I think you’ll do much better join right away, but there’s a 1 month subscription while you’re waiting for a bargain on a subscription that’s already a screaming bargain.
Don’t wait, Sulim. That THE MOST EXPENSIVE OPTION.
Hi Gary: Will you send an [intraday] update for adding to positions? And I never made the switch.. I’m guessing GDXJ/options or similar might be part of the plan. Guidance will be helpful. Thanks!
I know SMT portfolio followers are already 140% in this market. But for many others here waiting to add, be careful waiting for a full pull back.
With a poor ADP number today and a dollar in obvious distress, I would be very careful in dismissing the last 2 days of declines and yestday’s $1,527 print as the cycle low. It makes good sense that if the alternative cycle is in play and we’re 20 days or so away from a 3yr cycle low that gold would sniff this out and only give you a partial drop.
Gold was not ridiculously stretched and if on the verge of a final C-Wave parabolic run, it would be acting strong even into a cycle low. Add to the fact they we are way past the timing band for a low and although the drop didn’t break the trend line, it sure as hell touch it and produced a 3% drop. If we were willing to print a cycle low on a 4% drop, I would be cautious trying not to split hairs and dismiss the 3% drop as one, in light of what is to come. I say this not to contradict, but to be at least prepared for this scenario and have some piece of the action.
The supposed double bottom in the dollar might or might not materialize. The setup is not ideal as the dollar could be due to bounce, but I’m mostly ignoring it for metals trading purposes.
If you waste energy on the dollar, you not only have to guess it’s direction correctly (tough if can’t get metals right on their own), but you ALSO have to assume the usual relationship (dollar up/metal down) will hold. We’ve seen enough times that is not always the case.
I prefer to focus on my trade regardless of the dollar action.
Sign up today! Don’t wait around. You trying to save pennies and it could end up costing you hundreds or thousands of dollars.
Gary’s premium service is very inexpensive. If you’re not sure you want to commit to 6 months or a year, sign up for month and see how you like it. However, my recommendation is to sign up for at least 6 months. You will not be disappointed and your account will benefit enormously. Do it right now!
Thanks, Poly. I thought that’s what you were saying.
Yes, I have skin in, but added only a little yesterday. Of course, if I knew we weren’t going to go lower, I’d add more today. I may do that anyway as I’m not as fully invested as I want to be for this last run.
I’m also not concerned about miners getting away from me on the upside just yet.
I don’t know what the first hour will do, but even if they go higher, my charts are suggesting there is a probable pullback by mid-day at the latest if not earlier.
In licking my wounds, I took a look at the Gold C-Wave tops from 2004, 2006 and 2008 to determine any lessons for this go-round.
I’d post a chart with the results, but I’m too technologically challenged to know how, so I’ll provide it verbally.
Gold Price stretch (high print) over 200 SMA: 2004: 12% 2006: 41% 2008: 32% Current: 17% (Recent high price) Gold price to match 2008 stretch: 1784+ (I did not project future 200SMAs, but used current)
Gold price stretch (high print) over last significant consolidation zone (I was conservative with consolidation zones): 2004: 10% 2006: 27% 2008: 22% Current: 10% (Recent high print) Gold price to match 2008 stretch: 1742
I discount 2004 to a degree, since the bull market in precious metals was not as well understood as in 2006 and 2008.
So if past is prologue, we have further to go in Gold (mid 1700s). I know that this is not a new thought, but I thought the analysis might be of interest.
If anyone know how to explain chart posting to a neophyte, I’m all ears.
Aaron’s dollar cycle count makes sense as all the cycle highs in the current downtrend seem to tag the 30 dma. The high on 18th April tagged the 30dma.
I’ve been a long-term buy-and-hold guy on miners for a couple years (based on fundamentals). I have about 20 mining stocks (such as SLW, EXK, AG, GORO, MFN, FVITF, RGLD, SVM, etc.) that I am currently holding.
How should we position ourselves for maximum benefit for the upcoming C-Wave rise in miners? Would you recommend that I consolidate; leave well enough alone; get better leverage (e.g. NUGT); SLW options; other consideration(s)?
TJ: Here’s what I do—Copy the chart to your desk top. Go to a free site like imageshack.us Hit “Browse” and it will allow you to browse your own computers desktop. Find the chart you put there and hit upload. Once done a screen will appear to the left. Copy the url in “link” and cut and paste it to our blog. Done. There may be a better way (I won’t say who, but you don’t need to point out that I’m I’m a moron—I know), but this is quick and works fine.
Sophia, there is talk of Euro rate hike tomorrow, I doubt it. Still holding on, the trade was times, not priced, so Im giving it till Friday to work, and I NEVER use stops.
Gary: I am surprised that even after the huge shellacking silver has taken the decoupling from gold is still present today. Do you have any plan or thoughtds to handle the possibility that by the time gold is oversold, AGQ might be 190?
I wanted to verify as much as I could whether, other opinions notwithstanding, I believed Gold (as PM driver) would go up. The decoupling from Silver, though, has me flummoxed.
AG is a hold for me, partly because I may not be able to trade actively for the next 2 1/2 weeks, but I believe that AG & EXK are the class of the field to hold into the hoped for parabolic top.
DG I do this for a living, its my job. My stops are mental, this specific trade was to last till till Friday, price isnt as relevant. When Im wrong I pay the price. You only have to be right 60% of time if proper leverage and amount is used.
The cause of the decoupling is the near parabolic move in silver we had (I have to admit to being pissed at myself for only selling 1/2 my AGQ) This actionis just correcting that buying hysteria and has nothing to do with the dollar, gold, or anything else. The question I posted for Gary was kind of “How long can this go on and how low can silver go with gold doing basically nothing?” I don’t want to see AGQ at 190 by the time gold is oversold. I am NOT expecting or predicting that, just asking if G has thoughts about it.
C’mon Brian. This is a long standing thing and is more poking fun than anything else. There are many people here who are slightly annoyed every time they read his stuff for just this reason. (I’ve gotten private emails on this score) Mild kidding is good to blow the steam off I think. It’s just who he is and how he writes.
TZ: If I am really out of line with the “you forgot to add the ‘you moron’ ” stuff just let me know.
…I wish I would have done some combo options instead of the deep in the money…call @ 46 and prob a put at 42 or 43… I was much more confident about us either breaking up or down big than up big…dang it…
Well the good news is we are now down almost $10 so we are 50% done this correction, another $10 and we will be at a very low risk buying opportunity at the 200dmva. Although we should get a dead cat bounce here soon.
We are on the brink of another sell off we drop to 36 if we don’t hold…I am not concerned about my long term holding but the july calls a little so if we drop to 36
wmp: My question is less “what’s expected” as it is “how do we prepare for each possibility.” I like to have a plan for each realistically possible scenario. IF silver drops 15% from here while gold tries to find a bottom, what then? 20%? Is there any point at which it makes sense to act/sell/switch? Markets can do anything!
Sophia: I am so absorbed in the PM’s I am not much looking at anything else right now. Good luck though!
I don’t know what a comfortable position is for you.
I know we have to be close and a a parabolic run will cure any timing. I’m looking at the 1 min closely, I feel like gold wants to make a big run at that trendline right now!
I am trying to learn from this experience. There has to be a way to avoid getting hit like this. Or at least taking the whole hit. Maybe a trailing stop would have been in order once we got stretched so far above the 50dma. Sell if the last drops more than 5% in one day or similar. The problem then is knowing when to get back in. But if we would have sold out on a trailing stop and bought back in even 10% lower we would still have that 10% in our pocket assuming the C wave is still on which I believe it is.
I got stopped out of AGQ yesterday. So I am buying back partial position here. Silver is so severely oversold it has to bounce soon. Otherwise, I guess I just became a long term investor…
nota bene: there is no advantage to buying options on derivatives. buying an AGQ call is actually at your disadvantage because they are priced without considering the decay involved.
think about it. there is no difference between an call option that SLV goes up X than AGQ goes up 2X, except that people thing they’re “leveraging up” their purchase when in fact they’re most likely paying an unfair premium.
Funmike: Great question—that’s the spirit! I got partially caught too, and I should have known better. I think the lesson is the one Fubsy stated: Sell parabolas. At least take some money off the table. And NEVER buy into them. I got seduced by Gary’s confidence we would trade at 50. That is not part of his cycle theory, it is not part of technical analysis, and was a guess (an educated high-odds one that didn’t work, but still just a guess). Parabolas are EXTREMELY dangerous. When you see them, do something. As I said, I know this and am surprised I only switched 1/2 into DGP las Friday. This lesson is now burned into my brain and will stand me in good stead for the rest of my trading life. First time I have ever been caught in one.
Jeepers. I cannot imagine what a D-wave looks like. Can it really get worse? How? Silver goes into negative integers? People who upon a time stole into their garages in the wee hours of the morn to lovingly caress the shiny bars will be paying other people to come haul it away. It will be one click above busted snow globes, soccer trophies from the third grade, your ripped Farrah Fawcett poster, and the leisure suit your father wore to his brother’s wedding in the autumn of 1974.
jlinks — I’m the other Jennifer. I would not advise options on a leveraged etf. Barry Ritholtz once said that strategy was akin to dousing oneself with gasoline and lighting a match. Yes, it can work out well, sometimes spectacularly so. I had some AGQ puts just the other day, sold way too early, but still made a nice return. However, more often than not, you get killed. You’ve got extreme volatility, which you pay a huge premium for, and a double theta burn problem (decay in both the option and the underlying.) Stick to one product or the other. Best of luck.
DG, exactly. This was a good lesson learned. Maybe I’m relaxed as I sold 3/4 of my AGQ while silver was in the high 40s. I did turn a lot of that into gold, but kept some cash as well.
Still up, lessons learned, things getting oversold. That’s a good position.
K I am going to go with prob only 2 people on here have any idea what a combination option strategy is…sorry but this is no correction this is a full blown wave look at the monthly.. correction that is ridiculous…
When silver was at 49.50 it was the most extended it’s EVER been relative to the 200dmva at over 1.7X. In the past these parabola have ALWAYS return to below the 200dmva within a 1-2 months so people should not be stunned by this move as its just a repeat of what has happened half a dozen times since this bull market began.
A business partner of mine has a contact on the Goldman Sachs commodities desk. He was talking to his contact late last week when silver was still in the high 40s. The word from GS was that despite their firm’s call to sell commodities, the commodities desk was actively looking to get long commodities on a pullback. Specifically, the contact mentioned they were buyers on a 20% drop in silver (and said Soros was too). So if what this guy said was correct, silver should have some support in this area or maybe a little below near the 50dma.
funmike, you have to trade the cycles and not be bummed when you miss out on profits and then you have to be able to step in and buy back when the blood is in the streets. I held this cycle and traded the last one. I like trading it better. Book profits and have more power to buy the cycle lows. If a runaway develops then you can’t get hung up buying higher either.
SLV down over 3% and SLW almost flat? I’m not worried about a D-wave given that indicator. Of course, all of my SLW options look like they’ve been blowtorched, but I’m expecting that by end of next week I’ll be sitting pretty again. Still, the emotions being displayed on this board, along with the bearish newcomers, certainly conform Gary’s projections.
I bought gold at 1525 knowing well that it could go down to 1510.
While my account will be pretty hollow considering where it was Friday at close, I will buy silver below 39, where it should be if gold continues to fall.
silver just crashed and burned, it’s on life support at 40
if gold stays above 1515 i think we’re alright.
anyways, we knew a market correction was going to put a damper on everything stocks & commodities (markets now are very much linked correlated), so just buy some stuff at this time if you have cash.
here you have your weakness
buy into it, size your positions accordingly if there anymore downside left
SB, buying Silver futures and calls on Gold…not much, but if Silver rallies a bit I sell back until Gary says something…As for calls on Gold, I will keep for few days
“I am trying to learn from this experience. There has to be a way to avoid getting hit like this. Or at least taking the whole hit. “
Sell into strength. Scale out of position that are approaching historic numbers like 50 silver. To get a 25% draw down because price of Silver missed the 50 mark by .20 is a bit silly.
SB: I am not doing anything yet. I am now unsure whether to add to my AGQ or not. I will surely buy a slug of DGP. I want to see gold oversold and we are just not there yet. I have no problem buying on the way up if it looks right.
silver knife catchers: prices are looking good but i don’t think there’s going to be a big rush to get in. probably float around here for the rest of the week while gold catches up on the downside?
probably it for me today have fun everyone & sorry posting so much–interesting times.
We’ll have to see how strong the rally is (when it materializes), in order to get a better feel for the potential upside. Silver will be the tell.
If it rallies sharply, the bull/parabola/C-wave is on, but if it slows after a day or two and doesn’t cover much ground, I won’t be nearly as interested and will look for the exit.
Just NUGT, no metals or individual names yet. With the low volume it takes some attention working into a position. I have to break them up in several orders and spread them around.
I will focus on gold more than silver, even though silver will get a monster snapback at some point. My only concern with silver is that bounces will be met with sellers before long as result of all the pain we’ve seen.
This is why I think gold is the safer play, but will buy it only into an oversold situation.
I would say Gary has set himself up an excellent sentiment machine right here called the Smart Money Tracker! And he gets people to pay him! 🙂
I for one am a happy to be part of it but wow, it is interesting to watch people’s emotions on this blog on days like this and on days in which it seems PMs/silver will never stop going up!
silver has hit the price range (39.60 is low of day so far) of where I’d give it high probability of a bottom. I would not like to see it go below 36.72.
with my buy targets highlighted. first batch at 1500, second at 1460 if we get there. silver again i think will sit on its hands around here waiting for gold to bounce.
This dollar consolidation at 73 looks like the midpoint consolidation during a waterfall decline that started at 75.60. Break down here would take it to 70.40
jlinks: Thanks for the chart on GC RSI. I do not have access to futures charts, but have a question: Why would the RSI reading on JC be so very different than on GLD? Some discrepancy is expected, but GLD is at 46 and GC at 32…??
Erich, Your kidding yourself if you think you can avoid timing errors in real time.
During normal market hours silver only rallied a bit over $49. In hindsight it’s easy to say one should have done this or done that. But if that was the case then we would have done it.
If silver had topped at $48 then one could in hindsight say we should have exited at $48. Or you could say the same thing about $47 or $46.
I have to laugh when people come on and say they are going to learn from a particular timing mistake.
Folks there is no way to learn from a mistake unless you find a working crystal ball.
The best that I have found is cycles analysis to give me some idea of when to expect a correction.
The latest rally in gold nullified my cycle tool as it ran considerably past the timing band for the cycle low. In real time gold was in real jeopardy of moving into a runaway move.
Now if someone can tell me how in real time we could tell it was not going to turn into a runaway move I’m all ears.
Does this remind anyone else of May 2010? Last year at this time, there was a selloff of everything as the deflation trade became popular again. Granted, the dollar was strengthening back then, but it all seems a little too familiar.
Eric H, I don’t know that I BELIEVE anything. I know that letting something run down 30% or more is not good investing. So, stops should have been set.
Gold-Silver Troll, PLEASE, understand, there is no such thing as a WAVE in Silver! Gold is the driver. Silver went parabolic, now you pay for the hangover.
Elaine, The problem with just arbitrarily placing stops is you will get whipsawed out of positions, especially in a sector as volatile as silver. You never would have been able to ride the move up in the first place with stops.
So again you are kidding yourself if you think stops are the answer. they would only prevent you from riding the bull.
..looks really really ugly right now on the 1m 15m 5 day charts…not to mention we are loosing volume on the top side of this consolidation. might be putting in some sell side here
Hi Gary, There is a lot of rumor/chatter about the stability of SLV as a “paper” silver investment. Do you think this is reasonable way to play silver? Is there any extraordinary risk with SLV? Thanks.
Gary: I am happy to tell you. You can’t know whether it becomes a runaway or not. But that is NOT the question. The question is about odds, risk management, expectancy, and buying tactics.
1. Do not buy into parabolic moves. Sell something 2. Add less on the way up. Sounds like some people here bought more above 350. Ouch. 3. Runaways are very rare. A number of the best traders here switched before 50 (after they saw the China buying hysteria). You can say they were all lucky guesses, but I don’t think so. 4. You said you sell “early” in runaways. That means you are willing to leave some profit potential on the table. This is not different. Silver was stretched more above its 200 DMA than ever. Leaving some profit on the table (as you suggested elsewhere) seems fine to me by switching to gold.
The few times I have felt to do something other than what you have suggested, and have not done it, I have regretted it every time (so far). I am an experienced trader and am NOT suggesting other people deviate from your plans, but deviating in a way that is superior is simply not impossible. Someone else may see or “know” something that you don’t is all.
To be honest, you are about the best I have ever seen with your approach, but there are other talents and methods that can be brought to bear.
Access trading hours are after the pit closes. Margins are settled during access before the end of the day. With silver down 3 dollars, thats 15000 per contracts, and new lows, that should be a significant amount.
Folks the reality is that silver is only down 4 days. It’s not even below the 50 DMA yet. On the way up silver rallied from $40 to $50 in 8 days.
Recency bias is telling you this will never stop. But it will stop. It will stop as soon as gold puts in its cycle low. Then it will head back in the opposite direction until gold’s C-wave tops.
phew another $50 drop in agq and i will be break even for the year, fingers crossed it don’t get there still i have learned and hope to put it into practice.
alex i would like to complain that my exk is now only up %30 since your recomendation to purchase
okay, silver, you can stop now, you’ve hit the target, let’s take a breather okay? Slow it down, bottom out here and start to climb out of this hole you’ve dug. We do not need to see a sub $39 print!
Stock market may have topped, certainly is heading south now. That’s probably not a good thing for the miners, they’ll have the overall markets downdraft to overcome.
Given the various comments about a D-Wave, I continued working on the Top data. Here’s what I found:
D Wave stats: 2004: 14% fall from peak, double top, ended 6% below 200SMA 2006: 25% fall from peak, single top, tapped 200SMA 2008: 25% fall from peak, single top, ended 24% below 200SMA
As Gary has stated often, 2008 was a doozy.
Largest correction during the C-wave (after the last major consolidation zone):
I’m now OUT of all gold futures positions. Back to core holdings only.
Down about 16% from peak values and keeping the vast majority of gains since January.
We have broken levels and various technical indications to the point that I will not hold lower for now. I even have a manor of evaluating the metal bull which seems to indicate the C wave is over. Clearly I have no idea at this point.
I’m going to re-iterate something I just said -> For certain reasons I’m not going into this would appear to be indicating the end of the C wave.
Yes, that puts me in Gary’s “contrary indicator camp”. And I certainly don’t say this to cause anybody to blow out of their positions or not follow a plan they think is correct. It’s only my two cents and if I’m wrong you can point back to this post in a week or two and laugh. I got no prob with that, but I’m making a call.
I just want to be honest with how I view this. I’m OUT.
(Please think CALMLY before you act on my comment or actions alone. Emotions are high and this is not a post to make things worse.)
The 5 day RSI is at 41 at the moment. We probably need a couple more down days before this can reach true oversold conditions that will drive a cycle bottom.
jlinks: YOur setting are different from Gary’s YOu show RSI (5,70,30) on GLD and his charts in the premium site show just RSI(5). Does that explains it. He is looking for his to hit 30. Does this make sense? Anyone else’s comments?
Am I right Gary, that Gold at 1513 takes the runway move off the table?
There will be a great buying opportunity up ahead. But judging by the hysteria on this blog, 75% of people will miss it once again.
Gary gave us the opportunity to buy Silver long before it went parabolic and those of us that did now have a strong hand. I am still up 50% on my overall portfolio despite the recent sell off.
People really need to calm down. All this hysteria and micro analysis of every last squiggle does nobody any good.
I ask this because the same person can’t ask that question 10 times in one post, and have it apply. That would be too easy, and the Bull is smarter than that. I think we are only up to 5 or 6 under my interpretation of the rule.
Although a possibility, I doubt you’re going to get two more down days, not if you’re cycle counts are correct and history is any guide. This drop before a c-wave top run has more than satisfied all requirements now.
Remember me saying we needed to see panic day in gold before this could bottom. We’re getting it today and if the sentiment on the blog is any indication we are getting pretty close to a bottom.
The 10 day RSI for the HUI and silver are now at deep oversold levels. Once gold reaches short term oversold levels also we will be set up for the next, and should be last, leg up of this C-wave.
Gold RSI 5 is at the moment with gold at 1508 at 38. Its moves about 2 points every dollar gold goes up or down. That would mean the rsi 30 area is reached with Gold at around 1504ish$
Astrella, Yes gold would have to have held yesterdays low for the runaway move to remain intact. this is a full on daily cycle low. Once it’s finished we will have a new cycle count and the final run should be on.
Action and reaction folks. The silver shorts are sure piling on, but they will need to cover at some point in the future.
My sense is that day 1 (monday) of the decline caught everyone by surprise. On day 2 everyone wanted to show their emotional fortitude and were determined to not get shaken from the bull. Day 3 (today) however, the pain is just getting too much to tolerate, so everyone’s piling into the lifeboats. After this, nothing but strong hands will be left. If you could withstand -18%, -12%, -12% for three consecutive days…well you’re probably not going anywhere!
Guys: You’ll laugh but I am quite serious. There is a certain feeling I get in the pit of my stomach when I am on the wrong side and things are going against me. It has never failed (to be fair I am not caught often so it’s rare, but still 100% accurate.) I just got it. If this isn’t the bottom we are VERY close. You can post gratitude to my lower intestine if you like (I’ll pass it on…)
I put on some cheap, in my mind, put protection against gold..It will cost me 3.5% of any upward move, but me losses are defined…I don’t usually buy put protection, but I noticed some strange things….so another lesson I learned..when I sense something off, but I don’t want to sell, buy puts to define risk.
YesLet’s. Thanks.Duh, that makes sense. But I have real-time quotes as does jlinks…? Oh well, I’ll go with Gary’s numbers (and mine). Thanks for posting.
Look at it this way. Who is looking at silver after a drop from almost 50 to just over 39 and saying, that’s it, NOW I’ll sell. (Sure, there are some…but those people are going to get an education.)
So this…er…feeling that you are on the wrong side of the market–now that you have this feeling, does it mean that you ARE on the wrong side? Or that you have been on the wrong side but the market is about to change direction and put you on the right side of the trade again?
Gary’s cycle analysis has been correct so far with some minor variations so I don’t see why it would not be right again, unless.. unless I was Hitler in a past life..?
