by Dr. Samir Elias. He teaches income via selling covered calls & puts. But he goes into other aspects and offers “tricks of the trade.”

  334. ALEX


    Yeah, thats what I was seeing on NG.On a wkly chart, if it goes, its a winner.

    And I also read that O’Neil book (and his others)…It definitely enhanced/added to my trading and fine tuned what I look for on charts, but I still have my own methods too.

    O’Neil is known for buying breakouts,out of bases, to ‘new all time price highs’.

  335. ALEX


    I looked at all the stocks you listed. Its tough for me to comment, because I almost never by pink sheets anymore, and the ones you listed ( DRGDF,CTGO,AAUKY) barely had 500 shares traded on many days.

    In any kind of a sell off, you will not be able to get out I.M.H.O.

    As for VGZ, that one looks really good, buying volume is coming in nicely.

    As for NAK. I have owned this in the past ,but it is at a point right now where I would say that it needs to PROVE to me what it is going to do. Its 50/50. On a daily chart, it recovered the 10 sma, may have broken above a downtrend line, etc

    BUT, yes its been going up, but without real conviction so far. Look at a 6 month /WKLY chart…Month of Feb it was sellling off on VERY HEAVY volume. ALSO On a 6month/wkly chart…THAT could be a head and shoulders forming. As its climbing, volume (buying) is drying up. If it starts selling off…it could be a h&S and return to retest that break out at $10. This one needs time to prove itself.

    With a possible pullback coming in P.M.’s, its a ‘watchlist’ as you say, no buy recommendation.

    I say buy EXK on the pullback, maybe AG near $22 gap, or watch AXU…look at that one on a 6 month /WKLY…volume break out

  336. Brian

    Alex and OH Rob, Stocks like NAK (copper) and AAUKY (Plat&Pal) are bets on the economy. These stocks seem to be telling a story that all is not well. There was a Bloomberg story out today about Chinese copper purchases that was not encouraging. Another stock I made good money on is AZC, a copper play with a weak chart similar to these.

  337. Ryan

    Wow this is getting pretty crazy, I just saw a last of 41.75. Strangely enough, it’s getting me a bit nervous for some reason?

  338. trond56

    That was obviously not too smart.. 🙂 Got out at the first ‘explosion'(luckily) @ ~41.60 with loss 5.5k$
    This is asian’s action. Maybe a ‘tulipmania’ after silver is about to erupt in China, India, Vietnam.

  339. sophia

    Hi DG,

    Welcome back! I bought a bit of Dug as I felt in the light of Gary’s call on Usd that it could go up a bit in the next few days…and now, Gaddaffi seems to try to reach an agreement, so that could push it a bit…
    We shall see, it is all so interesting to have an idea and see if it works out

  340. fubsy_cooter

    @ Ryan,
    If silver rises without gold tomorrow, the way I see it is the daily cycle will likely continue higher as I picture it topping with a spike higher in Gold. But hey, silver has been leading, so who knows? I do know if Silver goes over 43 I’m selling 1/4 of my positions and waiting to see what happens.

  341. Ryan


    Yes silver has been leading most impressively. Well, since we’re both not leveraged, maybe we should try to hold strong into the next daily cycle low. I just know if it is scary like Gary said it might be, it’s going to be gut wrenching in real time. I’m still trying to decide if I want to hold onto everything for the ride. Gary did say most won’t be to ride it to the top.

  342. ease

    I have a question to understand… buying at the IT? Thanks in advance for your answers. 🙂

    PimaCanyon said…

    smaller position size at IT or Daily cycle lows and add as you become


    What is “IT”?

    What is “IT lows” ?

  343. ease

    Low Tax…
    My Dad passed away a few years back, he is on eternal patrol of the puget sound (laid to rest out to sea by a submarine squadron).
    God he loved that part of the country and spent the last 30 of his 35 years hunting and fishing to his hearts content. My Mom and siblings still are in the area. I have a sister who lives on Goattrail in Mukilteo. Where are you at?

  344. ease

    Thanks Guy, now I just need to know what the intermediate trendline is… LOL

    Still trying to decipher the lingo on this site. 🙂 It would help me make the proper moves and positions.

  345. guy

    at ease,

    i’m not as experienced as the other people here but i think it means:

    draw a line from the intermediate cycle low through the first daily cycle low. this gives you the intermediate trend line.

    again to confirm by smarter people.
    hope it helped.

  346. ease

    I am trying to look it up, however haven’t found anything yet. Getting limited info on my browsing. Thanks for your reply. 🙂 Can’t sleep so up checking on things and getting caught up on the blog.

  347. Poly

    “IT” or “INT” are just short for “Intermediate”. So “IT low” just means the ” Intermediate Cycle Low”, basically the end and low point of that cycle. Gary’s terminology section explains “IT” cycles.

  348. Alex in Montana


    We will be there in June, then to Calgary for a few nights. Only a 5 hour drive for us from Montana.

    Your son lives in a beautiful spot.