Gary: I hope you know that i do not mean to be argumentative. I have stated often how much I have appreciated and learned from your work. but from my perspective, you do have a bit of blinders on. There are other world-class traders (I am sure the hell not one of them) who use different tools that can be blended with yours, to advantage, I believe. For anyone not experienced, do NOT try this at home, but other valid tactics exist.
Just bought some UGL. But I’m already nervous about it. My account is down a near record amount for one day today, and that’s after two or three days in a row of big drawdowns. bleh…
Gold now dropping faster than silver… good sign of nearby bottom. Oh, and Gold and SLW currently down identical %. Good enough for me, even if I’m looking at big negative numbers on my SLW calls.
PC: The latter! I never get the feeling watching other people suffer (not enough compassion I suppose). When I am losing money at a certain point my stomach tries to jumps up through my throat and attempts to strangle my brain. That’s a top-notch buy signal. I actually feel much better now having experienced that and am ready to add DGP as soon as the RSI gets near or tags 30.
Well, that was an emotional buy… In the future, this late in an IT cycle, I will wait for a swing low. I am concerned that my sheer stubbornness will keep me long PM’s when it becomes obvious that something is very wrong here. We are not there yet, but there are definitely warning signs.
Allright, I’m in. After selling almost everything on April 12th and watching from the sidelines, the last sacrificial lamb has just stepped back in. I’m just establishing core positions in DGP, NUGT and AGQ, but now the final decline can begin. See you guys on the other side!
Thanks poly but let’s not do any victory laps yet. We’ll know more by monday, so let’s all keep our fingers crossed.
Besides, the market always falls after I buy (murphy’s law), so to steal your airplane analogy: “we are beginning our final descent into our destination, so please fasten your seatbeats and put your seats in their upright positions. This could get bumpy.”
$GC_F Gold just printed 1506$ with 37,3 RSI let us see if we can have that RSI@30 today. And the $spy does not look finished yet. Looks more like a sell off in the pm.
In past parabolic crashes, we usually get a dead cat bounce once we get a little under the 50dmva so another dollar or down or so and we should see a reversal for a few days atleast /jmo
Luckily it’s 1am here in Shanghai, so I have no compunctions about drinking while I buy these gold calls. I feel for you guys who have to wait until 5.
I just put the last of my dry powder to work. I’m now at 100%. (If things get worse, I’ll either add leverage or just go outside and bang a hammer against my thumb repeatedly for a nice change of pace.)
I’m turning off the computer now before I change my mind.
Thanks, Gary, for giving me the confidence to do this.
Just deployed the rest of my dry powder into AGQ and DITM July SLV Calls… I feel like I want to throw up… Best of luck to everyone and I’ll see you on the other side!
PST, I just checked my history: sold half my AGQ at 364.99 (and a quarter in the 255 area), so not too bad. Maybe that’s why I have been able to keep my cool the last few days.
Well played CMT. You got as close to perfect as you could have with that one. I screwed the pooch on my exit of AGQ, but it felt right at the time.
I still think that we could have some downside here, so our re-entry may not be ideal. I’ve been wanting some exposure though in case we do put in a bottom shortly. I don’t mind deploying the remaining 75% once this thing bounces.
Guys if I may make a suggestion…having been stuck and burned by these parabolic moves…Don’t buy just because something has been ripped to the downside. Stops won’t work, as the volatility will kill you. If you want to buy for whatever your good reasons,whatever they are, have the concept that a) drawdowns won’t be sold into, even if the thing drops more(a turkey type play) B) Use derivatives to hedge losses…
I have seen plenty of traders get destroyed by these things…great traders too…
Remember even if this turns into a C-wave surge, we are running out of time…either we surge and then tank, or b) we tank now….in both cases we tank..
Hindsight is 20 to 20, behavioral finance is a great topic btw…studies how shown that we become risk-seekers when we lose money, but only become risk adverse when we gain…
Anyways a friendly opinion from someone that got burnt from one of these before…
Gold Era: Keep a journal! Write it down. Of course you can learn from timing mistakes! You can’t learn to time perfectly, but did you do something wrong here? If so what? Did you get greedy? Did you ignore the risk of buying into a parabola? It’s not a coincidence that the most of the best traders here sold at least something. How did they know? From having blown this in the past and not wanting to do it again! The hard part is discriminating what was an error and what simply was correct but didn’t work. Time and patience and study and self-honesty and diligence.
wmp: Probably AGQ. The bounce in AGQ will be amazing and as SB said, if the rally looks weak after a few days, it might be good to switch to gold. It depends a little on my level of confidence that the bottom is in. I suggest you split it down the middle: DGP and AGQ.
I hope I’m not thinking to far ahead, but for those who still have a clean pair or two of shorts to wear today, think of this as the D wave, hopefully a month or two from now.
If you are looking to buy puts, look at how different strikes are working today and over the past few days. Hopefully your trading software allows you to see option prices day by day over the past few days and week at the various strikes.
Let’s hang on tight here folks, we knew it was going to be a rough ride UP and DOWN! I for one am reminded agin what happens if you sell even a day or two late! The last few days are going to stick in my head for the last ending move in PMs C wave.
PST, not too well played. I hung onto 1/4 of my AGQ – which is still above where i bought it, but the retreat from 375 has made the gains on it UNspectacular.
Now that Gary’s basement is filled up, a few of you can join me in my van down by the river. I’d got shag carpeting so you will sleep like a baby. The 20 lb rats have NOT been able to chew through the rusted out doors yet so that’s a good thing.
I went long the day after Easter when silver looked to be breaking 50. I leveraged up AGQ then. Bad call?
couple of juniors I follow in the green … rio.v and goz.to , an indication of things to come ?
DG .. i dont recall Gary buying anything on this parabolic move, i believe he even unloaded some into the strength. hindsight being what it is, its easy to poke holes at his system now, but, i think he has done ok until now, and we’ll see how this unfolds.
I personally added some AGQ at these levels, as I mostly missed the entire AGQ ride up, and back down I suppose.
My worry is that many traders are buying into the dead cat bounce…which we are due for btw…Everybody runs in thinking the correction is over…i guess this will turn into a C-wave advance if the bounce is strong enough to blast through recent highs. But I don’t look at the final surge as a great profit event, rather a sucker’s rally that could start and stop at any time….
We are due for a decent bounce..but this would be, IMHO, a last stop for exits….after that the real horror begins…of course if the bounce is small, getting stuck in a d-wave is likely.
CMT, A gain is a gain, or at least not a loss. Besides you probably had some nice gains on your sale at $365. Regardless, none of us will play this perfectly and we’ll all have our “what if’s” when this is finished.
Matthew, Do you have an agenda on this board? You’re certainly entitled to your opinion, but your scaremongering is probably freaking alot of people out. Again, alternate views are welcome, but we get it…you think we’re going down!
wmp: I pretty much always post my significant trades here. It’s encouraging to see the best traders here stepping in now. I feel left out, but my game revolves around timing entry points and I don’t quite see it yet—but we are very close. Hang in there everybody!
Keys that’s what cycles are for. The stop will be set once we bounce out of the daily cycle low. If it rolls over and we break that then we exit positions and avoid the d-wave.
DG, I think your right about waiting on an entry point. I would have waited for the swing or the RSI reading, but I didn’t even have a core position anymore. I’ll jump in more aggressively once we get further confirmation of a bottom. I’ll probably be following your lead, so please do post as usual.
Peter: Gary is 140% long, I believe, and did not lighten up. It’s more that people do not need to follow exactly what he does tactically (he has said having kids, debt, etc of course changes risk levels, but I mean tactics). I am not poking holes in what he does, or at least don’t intend to. It’s just that there are things other than what he uses that are of value, and he dismisses them way too easily, IMO. I and others are happy about selling chunks of AGQ above 360. Gary would say we were all lucky. Baloney!
Matthew, No need to apologize and again you’re entitled to your opinion. I’m sorry for calling you out, it just looked like you were trolling. I’m not on here everyday, so I don’t know who’s a regular and who isn’t.
dg this is amusing when you were selling at just under silver 50 i was trying to sell before they closed the plane doors and failed Got to the other end and it was too late I would be buying now if I had any dry powder but for me if this does not recover i need to work out my game plan for getting out do we have any ideas what it will look like if what we get is just a dead cat bounce 1/ up on weak volume 2/ selling at end of day 3/ miners performing early again or not joining the party
thoughts appreciated good luck all with your gut wrenching trades
There has been an algorithm that has been shorting SLV 10EMA on the 15 minute since Monday, straight. We may get our first break of that line and force this trader to desist and cover.
Fatboy: That’ll teach you to take a flight that closes its doors at 3:50 p.m.!
All three things you mentioned are tells I think. Everything will rally violently for day or two, then calm down. Then, do we get weakness or are pullbacks bought? Does volume peter out? Etc. This agrees with what SB said earlier, and I am sure we will both post our read of the bounce/rally. I want to see SLW up 4 points the first day and then NOT let people in easily after that. If there are easy places to buy you don’t want it!
Silver is so oversold that we could finish the day unchanged..Remember though that Gary said that we could get a rally today ( I wish) but still selloff until Friday/Monday
DG .. he did drop 15% of his AGQ along the way … probably very close to the top. As SLV got close to 50$ , certainly he should have sold more, but, this thing could easily have moved from 50$ to 60$. Everyone expected a pullback at SLV 43$ which never materialized. I have seen him get critcized for selling to quick and seen him get criticized for selling to late …
If his cycles are accurate, and I think there is no doubt about the validity of his work, this will be a blip by end of next week.
it was interesting to see you waver a little today tho … that gave me the confidence to buy some AGQ .. so, thanks to your bowels for that.
Traderlady: I’m tgellin ya. It had never been wrong in 35 years of trading. Amazing isn’t it? Sometimes there’s a bounce and a marginal new low, but it basically calls the low. Missed it by ten minute today
I’m back…still reading through the comments, but the behavior here at the first resistances should (1516 and 39.70) should give us a clue whether further significant downside is still left. They should drift down slowly and not go much below the lows. Better yet, go up hard from above the lows.
Haggerty- Unfortunately, when out of the market there is always that little bird on your shoulder whispering that you will miss the move— And equally unfortunate when you are invested there is that same bird whispering uyou are going to get creamed. As positions move greatly in our favor we quit listening to the bird and hear our own voice reminding us how great our decision was— Then Boom– Blindsided :(( Of course, this is just me and my experiences over time.
either silver’s got more to fall or i miraculously got a PSLV fill at the absolute low of the decline, to the penny (16.75).
unfortunately for the longs this is not in accordance with the curse the great god cthulhu has placed upon me SO silver’s got more to fall. waiting for a gap down + immediate fill to put a bow on it.
would like to see /gc eat the stops at 1492 first, too.
The behavior at the first resistances I mentioned is encouraging.
To get a swing low tomorrow. Gold would have to trace above 1543.50 for that. If we do get that, its almost $30 from here.
What Gary might say in tonights report is that tomorrow, if we get a slightly lower low and a low range day, it would be much easier to get a swing low on Friday, and it would be a number lower than 1543. But that does mean dealing with a lot more anxiety tomorrow. Personally, I would like to see it just run up.
I finished my purchasing of GLD calls at gold 1509-ish. It was not easy and I had a gnarly pit in my stomach. I’m done for this cycle low and hope that was the worst of it. Right now I have doubts about the rest of the C-wave too. Hopefully we at least get a strong bounce over the next few weeks to offer a decent exit if so.
As painful as this draw down was/is, I feel like I’m walking into an ER with only a bad sun burn compared to the bear mauling victims that are the silver holders this week. I feel for you (I was only in gold/cash as of Friday’s close).
I want to convert my SIL positions into AGQ. Do you think it is good time to do it or it’s better to wait at least till tomorrow? Do you think we’ve just seen the bottom (gold still neutral in 5 RSI)?
FOR THE RECORD: The DG gut indicator has done it again. It’s the first time during this entire mess I have felt that twinge. Please send gifts and flowers to: DG’s gut c/o his arms, Mountain View, CA
(Actually to be fair, there is sometimes another marginal dip but I bet the low on the miners holds)
I’m thinking if it plays into our C-wave finale, it would have to break up either going into or following the jobs report, then roll over into the 3 year low.
If this happens, it will be interesting to see how Gold reponds.
The current weakness in SLV is most likely a function of folks being pressured by ever rising margin requirements. All this means is that as soon as they are forced out…we bounce.
If this is the daily cycle bottom, I would like to see a couple of days of consolidation on SLV between 38-39.25, then one final tail down to < 37.90. A little consolidation down here would be healthy to bulid a base to move higher, rather then just rocketing higher. That’s where my buy order will be, 37.89. Consolidate the rest of today and Thursday, one final dip down on Friday, then the C wave finale can begin! Just my 20 cents (inflation)
Last week you posted a gold trade trigger for people who were not yet in the market. It seems like that scenario may work out this week. It’s either that or another $4 lower. Could you please address this in tonight’s post. Thanks!
Less: I was really looking at that. Unfortunately I am away then and have a commitment that weekend. Rats! How about a San Francisco Bay Area gathering? Maybe Gary’ll get up here some day.
You live on Vancouver Island? Great place, I almost moved there a few years ago. Beautiful there. (but very gray, dark, rainy, and cold for 6 months out of the year.)
pimaCanyon, We don’t live in BC, we’re uh…a tiny bit further north. We did live in Victoria for a short while though and now lookng for a permanent move southwards.
Well, I was open to adding more into the close today but it looks like we will end on a strong note.
No problem…I’m happy that I could pick up a slug of DGP earlier at my limit order price.
With today’s DGP buy I’m now 122% leveraged…less than Gary, but I wanted to leave myself some breathing room because there’s plenty of time between now and Friday–i.e., plenty of time for Da Big Boyz to engineer a quick dollar rally and one last PM plunge.
If it happens I’ll top off to 140% leveraged. If not, I have PUH-LENTY of shares already.
If I got this right, you believe we are near a daily cycle bottom. That miners have probably hit their low today but metals may dip a little lower? Thanks, Also, Have you bought all you are going to or still waiting?
Shalom: “And we’ve probably put in a bottom with miners, even if we don’t rocket straight from here.”
That’s what I’m fishing for. Recall the miners were first to diverge from PM’s. They were weak 10 days or so ahead of this correction. I suspect we have not seen the bottom of PM’s just yet, however not before a bounce IMHO.
GLD’s RSI still a good bit from target, so I guess we still need another big down day in gold. That would kill silver. AGQ already down 33 1/3% in 3 days. Hammers on the miners looks good, but if GLD has another big down day, I bet we retest lows.
So Gary sensei is out rock climbing? Amazing nerves of steel, or he has me totally fooled and he’s actually a nut in a rubber room in Bellevue Hospital.
Greggy: That’s exactly right. I agree completely with SB on both metals and miners (miners low is in; metals mat drift down a bit). I have only nibbled and still have powder, but am there in good size. If we take off I am happy to buy on the way up once it seems the bottom is truly in. Today’s action was very constructive, though.
FYI using Gary’s BB settings for GLD, the lower BB is at 144.90, another 1.9% down to go. Today’s drop was 1.5%, so to get to the lower BB we need another big red candle in GLD. I’m skeptical but I’m still learning.
Last time we saw a big up day in miners was about a week ago, and it was a one day wonder.
DG,
While the action in some miners gives some hope, I wouldn’t call this day constructive considering that AGQ seems to be closing near the lows of the day. Nevertheless, I hope you are right.
I bought AGQ when it was about 8% down this morning. I just sold it again at -10.5%. I don’t like doing this sort of thing; it’s nonsense trading, but I cannot convince myself yet that it’s good to jump back in here. I am all cash now, after trading out of DGP this morning. My physical silver is untouched and remains so for the time being.
If silver does drop to 30, this would pretty much be the D wave as that would take it very close to a 50 percent retracement of this entire C wave (from the 2008 low).
just trying to put things in perspective for those unforntunates who are hurting.
basic things I have learnt from the blog over 2 years PM’s on the blog, # Pay NO attention to unverified statements e.g. we are all doomed.
1/ don’t panic and sell into weakness 2/ have or develop an exit strategy incorporating gary’s 3/ don’t take on uncomfortable leverage 4/ there are a lot of smart cookies out there and I am not one of them 5/ keep a weather eye on the experienced traders here
Playing devil’s advocate here… What did your gut indicator tell you back in the early 80’s when you blew up your 600K account? Was is not working then or is that the one time it failed?
I am thinking that like the past, miners will LEAD the metals. They lead them down, now I am looking for reversals and up. If its light volume up…it would be possible that the bottom gets retested and Metals bottom in a day or two.
Basil—Just my take on it: This seems like the reverse of what happened at the top. At the top, gold and silver went higher but the miners lagged. That’s in part why I sold 1/2 my AGQ. Now silver is lower and the miners are arguing with the metal again. I have seen this p[pattern in oil as well (XLE and OIH refusing to drop even when USO does, for example). The companies tend to be a tell for the commodity, IMO. I think silver may even drop a bit more but if SIL and GDX hold up that’ll be my cue to put in the rest of my funds. I’d love to see silver down modestly tomorrow and the miners up for the day.
Many of the hammers turned into doji’s – meaning, indecision, neither here nor there. The $HUI did put in a key low it seems though. Let’s hope so.
If GLD busts down further, I think Gary’s right that SLV will fall further, but that GDX will just retest the lows – GDX started tipping over way before GLD/SLV did, so I expect them to bottom early as well.
Right now everythings on a sell signal in my book. It looks to me that the dollar bounce could last weeks not days. But I don’t predict, I just follow.
Am just learning about cycles, and hopefully you all and Gary can make me a better trader.
FWIW, Here’s my prognosis for the next couple of days as the daily cycle bottom is being formed. Thursday – consolidation, narrow range day. Friday first 90 minutes, one more drop down to: Gold 1497, Silver 38.85, Dollar hits 73.48 then clear sailing for the C-wave finale!
And UUP and ZSL…huge volume, and it is out of place for me to dive in here when that is going on ( yes, it would normally concern me),I think it affects the Metals Now, but I will ‘trade’ miners OR ‘buy and ride’ for now.
There is no way we can go straight down into a D-Wave, we will hit a cycle low here, the timing band dictates we will. The oversold bounce will come, you should be assured of that.
This will provide a cycle low to base our future trade stops and will provide simple and tight stop protection against a possible failed daily cycle, which is what you would expect in an unfolding D-Wave.
We really are VERY close (already there IMO) to a low risk entry area. Many of you need to get your heads out of doomsday thoughts, stopping looking at your daily P/L and recognize there is an opportunity in front of you.
I was a moron. It doesn’t work for complete morons because you get that sick feeling and you are just totally wrong.
I had a smart trading friend and whenever he was in pain on a trade I’d then take it; it just meant he was early. But that’s because he was smart. A moron can get that sick feeling and it just means he has lost a lot. Doesn’t mean a turn is near. I felt it off and on the whole way up. I then burnt my moron membership card (I hope!)
FYI I say the dollar looks like it could bounce for week based on the weekly chart – it’s stretched far from the 20 week EMA, same as in Nov ’09.
But I also don’t believe that the dollar and gold are always correlated (like I used to), so I don’t care about it as much lately. I just watch the animal I’m after: the PM sector.
Dollar index is touching its downtrend line at 73.13. If it breaks that, 73.30 is in the cards. The metals could drift lower until then.
73.30r is also the top of the waterfall decline midpoint consolidation range that I mentioned earlier, and the dollar should be rejected there.
That touch could be the last touch of the line as it will fall back, and hopefully break the lower end at 72.70 convincingly giving us a nice bounce in the metals.
If that happens, the dollar index will see 70.40 in a few days and provide a boost to the metals.
Many of the hammers turned into doji’s – meaning, indecision, neither here nor there.
BILL, I know the dogi,(correct, at tops it almost ALWAYS reverses), sometimes at bottoms , also reverses… look at GPL yesterday and look at EXK April 28th. Same dogi look near the bottom, sometimes a battle of buyers and sellers AFTER excessive selling leaves no sellers left.
You should close out your browser, you’re freaking yourself out.
After a massive 4 day collapse like this in Silver, you’re going to get a bounce back, there is no doubt of that. JUST as many here should have realized when Silver hit the $45 area on the way up, it was going to drop hard at any moments notice.
This bounce should be a good for 3 to 7 days and tack on at least 30% of the losses. It’s at that point the cycle will have to show us the money. If the cycle is destined to fail, it will be right there, not now.
I lived in Nanaimo for about a year many years ago and my Mum still lives close to that city. You may want to skip that town. Seriously negative vibe. Lotsa drugs, petty crime – a sad place IMO. The north end, near the mall, is alright, but I could never recommend Nanaimo.
Gary, Looking at all that has happened in the last few days…it seems it would have been better to sell and then rebuy at the lower levels. Holding silver and gold and then agonizing over the downward plunge seems to make no sense given the intensity and time…have not yet seen the c wave so I have no experience with that…but losing some getting back in may be preferable to the losses involved with holding? I am not watching my accounts on your advice but with slv in the 38’s vs 48’s says a boatload…comments welcome
In both the 2006 and 2008 C-Wave tops, Silver had a double top, with the second peak slightly above the first. Not predicting it will happen this time, but it is possible and there is precedent.
An up candle tomorrow would confirm what you are saying.
I’m just wondering now what Gary will say with the cycles stuff, plus GLD’s RSI and the BB.
He’s probably holed up on some cliff with a beer, watching the sunset and not a care in the world. Zen masters over here in Japan could learn from Gary.
we have DG’s gut calling bottoms, and I have one too..
My wife said last night…”Hey, you took our picture down and replaced it with our Aruba trip,why?”
I said, ” Its a ‘happy picture’, it’s the restaurant on the beach that we ate at.”
She said, “yeah, but your metals have been tanking since you took us down , you better change it!”- then she just laughed
So as a joke…I changed it back last night ( and you can see that I posted last night with the old pic , and then this morning pre mkt with the new).
Today my portfolio is green 🙂 ,and I KNOW she will ask when she gets home 🙂
— and if miners bottomed today- and I think they may have, (they may retest lows again, but only on light volume-but so far a reversal is in…in my book)I will be told ..”See, I thought that was the problem”
…so when I sell for the D-wave-should I put up a picture of my ‘ex’ , and tell my wife that the ‘Ex’ jinks it?? 🙂
james r, I have trouble w/gaps. I’ve read that HF’s target them, but esp. regarding the metals, since they trade 24×7, gaps in these are different than in US equities aren’t they? I see gaps in AGQ all the way down to the Jan low. See 140 on Feb 7/8. But, HF’s do target them so maybe you’re right.
73.48 is the price to watch on the dollar index futures. 4 times it hit that price and pulled back, so serious resistance there. (on 4/28, 5/1, 5/3 early morning and 5/3 late evening).
My guess is that DX will break lower out of this trading range of the past 5 days (or maybe first a flase break slightly above it, then reverse lower and break below it). Once it breaks below the trading range, I think a move down to 70 would be a slam dunk. Lower than that, I don’t know. Also, that move down to 70 should not take very long 2 or 3 days max, maybe happen all in one day.
The thing I don’t like about this scenario is that it doesn’t give PM’s very much time to rally.
I agree with you re gaps in the metal etf’s, especially the double long etf’s like AGQ or DGP. I think they’re pretty much meaningless. However, it would be nice to look at any studies that have been regarding these gaps.
Gaps in stock indexes are a different story. But GLD, SLV, AGQ, etc. are not stock indexes!
In hindsight, if anyone had known that this is what these past 4 days would look like, he/she would have been a fool not to sell…but no one has a crystal ball. And no one knew that silver and gold would fall this far.
You play the odds, and with the C-wave top still to come, Gary wanted to keep us focused on the road ahead. Gary is awfully good at what he does, but he can’t predict every move with precision…noone can.
My big error was in not taking $ off the table at 47-49 – I thought about it but did not do it. This oversight has cost me dearly.
I didnt realize I was talking to BILL IN JAPAN this whole time.
I remember THAT day , and you popped on here.So glad things are getting better over there, although probably quite slowly). Nice to have you with us! And F.Y.I. , I trade and am in front of a p.c. quite a bit, so I can buy miners today, and sell if need be ( though I dont think I will). -so wait for Gary and it’ll be more of a sure bet bottom for miners then.
Alex, yea Gary’s waiting for the dollar to bottom, but what get’s me is that silver has led gold all the way since like last August, so maybe that dynamic has changed? Plus the miners may have bottomed today. And I agree w/pima that the dollar looks to be doing a sideways correction, w/the next move down, although it could take more than a few days to go from 73.11 to 70.
I’m a buyer of PM’s again when they get above their 20d EMA’s on a closing basis.
But Gary’s been right about so much here – if GLD does drop another 2% to hit it’s lower BB w/a low RSI, that could make silver and the miners make a lower low, that is divergent.
If so, can you update this chart from 03 that Mach posted on Doc’s site a while back? It’s not updated, but I’m pretty sure the top of the channel was exactly where price was rejected. Looks like the blue line in the middle may have caught this decline.
“Silver had a double top, with the second peak slightly above the first. Not predicting it will happen this time.”
I agree, this is a very common pattern with many big parabolic tops too. I also strongly feel that the all time high set 30 years ago needs to be smashed this time around. I could see a picture where Silver crawls its way higher, similar to 2006 all the way back up.
TJ Thanks for the feedback….I am a newbie and I agree…thats why I signed up with Gary…an educated experienced PM trader but the cycle theory that Gary follows seems to add some certaincy…timing is an issue but Gary was right on this prediction and its pain…wish now I had sold and watched it fall as an outsider and I would be buying now…gut feeling we are there. Thanks again
Your absolutely right about selling and rebuying lower –IF– you know for sure that that is what will happen. But who knew? Just a few days ago Gary thought it was likely we were in a runaway move. What if you had sold at 48 and today silver’s at 58? There’s risk either way you go. If you hold, the risk is having to weather a larger (HUGE!) drawdown and even the risk that the C wave is done. But if you sell anticipating such a move down, the risk is the market just keeps going up and you’re sitting there with no position.
Alex, in your picture there you look like a linebacker for the Dallas Cowboys, or a Navy Seal. Which is it?
Glenn, take heart that Gary is still holding, and also that the SECOND he sees something different he’ll tell us. He’s not attached to anything, and is very flexible.
Both Terranova and one of the other guys (not Adami- the new guy) seem to both be silver bulls. I had never heard them be bullish with such conviction.
Fast Money is a show on CNBC featuring “traders” rather than investors.
Regarding the dollar ranges, what I mentioned in an earlier post was based on exactly those intra day highs the past few days. However, that number is 73.30 in my charts. I don’t see it being higher at anytime. Either way, we are talking about the same setup.
It is probably not going to be a single day action to the 70 area. But either way, no one says thats where it stops.
These are not the margin hikes you’re looking for.
Seriously, in CME’s defense, you have to admit the volatility should scare the crap out of any broker. I wouldn’t let my best friend borrow my money to play silver.
To me, these margin hikes where the other shoe to drop and the reason silver got hammered again while miners were able to strengthen.
Getting these hikes out of the way might just be the catalyst to put a bottom in the metals.
And for those that don’t believe conspiracies exist (especially with politicians or criminal bankers), ask yourself how somebody would know to sell their silver today after many days getting smashed? I would not consider selling into this, but a couple hundred million shares had no problem doing it.
Well the margin is set by volatility, this exists in down markets too. Maybe these margin hikes will help settle the price a little and back into an orderly rise. The spec’s got crazy and out of hand and they got pummeled.
I fail to see why anybody is surprised to see Silver down $10 in 3 days after such a run. Reversion to the mean, nothing more.
O.K. Nap over. Thanks for the anniversary wishes everybody…
Poly: Yep! I posted earlier about the shot USERX had about being up. It is composed of miners, so is like what SB and I have been talking about —metals down and miners up. Vuvvy said this has been 90% accurate since 2001 and is good for 15 points over the next 2-3 days. Heck, that’ll get us going.
Truth is, anybody could have guessed these hikes were coming (though perhaps not quite so many of them).
I’d seen a lot of commentary on silver demanding that the exchanges raise margins because of the danger that an exploding silver “bubble” could cause. Contagion into other markets, etc.
This was ridiculous, of course, since silver is such a tiny market. But the point is that there were many who thought that the hikes were overdue.
Jay: Thin and you need a limit. Don’t chase. If you like the price grab it. If not go in the middle and wait. Market closes at 8:00 pm ET. I usually can get what I want but not always. Don’t save 3¢ a share trying to be cute, but if the spread is really too big, or the offer is too high above the close, wait for tomorrow or hope someone hits your bid.
Just to clarify, my point is not so much that the margin hikes are a conspiracy to squash silver, as they prove people had inside information in advance and acted on it (and at the expense of others).
Either way, this bolsters my confidence in the silver story going forward. It could blow the roof off! 🙂
Yesterday’s news was that Soros was selling his silver. Today I get an alert on my phone from CNBC that Carlos Slim has been selling futures. Now the two margin hikes. If this isn’t the bottom, I don’t know what is. 🙂
SB is correct. The whole world works on “inside” information. Regardless of what the business is, those who get the “inside” scoop do better. It not a conspiracy or even to the point of being illegal, its simply reality.
I’m not sitting in the room with them so don’t know exactly when the info makes the rounds. Criminals cheat criminals too, you know? Some will share the inside info ONLY after they’ve acted, for example.
I’ve bumped into many criminals in this business (some that have seen lengthy prison sentences), and I can guarantee you that if there is any way to cheat, somebody will do it. I’m sure it’s the same in other areas too, but I know it here.
I believe the margin hikes in silver are a reaction to the price action and not vice versa. With the ATR of silver moving up so rapidily it makes sense for exchange to move up margins. The volatility in silver is what is causing the margin hike not the otherway around.
This board is living in fantasy land…silver was over 1.7X extended over it’s 200dmva (a new record) and it has now crashed over 20%, just like the other half dozen times it’s had parabolic runs since this bull market began in early 2000s. And now most here are predicting that, unlike ever before, this thing will roar back and make new highs?!? Study some historic charts guys. This thing is going to have a dead cat bounce very soon, as stocks are already holding better than the metal, that will last anywhere from a couple days to a few weeks (5-15%) and then it’s going roll back over until it hits the 200dmva around $30. This is how ALL other parabolic runs have played out and it is highly likely that is how this one will play out.
The argument that this hasnt ended because gold wasnt “extended enough” is just plain silly and goes against history, fact is, gold does not need to be extended! Again, if you study past parabolic runs you will see this for yourself. It’s obvious most of the speculative capital went into silver this time around…some years it’s PM stocks, some years it’s gold, this time it was silver. This isnt the ballet, markets don’t move in perfect unison.
2006 was a complete different ball game than today, it was essentially a one day panic washout…while this will now be entering its 5th day. Big boys today have actually put some thought into this before selling their positions. Furthermore, in 2006 the dollar started its decline from a very neutral point and went down for dozens of days in a row and believe it or not, back then the dollar still didn’t end up being as oversold as it is today (0.9X 200dmva)! The dollar has historically always bounced at 0.9X its 200dmva, just like silver has always topped out by 1.7X 200dmva. Not to mention that the dollar bull sentiment readings are at records lows. So to bet the dollar is heading much lower is again going against history with limited odds of success.
And to add a cherry on top of all this, we are now in May…weve got some of the worst seasonal months dead ahead of us. They dont call it summer doldrums for nothing.
Furthermore, for you conspiracy theorists, the margins are already going up daily almost daily….care to take a guess what the CME would do to those margins if silver now all of a sudden reversed and started head to back up?? Ha!! That would really be something to see!!
Put this all together, are these really acceptable conditions for a re-birth of the “C-wave”??
Hey, who knows, maybe im wrong and maybe “this time will be different” and the bubble that has already burst will suddenly inflate all over again, its possible, but so is winning the lottery.
To each to their own, from reading this board it seems the more experienced traders sold early and missed most of this first half of this roughly $20 “d-wave” but I truly feel sorry for the beginners, who didnt use any stops, especially those naive enough to be holding decaying derivatives like agq through this crash.
Smartest thing anyone could do now is wait for the bounce, then buy some put options if you wish to speculate, and simply wait for the price to reach the 200dmva. We are no more than a couple months from a very safe entry point.
I have to say, while extremely unpleasant, this dive in silver price has been a great learning experience for me. Its difficult to be subjective with your own emotions, but just looking at this blog and its sentiment as the price dropped is a really great tool and indicator. I am becoming more seasoned and learning new things every day. Thank you SMT bloggers!
Too many negatives along with many positives for PZG would have me leaving this one for now. Maybe on a watch list , it could improve and run hard. These small miners often make up for lost ground in SHORT time.
It has closed gaps and retested high volume breakout, has support @200sma approaching, but other ‘not ready ‘ signs yet.
I agree..Silver’s parabola has burst. Gold however is trading in a completely different manner. I suspect gold will have a parabolic move as their has been a lot of money put there over the past couple years that is not as yet unloading. From my experience, big money unloads on little guys in a parabola as the volume and momentum become favorable to them exiting into strength.
Also, with the move gold has had, its hard to imagine it just falling away.
To Alex’s point, I also feel that the larger miners will do comparatively well to juniors after this recent beating. I reached this conclusion after I contemplated buying something like GDX a couple days ago, when I’d typically try to narrow down to the best horse.
Their gains might not outpace the juniors, but people are more inclined to pay for the relative safety which will draw at least some funds away from the more speculative names. I know I’m playing it more safe for the end of this C-wave, and I can’t be the only one.
Dan: What about sentiment. Sentiment in gold on the day of the high was dead neutral. As well, “Parabolic” is not well defined. I have seen parabolic runs before and while this was arguably one, it is not of the size that would convince me that a challenge of the highs is not possible. “Dead cat bounce” is also not well defined. We will see what the rally looks like. A crappy rally is easily distinguishable from a genuine one. Are the miners out-performing? Is the volume there? Are the pull backs orderly? I am also concerned, but if the dollar really does tank, I can;t believe gold will make new highs and silver will not get back to at least 50ish. Beside if we get the “bounce” the stop is the low we are printing now and if the bubble has burst the damage from here will be minimal. We don;t need to know or argue. If the low being set now breaks after a rally we are out.
I think we are getting there. Dan’s post is a clue. Another very respected trader I follow, just decided to go double short silver WITH long SLV calls as a hedge (he is good). We seem to be accumulating the shorts which will help us launch the crescendo.
GDX bounced of the 62% retracement and the trend line of the Jan lows. SLW also got a good bounce.
I really want to reiterate something. Gary has a different style of trading and holding. He can take HUGE draw-downs. Most people are not like that. Though we all hope that we get that blow-off rally getting everyone wrong, remember that it does not have to happen.
I urge you to use options, especially bullish ratio spreads. Example of some trades I did
GLD Ratio Spread: Short 1*July 152 AND Long 2*July 153 Call SLV: Ratio Spread: Short 1*June 40 AND Long 2*June 41 Call UGL: Ratio Spread: Short 1*July 82 AND Long 2*July 23 Call
These captures almost all the upside if we get the parabolic move but have very limited downside. They allow you to get the same exposure as long calls or long outright but protect your downside.
Once we get the move up buy puts to protect the gains, and finance them by selling calls. You will sleep much better.
TOS (thinkorswim) has an excellent platform to plot these trades and take the uncertainty out of the game. You used to be able to download it on your PC even if you do not have an account (you need to register though)
Markets usually choose the path of maxiumum frustration. The most frustrating thing now would be for silver to come within $1 of its old highs, fail to conquer them, then spend years consolidating.
Of course, it would then slice through $50 effortlessly on its way to $100.
In the meantime, gold is only 12% over its 200dma. The XAU is already at the 200dma. Plenty of safety there.
Your fears are warranted and its great to be guarded. I think you make some valid points to consider. Using price targets are dangerous, they can box you in, I fall victim to that too often.
All we need is a bounce out of deeply oversold levels to form a low which will provide us with stops for another run. The next cycle will have to stand on its own merit from there, but we should be protected and don’t need puts as we will have stops.
The problem here was NOT the cycles, Gary had that coined perfectly.
The problem was the trade and being 140% exposed solely to Silver, after it had gone parabolic and was sitting on Day 33! The cycle was late and due any day for a cycle correction that Gary himself said could bring Silver back to $40-$42. The gains were astronomical at that point and a big part of the line should have been brought in and protected at that point. The waiting for $50 when it was already at $49 and severely stretched was not warranted. I questioned it last week and Gary said it was a physiological trade ($50 would hit) and not a cycles based trade.
I know DG feels likewise and please don’t take this the wrong way, but that trade was visible in real time. I know Gary will never admit to it, but I wish it would be analyzed so the trading strategy could be tweaked. SMT portfolio took a margin related 37% hit, it least as a trader, pays to analysis loses of that magnitude. IMO.
The waiting for $50 when it was already at $49 and severely stretched was not warranted. I questioned it last week and Gary said it was a physiological trade ($50 would hit) and not a cycles based trade.
And what in the world does this mean? I feel foolish for not selling at $49ish and waiting for another $1 but I was waiting for Gary’s go ahead (and he got us here but I just didnt understand the neeed to wait for another $1-$2 dollars). It may have come if he had not been sick that night (thurs) b/c it did come over the weekend but it was a little too late that that point.
I spoke to a couple of other subscribers they didn’t listen and sold. I hope Gary’s right.
Thank you for those spreads and bringing them to my attention. While I know conceptually how they work, I have never done them. Never sold an option in fact. I will have to read more about spreads and become comfortable with the concepts before making them work.
If you recall we hit $49 twice, once early morning after hours and the 2nd time 3 days later, it came within less than a $1. Both times the trade was to take out $50!
I’m just saying, with a VERY stretched daily cycle and Silver so far stretched, it wasn’t the time to get cute.
Sorry, it’s not intended to be offensive or to put anybody down, it’s just how I see it.
My argument is the most of the speculative capital went into silver this time around. If you study previous peaks you will find that the moves relative to the 200dmva vary vastly between gold, silver and PM stocks depending on the year. You can even find examples where silver was by far the biggest under performer of the three.
Dan: fair enough. I respect the points you have made. We will get the bounce and the stop at this low will protect from further damage. As this is being driven by dollar printing it does not make sense to me that gold will stay this moderate.We will see…
FYI just noticed that $TYX (30 yr bond yield)just went below the March low, both intraday, and on a closing basis. So now we have rates making an official lower high and now a lower low.
Yes it possible that we go break new records and go below 0.9X 200dmva for the dollar and the dollar sentiment could from the current multi-year low in the teens % down into the single digits. All records are meant to be broken I suppose.
Question for the futures traders, it looks like you need 25% of the contract to trade silver, is thatt he case, and if so would that amount of leverage be attractive to hedge funds, et al.
Thanks.
PS I like that silver did not sell off at the close, although still under this algo at the 10 EMA on the 15 minute shorting every pierce of it.
I feel that the silver miners may %-wise fair very well once we get going here. IF they start to taper off in volume as they approach old highs ( or their way there , maybe they tire out sooner) , we can trade into Gold stocks if we see them ripping out.
Previous highs for silver, then re- tests while gold went to new highs..were tradeable
I agree in principle with a lot of what you’re saying. Common sense really. However, in a lot of prior blow out tops it turned out that the bubble had no real reason to exist – e.g. lack of profits in internet stocks or ill advised loans to people who couldn’t actually afford homes.
As for the gold and silver tops in the seventies, those where broken by huge interest rate increases, which are much less likely today. And remember that $50 in 1980 is much more in today’s inflated money.
So the case may be made that there are still solid fundamental reasons for rising PM prices (as many others have also said in previous posts).
Whatever the outcome, it sure is a great learning experience.
Yes but thats where other factors come in such as length of the preceding consolidation etc. If silver corrects at 1.5X its extremely unlikely it would crash 20% overnight as it did in ’06 and recently so you can just wait for the trend line to break to sell. Problem with runs where it gets to 1.7X is inherently you keep developing steeper and steeper trend lines until one day it crashes so you just have to scale out slowly. Or you can buy late summer (july/Oct) puts because however high it ends up going, you can be confident it will inevitably crash and reach lows by the end of summer.
I agree but I dont think we are in the final 2-3 years of this bull market. Once we are in the final parabolic stage then yes it will go up without reason or logic.
I have repeatedly seen the sell off and heard you say in the heat of the dip things like ( no quote really)-
” This looks like a good sell off, but I’m not ready yet. patience.”
then again a day later, ” We’re really getting taken down here, I’m almost ready to nibble”
3rd day, ” boy , its really tempting here , they’re selling everything, but I dont feel it yet. ALMOST.”
I thought ‘patience’ or ‘fear’??? Will he really ever buy?? haha
Then today you began buying in the heat of this crazy sell off and I swear I said to myself…IT WAS PATIENCE!! Chomping at the bit daily , yet restrained …
Nice Job
And great blog newbies and old , naysayers and friends.It helps me to think of things at times, that I wouldnt really think of. Great debates that I could take either side!! 🙂 gotta love that!
Did you warn everyone here when silver was at 49? If so, I missed that warning (lots of comments here), but I did sell my silver then and put some of that money into gold, but a few days later repurchased 1/4 of my silver position.
I think if you had warned SMT traders with a post like the one you just made, quite a few folks here would have sat up and listened and maybe even acted on it. Not sure though, Gary’s track record is hard to beat, so it’s difficult for many to go against his advice.
Yeah, I have one lot with 34.90 (I wrote 35.90 by mistake in the previous post) and another lot with 29.50 stop loss. I chose them based on having scanned various sources’ predictions of how far down we could go. And 36 seemed to be a general lowest target at that time. So still hoping to sweat through this ordeal. 🙂
I also have a bigger bunch of gold minilongs with stop loss around 1,380.
I too think holding all through 50 was a mistake, but seriously, who expected a decapitation the second we opened in Asia that grim Monday morning.
I also understand that we’re not yet at the peak of the currency crisis. But the storm clouds sure are gathering! And the anemic dollar seems to agree…
And so the hammering continues by the way: we’re now under 39. Damn – this is relentless.
Funny how when we go down it’s “manipulation” but when we went from 40 to 50 in eight days it was just “Whee!” Markets always go down faster than they go up, so up in 8 days and down in 4. I don’t need a conspiracy to understand it.
From Dan Norcini–I suspect however that there is more here than keeping the integrity of the clearing houses. It is too much too fast given the already steep decline in the market. It smells like a deliberate effort is being orchestrated to take the metal lower and rescue the shorts who as I said previously, are voting members of the exchange and who could no longer handle the bleeding of their accounts. oF COUSE GARY THERE IS NO MANUPULATION IN THE MARKETS –WHAT A JOKE THE WHOLE THING IS
Pima, its just good practice to critic trades, especially when the “paper decline” is so great. I hope people don’t take offense or take it as bragging. But if we’re to perfect this craft or avoid such events in the future, open dialogue should be encouranged. Yes Gary has done wonders and his analysis and timing with cycles are truly world class, i mean that. But that should not make the trade immune from discussion, especially since so many follow. Come to think of the trade some more, he nailed the outcome perfectly, just didn’t avoid it until it was to late. Maybe he just didn’t follow what he always preaches, “never try to pick a top”. I’m done with this conversation, not going to beat it anymore. Hopefully been here long enough for Gary to know it’s out of compete respect. Let’s hope we start “swinging” higher.
Thank you for your comment, Poly. I am agreement. I know Gary doesn’t want us getting “whipshawed” but seriously, the decline without stops in AGQ has been completely ugly. And, SIL, went lower today than what I bought it on February 15, so it’s not like I got into the market last week.
I know that you have little time to answer mails like this, but when the CME now hikes the silver margin for the FOURTH time in a few short days, I have to ask: is this warranted in a commodity that has just fallen more than 20%?
Clearly, small investors are getting slammed by the margin hikes that coincide with sharp price drops. It’s pretty obvious that the beneficiaries are the big bankers with their endless supply of free Fed money.
Best regards, Jonas
The interesting response:
I’ll look at that. We usually leave margins to them, but you raise a good question. Thx,
FYI I am one who doesn’t have the funds to support the margin calls on this portfolio as it weathers a 40% hit give-or-take. I’ve stuck it out while puking, but I may have actually little choice but to liquidate and buy back into DGP when a “bottom” is called…. I can’t be alone in this. I’d rather hold with hope but it’s such a loss already, is that what I’m supposed to do, really?
As for the conspiracy talk, why is it so easy to accept that many governments, including the American, is manipulating their currency in relation to other currencies – yet so hard to accept that the same thing occurs with the only age old universal currencies gold and silver???