    Enjoy your trip


  349. Aaron

    The last cycle was 31 days, a tad on the long side, thus leading to a cycle on the short side to follow. This thing should bottom this week, to early next week if history serves us right.

  350. Hot Rod

    The action is starting to (obviously) look like the daily cycle swing high wants to form.

    In order for it to happen, would we take today’s low price (assuming we don’t go lower than 39.51) and then if it is taken out to the downside, today is swing high?

    If so, there seems to be good parts and bad parts about it. On the positive side, our high was all the way up to $42, so if we correct $4 it’s “only” to $38. The bad side of course is we’ll see lot’s of selling pressure and counter-trend rallies over the next couple of weeks and our emotions will be f-ed with.

  351. Gary

    The swing has to occur on gold not silver. Your wasting you time trying to time a top with silver.

    Gold is the cyclical driver of the sector.

  352. pimaCanyon


    I’d put it in the Roth. But it would be nice if your broker allowed your Roth to trade options. That way, you would have the ability to do leverage (but keep it small, otherwise Gary will beat the crap out of you 🙂 IF and WHEN you are comfortable doing that. And if/when you’re ready to do that, read what Gary says about trading options (and other options material as well). Deep in the money options are probably safest because they track the underlying nearly one to one. The danger with them is that you can leverage your account too heavily and then freak out when you see a huge drawdown during a correction, so caveat trader.

    On the other hand, even if your broker for the Roth does not allow options, you can still get leverage (although some prefer not to call it that) by trading AGQ.

    My Roth and Traditional IRA accounts are with Think or Swim and they do allow options trading.

  353. CMT

    Sold my PSLV, PHYS, SHZ, April SLV calls and August GDXJ calls this morning. Ready to buy more AGQ on pullbacks over the next week or so.

  354. Poly

    Silver really s t r e t c h e d here.
    I know that’s normal in this environment and to be expected/traded, it’s where the money is flowing. A few weeks ago $42 was a dream.

    But Silver has added BIG numbers this daily cycle and considering a cycle top is probably this week, I would caution anybody leveraged to the point where a 10-15% Silver drop is going to cause panic. A healthy 10% drop is big to over leveraged accounts.

    Looking at the Silver weekly chart, a drop back to $37-$38 should be expected. This will drop it back into the well established channel and it would mimic the character of past daily declines.
    I couldn’t re-produce a Silver Weekly chart well enough myself, so I am linking to Jesse’s site.

    Notice that since last Aug that whenever Silver poked itself out of that very steep rising channel, it got smacked back down into the channel. A cycle low is typically the fuel.

  355. Jennifer

    Did a little rebalancing this morning. I just moved 40% of my AGQ position into SLV just in case… I’ll move it back after the daily low. I also moved 10% of it into cash… So still more than 90% invested, but feel a little safer.

  356. DG

    Alex: Sold my SHZ. Thanks! A stock will often test the reversal high the next day or two. Had 6.50 been bested i’d have held, but Friday looked exhausted to me. If it keeps going, great for someone else, but that was a hell of a two day trade.

  357. Poly


    Well I sold down to a very conservative core holding, which I will take through to the low. About 65% cash now.

  358. Dan

    Just reduced my account from 150% to 100%. Will keep this level for any upcoming correction then go back up to 150%. Alternatively will buy back if we go flat for several days instead of correct. Just hope it doesn’t go shooting higher!

  359. pimaCanyon


    Thanks for the shout out on Friday about how the daily cycle might be close to topping. I had small positions in AXU, NG, and GDXJ, and a larger position in SVM, all of which I sold on Friday, near the top! 🙂

    (I let the trend/channel lines on the 5 min chart take me out on each one. I had OCO orders with a limit up near where I thought it MIGHT be possible to hit on Friday, with the other part of the OCO as a tight stop along the lower channel or TL. I kept moving that stop up during the day and eventually they all were taken out.)

    I still have a core of SLV and GLD, both shares and deep in the money calls. Sounds like my core is a little larger than yours–40 percent in cash right now.

    Not sure yet how I will deploy that cash, whether to keep it all in GLD/SLV or whether to buy back some of the mining shares.

    Do you intend to just stick with SLV options or will you also buy some of the miners?

  360. Douglas


    I’m 40% Jan ’12 calls. SLV (up 230%), GLD (0), GDX (up 16%), GDXJ (up 30%). SLV is biggest position by far. All in the money. SLV too much. Will roll them maybe to Jan ’13.

    20% Canadian dividend paying stocks.

    40% Cash. Sold 1/2 SLV +205% last week. Profits amounted to 10% of my port.

    Looking to double my safety first stocks to 40%.

    Re-enter SLV when I’m more comfortable. I got nervous last week.

    I use options to maximize PM exposure while keeping most of my assets relatively safe. With the dollar down 7.6% against the €, US stocks and cash are hardly safe. I live in France so that drop hurts.

  361. Curtis

    Many traders only deal in these cheaper stocks because of the greater volatility associated with them. In penny stock fortunes using a cheap stock specific program like Penny Stock Prophet.

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