“The waiting for $50 when it was already at $49 and severely stretched was not warranted”
My exact thoughts last week. Silver hit 49.5 2 weeks ago on Sunday night’s open and immediately broke 10%. It then spend the next few days rallying to 49.5 and 49 in regular trading hours only to get rejected. Given the circumstances, the risk of being 140% leveraged in Silver plays for that .50 or 1 dollar is a bit naive.
Personally I’m hanging in there, but I have no idea what your margin call situation looks like. It certainly seems more likely than not that we’ll soon have some kind of bounce – even if only the dead cat variety. I’d at least rather wait and sell into that. (But I’m the first to admit that the pounding is pretty relentless, even as I type this and look at the 1 minute chart).
“I am one who doesn’t have the funds to support the margin calls on this portfolio as it weathers a 40% hit give-or-take. “
Leverage is a double edge sword. When you’re on the wrong side of the trade, it can blow your account up.
To take 40% hit in 3 trading days is simply mind blowing. Your account would need to rally 69% to get back to where it was 3 trading days ago. That’s like watching GDX rally from the current price of 58 to 98.
As we neared the $50 mark, I sold all stocks and replaced the leverage with DIM SLV options. With these I was 140% leveraged, but with very high cash levels.
Was that smart ? Well, obviously not as smart as getting out would have been.
I have sold nothing. Again, this was not too smart.
On Monday, I set a personal record of the highest loss I’ve ever had in a single day. So far this week, I have the highest loss I’ve ever had in a week.
I have added AGQ options twice, once at $280 and again at $230.
And yet, in spite of all this carnage, the cash I’m still holding exceeds my entire account balance on 1/1/2011.
I agree with many of the comments you are making here tonight. You probably already know that.
STEVEN,
I’ll elaborate a bit later when I get some time on my decision for selling out and going back to core position. (Selling gold futures. I was already out of silver.)
I think the C may be over.I think it may be possible, as dan has said, that the speculative frenzy went into silver this time instead of gold and that you won’t get a wild runoff in gold this time.
Clearly this is speculation only. I could easily be wrong and people should follow what makes sense to them. A bounce here (whether we continue up or not) is not out of the question either. But being out I dont’ have to agonize over that anymore. Conservation of mental capital.
I’m happy with the profit I booked for now and I’ll evalute as new info comes in. I don’t view taking a position here as a strong risk/reward bet. And the actions this week (and today mostly) broke my expectation of what was going on.
When what is going on doesn’t make sense, it is usually good to get out as I see it. I can no longer convince myself of a strong and quick return to the upside for a multi-week blowoff in gold (let’s not even go there with silver).
Anyway, I’ll try to explain my view later in more detail.
From Jesse’s cafe , an excellent blog-boy he really nails it–what a crime.Also forget the CFTC they have never done a dam thing to protect the small investor-its all about protecting the big boys From Jesse–
CME Raises Silver Margin Requirements for the 4th Time
I’m trying to remember how many times the Fed raised stock margin requirement during the tech bubble, or mortgage down payment minimums and bank reserve requirements in the last credit bubble.
The spin machine and demand dampening campaigns are well underway in an attempt to rescue the pampered princes of Wall Street and the City of London from yet another overleveraged paper asset scheme gone wrong, wobbling the Anglo-American banking system.
It is the duty of the central banks and the government to preserve and protect the privileged few and their financiers not only from justice, but any pain of loss or minor inconveniences as well, no matter the cost to the public trust.
Now if only they could magically create some substantial new bullion supplies for the Comex to forestall what appears to be an approaching default on delivery, at least based on identifiable inventory and assets represented by paper in customers’ hands.
As Daniel Drew once famously observed:
“He who sells what isn’t his’n, must buy it back, or go to prison.”
Deleted my comment cause david said new post, but don’t see one. Reposting again:
—–
I believe I did say to people a little while ago that I saw almost everybody here looking “up” instead of down. And only holding and buying and adding. Even today.
It may work. But it may not.
You always have to ask yourself “what if I’m wrong and what damage does that cause”.
Clearly I don’t know people’s positions, leverage, options or whatnot. But it appears that many haven’t examined and prepared for the ‘what if i’m wrong’ scenario.
Today we hit the level where I said “I have a good suspicion that I’m wrong, and I’m no longer willing to suffer the damages if so” (which also means I won’t benefit from any further upside if right).
So I sold. Bang. Done.
It was mostly cold and calculated and I had that exit point in my head (and constantly adjusting) for a few days now.
Too many times in the past I rode down these type of situations only looking *up* and believing I couldn’t be wrong. Not again if I can help it.
Now I try to look down as often as possible and say “what if THAT happens?”.
We may still be heading up violently. I don’t know. And if you sell on my comments and we do then that is your risk.
I’m just saying I asked myself that ‘what if’ whenever I can and my trigger got hit today. I’m no longer willing to risk more downside in exchange for an upside that doesn’t make sense anymore as I see it. (I lost a not insubstantial profit before getting here today, so I’m by no means immune to what everybody else is going through. But I want to keep what’s left instead of risk it trying to make more at the moment.)
Hopefully we bounce and resume going up. You guys can clean it up and I’ll re-engage if I can get back in safely. Maybe I miss most of the gains. You are taking risks and I’m not by buying/holding here. Maybe I’m one of the indicators of the bottom like gary says. No worries. I can accept that and I’ll just handle it from there as best possible.
Thanks for your sympathy – and I will not say I wasn’t warned. Just wish I’d set some “stops at the tops”. I’ve learned a valuable lesson. I’m going to read tonight’s report and then decide whether to liquidate or pray, or both.
USERX/gold trade is on! I think the bottom is in or very close and I will be adding a bit tonight.My system sold today and will be back to a full blown buy at 1571 with that number moving down over the coming days. I think that buy signal will be the green light for our parabolic move.This last trade yielded over 100 points on gold:)
Thanks for the comments. I have been wrestling with exactly the issue that you have expressed (and resolved) – what to do as regards the apparently ongoing move to the downside. Sell now and get back in at a swing low, or grit my teeth and bear it.
Not sure where I’ll wind up, but it is helpful to hear your thinking.
I do know that the fundamentals haven’t changed – there is a metal shortage and (in my view) an effort to shake weak hands out of the metal. So long term holders will be rewarded. The real trick is to arrive at the long term more or less intact.
I’ve just skimmed the board, so if this has been said already, I don’t mean to rehash….but noone can blame Gary or anyone else for how you trade and how your portfolio has performed. Gary provides analysis which should be a supplement to your own due diligence. He even goes as far as keying us all in as to what he is trading and why, which is extremely beneficial for newer traders. However, to just follow someone blindly without forming your own opinions is just not a smart way to trade. Gary never told any of us to wait until silver hits $50 and then to switch over to gold. What he said was that was what he was planning on doing. If you chose to follow that trade, then that is a conscious decision that you made. I know it doesn’t feel great right now giving back profits, but please don’t look to blame someone else for what happened to your account. No disrepect to anyone here, but we all are accountable for our own actions.
I hate gold..I hate silver..I hate having to deal with these metals because of the FED and the US tax issues. I would love for a strong dollar deflationary policy…A plan where your money appreciates just by putting it under your pillow.
Instead the FED needs to f**k with people and try to steal from them anyway they can. Nothing is as evil as someone stealing from a starving family, and the FED does this with calculated daily measures. The true terrorists are here at home, not abroad.
That previous drop stopped short at 38.2% retracement. This one’s close to 50% almost, which is $38. I will put the other half then. If we break that level, it should only be intra-day. Anything more, I’m out.
Veronica, i was looking out for Userx today, had a suspicion it would be positive. Nicely done considering the drop in gold. The miners being so strong is a positive tell, Gary picked it up tonight too.
Most of the people asking questions are those who were out entirely or who had switched to gold already, so they aren’t blaming anyone for losses they don’t have.
There is some value in asking what the “lessons learned” are, to be used in the future. That’s not the same as Monday-morning quarterbacking or assigning blame.
That is just what I needed to hear, regardless whether I do the same or not. A decision for which only I am accountable, as with all the rest I’ve made. Thank you.
Yields are also correcting after a massive run up. My time projection puts an end to the long-bond yield correction at May 17th. That’s a good time for people to start realizing, “Oh shit, the Fed isn’t gonna be buying this anymore, huh?” When that happens, we will probably see yields move higher and yields are positively correlated with metals.
Also worth noting is that there is a annual tendency for Treasury bond prices to bounce around April for a quarter or two before they head lower and form a new higher low. If our macro outlook is correct and Bernake’s printing coupled with austerity measures across the globe change things materially, we may see a left translated cycle in Treasury bonds and the start of something new. If this is the case, metals will benefit – big time.
David, Fair enough. I’m not pointing fingers or accusing anyone in particular. People should absolutely question the moves that they made and try to take away any lessons that they can. I got out of silver at $42, and need to rationalize why I made that decision and figure out how to avoid it in the future. I hope my post isn’t misinterpreted as attacking people who are doing this self-reflection. It is more geared to those few who are wondering why Gary didn’t get them out sooner.
Thanks for invoking “real”discussion” no matter opinions. This is how we get to the “truth.”
One of the points you made is the main reason why I posted my “the D wave may be here” post. I wasn’t just doing it for superstitious reasons. Looking back at 2008, 2006, etc. what is happening now is completely unprecedented. Yes, if you go based on purely history, maybe we are in the D wave or a mini one.
However, at the same time, history writes a new chapter every time. Just because silver went down X % in one day in 2006 and it isn’t doing the same now doesn’t mean much.
David, My lesson learned was not being patient to determine if this was a runaway or cycle low coming. I swore last intermediate cycle down, I would sell before going back down. Instead I sold some good DITM GLD on Monday when the price was up on GLD and took some nice profits, but not wanting to be out, on the day low bought back in on not so deep in the money GLD options. I wanted to spend time with the family this week, so wasn’t expecting the cycle drop this week. But now just happy to be distracted this week while everything sorts itself out. So I too had a good take down. But still all in all, have more than I started with in February, so no complaints and hoping to finish off this C wave as we all planned.
Here’s my take away: First, I have learned more from Gary than any other single source in my entire trading career. I never appreciated cycles before but I can now see what they can do and can see what a master he is at them. I do not say this lightly.
That said, there are other aspects of his work that are tactics and not based on cycles. . There is lots of wiggle room around this idea vis a vis trading tactics. If the top traders on this blog all sell between 50 and 100% of a position, I don’t care what Gary says, that is worth noticing. “We’re going to tag 50” is just a trading idea, and is not based on cycles. I personally would not argue with Gary about cycles; he is far, far superior to me there. But trading tactics…? His edge is not nearly so great, to me at least.
I think this is the maturation of SMT. If we can get through this together we are going to own the planet by the end of the next C wave. I agree with virtually everything Poly has said. No axe to grind whatsoever on my part. but if we don’t learn the difference between cycles and tactics from this we will have entirely wasted the experience. I never mind scars. I hate scars that serve no purpose.
In the evening 24th April while silver surged, i hedged my silver long position with a 40k oz put at 47,80 strike. (costed 36k$) Bit too early since silver continued up to 49.50 and the value of the put scrank to only 5k$. Unfortunately I put the expiry date at 28th of April(10 am) 3,5 days later, to get it as ‘cheap’ as possible and in anticipating that a crash would be of similar swiftness as in 2006 and 2008.
As we know this time it took longer. Maybe that had something to do with the fact that the ascent this time was slower, as documented on the 2011/2006 similarity charts posted last month. But even if the dip this time had taken more than twice as long time as in 2006, it would still have been ok. -However it expired valueless.
If the dip had been faster, or if the expiry date had been some days later, at 39$ silver the put would presenty been worth 350k$.. Anyway I’ve become more wise after this and will change some details next time 🙂
I couldn’t have said it any better. Although I was not one of the lucky ones to sell as I was waiting for the tag of $50. I kept asking myself why is Gary waiting but I trusted him this far and I continued to trust him. I will also continue to trust him moving forward but the differences you bring out are great examples.
Well said DG. Perhaps my post wasn’t as nuanced or as subtle as it should have been.
I respect and have learned alot from everyone on this board and I appreciate the diversity of the views expressed. I was just rubbed the wrong way by one post in particular which I felt implied that Gary was responsible for their losses. To all the others, I meant no offense.
Gary and his work are amazing and I am glad to be on board. This is a completely forecast hiccup and I should have been prepared for it based on my own risk tolerance and account details. I have learned that I need to set stops even if it’s a bother for me getting in and out like that. I must take a longer view.
I think that also determines my actions for tomorrow. It has been very helpful to have some discussion on this board about it, for a new cat like me just stretching his claws. Thank you all for the talk.
I suggested to Gary that he make it required reading to all subs his friend Doc’s article at The DOCument called “The Mentality of the Successful Trader” I think it may be helpful for some…
I just ran into the person who introduced me to options trading which really got me interested in trading for a living. She was astounded that I was focused solely in the precious metals as volatile as it is, she jumped out months ago. I told her that I had to choose a sector of trading I was comfortable with and her tip that got me into gold last spring led me to where I am today. I told her I have a great gold/silver cycles guru and blog I follow with great traders. I thanked her again, for her tip and told her since that tip and following STMP my accounts have increased more in 6 months than I made in 10 years in the mutual funds. She could tell I was very happy and I repeatedly thanked her for her single tip that has me focused on this sector now. And this was with the week we are enduring right now, she probably walked away shaking her head, thinking I must be nuts.
I like your idea. I feel that we should look at different game plans for different situations. We should be able to discuss these situations with Gary.
I feel those of us who subscribe to the premium service should have a separate board where we can ask Gary a question that he can answer and not be afraid to give his material away.
I said this earlier in morning and I’ll say it again.
In hindsight one can say I should have got out at $49. It was so obvious. But in real time that’s pure nonsense. In real time one doesn’t know whether the top is going to occur at $49, $48, $47 or $45 or it could have just as easily occurred at $55. Then if you had exited you would be chasing right now.
Folks for as long as you trade the markets you are going to have timing mistakes. It’s just a part of the business and is unavoidable.
If silver had just opened flat I would have converted to gold. Unfortunately that day silver chose to start melting down premarket so we never got a chance to convert.
One rule I learned a long time ago is not to sell into a daily cycle low. Even if you have to ride out the correction you almost always end up getting a better exit if you wait for the bounce as the next cycle begins.
Once we got caught the odds were better to wait for the bounce out of the cycle low and I dare say none of us without a crystal ball could have guessed at how hard silver would sell especially since we have none of the hisotrical signs of a C-wave top.
Now maybe this time is different and the largest C-wave of the entire bull will top with a whimper, maybe it will top before sentiment reaches bullish extremes, maybe it will top before open interest on gold spikes to new highs, maybe it will top after only two daily cycles instead of the normal 3 or 4, maybe it will top with gold a measly 16% above the 200 DMA, maybe it will top before the miners ever get stretched above the mean, maybe it will top without the dollar making new lows, and maybe it will top before gold ever enters a final parabolic move up.
The problem is how can one tell before hand that something that has never happened before is going to happen. The answer is you can’t. And if it’s never happened before then you would be a fool to bet on it because 9 times out of 10 you will be wrong.
So gold is only three days into a daily cycle correction. I have no problem waiting for that correction to run it’s course and I have no problem betting that gold is going to top similar to every other C-wave for the last 11 years.
And if that is the case silver has followed gold up into that final top during every major C-wave so I’m going to assume it will do so again and at the very least it will tag $50 before this is over.
I just want to point out that Gary predicted this. ALL of it. Yes, he decided to stay with silver in the hopes it would tag $50.00 — but he also warned us of a cycle low, one that would be scary and very painful and would cause people to question whether we are in a D-wave. He said all this, and now it’s happening. He said we’d go until Thursday at the earliest and maybe through Monday. Folks, it’s Wednesday night. I think we need to remember that he hasn’t been proven incorrect on this call, yet. Hold off on the post-mortems.
Even if Gary did get his timing off on this severe silver correction, he did warn us beforehand that it was possible!
It helped me take proper precautions portfolio wise and mentally.
I sold more that half my silver holdings near 49 and converted some to gold at 1520. This is thanks to Gary.
Now I am buying back at lower prices slightly uner 42 for spot silver. Probably should have been a bit more patientbut if it goes back to 50 it is not really going to matter much.
But my other half of silver is in AGQ and I rode that down. I still feel the pain. Even when I know it could happen, handling my emotions is a challenge and am glad to have Gary and this board to help me learn.
I feel bad for the folks who are leveraged here, or maybe just on margin and not heavily leveraged. Leverage scares me, and heavy leverage scares the crap out of me. If there’s a lesson here it’s this: When you take on leverage, calculate what your account will look like if the trade goes against you, and figure worst case scenario. If that scenario is too bleak for you to stomach, then you have two choices: 1)Don’t use as much leverage (or don’t use any), or 2) decide at what price you will reduce your leverage by closing part or all of your positions.
I know no one wants to sell at the bottom, but the problem is that no one knows where the bottom will be. Was it today, or do we have another day or 3 to go?
This is a tough business. Most of us are small fishes swimming with sharks.
I’m seeing a beautiful thing in this community… I feel I know a bunch of the regular contributors intimately after spending some time on this blog in the last few months.. Many thanks for all your posts, you know who you are….
Newbies, this is a great place to learn!
And of course, many thanks to Gary for being a true beam of light. His advice is the best I have ever seen. Other than that everybody should know their risk level and should act like they are investing THEIR OWNN MONEYYY
I kind of like the “smartest guy in the room” game here and the recent debates… Keeps us flexible and honest… Also, I’m noticing huge nr of posts today so the bottom must be close :))
waiting for the dead cat bounce that might take us to new highs… and for the Switzerland trip…
Clarkatroid, I hope you still have some clean pants for tomorrow man… This drop has been tough on you…
I agree with all you just said, yet I have to say as DG and POLY point out that there are other tactics to employ along with cycles. In my experience a parabola puts one on watch for a spike in price on volume to exit. Sure, it may not be the top, but when a spike in price and volume occur, it tells me that big money is unloading, thus the volume, and momentum traders are eating it up, thus the rise in price.
As far as tactics go, for me that is the time to sell, and I and many others with years of experience bailed. I think what will make us even better as a blogregation is to develop tactics that can be used in real time to avoid a drop when parabolas occur, as they are unsustainable and always end badly.
No, none of the things that mark a C-Wave top occured in gold or miners, but they sure occured in silver.
The main reason I sold “early” is because there have been countless times in my life that I “missed it by that much” just like the intention you had to get out Monday morning. It seems that you were thinking what many others were thinking, as well. The goal in a top is to front run the masses.
Anyway, I also need to echo what DG and POLY said, which is that I have learned more from you and your blog than any other single source in my trading/investing career, and I don’t say these things to make you wrong, only to make us better as a team, which I really feel SMT is becoming.
Thanks for everything you do! You rock, and are a true genius.
“Now maybe this time is different and the largest C-wave of the entire bull will top with a whimper, maybe it will top before sentiment reaches bullish extremes”
Gary, Silver went from 17 on July 2010 to 49.75 on April 24th. That is almost a 300% move in 9 months. At the peak it was stretched over 100% above the 200 dma. Prior to the top, Silver closed above the the (20,2) Bollinger Band an unprecedented 7 straight trading days. I did some digging and some of the great commodity runs over the past century didn’t even pull of this feat.
Worth noting: if you look at a gold chart, we have a mirrored rise and fall from Thursday until now. We hit new highs after the Bernanke speech, and we went up very fast without time to establish a base. On the way down, it’s those levels that are sliced through easily. Air pockets, some of the more seasoned traders call them. Interestingly, gold stopped its decent precisely from the levels at which it took off on Bernanke Day.
Also worth noting (and it’s been noted elsewhere but I think it bears repeating:) The miners are often a tell — they are the canary in the proverbial mine. They were warning us of a decline, and look at them now — many of them holding their own today amidst the carnage. Even more impressive when you consider the general market was down and they often trade in tandem with that.
Two good arguments for a bottom hereabouts. We’ll have to wait and see, but it’s food for thought.
Eric, Silver doesn’t drive the sector, gold does. You’re wasting your time trying to make decision about the sector via silvers action.
At the top silver was 80% above the 200 DMA not 100%. I’ve seen assets stretch 200% above the 200. There is nothing that says 80% is the limit. As a matter of fact at the final bull market top I won’t be surprised to see silver 200% above the 200 DMA.
If you exit at 80% you would miss 120% of the move.
Again it’s easy to say one should have done this or that but in real time it’s just not possible.
The fact is people have been calling a top in silver for months. Those people missed almost the entire move.
Now I’ll say it again. No C-wave has ever topped with gold and miners at such low levels. No C-wave has ever topped without silver following gold.
Even in 06 after a viscous correction silver came back to make a double top.
So I’m going to assume that gold isn’t done yet and if that’s the case silver will follow it back up at least to a double top.
Unfortunately I suspect almost no one will be on for the ride because the correction will have knocked them off. I doubt anyone was able to hold on for the double top in 06 either.
Let me point out something else. Big money tends to drive gold above a big round number so they can trick the little guy into buying what they are selling.
Without the benefit of hindsight the most likely scenario would have been for big money to drive silver above $50 and convince everyone that a major 30 year breakout had occurred and then sell into panic buying.
That was what I was expecting to happen. Unfortunately this time it didn’t happen.
I follow another forum/ subscription that I respect very much over the years (itulip): on friday he made the rare call to sell his silver (although he failed to call out the stunning rise in silver in last few months. He however does not focus on gold or silver investing)
He is celebrating this call, and now King World News KWN) has Ben Davies blabbering about scrap silver coming into market and causing temporary oversupply. At same time KWN has Turk saying $50 by end of June.
I’m just thinking even if we get a bounce tomorrow, folks like my self who are “true beleivers” may be so worn out that we may just exit some positions (AGQ#!$@$) for peace of mind…..
nice post, Benjamin. And lucky you to be going on the Switzerland trip! The beauty of that area is mind boggling, and you’ll get to me Gary and some of the SMT folks in person. Should be a great time!
Gary said “Unfortunately I suspect almost no one will be on for the ride because the correction will have knocked them off. I doubt anyone was able to hold on for the double top in 06 either.”
Understood- surely my state of emotions must mean we are close to a bottom- I’ll be hanging in!
I wish. We have a family reunion to go to on one side of the country (Virginia), then later in the summer a trip to Washington State. Right now I don’t have the funds to finance those trips AND a trip to Europe. Hopefully I’ll make an SMT gathering before this bull is done though.
I wasn’t trying to criticize Dan when I asked him whether he made a post when silver was up near 50. I asked because I didn’t know AND because his post was quite thorough AND if he had made such a post, I suspect more than a few SMT readers would have sat up and listened.
So my intention was not to blast Dan for his post, but to ask whether he’d made a post like that before, and if not to suggest that such a post could have been helpful to some here.
I agree with you and others that post mortems are worth doing. I certainly want to develop better trading tactics, and examining how each trade has worked out is one way to improve tactics.
Hypothetical question based on some trends I saw in the Ichimoku Cloud formations of past C wave tops…
Is it possible that the C wave top for gold can be pushed out to September, meaning we have many more months of daily cycles and grinding higher? If this does happen (lets use cycle theory to back into and reverse engineer) what cycle timings would it take? Could we have a whole new intermediate cycle for USD?
So I decided to check Dan’s assertion that there have been times where one of the three basic items we track peak while the others lag or show weakness. The charts do not seem to bear out his assertion. Decide for yourselves.
I have followed Gary’s plan all along. I have not sold anything. Silver could fade like oil and move on to the next big thing – gold. Since there is more upside potential with gold, what about converting 50% AGQ shares to DGB after a bounce?
Gold had a big consolidation and made a nice run up (sort of looked parabolic) in Sept and Oct. THen in early Nov, gold got hit (silver not as much as today, though) and the USD did a little “bottom feeding.”
Ok, now here is a chart with 5 more months added on:
In late Dec 2007 Gold took off again and ran the final C wave top to March.
Another key here is the trend on the USD here and potential similarities. In Nov 2007 the USD bottom fed around 75. Then at the C wave top it was at 72 (give or take).
Fast forward to 2011. We are at 73 now. What if it stretches and takes 3-5 more months to fall to 70 and we can made another more organized run here?
Another possibility is that the raid right now is re-playing the late Jan 2008 dive (where you can clearly see people would have thought the C wave was over). If so we have another 1 1/2 to 2 months left.
great post and im hanging in there . thankyou for everything.
question are the margine rate hikes out of the norm? gforce for instance puts out a report and they are saying ” even if you have a 7 figure account do not touch silver with a 10 foot pole” gforce increased their margin to 25000 while dainels is still holding theirs at 16000per 5000oz contract
Have been in a conference the last three days, with only occasional glances at market (the distraction has likely “saved” me.)
Not pretty; no indeed. In fact, today’s/tonight’s levels reflect what I anticipated as ultimate worst case scenario.
So revising my expectations and playing with what could be worse than worst?
Thinking of others here, whom I don’t know but paradoxically(?) for whom I feel, and hoping the metaphorical or literal whiskey is seeing folks through.
Nice to see AG and GDXJ in the green! A guiding bright spot resonating with Gary’s guidance?
Gary” Unfortunately I suspect almost no one will be on for the ride because the correction will have knocked them off”
Well ive copied your portfolio gary and i can tell you 100% I’ll be all in, all the way. Im mentally prepared to give back alI of this years profits . And if that happens then so what? It’s only money I didn’t have 12 weeks ago anyways. So I’ll still have a smile on my face and a thankyou for one hell of a ride to boot.
I Won’t however be thanking you for crapping my pants on an hourly basis though
I am intrigued by the posts regarding exits out of blow off tops. There were a couple of strategies suggested and I would welcome the wisdom from the board on the pros and cons of each approach:
1. Look for exhaustion signs. This is what Gary plans to do.
2. Gradually scaling out. someone suggested this I think. Fubsy?
3. How about using stops to be triggered when a swing high occurs?
Hi Clark – good to see you haven’t jumped off the tower [it’s not open yet after refurb, anyway! 🙂 ]
I had a limit which got hit on that Sunday – so exited most trades … but got back in quite big a couple of days later with all the enthusiasm here.
The good news is that I just noticd that today’s level puts the silver price right at support of the channel going back to Novemeber. Here’s a chart someone posted yesterday without the channel http://www.finviz.com/futures_charts.ashx?t=SI&p=d1
BTW .. a thought for conspiracy people: I tread carefully around certain dates … May 1st is one. I wondered if silver might get hit then [the anniversary of Adam Weishaupt’s Illuminati!] 🙁
Niven, Get it in your head that silver isn’t going to reverse until gold bottoms. I really doubt gold has any chance of bottoming until at least Friday.
Elove, So do you have a crystal ball? Do you know for sure that if gold goes to $1650 (I figure that is a minimum for the C-wave) or $1700 or even $1800 that silver will not follow and will continue down?
Let me make this suggestion again. If you can’t control your emotions and are constantly checking your portfolio you need to turn off your computer and do something else for the next week and let this correction run it’s course.
For anyone being tempted to use the Minilongs that I’ve promoted recently, just a piece of hands-on experience:
My main positions are at stop-loss levels that I still view as prudent although 34.90 starts to feel less comfortable every day.
However, I tried a new experiment, which involves making a trade very close to a stop-loss limit, based on the fact that it was sitting just under what appeared to be a resistance level. The price of course sliced right through the resistance and breached the stop loss level. So far so good – it was a calculated and minimal loss. But the downside I hadn’t counted on is that it’ll take me 10 bank days to get the proceeds of that forced sale.
Conclusion, don’t wait for the automatic stop loss sale to trigger unless there’s a very good reason. Better to sell ahead of it.
This is going very well. Today a lower low, with 1522 as its high will make putting a swing in a lot easier. Today should mark the low. Silver looking like a forgotten child.
Here’s a piece of advice from ShalomBernanke last month that resonated with me and I think is well worth keeping in mind now:
“One rule I’ve always followed since I became profitable is to let whatever analysis that got me into a trade be the same analysis that gets me out.
In this case, Gary has been as accurate as is possible by any trader. He got us in, I’ll let him get me out.”
A mistake that I’ve often made in the past is reading too many different views, which often contradicted each other in some way, trying to reconcile them into a plan of action and ending up with a bit of a dog’s breakfast.
After reading this blog for a few months, I became a subscriber earlier this year and decided to follow Gary more or less exclusively. It’s paid off so far and I intend to stick to his in terms of how he sees the C-wave finale unfolding.
Now if somehow this time is different, it throws a serious curve, etc, well so be it, I’ll let Gary make that determination if it comes time to change direction.
Nothing wrong with second-guessing things, discussing alternate ideas, etc – I find the discussion here interesting – but ultimately I’m going to let the analysis that got me into this trade get me out of it, as I think this is sound advice.
Can always do a post-mortem once we’re definitively into the D-wave, but until then I’m happy to keep riding with Gary.
This looks to me that gold/silver will take a rest and consolidate lower for a couple of months to work off the froth. I’m not sure why the cycles haven’t taken this into consideration allowing for the continuation of the advance when seasonality is more condusive to the PMs.
Additionally, if I read your latest report correctly, the two dollar scenarios you laid out essentially call for a continuation of their decline. Isn’t a decent size rally in the dollar at this point more or just as likely coinciding with gold’s well deserved rest?
Although May certainly has some precedent for an upward move in gold, I’ve not seen on the charts where gold moves higher in the May-July time period when it has already advanced quite abit going into this period of unseasonability.
Hopefully Gary will live long enough to tell us when to exit – one slight false move in a snatch and his entire nervous system gets crunched like a xylophone – or one slightly sweaty hand means a ground fall 50 meter – either way we’re screwed!
Gary, how about bowling or something safe like that? 😉
I think this is just a correction, as the money supply from QE is still persistent, plus $TYX made a lower low today (after a lower high) – so we’re in a downtrend now.
G, That’s just not the way intermediate cycles work. If gold tops here then it will head lower for 7 to 12 weeks.
That would be an extreme D-wave at this point. But I just don ‘t buy a D-wave before gold and miners both get really stretched.
A D-wave is a regression to the mean event spawned by a parabolic C-wave finish.
We haven’t got the parabolic finish yet.
Cycle wise gold is due for a daily cycle low. It’s pretty obvious it’s working down into the low right now.
Oil and stocks are also due for a cycle low.
Once these have run their course then we should see gold’s C-wave put in the final parabolic finish. Oil should rally sharply enough to collapse the global economy and the stock market will likely make marginal new highs before rolling over into the next leg down of the secular bear market.
Good morning Gary et al. Your calm words, Gary, are gettin’ me through this, and I know the sunny days in my portfolio will come again. Great Panther was up 5.77% yesterday; in the past it has led every move, up or down. Let’s hope it’s true this time, too!
My main worry at this point is based on my belief that this is not a fair and well functionioning market.
Unless someone shows evidence to the contrary the indications poin to that:
– The bullion banks are massively short silver – The Comex physical silver stocks are dwindling – The bank cartel controls the Comex – The CFTC is passive despite seeing the problems
So it may not really be a case of whether this is a C-wave correction or a beginning D-wave. My concern is that it’ll be whatever the bank cartel wants it to be. And they’ll use all the tricks in the book, including incessant margin calls, propaganda and shortselling to induce more long liquidations.
Does that ease sentiment enough to cause a bottom in metals?
Gold looks headed to 1475; no stops Gary? Then there is the 1440 b/o area. But lets not get too far ahead.
Gary, don’t want to beat a dead horse; (coulda, shoulda, woulda) … but: you wanted silver 50/SLV 48.70; SLV was sitting at 48.00 for some time; why wait for the last 70 cents? Yeah, I know, hindight bla bla, but it was 70 cents up, $12.00 down, and counting.
If we can hold these lows into the open, I’m going to go out on a limb and start scaling in my remaining cash, about 45%, which I had reserved for a swing low. Yeah it’s a falling knife, but were printing a cycle low here and we should be just about done after 3 days and gold in the $1,400’s
Bruce, If you knew SLV was only going to 48 then why did you wait?
I didn’t know ahead of time that SLV was going to stop at $48 because my crystal ball is in the shop.
BTW since you apparently do know the future please tell us where we should buy 🙂
Might I suggest you are a candidate for turning off the computer for the next week. You are just torturing yourself and your mind is convincing itself that this will never turn. At this rate you will sell at the exact bottom.
It is not silver that is causing all the pain around here. It’s position sizing inconsistent with one’s risk tolerance and volatility of the vehicle traded.
Bruce, I will look for the close. For sure, they will run it below 38 to gun the stops. If we go close way below that level, then I don’t know where the bottom will be.
Well we officially hit low 37s, that puts us under the 50dmva so we should bounce soon for a few days atleast. Debating whether this has already burst or not it is just silly imo, there are no parabolic moves where silver crashes 25% and then continues upward after. Good news we are now only $8/9 away from the 200dmva so more than 50% of the pain is done. /jmo
I’m very far away from being able to explain anything that’s going on at the moment.
However, unless the enormous short positions and the rapidly sinking Comex stocks are carefully manufactured lies, then you have to draw the conclusion that the banks are facing huge losses when they have to cover or deliver. Right?
As for what they’re capable of doing to protect themselves from those losses? I don’t know anything about that, but I know that I have very little trust in bankers’ honesty over their greed.
As for why they would let it run to 49? Well, how about drawing in as many speculators as possible and then paint a nice post-parabolic crash to get rid of the pesky Sprotts and Keisers and their followers for at least as long as they need in order to collect the 2011 bonus?
I’m still holding all my positions though, so I’m not saying that this is for sure how it actually is. Just that this is my main concern.
Anyway, even old time pros like Richard Russell believe that the PM markets are heavily influenced by banker manipulation.
Gary Gary, you misunderstood my question: All I was saying (to your immense credit, foresight & understanding) you rode a ginormous move in silver, and you were waiting for the last 70 cents up to trigger your sell. You rode AGQ from 150ish to 380ish.
Why wait for the last percent when you’d made over 150%?
I think Oil is not going to close just a daily cycle, but an intermediate one, and that should bring it under 100$.
How this will affects the aother commodities market, one should only guess, but i think it’s not good for bulls.
That does NOT apply to gold and silver. They pushed up despite oil retracements sometimes, they have no difficult doing that.
I as gary was waiting for a daily cycle correction that simply didn’t seems to come, and when it came, it found everybody unprepared. I was deleveraged at the top, I have 4 bullets to shot and just shot the 2nd now (first was @41). Will they go to 32? I don’t know, I don’t care.
The reason WHY gold and silver went going up has NOT changed.
Seriously guys, why the panic? Yes, it hurts like hell to see profits disappear, but with proper money management, no one should be counting any losses at this stage (anyone who just blew out their account has learned an expensive lesson about leverage)
I was prepared for a very nasty downturn simply because Gary said it would happen. Now, either this is the final battle, and those who stand firm will prevail – or we are currently experiencing some weird, unpredictable, out-of-space, negate-all-patterns event.
No one ever said these things cannot happen. Why are you trading if you cannot take the heat? Did you think there was going to be free money, without risk?
As a new subscriber, my idea is to invest in GLD calls that would not expire until 6 months from now. I might lose some pop that a June exp might deliver, but wouldn’t this protect from a D wave scenerio?
I could use more timeline info on the C, D, and A waves.
Any comments would be appreciated. I’m learning from all of you.
I appreciate your analysis and continued caution – it makes us all continue to assess and think.
That said…
If this is the top in gold, it is not behaving like the tops in 2004, 2006 and 2008, all of which had post-parabolic spikes down. It looks much more like corrections on the way to the top of the past c-waves (the largest of which was 10% in 2004)
In each prior C-Wave, silver topped when gold did – actually within a week.
So my conclusions: 1) It is likely (but not certain)that gold has not topped. Sentiment supports this idea. 2) It is likely (but not certain) that silver will top when gold does.
The one thing I question is the multi-day decline in silver and it’s impact upon sentiment. Rather than a quick spike down, we’re getting a bit of a grind down, something that feels like it will take time to consolidate before moving higher.
Agreed on the multiple down days in silver. (Isn’t there even something called four day corollary?).
I was convinced that I’d use my dry powder to buy into lower prices, but with this constant sinking I can’t bring myself to pull the trigger. Just feels like we might just as well get whacked for another 10%. So I’ll just wait for a swing low instead.
Bruce, That one is easy. Because in real time there is no way of knowing that was the last 1%. And if you will remember I was prepared to go ahead and convert but we got caught by a premarket sell off.
Now if I had a crystal ball I would have just gone ahead and sold into the opening gap. But I don’t have any special ability to see the future so I decided to just ride out the daily cycle since I was already caught.
He is a thought and a question? Is it possible that a big cause for this pull back is “hedging” by minners? I heard yesterday that Carlos Slim who owns a silver mine and is a bull on Silver has been shorting this week to hedge. I have to belive that most minners do the same thing and likely did it much more 47 -50 when they locked in rediculus profit margins. So wouldn’t it make sense that medium term minners will lead no matter where silver goes? I think SLW reports next week. So we may get a read next week from them. Thoughts?
Got caught holding the bag, and decided to keep holding… IMHO this “if I had a crystal ball thing is BS”. That is dang horrible way of admitting you made a devastating mistake. People keep bottom buying on here are going to get hammered some more. The hedge money is gone it went over to bonds. No bounce without them.
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Gary can we expect another promotion on membership soon ? i would like to join but at discount 😉
Also i renew my question: is this possible that gold put bottom at 1527 or it should go lower to about 1500 ?
i closed my position to early and now im waiting for a moment to join again, dont want to miss it..
Gary,
Where is the “cycle count link” on the website? Nothing seems to have that label.
Karl, look under “Charts.”
Karl, look under “Charts.”
Whoops. Need to remember which Google account I’m logged into.
Gary – do you think stocks will follow gold for another high, say to 1425-1430 by late May/early June?
Sulim,
I think you’ll do much better join right away, but there’s a 1 month subscription while you’re waiting for a bargain on a subscription that’s already a screaming bargain.
Don’t wait, Sulim. That THE MOST EXPENSIVE OPTION.
Best,
Le Fou
Thanks for the alternate count Gary.
Gary,
I meant where is the top of the BB. Make sense?
Daily cycle counts
charts
Steve,
What meaning does the top of the BB have?
gary, whats your best stab as to where this correction ends in silver.
i know you said you expected an avalanche of buying around 40, that still your view?
Clark,
Think Gary said to watch gold and RSI 5 getting oversold.
Good morning
I think this is it..The dollar sucks and silver went down to 40,32..Gold down to 1516..Very close to Garys target.
The only thing we are waiting for is for gold to be oversold.
Earlier silver was leading gold. I think silver has bottomed..
I dont expect that we will go under 40,32 in silver when the dollar sucks like this. No way!
Hi Gary: Will you send an [intraday] update for adding to positions? And I never made the switch.. I’m guessing GDXJ/options or similar might be part of the plan.
Guidance will be helpful. Thanks!
I know SMT portfolio followers are already 140% in this market. But for many others here waiting to add, be careful waiting for a full pull back.
With a poor ADP number today and a dollar in obvious distress, I would be very careful in dismissing the last 2 days of declines and yestday’s $1,527 print as the cycle low. It makes good sense that if the alternative cycle is in play and we’re 20 days or so away from a 3yr cycle low that gold would sniff this out and only give you a partial drop.
Gold was not ridiculously stretched and if on the verge of a final C-Wave parabolic run, it would be acting strong even into a cycle low. Add to the fact they we are way past the timing band for a low and although the drop didn’t break the trend line, it sure as hell touch it and produced a 3% drop.
If we were willing to print a cycle low on a 4% drop, I would be cautious trying not to split hairs and dismiss the 3% drop as one, in light of what is to come. I say this not to contradict, but to be at least prepared for this scenario and have some piece of the action.
I will not be adding to positions as I’m fully invested. I will note in the nightly update if I think the cycle has bottomed.
The dollar has reversed the swing. Arrons cycle count may very well turn out to be correct.
Amazingly enough if gold were to have bottomed yesterday the runaway move would still be on the table as we would have a perfect $40 correction.
Poly,
Very good overview, thanks a lot.
But….If…The dollar reverses from here, we do have a clear double bottom.
Any concerns with that?
Thanks Gary (and Poly)..
Poly,
You last post: Are you saying to be careful because the low could already be in? Or be careful because there is more downside ahead of us?
Hot Rod,
Just saying it’s an alternative to watch out if you’re “under invested”.
Even if we get a further drop, this late in the cycle it couldn’t much further down from yesterday’s $1,527, so what if you miss 1% on gold!
The supposed double bottom in the dollar might or might not materialize. The setup is not ideal as the dollar could be due to bounce, but I’m mostly ignoring it for metals trading purposes.
If you waste energy on the dollar, you not only have to guess it’s direction correctly (tough if can’t get metals right on their own), but you ALSO have to assume the usual relationship (dollar up/metal down) will hold. We’ve seen enough times that is not always the case.
I prefer to focus on my trade regardless of the dollar action.
Pima,
Be careful of a runaway and have some skin in the game. I guess we all have skin in it by now anyway 🙂
I still hope we can drop to a real cycle low, that would give us a nice stop to play with too.
sulim,
Sign up today! Don’t wait around. You trying to save pennies and it could end up costing you hundreds or thousands of dollars.
Gary’s premium service is very inexpensive. If you’re not sure you want to commit to 6 months or a year, sign up for month and see how you like it. However, my recommendation is to sign up for at least 6 months. You will not be disappointed and your account will benefit enormously. Do it right now!
Thanks, Poly. I thought that’s what you were saying.
Yes, I have skin in, but added only a little yesterday. Of course, if I knew we weren’t going to go lower, I’d add more today. I may do that anyway as I’m not as fully invested as I want to be for this last run.
I’m also not concerned about miners getting away from me on the upside just yet.
I don’t know what the first hour will do, but even if they go higher, my charts are suggesting there is a probable pullback by mid-day at the latest if not earlier.
Let’s see.
Had AGQ buy orders in for the open in my low risk accts but cancelled at the last second with some quick read on weakness.
I hate this game.
I’m leaving in 20 minutes , but I just wanted to chime in 🙂
GPL looked like a lighter volume retest of the low put in last week. Last week it shot up 17% in one day when it reversed.
So I added to my GPL and AG yesterday.
POLY and LE FOU-
I read that you guys got AG too.
Last April 12 to 13th , when it bottomed, it jumped $3 in one day ($4+ in 2 days)…Did you both buy to ‘trade’ or holding for the run at this point?
Beep
Beep
Alex,
I bought to hold to the C-Wave top.
What would be your #2 + #3 picks? GPL?
Thanks always.
In licking my wounds, I took a look at the Gold C-Wave tops from 2004, 2006 and 2008 to determine any lessons for this go-round.
I’d post a chart with the results, but I’m too technologically challenged to know how, so I’ll provide it verbally.
Gold Price stretch (high print) over 200 SMA:
2004: 12%
2006: 41%
2008: 32%
Current: 17% (Recent high price)
Gold price to match 2008 stretch: 1784+ (I did not project future 200SMAs, but used current)
Gold price stretch (high print) over last significant consolidation zone (I was conservative with consolidation zones):
2004: 10%
2006: 27%
2008: 22%
Current: 10% (Recent high print)
Gold price to match 2008 stretch: 1742
I discount 2004 to a degree, since the bull market in precious metals was not as well understood as in 2006 and 2008.
So if past is prologue, we have further to go in Gold (mid 1700s). I know that this is not a new thought, but I thought the analysis might be of interest.
If anyone know how to explain chart posting to a neophyte, I’m all ears.
Aaron’s dollar cycle count makes sense as all the cycle highs in the current downtrend seem to tag the 30 dma. The high on 18th April tagged the 30dma.
silver down again 1.8%
this is like never ending
Thanks TJ.
Those numbers put it into perspective nicely, no need to chart that!
Gary,
I’ve been a long-term buy-and-hold guy on miners for a couple years (based on fundamentals). I have about 20 mining stocks (such as SLW, EXK, AG, GORO, MFN, FVITF, RGLD, SVM, etc.) that I am currently holding.
How should we position ourselves for maximum benefit for the upcoming C-Wave rise in miners? Would you recommend that I consolidate; leave well enough alone; get better leverage (e.g. NUGT); SLW options; other consideration(s)?
Thank you for the guidance.
TJ,
Thanks for doing that research..
Lillie-
Happy to do it. Analysis is therapeutic for me.
AAron, are we going to 1.50 on Eur/usd? Pretty strong so far
Poly-
You’re right, of course…I’m big on putting analysis into visual context, where possible.
POLY
Last week I was looking at Gold stocks, but the set ups on some silvers are looking good I switched to looking at wkly charts.
Look at AG w/20sma , EXK , and GPL
They look good.
as for my AG, lets say it goes up to $19.50 on $3 million, then $22 on 2 million…I will sell. It fits the pattern and I would shoot for a lower buy.
These chart still works so far
http://www.screencast.com/t/QoDpLkfKzT
http://www.screencast.com/t/ZXtDulzP3
http://www.screencast.com/t/eIvBi5aESl
Gone for a few hours, happy trading
p.s. no gap today on AG 🙂
Good morning, all.
Who knows…today might just give us a break from high drama in the PMs. Maybe we wobble around and close flat or even a bit up.
Then tomorrow gives us another sharp down day to flush out the rest of the weak hands before we pivot Friday.
TJ: Here’s what I do—Copy the chart to your desk top. Go to a free site like imageshack.us Hit “Browse” and it will allow you to browse your own computers desktop. Find the chart you put there and hit upload. Once done a screen will appear to the left. Copy the url in “link” and cut and paste it to our blog. Done. There may be a better way (I won’t say who, but you don’t need to point out that I’m I’m a moron—I know), but this is quick and works fine.
Good Morning, thanks for all the sentiment and thoughts shared yesterday. Blog made for a good day of reading and sharing the pain.
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DG, this made me laugh out loud:
“There may be a better way (I won’t say who, but you don’t need to point out that I’m I’m a moron—I know), but this is quick and works fine.”
just bought some DAX to keep busy…
Thanks, DG…I’ll give it a shot.
This is weird. DXY Breaking and Gold doesn’t give a shit.
Gary, I am not one who regularly comments on your blog, but I do check it regularly because your work on cycles is very valuable and unique.
real pain starts now?
that was not a good idea !
Thanks Alex, appreciate it
Silver SLV 120Min Chart ,Possible support levels :
http://screencast.com/t/mvlDfIXQ4Jif
Sophia, there is talk of Euro rate hike tomorrow, I doubt it.
Still holding on, the trade was times, not priced, so Im giving it till Friday to work, and I NEVER use stops.
Jim,
I can’t answer that question for you. All I can do is show you what I’m doing. My portfolio is published in every weekend report.
Aaron: I'[m intrigued. If you never use stops what happens when you are wrong and don’t know it?
Great post, TJ Rand. Thanks!
Gary: I am surprised that even after the huge shellacking silver has taken the decoupling from gold is still present today. Do you have any plan or thoughtds to handle the possibility that by the time gold is oversold, AGQ might be 190?
Silver miners showing some strength so far today. Possibly a good sign????
TJ,
If you want to post charts in the future, you can use Jing. Not too hard to do. You first have to download the program from here:
http://www.techsmith.com/download/jing/
I’m doing a little buying in here.
Hot Rod,
Gold sniffing out a dollar bottom?
You’re welcome Pima.
I wanted to verify as much as I could whether, other opinions notwithstanding, I believed Gold (as PM driver) would go up. The decoupling from Silver, though, has me flummoxed.
Pima-
Thanks for the Jing tip…I’ll check it out.
ISM number was a shocker! ADP numbers look bad. No stimulus left to spend. No tax cuts to come. No political will to fix the problem.
Yeah sure the dollar has bottomed! Not.
ALEX,
AG is a hold for me, partly because I may not be able to trade actively for the next 2 1/2 weeks, but I believe that AG & EXK are the class of the field to hold into the hoped for parabolic top.
Best,
Le Fou
if we’re looking for gold to get oversold here..silver could be mid 30s, if not low 30s
in that case, this is the d-wave right?
maybe we bounce to 45 as gold goes to 1650
atleast for silver.
Pima,
I don’t know. Everything seems to be decoupled right now and there sure are still a ton of sellers in gold.
The gold range is narrowing fast. We either break up or down (stating the obvious).
I am getting real tired of this! I guess I should shut down BUT I wanna
buy so I listen and wait and wait.
This job requires so much patience.
Gold and Silver Troll very apt name.
TJ: For me, I don’t like downloading stuff into my computer. You never know what incompatibilities there might be.
DG I do this for a living, its my job. My stops are mental, this specific trade was to last till till Friday, price isnt as relevant.
When Im wrong I pay the price. You only have to be right 60% of time if proper leverage and amount is used.
The cause of the decoupling is the near parabolic move in silver we had (I have to admit to being pissed at myself for only selling 1/2 my AGQ) This actionis just correcting that buying hysteria and has nothing to do with the dollar, gold, or anything else. The question I posted for Gary was kind of “How long can this go on and how low can silver go with gold doing basically nothing?” I don’t want to see AGQ at 190 by the time gold is oversold. I am NOT expecting or predicting that, just asking if G has thoughts about it.
IMO best way to post charts is tinypic.com
simple, free, needs no software
Some of my buy orders getting triggered on NUGT, with more to come.
Brian,
You follow Gary’s allocation and plan religiously or do you deviate? Margin, AGQ, etc.?
Thanks
sufficient damage on CEF, registering a BUY
TJ and St. D: Yep! tinypic.com is much easier. Thanks St. D—I will switch over.
Looks like XAU wants to kiss it’s 200 MA around 205.
Very comfortable buying in here.
Does anyone know if DGP generates a K-1, i.e is it a Limited Partnership?
D wave uglier than this…..idk
good call SB. i’m smelling a late morning reversal.
the 5 year bond has been tracking PMS pretty well last few weeks.. it’s about to break its march highs. seems those guys are expecting more QE too.
I want to buy here but that would require that I actually….y’know….look at my account.
Not willing to take a look at this particular juncture. 🙂
If we don’t hold 40… 36 here we come that will be ugly and in my book constitute a full blown d wave
This Brian went off margin Friday. Still fully invested though. On a swing low, it will go back on.
DG, Instead of snide remarks, perhaps you and TZ should just put on the gloves and get it over with!
What are the technical behind a “Matthew D-Wave” in Silver? Nobody else follows a silver cycle.
thanks Aaron.. I doubt it too…
Why not a Blog fight for more action!
Nice weakness for those looking to add, IMO.
trying to buy at 39.77…will see
C’mon Brian. This is a long standing thing and is more poking fun than anything else. There are many people here who are slightly annoyed every time they read his stuff for just this reason. (I’ve gotten private emails on this score) Mild kidding is good to blow the steam off I think. It’s just who he is and how he writes.
TZ: If I am really out of line with the “you forgot to add the ‘you moron’ ” stuff just let me know.
Here comes that Silver 3 handle! Panic buying turns into panic selling.
We just need gold to confirm and we should have this behind us.
Cycle low in gold, d-wave in teh silvers
Silver breaks 40….should hit a lot of sell stops here
archrival,
I don’t believe DGP issued a k-1 to me when I traded it in the past, but you might want to check into yourself to be sure.
Poly – Silver 3 handle? Can you elaborate?
stopped on DAX…
Captain has turned on the fasten seat belt sign.
Revett Minerals approved for Amex listing. Just happened today so have a look at this company quickly.
http://finance.yahoo.com/news/Revett-Minerals-Approved-for-iw-4129780908.html?x=0&.v=1
…I wish I would have done some combo options instead of the deep in the money…call @ 46 and prob a put at 42 or 43… I was much more confident about us either breaking up or down big than up big…dang it…
Of course I was kidding too, but you seem to take him so seriously! Nobody ever changes, except temporarily.
“3 handle” = price beginning with 3
personally looking for wicks around $39 before jumping in.
For those that have a lot of dry powder. The miners offer tremendous value today. I am buying some today for this final C run if we get it.
GG June 48 call option
GDX June 55 call option
SLW June 35 call option
gary,
I’d have the same question as DG about the AGQ levels you’d anticipate as gold bottoms in the cycle. Can you share your thoughts please?
Thanks
yesterday I was hanging from the edge of a cliff, holding on to a tree branch…today…a pine needle.
@Poly,
About your first comment about making sure your not under invested.
I’m currently 25% in GLD, would you deploy half of the rest now in case we bottomed already? Or wait for confirmation?
BTW I want to get some AGQ OTM calls, anyone have an idea with silver at 60 what it transalate to AGQ? (I think 500 range)
how can the d-wave get any uglier than this?
silver down more than 25% in 3 day…in d-wave does it go down 50%?
no wayyy
DG, I know that you are following those things… bought some Ery and Dug yesterday…wish me luck
King Dollar 🙂
Well the good news is we are now down almost $10 so we are 50% done this correction, another $10 and we will be at a very low risk buying opportunity at the 200dmva. Although we should get a dead cat bounce here soon.
I had GC trend line about 1525 for today, can anyone confirm or have a different number?
We are on the brink of another sell off we drop to 36 if we don’t hold…I am not concerned about my long term holding but the july calls a little so if we drop to 36
Seriously, this is getting really stupid with AGQ, we didn’t set stops because????
wmp: My question is less “what’s expected” as it is “how do we prepare for each possibility.” I like to have a plan for each realistically possible scenario. IF silver drops 15% from here while gold tries to find a bottom, what then? 20%? Is there any point at which it makes sense to act/sell/switch? Markets can do anything!
Sophia: I am so absorbed in the PM’s I am not much looking at anything else right now. Good luck though!
Wow, at these prices I’m tempted to wade into some silver but I hate buying this early in the day.
Just got a bulletin that IB is raising silver margin above exchange requirements to fall in line with the other exchanges.
“Seriously, this is getting really stupid with AGQ, we didn’t set stops because????”
Because YOU believe C waves don’t correct.
And the crazy part out of all of this…the dollar hasn’t even begun to rally yet.
did anyone else consider doing an option combination ? call @ 45.. put @ 42 ??
Just sold DGP and bought AGQ. Can’t get worse than this, right?
I hope…
@jlinks.
I don’t know what a comfortable position is for you.
I know we have to be close and a a parabolic run will cure any timing. I’m looking at the 1 min closely, I feel like gold wants to make a big run at that trendline right now!
gold troll I totally agree with you..
Gary,
Do they track a Blees rating for silver?
bought some calls June 1500
sold back my silver bought at 39.77 at 40.17…don’t feel like holding anything too long yet
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I am trying to learn from this experience. There has to be a way to avoid getting hit like this. Or at least taking the whole hit. Maybe a trailing stop would have been in order once we got stretched so far above the 50dma. Sell if the last drops more than 5% in one day or similar. The problem then is knowing when to get back in. But if we would have sold out on a trailing stop and bought back in even 10% lower we would still have that 10% in our pocket assuming the C wave is still on which I believe it is.
Gary,
At this rate in a week I will need to start living in your basement…
I got stopped out of AGQ yesterday. So I am buying back partial position here. Silver is so severely oversold it has to bounce soon. Otherwise, I guess I just became a long term investor…
nota bene: there is no advantage to buying options on derivatives. buying an AGQ call is actually at your disadvantage because they are priced without considering the decay involved.
think about it. there is no difference between an call option that SLV goes up X than AGQ goes up 2X, except that people thing they’re “leveraging up” their purchase when in fact they’re most likely paying an unfair premium.
I’m not saying this is fun, but I’m still up over 25% since the beginning of the year. I’ve got cash and can buy when we seem to have bottomed.
What’s the panic for? Do you all think metals are done? Did I miss the memo about the US getting its finances in order. Relax.
Chalk me up in the count for believer the D wave has begun.
We’re getting a lot of SMT’ers claiming Gary’s sofa in the basement.
Getting close to the end of the decline, I’d say. 🙂
Funmike: Great question—that’s the spirit! I got partially caught too, and I should have known better. I think the lesson is the one Fubsy stated: Sell parabolas. At least take some money off the table. And NEVER buy into them. I got seduced by Gary’s confidence we would trade at 50. That is not part of his cycle theory, it is not part of technical analysis, and was a guess (an educated high-odds one that didn’t work, but still just a guess). Parabolas are EXTREMELY dangerous. When you see them, do something. As I said, I know this and am surprised I only switched 1/2 into DGP las Friday. This lesson is now burned into my brain and will stand me in good stead for the rest of my trading life. First time I have ever been caught in one.
Jeepers. I cannot imagine what a D-wave looks like. Can it really get worse? How? Silver goes into negative integers? People who upon a time stole into their garages in the wee hours of the morn to lovingly caress the shiny bars will be paying other people to come haul it away. It will be one click above busted snow globes, soccer trophies from the third grade, your ripped Farrah Fawcett poster, and the leisure suit your father wore to his brother’s wedding in the autumn of 1974.
Sell parabolas, but especially when in double-etfs.
jlinks — I’m the other Jennifer. I would not advise options on a leveraged etf. Barry Ritholtz once said that strategy was akin to dousing oneself with gasoline and lighting a match. Yes, it can work out well, sometimes spectacularly so. I had some AGQ puts just the other day, sold way too early, but still made a nice return. However, more often than not, you get killed. You’ve got extreme volatility, which you pay a huge premium for, and a double theta burn problem (decay in both the option and the underlying.) Stick to one product or the other. Best of luck.
DG, exactly. This was a good lesson learned. Maybe I’m relaxed as I sold 3/4 of my AGQ while silver was in the high 40s. I did turn a lot of that into gold, but kept some cash as well.
Still up, lessons learned, things getting oversold. That’s a good position.
It was a poor trade, full stop. You all need to move on and concentrate on the NOW. Gold is about to break trend and we are VERY near a bottom.
You can panic, sell, complain and blame others or get to work getting it all back 2X
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K I am going to go with prob only 2 people on here have any idea what a combination option strategy is…sorry but this is no correction this is a full blown wave look at the monthly.. correction that is ridiculous…
When silver was at 49.50 it was the most extended it’s EVER been relative to the 200dmva at over 1.7X. In the past these parabola have ALWAYS return to below the 200dmva within a 1-2 months so people should not be stunned by this move as its just a repeat of what has happened half a dozen times since this bull market began.
A business partner of mine has a contact on the Goldman Sachs commodities desk. He was talking to his contact late last week when silver was still in the high 40s. The word from GS was that despite their firm’s call to sell commodities, the commodities desk was actively looking to get long commodities on a pullback. Specifically, the contact mentioned they were buyers on a 20% drop in silver (and said Soros was too). So if what this guy said was correct, silver should have some support in this area or maybe a little below near the 50dma.
This is painful, but I don’t think its max pain yet. Another 15 point drop in Gold later today taking Silver below 39 would do it.
But I’m not banking on it. Added gold at 1525.
funmike, you have to trade the cycles and not be bummed when you miss out on profits and then you have to be able to step in and buy back when the blood is in the streets. I held this cycle and traded the last one. I like trading it better. Book profits and have more power to buy the cycle lows. If a runaway develops then you can’t get hung up buying higher either.
SLV down over 3% and SLW almost flat? I’m not worried about a D-wave given that indicator. Of course, all of my SLW options look like they’ve been blowtorched, but I’m expecting that by end of next week I’ll be sitting pretty again. Still, the emotions being displayed on this board, along with the bearish newcomers, certainly conform Gary’s projections.
Just wish I had more dry powder…
Excellent lesson from silver and Excellent experience sharing DG and funmike.
Different in selling at 50.5 and 49.5 is not worth caught by 20% drop like this.
Yes, we MUST take some money off the table.
Anybody doing anything, or stuck like a deer in the headlights?
sounds like reminiscence of a stock operator to me
SB,
I bought back on when it dropped below 40 really quickly…
Looking to add more if we tag 39.
SB,
I bought gold at 1525 knowing well that it could go down to 1510.
While my account will be pretty hollow considering where it was Friday at close, I will buy silver below 39, where it should be if gold continues to fall.
also, easy to write but hard to do real time.
SB,
Couple of calls executed right @ $1,526, but besides that I’m holding back, although its getting difficult to keep holding from buying these.
I want to see a big (nice) clean drop in gold to dump on it. A $10 drop to $1,515 or so.
silver just crashed and burned, it’s on life support at 40
if gold stays above 1515 i think we’re alright.
anyways, we knew a market correction was going to put a damper on everything stocks & commodities (markets now are very much linked correlated), so just buy some stuff at this time if you have cash.
here you have your weakness
buy into it, size your positions accordingly if there anymore downside left
I am seriously considering adding, maybe today.
Man it’s tough spotting a bottom. Got in a few Silver futures at 40.48, went up to 41.80+, then I got stopped out at 40.40. Oh well, try again later…
SB, buying Silver futures and calls on Gold…not much, but if Silver rallies a bit I sell back until Gary says something…As for calls on Gold, I will keep for few days
Good to hear, and glad to see people take advantage of the situation!
I must admit it looks shaky, but I’ve been buying as well. 🙂
Is this a time to buy? Or would we have to wait for the dollar to spike b4 getting into more exposure?
“I am trying to learn from this experience. There has to be a way to avoid getting hit like this. Or at least taking the whole hit. “
Sell into strength.
Scale out of position that are approaching historic numbers like 50 silver. To get a 25% draw down because price of Silver missed the 50 mark by .20 is a bit silly.
Shalom,
Glad you asked. I just entered a limit order for another slug of DGP should gold hit $1510.
I’m not even looking at silver. Gary has beaten into my head that GOLD IS THE DRIVER AND SILVER IS ITS FLIGHTY LITTLE BROTHER.
So I’m keeping my eye on the ball–gold.
My plan is to add silver if gold hits $1500.
SB: I am not doing anything yet. I am now unsure whether to add to my AGQ or not. I will surely buy a slug of DGP. I want to see gold oversold and we are just not there yet. I have no problem buying on the way up if it looks right.
SB, all in, nothing to do but wait for red to turn to green again. 🙂
auger, i think i emailed you, yahoo.ca?
silver knife catchers: prices are looking good but i don’t think there’s going to be a big rush to get in. probably float around here for the rest of the week while gold catches up on the downside?
probably it for me today have fun everyone & sorry posting so much–interesting times.
BTW Shalom, have you bought metals or just miners today?
C’mon dollar! Is this all you’ve got?!
New HUI and Silver trader here. This has been great! I bought the break outs on silver at 50 & the HUI at 600. I hope this works!
We’ll have to see how strong the rally is (when it materializes), in order to get a better feel for the potential upside. Silver will be the tell.
If it rallies sharply, the bull/parabola/C-wave is on, but if it slows after a day or two and doesn’t cover much ground, I won’t be nearly as interested and will look for the exit.
“To get a 25% draw down because price of Silver missed the 50 mark by .20 is a bit silly.”
Except this hit after hours and then only briefly. If there hadn’t been the margin hikes the outcome could have been quite different.
DG,
Sure..me too
And if miners just keep going straight down from here I’ll get stopped out with a loss and look for my sofa at Chez Savage. 🙂
The only reason I’m not more aggressive is that I just can’t see the tide turning until jobs Friday.
The most compelling narrative is the Big Boyz flushing people out then in a final crescendo downdraft.
SB, I added to NUGT. You doing some on the jr miners, SLW?
EXK reports tomorrow.
Did we break Docs trendline?
How close are we (in price of gold)to hitting the RSI (5) oversold region?
Trendline has broken! Cycle low WILL print, at some point.
5 Day RSI oversold is getting kissed on /GC
i wouldn’t put 100% net worth into any one trade. ie. PMs
so if it screws up you’re not 100% screwed. lol
my TIP bonds are doing good today.
I think the bottom is in for Silver.. Gut feel. But it could also be wrong 🙂
catbird,
Just NUGT, no metals or individual names yet. With the low volume it takes some attention working into a position. I have to break them up in several orders and spread them around.
I will focus on gold more than silver, even though silver will get a monster snapback at some point. My only concern with silver is that bounces will be met with sellers before long as result of all the pain we’ve seen.
This is why I think gold is the safer play, but will buy it only into an oversold situation.
ILiveinaVanDownBytheRiver
i think you are talking about silver 40
I smell a very dirty bottom. :))
Jlinks,
I don’t see it. I have 5 day RSI at 53 now. Oversold is 30, right?
I would say Gary has set himself up an excellent sentiment machine right here called the Smart Money Tracker! And he gets people to pay him! 🙂
I for one am a happy to be part of it but wow, it is interesting to watch people’s emotions on this blog on days like this and on days in which it seems PMs/silver will never stop going up!
traderlady,
No, nothing with the individual names yet, just the etf.
catbird,
Friday could be the catalyst and I do feel like I might be early on today’s purchases. I KNOW I was early on the ones made the last several days. lol
Last time GLD was down 3 days in a row ahd SLV 4 days in a row was in January during the IT decline.
That happened twice in the month, and each time added another day to it. So GLD was down 4 days and SLV for 5 days in a row.
Don’t sweat too much over the specific names and vehicles traded, anything PM is going to move together if we’re right.
catbird, I like the gold 1500 strategy.
Here’s the latest from sprott on KWN:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/3_Eric_Sprott_-_Sprott_Has_More_Physical_Silver_Now_Than_Ever%21.html
We know we’ve seen the shorts jump on silver like this before. This cycle low panic selling nasty correction is exactly like Gary predicted weeks ago.
silver has hit the price range (39.60 is low of day so far) of where I’d give it high probability of a bottom. I would not like to see it go below 36.72.
Even the consistent last-place performer, SIL should work. 🙂
Gold is holding up better than I expected–it looked to me like 1490 was a possibility. Seems likely to me it will drop below 1519.
we are stabilizing…it might be enough to calm down all potential sellers….
Added some agq. Time will soon tell if it was wise or foolish.
The real pain for silver should appear in access today if we close here at 12:25
http://oi54.tinypic.com/2czzn8x.jpg
5 RSI getting oversold
Hey VanMan,
Good job! You should do quite well on those trades.
What’s your plan for today? You buying the dip–er, maybe that “canyon”–or just sticking with Old Turkey?
one last chart, sorry!
/gc 4 hour http://i54.tinypic.com/2hnrrs8.png
with my buy targets highlighted. first batch at 1500, second at 1460 if we get there. silver again i think will sit on its hands around here waiting for gold to bounce.
This dollar consolidation at 73 looks like the midpoint consolidation during a waterfall decline that started at 75.60. Break down here would take it to 70.40
stabilizing…this is consolidation we are about to get another big move.. prob later this afternoon…imho
Half of my limit order buys just triggered. That confirms that we will get a daily cycle low.
jlinks: Thanks for the chart on GC RSI. I do not have access to futures charts, but have a question: Why would the RSI reading on JC be so very different than on GLD? Some discrepancy is expected, but GLD is at 46 and GC at 32…??
this is getting too funny…silver down 5% now…almost 30% in 3 days
can someone please tell me how the d-wave can be worse
Erich,
Your kidding yourself if you think you can avoid timing errors in real time.
During normal market hours silver only rallied a bit over $49. In hindsight it’s easy to say one should have done this or done that. But if that was the case then we would have done it.
If silver had topped at $48 then one could in hindsight say we should have exited at $48. Or you could say the same thing about $47 or $46.
I have to laugh when people come on and say they are going to learn from a particular timing mistake.
Folks there is no way to learn from a mistake unless you find a working crystal ball.
The best that I have found is cycles analysis to give me some idea of when to expect a correction.
The latest rally in gold nullified my cycle tool as it ran considerably past the timing band for the cycle low. In real time gold was in real jeopardy of moving into a runaway move.
Now if someone can tell me how in real time we could tell it was not going to turn into a runaway move I’m all ears.
it still has not hit gary’s target….love emotion
agreed gary – thank you
Does this remind anyone else of May 2010? Last year at this time, there was a selloff of everything as the deflation trade became popular again. Granted, the dollar was strengthening back then, but it all seems a little too familiar.
first time in two or three days I’m seeing anything PM related on the BoW list. SLW made the top 10.
Eric H, I don’t know that I BELIEVE anything. I know that letting something run down 30% or more is not good investing. So, stops should have been set.
Aaron said “The real pain for silver should appear in access today if we close here at 12:25”
Could you explain “in access”?
silver troll…d-wave…free silver
Gold-Silver Troll, PLEASE, understand, there is no such thing as a WAVE in Silver! Gold is the driver. Silver went parabolic, now you pay for the hangover.
And Silver lower… Hard to pick that bottom 😀
I think we’ve seen the worst of it for at least several hours.
DG
I’ll try to create a GLD RSI chart. Although I see that TOS only has RSI_EMA (exponential moving average which might increase the oversold position)
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Elaine,
The problem with just arbitrarily placing stops is you will get whipsawed out of positions, especially in a sector as volatile as silver. You never would have been able to ride the move up in the first place with stops.
So again you are kidding yourself if you think stops are the answer. they would only prevent you from riding the bull.
Good reply Gary.. But the real question is.. Is this the D wave? And if so is there any room left in your basement??
Opened OTM GLD June $160 calls here. 20 bagger right there if Gary is close on his C-Wave end.
That’s enough buying today for me. Will save the rest for the swing.
gary – thanks for straigtening things out.
no one knows the future. so speculate/risk accordingly.
trade with what you know in real time.
never in hindsight.
some serious damage getting hit across the board. all i know is when people are jumping ship, i’m boarding.
..looks really really ugly right now on the 1m 15m 5 day charts…not to mention we are loosing volume on the top side of this consolidation. might be putting in some sell side here
Hi Gary,
There is a lot of rumor/chatter about the stability of SLV as a “paper” silver investment. Do you think this is reasonable way to play silver? Is there any extraordinary risk with SLV?
Thanks.
Gary: I am happy to tell you. You can’t know whether it becomes a runaway or not. But that is NOT the question. The question is about odds, risk management, expectancy, and buying tactics.
1. Do not buy into parabolic moves. Sell something
2. Add less on the way up. Sounds like some people here bought more above 350. Ouch.
3. Runaways are very rare. A number of the best traders here switched before 50 (after they saw the China buying hysteria). You can say they were all lucky guesses, but I don’t think so.
4. You said you sell “early” in runaways. That means you are willing to leave some profit potential on the table. This is not different. Silver was stretched more above its 200 DMA than ever. Leaving some profit on the table (as you suggested elsewhere) seems fine to me by switching to gold.
The few times I have felt to do something other than what you have suggested, and have not done it, I have regretted it every time (so far). I am an experienced trader and am NOT suggesting other people deviate from your plans, but deviating in a way that is superior is simply not impossible. Someone else may see or “know” something that you don’t is all.
To be honest, you are about the best I have ever seen with your approach, but there are other talents and methods that can be brought to bear.
Access trading hours are after the pit closes. Margins are settled during access before the end of the day.
With silver down 3 dollars, thats 15000 per contracts, and new lows, that should be a significant amount.
Gary… I will live and die with your cycle analysis except your climbing hobby. Now, can you please change sport for us all? 🙂
After I seeing the movie “127 Hours”, I pray that it won’t be you…
I’m trying to wait to buy Sprott’s gold etf until gold gives us a daily cycle low, but I like that the premium is only .8% now.
jlinks: Thanks!
Looks like just another day bfore RSI should enter oversold?
Folks the reality is that silver is only down 4 days. It’s not even below the 50 DMA yet. On the way up silver rallied from $40 to $50 in 8 days.
Recency bias is telling you this will never stop. But it will stop. It will stop as soon as gold puts in its cycle low. Then it will head back in the opposite direction until gold’s C-wave tops.
just bought some at 39.37 ( will see 🙂
phew
another $50 drop in agq and i will be break even for the year, fingers crossed it don’t get there
still i have learned and hope to put it into practice.
alex
i would like to complain that my exk is now only up %30 since your recomendation to purchase
lol all
Gary,
I think one think we overlooked was the performance of the miners. Their refusal to join the party was a clear warning sign.
SLV not far off from 50 DMA !!!!
That should hold and will coordinate (hopefully) with Gold reaching oversold on RSI?
Anyone??
okay, silver, you can stop now, you’ve hit the target, let’s take a breather okay? Slow it down, bottom out here and start to climb out of this hole you’ve dug. We do not need to see a sub $39 print!
The fact that the stock market also appears to be dropping into a cycle low is exacerbating things.
But ask yourself what Ben’s response will be if the market weakens.
SLV short interest is massive.
It’s now in way oversold territory. The RSI 5 is at INT cycle low basement levels.
At some point when this turns, there will be a monster short squeeze and rally.
Now gold is joining in the decline. Thanks, TK!
Stock market may have topped, certainly is heading south now. That’s probably not a good thing for the miners, they’ll have the overall markets downdraft to overcome.
I am having second thoughts about buying here now. Gold may go below 1500 if dollar goes to 73.30.
gold under 1515…
US$ Index flat… I don’t like that..
Poly,
Where do you get short interest data?
Given the various comments about a D-Wave, I continued working on the Top data. Here’s what I found:
D Wave stats:
2004: 14% fall from peak, double top, ended 6% below 200SMA
2006: 25% fall from peak, single top, tapped 200SMA
2008: 25% fall from peak, single top, ended 24% below 200SMA
As Gary has stated often, 2008 was a doozy.
Largest correction during the C-wave (after the last major consolidation zone):
2004: -10%
2006: -6%
2008: -7%
Current: (excluding current in-progress daily cycle low): -4%
Doesn’t appear that Gold is anywhere near a D-Wave, however those in leveraged silver (including me) have felt the pain of a gold-sized D-wave drop.
I’m now OUT of all gold futures positions. Back to core holdings only.
Down about 16% from peak values and keeping the vast majority of gains since January.
We have broken levels and various technical indications to the point that I will not hold lower for now. I even have a manor of evaluating the metal bull which seems to indicate the C wave is over. Clearly I have no idea at this point.
I will of course re-evaluate going forward.
OMG..im going to die
I can’t believe anybody would sell silver into this!
GLD 5 Day RSI
…it’s going to be an ugly rest of the day..
SB
i can’t believe it isn’t running out of seller
forgot the link
http://oi54.tinypic.com/28qvxqb.jpg
GLD 5 Day RSI
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Gold era,
that too. Makes one wonder about those conspiracy theories. 🙂
wow i’ve never actually gotten physically sick to my stomach like this watching the market
I’m going to re-iterate something I just said -> For certain reasons I’m not going into this would appear to be indicating the end of the C wave.
Yes, that puts me in Gary’s “contrary indicator camp”. And I certainly don’t say this to cause anybody to blow out of their positions or not follow a plan they think is correct. It’s only my two cents and if I’m wrong you can point back to this post in a week or two and laugh. I got no prob with that, but I’m making a call.
I just want to be honest with how I view this. I’m OUT.
(Please think CALMLY before you act on my comment or actions alone. Emotions are high and this is not a post to make things worse.)
Are we there yet?
The 5 day RSI is at 41 at the moment. We probably need a couple more down days before this can reach true oversold conditions that will drive a cycle bottom.
silver please get back 41 to the end of the day
jlinks: YOur setting are different from Gary’s YOu show RSI (5,70,30) on GLD and his charts in the premium site show just RSI(5). Does that explains it. He is looking for his to hit 30. Does this make sense? Anyone else’s comments?
We’re ALMOST done here.
Captain will soon announce free to walk around the cabin. Although I expect a decent line by the lavatory!
Is AGQ the next ZSL and vice versa?
Am I right Gary, that Gold at 1513 takes the runway move off the table?
There will be a great buying opportunity up ahead. But judging by the hysteria on this blog, 75% of people will miss it once again.
Gary gave us the opportunity to buy Silver long before it went parabolic and those of us that did now have a strong hand. I am still up 50% on my overall portfolio despite the recent sell off.
People really need to calm down. All this hysteria and micro analysis of every last squiggle does nobody any good.
Is this the D Wave?
I ask this because the same person can’t ask that question 10 times in one post, and have it apply. That would be too easy, and the Bull is smarter than that. I think we are only up to 5 or 6 under my interpretation of the rule.
Poly, when you say “almost done” do you also mean a couple more days down?
DG
The 70,30 is just the way TOS reports the oversold/overbought signals
lol this is getting ridiculous.. we should just go to 0 and get it over with.
Poly,
You are too funny:) We need some humor to keep us going at this stage.
Poly, you crack me up!
Gary,
Although a possibility, I doubt you’re going to get two more down days, not if you’re cycle counts are correct and history is any guide. This drop before a c-wave top run has more than satisfied all requirements now.
I’m not adding anymore until a swing either way.
@#$#%^%!!!
Silver broke 39, it’s now at 38.98. This is a route, full on panic!
Remember me saying we needed to see panic day in gold before this could bottom. We’re getting it today and if the sentiment on the blog is any indication we are getting pretty close to a bottom.
The 10 day RSI for the HUI and silver are now at deep oversold levels. Once gold reaches short term oversold levels also we will be set up for the next, and should be last, leg up of this C-wave.
XAU kissed the 200 MA, and SLV about 20 cents away from it’s 50 MA.
Gold RSI 5 is at the moment with gold at 1508 at 38. Its moves about 2 points every dollar gold goes up or down. That would mean the rsi 30 area is reached with Gold at around 1504ish$
jlinks: that’s not what I meant. If you look at your chart the upper left hand corner above the RSI graph shows exactly: RSI_EMA (5,70,30,CLOSE)
Gary’s and mine just shows:
RSI(5)
This may just be a difference about how TOS shows it, but his and my values agree and yours doesn’t…?. I show about 41 like he does (well, 39 now)
http://oi55.tinypic.com/2vht2ti.jpg
all RSI in TOS
Decided to stick to my plan and bought at 1509 against all my emotions. Done for now.
I just purchased May AGQ 230 calls. Wish me luck.
please tell me the drop is over….
Gary,
You’re still in Oregon, right? Hope you’ve managed to get in some climbing. Get out there today and enjoy!
You still heading back to Vegas tomorrow?
goldera,
The drop is over.
Astrella,
Yes gold would have to have held yesterdays low for the runaway move to remain intact. this is a full on daily cycle low. Once it’s finished we will have a new cycle count and the final run should be on.
Revised Pain Scale:
http://tinyurl[dot]com/yboung2
I’d say were at about 10 right now 😉
Thanks Gary. I am not at a loss yet
BUT getting real close. I would appreciate a stop to this nonsense
http://1.bp.blogspot.com/-BFDmHxBj_xU/TcF2hVi5nfI/AAAAAAAAAY0/E56KmVXa2Y0/s1600/snapshot-663.png
trader Dan from JSMINESET…please note his comments on margin hikes and bite me if you bashed on my conspiracy comments !
Kinda screwed here…..
Yes still in OR. one more day of climbing, leaving in a few minutes and will be back home tomorrow afternoon.
Action and reaction folks. The silver shorts are sure piling on, but they will need to cover at some point in the future.
My sense is that day 1 (monday) of the decline caught everyone by surprise. On day 2 everyone wanted to show their emotional fortitude and were determined to not get shaken from the bull. Day 3 (today) however, the pain is just getting too much to tolerate, so everyone’s piling into the lifeboats. After this, nothing but strong hands will be left. If you could withstand -18%, -12%, -12% for three consecutive days…well you’re probably not going anywhere!
Luck WES.
I purchase SLV $40 WEEKLY’S 🙂
good luck Wes!
You like those AGQ calls, eh? The wide spreads give me the heebee jeebies (that’s a technical term) so I’ll probably stick with GLD and SLV calls.
You’ll have fun getting out of them when AGQ is at 500!
DG,
That 70, 30 has no bearing onthe RSI value. Its just the horizontal lines at the 70 and 30 levels.
If you are using stock charts, Close is the default as well. Intraday, its the same as the last value.
So it may just be the timing of the chart and/or the delayed nature of quotes.
Poly,
I bet you know how to walk away from the blackjack tables with full pockets, no?
Guys: You’ll laugh but I am quite serious. There is a certain feeling I get in the pit of my stomach when I am on the wrong side and things are going against me. It has never failed (to be fair I am not caught often so it’s rare, but still 100% accurate.) I just got it. If this isn’t the bottom we are VERY close. You can post gratitude to my lower intestine if you like (I’ll pass it on…)
slv 37.2 50% retracement
Safe and comfortable travels tomorrow, Gary. Have fun out there today.
I put on some cheap, in my mind, put protection against gold..It will cost me 3.5% of any upward move, but me losses are defined…I don’t usually buy put protection, but I noticed some strange things….so another lesson I learned..when I sense something off, but I don’t want to sell, buy puts to define risk.
thanks pima that is warm
YesLet’s. Thanks.Duh, that makes sense. But I have real-time quotes as does jlinks…? Oh well, I’ll go with Gary’s numbers (and mine). Thanks for posting.
Ok I finally bought a little more gold here.
Look at it this way. Who is looking at silver after a drop from almost 50 to just over 39 and saying, that’s it, NOW I’ll sell. (Sure, there are some…but those people are going to get an education.)
Smart money isn’t selling right here.
DG,
You’re right. If anybody has any dry powder and wanted to commit it, now would be the time, IMO.
DG,
So this…er…feeling that you are on the wrong side of the market–now that you have this feeling, does it mean that you ARE on the wrong side? Or that you have been on the wrong side but the market is about to change direction and put you on the right side of the trade again?
I know Gary said trendlines don’t mean anything in these moves, but…. Both gold and silver backtesting longterm trendlines now.
[IMG]http://i52.tinypic.com/v8hr43.png[/IMG]
[IMG]http://i55.tinypic.com/2u3w8yu.png[/IMG]
Whoever suggested tinypics.com thanks! Very easy to use.
Gary’s cycle analysis has been correct so far with some minor variations so I don’t see why it would not be right again, unless.. unless I was Hitler in a past life..?
Gary: I hope you know that i do not mean to be argumentative. I have stated often how much I have appreciated and learned from your work. but from my perspective, you do have a bit of blinders on. There are other world-class traders (I am sure the hell not one of them) who use different tools that can be blended with yours, to advantage, I believe. For anyone not experienced, do NOT try this at home, but other valid tactics exist.
Have a safe trip home.
Just bought some UGL. But I’m already nervous about it. My account is down a near record amount for one day today, and that’s after two or three days in a row of big drawdowns. bleh…
Miners getting pressured by the market and by the metals, still holding up fairly well given what we are seeing
jlinks
Your chart is for the futures contract. Gary calculates it on the EOD price in Stockcharts.
Gold now dropping faster than silver… good sign of nearby bottom. Oh, and Gold and SLW currently down identical %. Good enough for me, even if I’m looking at big negative numbers on my SLW calls.
PC: The latter! I never get the feeling watching other people suffer (not enough compassion I suppose). When I am losing money at a certain point my stomach tries to jumps up through my throat and attempts to strangle my brain. That’s a top-notch buy signal. I actually feel much better now having experienced that and am ready to add DGP as soon as the RSI gets near or tags 30.
Well, that was an emotional buy… In the future, this late in an IT cycle, I will wait for a swing low. I am concerned that my sheer stubbornness will keep me long PM’s when it becomes obvious that something is very wrong here. We are not there yet, but there are definitely warning signs.
Gold doesn’t have to touch 1481 lower BB to print a low, does it?
Allright, I’m in. After selling almost everything on April 12th and watching from the sidelines, the last sacrificial lamb has just stepped back in. I’m just establishing core positions in DGP, NUGT and AGQ, but now the final decline can begin. See you guys on the other side!
RSI, 5 on TOS is currently reading 38.5. It’s not dark yet, but it’s getting there…
Hand shaking but put in the rest of dry powder in HZU. Now I really have to step away for a bit.
Today looks like the panic day Gary was just telling us about
I just bought silver and am close to throwing up. Excuse me.
I do feel like I am so exposed and could be violated any moment after all the buying.
I just want to sell everything and flee town.
PST,
CONGRATS, very nice.
You and WES did it perfectly.
Thanks, DG.
18% in 3 days is TOO much…long and waiting
unkle gary, can you hold my hand please
Another lamb to the slaughter here. Just started scaling into DGP with 1/4 of my cash. Get ready for 14xx. 😉
Thanks poly but let’s not do any victory laps yet. We’ll know more by monday, so let’s all keep our fingers crossed.
Besides, the market always falls after I buy (murphy’s law), so to steal your airplane analogy:
“we are beginning our final descent into our destination, so please fasten your seatbeats and put your seats in their upright positions. This could get bumpy.”
$GC_F Gold just printed 1506$ with 37,3 RSI let us see if we can have that RSI@30 today. And the $spy does not look finished yet. Looks more like a sell off in the pm.
In past parabolic crashes, we usually get a dead cat bounce once we get a little under the 50dmva so another dollar or down or so and we should see a reversal for a few days atleast /jmo
CMT,
Welcome to the slaughterhouse!
Luckily it’s 1am here in Shanghai, so I have no compunctions about drinking while I buy these gold calls. I feel for you guys who have to wait until 5.
I would have to say silver please fasten the seatbelt but not me.
any options ideas for slv – looking for both ITM and OTM
Clarkatroid – thanks, man. I just blew my Diet Coke through my nose.
PST,
I’m more than confident your patience and timing will be greatly rewarded, no matter how bumpy the landing is.
The goal is to make out of this slaughterhouse alive. If you can do that, you can be free.
No joke, I just puked…rushed to the toilet it was ugly. Then I promptly bought more GLD calls.
I think I need to leave to protect my positions from myself. I will see you guys in an hour.
Felix,
I have the lower BB around 1486 today. Use 1.9 instead of 2 for the band settings. Still, that’s another big drop from here, let’s hope we’re done!
I just put the last of my dry powder to work. I’m now at 100%. (If things get worse, I’ll either add leverage or just go outside and bang a hammer against my thumb repeatedly for a nice change of pace.)
I’m turning off the computer now before I change my mind.
Thanks, Gary, for giving me the confidence to do this.
eric, you are funny. (but… is it true, did you puke? And THEN bought MORE calls??)
Damn, my broker making a killing off me today, glad somebody is, it’s not me.
Well hopefully we’ll all be rewarded in the end.
BTW, perfect would have been selling AGQ at $375 and not $275, but it was nice being emotionally uninvested on the way down.
agree poly.
PST you really are PST(Pacific Standard Time) . Good timing!
I am curled up in the fetal position, eyes closed, whispering to myself, “wait for the swing low, wait for the swing low”.
oh man, get a hold yourselves guys, this was risk money right?!
it’s not over until we see that it’s over.
gold not registering a BUY yet in my opinion..
since it did not adhere to 1515, then unfortunately 1460 is in the cards for downside.
help yourselves if you’re leveraged.
anyways what goes down does go up. this is temporary.
poly : my broker did called me 🙁
The HUI is right at the trendline created by the Jan and March lows.
If you believe the C wave isn’t over, now is as good a time to buy as ever.
Poly – Thank you for the correction – do we have to hit near 1486 to print this low?
Just deployed the rest of my dry powder into AGQ and DITM July SLV Calls… I feel like I want to throw up… Best of luck to everyone and I’ll see you on the other side!
Uh oh. When it rains it pours. Not only is my account down 20% in the past few days, but THERE’S NO SHERRY VINEGAR IN THE PANTRY#@#$@
I have to eat my lentils with f#@%@ing HEB brand red wine vinegar. Where’s my gun?
Jlinks,
I believe You want the “RSIWilder” study on ToS , not “RSI_EMA”.
PST, I just checked my history: sold half my AGQ at 364.99 (and a quarter in the 255 area), so not too bad. Maybe that’s why I have been able to keep my cool the last few days.
guys is there any good method to mark down the pain today so we could remember it and remind us the lesson we take?
or just like gary said “I have to laugh when people come on and say they are going to learn from a particular timing mistake.”
So DG..
When the time comes what have you decided? AGQ or DGP??? Trying to decide myself and wondering whether to cancel a 230.00 limit order.
I’m all in…
Will add some leverage once we get the swing low.
Pima, totally true. BTW, I’m up in the Phoenix area, your Wildcats are on fire in BBall. I’m a sun devil and scared to death of Shawn Miller.
…everyone ready for another down leg…..cause it’s coming again ….it’s like a car accident in slow mo….ouch ouch ouch ouch ouch ouch…
I will admit I am a bit anxious…
Who am I kidding
{Nervous}
Well played CMT. You got as close to perfect as you could have with that one. I screwed the pooch on my exit of AGQ, but it felt right at the time.
I still think that we could have some downside here, so our re-entry may not be ideal. I’ve been wanting some exposure though in case we do put in a bottom shortly. I don’t mind deploying the remaining 75% once this thing bounces.
With all these comments about throwing up, I see a need for a new technical indicator, henceforth to be known as the NIX:
The Nausea Indicator. (Sort of like the VIX, but it’s happening somewhere in your lower gastrointestinal tract.)
Looks to me like we are topping out on the NIX and a bottom is imminent.
Guys if I may make a suggestion…having been stuck and burned by these parabolic moves…Don’t buy just because something has been ripped to the downside. Stops won’t work, as the volatility will kill you. If you want to buy for whatever your good reasons,whatever they are, have the concept that a) drawdowns won’t be sold into, even if the thing drops more(a turkey type play) B) Use derivatives to hedge losses…
I have seen plenty of traders get destroyed by these things…great traders too…
Remember even if this turns into a C-wave surge, we are running out of time…either we surge and then tank, or b) we tank now….in both cases we tank..
Hindsight is 20 to 20, behavioral finance is a great topic btw…studies how shown that we become risk-seekers when we lose money, but only become risk adverse when we gain…
Anyways a friendly opinion from someone that got burnt from one of these before…
Good Hunting! 🙂
If you bought at the last cycle low in March, you are still comfortably above water. That was a similarly brutal correction in the miners as today’s.
Now if you added to you position since then, well…
Gold Era: Keep a journal! Write it down. Of course you can learn from timing mistakes! You can’t learn to time perfectly, but did you do something wrong here? If so what? Did you get greedy? Did you ignore the risk of buying into a parabola? It’s not a coincidence that the most of the best traders here sold at least something. How did they know? From having blown this in the past and not wanting to do it again! The hard part is discriminating what was an error and what simply was correct but didn’t work. Time and patience and study and self-honesty and diligence.
wmp: Probably AGQ. The bounce in AGQ will be amazing and as SB said, if the rally looks weak after a few days, it might be good to switch to gold. It depends a little on my level of confidence that the bottom is in. I suggest you split it down the middle: DGP and AGQ.
looks like we are going down to 37.57 on slv on this next little leg down…
I hope I’m not thinking to far ahead, but for those who still have a clean pair or two of shorts to wear today, think of this as the D wave, hopefully a month or two from now.
If you are looking to buy puts, look at how different strikes are working today and over the past few days. Hopefully your trading software allows you to see option prices day by day over the past few days and week at the various strikes.
Let’s hang on tight here folks, we knew it was going to be a rough ride UP and DOWN! I for one am reminded agin what happens if you sell even a day or two late! The last few days are going to stick in my head for the last ending move in PMs C wave.
PST, not too well played. I hung onto 1/4 of my AGQ – which is still above where i bought it, but the retreat from 375 has made the gains on it UNspectacular.
on the Drudge, “Dollar hits 3 year low” so when does gold go up?
Miners resisting the drawn down
Good sign the bottoming is taking place
James
An hour ago I returned from the gym to find I got a great fill on my DGP limit order.
Haven’t done anything else. Looks like things might be calming down. If we drop into the close, I’ll probably buy another slug at 3:59 ET.
Thanks DG..good suggestion. Keep us posted on what you do as well?
Now that Gary’s basement is filled up, a few of you can join me in my van down by the river. I’d got shag carpeting so you will sleep like a baby. The 20 lb rats have NOT been able to chew through the rusted out doors yet so that’s a good thing.
I went long the day after Easter when silver looked to be breaking 50. I leveraged up AGQ then. Bad call?
couple of juniors I follow in the green … rio.v and goz.to , an indication of things to come ?
DG .. i dont recall Gary buying anything on this parabolic move, i believe he even unloaded some into the strength. hindsight being what it is, its easy to poke holes at his system now, but, i think he has done ok until now, and we’ll see how this unfolds.
I personally added some AGQ at these levels, as I mostly missed the entire AGQ ride up, and back down I suppose.
My worry is that many traders are buying into the dead cat bounce…which we are due for btw…Everybody runs in thinking the correction is over…i guess this will turn into a C-wave advance if the bounce is strong enough to blast through recent highs. But I don’t look at the final surge as a great profit event, rather a sucker’s rally that could start and stop at any time….
We are due for a decent bounce..but this would be, IMHO, a last stop for exits….after that the real horror begins…of course if the bounce is small, getting stuck in a d-wave is likely.
So we have the Nausea Indicator and the DG Colon Cleanse indicator in our tool belt now!
Always good to add to the arsenal!
CMT,
A gain is a gain, or at least not a loss. Besides you probably had some nice gains on your sale at $365. Regardless, none of us will play this perfectly and we’ll all have our “what if’s” when this is finished.
Matthew,
Do you have an agenda on this board? You’re certainly entitled to your opinion, but your scaremongering is probably freaking alot of people out. Again, alternate views are welcome, but we get it…you think we’re going down!
AUY just turning green and PMs bouncing back … close to a bottom IMO. Add to that the USD starting to pull back.
wmp: I pretty much always post my significant trades here. It’s encouraging to see the best traders here stepping in now. I feel left out, but my game revolves around timing entry points and I don’t quite see it yet—but we are very close. Hang in there everybody!
Can i make a reservation for a spot in the van? I did the same thing as you. No worries though. We will make it all back plus some.
SB,
Do you still hold NUGT, or sold already?
I rotated some of my DGP into AGQ and bought a few SLV JLY 40 calls, up to 150% in my trading account.
Now I feel like George Castanza when he swam in the ocean. Time to switch off the monitor for a week…
Keys that’s what cycles are for. The stop will be set once we bounce out of the daily cycle low. If it rolls over and we break that then we exit positions and avoid the d-wave.
With all the trolls appearing, I’d like to think a bottom is near.
DG,
I think your right about waiting on an entry point. I would have waited for the swing or the RSI reading, but I didn’t even have a core position anymore. I’ll jump in more aggressively once we get further confirmation of a bottom. I’ll probably be following your lead, so please do post as usual.
Can someone explain something to me?
Silver is down 8% today, but ZSL is only up 10.5%…Why?
DG, Me, too, nibbled at GDXJ,and SLW
Peter: Gary is 140% long, I believe, and did not lighten up. It’s more that people do not need to follow exactly what he does tactically (he has said having kids, debt, etc of course changes risk levels, but I mean tactics). I am not poking holes in what he does, or at least don’t intend to. It’s just that there are things other than what he uses that are of value, and he dismisses them way too easily, IMO. I and others are happy about selling chunks of AGQ above 360. Gary would say we were all lucky. Baloney!
pst.. sorry just crapping my pants/pissed like everyone else on here and By my looks it isn’t done yet…
NG is green with nice buying volume!
Matthew,
No need to apologize and again you’re entitled to your opinion. I’m sorry for calling you out, it just looked like you were trolling. I’m not on here everyday, so I don’t know who’s a regular and who isn’t.
My bad….good luck
dg
this is amusing
when you were selling at just under silver 50 i was trying to sell before they closed the plane doors and failed
Got to the other end and it was too late
I would be buying now if I had any dry powder but for me if this does not recover i need to work out my game plan for getting out
do we have any ideas what it will look like if what we get is just a dead cat bounce
1/ up on weak volume
2/ selling at end of day
3/ miners performing early again or not joining the party
thoughts appreciated good luck all with your gut wrenching trades
meant miners underperforming ….
AG JUST WENT GREEN!!!!!!!!!!!!
WOOOO HOOOO!!!! I’m up $20 on that position for the day~!
HUI about to go GREEN!
S&P down big. Gold and Silver down big.
Keys,
Thank you for your input.
Always look at the different possible scenarios.
I will be ready if this is a dead-cat bounce.
James
I see sunshine far in the distance……..and a rainbow.
There has been an algorithm that has been shorting SLV 10EMA on the 15 minute since Monday, straight. We may get our first break of that line and force this trader to desist and cover.
How big are the trades though?
Yea Poly, but a mean looking Leprechaun is hiding behind the pot of gold with a sledge hammer ready to bash our heads in! 🙂
NUGT is green,it must be SB buying!!!
Fatboy: That’ll teach you to take a flight that closes its doors at 3:50 p.m.!
All three things you mentioned are tells I think. Everything will rally violently for day or two, then calm down. Then, do we get weakness or are pullbacks bought? Does volume peter out? Etc. This agrees with what SB said earlier, and I am sure we will both post our read of the bounce/rally. I want to see SLW up 4 points the first day and then NOT let people in easily after that. If there are easy places to buy you don’t want it!
Jay,
I never said it would be easy getting there, but I see the rainbow 🙂
Is DG’s gut the catalyst????
Silver is so oversold that we could finish the day unchanged..Remember though that Gary said that we could get a rally today ( I wish) but still selloff until Friday/Monday
Miners fighting back!
Here’s me
DG .. he did drop 15% of his AGQ along the way … probably very close to the top. As SLV got close to 50$ , certainly he should have sold more, but, this thing could easily have moved from 50$ to 60$. Everyone expected a pullback at SLV 43$ which never materialized. I have seen him get critcized for selling to quick and seen him get criticized for selling to late …
If his cycles are accurate, and I think there is no doubt about the validity of his work, this will be a blip by end of next week.
it was interesting to see you waver a little today tho … that gave me the confidence to buy some AGQ .. so, thanks to your bowels for that.
!!EXTRA EXTRA READ ALL ABOUT IT!!
SENTIMENT TURNS ON A DIME.
Keep your focus kids.
Just topped off my wife’s IRA with a DGP purchase (don’t tell her!)
It’s 12:50 central time, and I’m still in my pajama pants. Been in front of the computer all morning. I think I need to go do something else.
Traderlady: I’m tgellin ya. It had never been wrong in 35 years of trading. Amazing isn’t it? Sometimes there’s a bounce and a marginal new low, but it basically calls the low. Missed it by ten minute today
My margin is back on. What came out of AGQ went into DGP. Still have a sizable AGQ stake.
http://www.wavetimes.com/silver-outlook-elliott-wave-analysis/ wonder what people think of this and silver bottoming lower than current levels? New to this, just starting to learn about the wave patterns.
Ask Gary, he’s a big fan of EW. 😉
And as a nod to DG’s colon, I grabbed some GLD OTM’s.
If the miners hold tough we may get the veronica/vuvvy buy signal. Remember the USERX/Pit divergence. Veronica—you out there?
Reversal candlestick looking good
GDX green??!!
Nervousness abating…
Funny Jayhawk
Pima please tell we have BOW
Nibbled on SLV-Jul 40s at ~39.38
Poly-
The new and improved HUI trend line looking good.
http://screencast.com/t/NzbjDSZt
I think one more little leg on GLD (Into the close? Tomorrow?) will do it.
Strange. XG didn’t fall these days like the other gold miners. It’s 6.8% up today.
Anybody knows why ?
Taking a break from sunshine to fully load up for next leg higher. Turkey looks like it’s detox’d enough already.
makutaku,
XG announced findings results, you can check it on Yahoo! Finance or any other financial site.
I’m back…still reading through the comments, but the behavior here at the first resistances should (1516 and 39.70) should give us a clue whether further significant downside is still left. They should drift down slowly and not go much below the lows. Better yet, go up hard from above the lows.
If hui/xau close green will buy in to play the counter move…
I would like to see some more PM related stuff on the BoW page! So far SLW is the only etf or miner on the list.
Totally off topic,
Any Canucks here live in the Nanaimo area?
Dollar appears to be coiling.
SLW green! Sweeeeeeeeeeeeeeet…
MrMiyagi, nice you on the island? I’m in Vancouver.
Fubsy,
Good call on possible dollar coil. That would fit in well with a fake out move up followed by the crash into the three year low.
Nice eye…..
On the bullet train traveling across the countryside and sipping my margarita.
Ah!
I must say some of you guys are very impressive with your patience. I always think the bull is going to take off on me.
Ryan,
Not yet, we’re in YT looking for a move to (much) warmer areas outside giant Vancity.
It looks like the day of January low. Miners are paining hammers. Too bad I am out of dry powder.
What to do with just a few grains of dry powder ?!
What about convert GDXJ to NUGT ?
Haggerty-
Unfortunately, when out of the market there is always that little bird on your shoulder whispering that you will miss the move— And equally unfortunate when you are invested there is that same bird whispering uyou are going to get creamed. As positions move greatly in our favor we quit listening to the bird and hear our own voice reminding us how great our decision was— Then Boom– Blindsided :((
Of course, this is just me and my experiences over time.
either silver’s got more to fall or i miraculously got a PSLV fill at the absolute low of the decline, to the penny (16.75).
unfortunately for the longs this is not in accordance with the curse the great god cthulhu has placed upon me SO silver’s got more to fall. waiting for a gap down + immediate fill to put a bow on it.
would like to see /gc eat the stops at 1492 first, too.
Green shoots popping up across my positions!!!
In perspective
last week rise from 1492 – 1565 = 73 pt +
1577 – 1505 = – 72 pt so far
nothing gain, nothing lost
if you didn’t make a move last week
when is it safe to buy? when you have a bit of margin, imho buy zone are at 1460 – 1515
When will we get confirmation that this isn’t a false move up?
Traderlady, unfortunately there is non, but a swing. With today’s drop, that will have to wait until Friday, at best.
Thx Poly, I look for higher lows but not used to volatile metals.
The behavior at the first resistances I mentioned is encouraging.
To get a swing low tomorrow. Gold would have to trace above 1543.50 for that. If we do get that, its almost $30 from here.
What Gary might say in tonights report is that tomorrow, if we get a slightly lower low and a low range day, it would be much easier to get a swing low on Friday, and it would be a number lower than 1543. But that does mean dealing with a lot more anxiety tomorrow. Personally, I would like to see it just run up.
Will be looking closely at the relative performance between miners and metals.
I expect AGQ to perform well against the miners. But things can change.
Just MHO here, but I would certainly NOT go long in metals now: see the Gold rectangle of Gary revisited here:
http://screencast.com/t/qrfgteeS
If DG is good with his wife’s account I know I am good. 🙂
Just hanging on tight.
it’s that it for a market correction?
there’s got to be more in store
Saw some green on my computer screen and figured my display was acting up. Rebooted and it’s still there!
Jayhawk- LOL at the Jim Carey dance.
I finished my purchasing of GLD calls at gold 1509-ish. It was not easy and I had a gnarly pit in my stomach. I’m done for this cycle low and hope that was the worst of it. Right now I have doubts about the rest of the C-wave too. Hopefully we at least get a strong bounce over the next few weeks to offer a decent exit if so.
As painful as this draw down was/is, I feel like I’m walking into an ER with only a bad sun burn compared to the bear mauling victims that are the silver holders this week. I feel for you (I was only in gold/cash as of Friday’s close).
oa92000,
Sorry, didn’t see your question earlier….just returned.
Yes, I have my NUGT still. I’m actually up just hair on my entire stake as I type.
I’m not too concerned where things settle today and will stay with it even if we see additional weakness tomorrow morning.
Good to see miners starting to resist the decline for a change.
I am nibbling at DGP here. I like the action of the miners.
Careful kids, this could just be a bounce.
I am keeping my long at 39.37
Fubsy/Greg,
Saw that coil in /DX also but was thinking initial break DOWN to 3-yr low and then more durable break UP. Thoughts??
“Careful kids, this could just be a bounce.”
Always a chance! Also often we come back to test the lows for confirmation too.
But by god you have to believe we came close to THE cycle low. That should give some comfort.
Hi everyone!
I want to convert my SIL positions into AGQ. Do you think it is good time to do it or it’s better to wait at least till tomorrow? Do you think we’ve just seen the bottom (gold still neutral in 5 RSI)?
Is this, in your opinion good switch?
Thanks for advice!
FOR THE RECORD: The DG gut indicator has done it again. It’s the first time during this entire mess I have felt that twinge. Please send gifts and flowers to: DG’s gut c/o his arms, Mountain View, CA
(Actually to be fair, there is sometimes another marginal dip but I bet the low on the miners holds)
Poly,
I am pessimist by nature, this way I’m never disappointed.
abc: In my opinion – and I think it’s also Gary’s opinion – miners are a better deal at this point, better risk and potential reward.
I’m thinking if it plays into our C-wave finale, it would have to break up either going into or following the jobs report, then roll over into the 3 year low.
If this happens, it will be interesting to see how Gold reponds.
F
woohoo! GLD down over 1 percent, but GDXJ UP 1/2 percent, AXU UP nearly 3 percent, NG UP nearly 2 percent!
Hopefully miners are leading the way now!
Same thing with SIL and SLV. SLV down over 4 1/2 percent! SIL UP 1/3 percent.
This comment has been removed by the author.
DG,
Can you come down and meet with us on May 22th for dinner with Gary? Mountain View is not too far from Monrovia CA… just 3hrs drive.
The current weakness in SLV is most likely a function of folks being pressured by ever rising margin requirements. All this means is that as soon as they are forced out…we bounce.
If this is the daily cycle bottom, I would like to see a couple of days of consolidation on SLV between 38-39.25, then one final tail down to < 37.90. A little consolidation down here would be healthy to bulid a base to move higher, rather then just rocketing higher. That’s where my buy order will be, 37.89. Consolidate the rest of today and Thursday, one final dip down on Friday, then the C wave finale can begin! Just my 20 cents (inflation)
Gary,
Last week you posted a gold trade trigger for people who were not yet in the market. It seems like that scenario may work out this week. It’s either that or another $4 lower. Could you please address this in tonight’s post. Thanks!
Yeslet’s – Is this the behavior your were looking for when you posted at 2:10?
Hi all.
Silver looks like it tagged it’s 50 DMA. Sold my AGQ puts from Friday moments ago for a 137 pt gain!
Bought a small, probing position in AG as it tagged a possible trendline.
Charts at
http://speculativemeasures.wordpress.com
Best of luck everyone
I wanna believe we hit bottom today, but so far the bounce in silver looks weak. Gold looks a little better.
Less: I was really looking at that. Unfortunately I am away then and have a commitment that weekend. Rats! How about a San Francisco Bay Area gathering? Maybe Gary’ll get up here some day.
@makutaku
I’ve already own SLW and AG, but I have no silver ETF. When silver backs to $50, it would give ~50% no AGQ. I doubt SIL will move that violent…
However there are roumours that there might be 2 prices: spot and physical one. In that scenario any ETF won’t be safe…
Miyagi,
You live on Vancouver Island? Great place, I almost moved there a few years ago. Beautiful there. (but very gray, dark, rainy, and cold for 6 months out of the year.)
pimaCanyon,
We don’t live in BC, we’re uh…a tiny bit further north. We did live in Victoria for a short while though and now lookng for a permanent move southwards.
Less – Mt. View is 388 miles from Monrovia.
388/3 = 129 mph
DG probably not getting his Ferrari until the C wave is over…
I’m still prepared for the possibility of more weakness, but the good news is that we now see dips can be bought.
I will look to add into pullbacks over the next day or two, if they present.
I feel as low as as slugs butthole
And we’ve probably put in a bottom with miners, even if we don’t rocket straight from here.
All we need now is for the metals to bottom, then look out!
This is the first time in recent memory the silver miners have outperformed.
SB, and others,
I hope we are nearly over.
Have not even dared to open my account….been consoling myself by reading Gary’s reports and forum here.
Well, I was open to adding more into the close today but it looks like we will end on a strong note.
No problem…I’m happy that I could pick up a slug of DGP earlier at my limit order price.
With today’s DGP buy I’m now 122% leveraged…less than Gary, but I wanted to leave myself some breathing room because there’s plenty of time between now and Friday–i.e., plenty of time for Da Big Boyz to engineer a quick dollar rally and one last PM plunge.
If it happens I’ll top off to 140% leveraged. If not, I have PUH-LENTY of shares already.
Less Is More–
I might be available for the Monrovia get together on the 22nd!
What are the details (if you know already?)
I’m quite confident the worst of it passed this morning. We’ll see.
Shalom,
Hey, you’re the man with the printing press…who are we to argue? ; )
In fact, with miners in particular I would say it’s safe to buy dips which is also my plan.
🙂
DG,
If I got this right, you believe we are near a daily cycle bottom. That miners have probably hit their low today but metals may dip a little lower?
Thanks,
Also, Have you bought all you are going to or still waiting?
Shalom: “And we’ve probably put in a bottom with miners, even if we don’t rocket straight from here.”
That’s what I’m fishing for. Recall the miners were first to diverge from PM’s. They were weak 10 days or so ahead of this correction. I suspect we have not seen the bottom of PM’s just yet, however not before a bounce IMHO.
I expect Silver to tag $30 before it’s all over.
Just catching up on the blog AGAIN…482!!Good stuff.
Blogger Shalom Bernanke said…
Sell parabolas, but especially when in double-etfs.
AB—SO—LUUU—T—LY!!
Fatboy said…”alex
i would like to complain that my exk is now only up %30 since your recomendation to purchase
ALEX says…”Talk to me next week” 😉
Felix,
Yes, that immediate initial behavior was encouraging, if not marvelous, but then we don’t expect it to be that easy right?
Silver looks are like its want another test. Thats ok, as long as its orderly and not panicky.
GLD’s RSI still a good bit from target, so I guess we still need another big down day in gold. That would kill silver. AGQ already down 33 1/3% in 3 days. Hammers on the miners looks good, but if GLD has another big down day, I bet we retest lows.
So Gary sensei is out rock climbing? Amazing nerves of steel, or he has me totally fooled and he’s actually a nut in a rubber room in Bellevue Hospital.
Hmmmmm playing with channels on the longer term move on the /SI chart from last summer…
This would be sweet if it was support
I am fully in and this is a bottom I.M.O.
Gold was down $20+ and Silver down $2q+ and Miners were doing reversals.
AG EXK and GPL bought when I got home and saw that crazy divergence
But Alex, isn’t the litmus test GLD’s RSI?
spec measures- silver to 30! 150 ish on AGQ!! this board would go more insane than the past couple of days.
Imagine what these miners are capable of when silver turns higher.
Greggy: That’s exactly right. I agree completely with SB on both metals and miners (miners low is in; metals mat drift down a bit). I have only nibbled and still have powder, but am there in good size. If we take off I am happy to buy on the way up once it seems the bottom is truly in. Today’s action was very constructive, though.
Alex,
did you buy into silver (AGQ or SLV)?
FYI using Gary’s BB settings for GLD, the lower BB is at 144.90, another 1.9% down to go. Today’s drop was 1.5%, so to get to the lower BB we need another big red candle in GLD. I’m skeptical but I’m still learning.
Alex/others, what do you think of the volume coming in on UUP?
The PMs have ignored the dollar in the past and I’m not sure how ndicative UUP is but the volume has been really high over the last week or so…
Thanks
Shall we expect a rebound in silver tomorrow? I’m sure the close will fall below the bollinger band after market closes.
Last time we saw a big up day in miners was about a week ago, and it was a one day wonder.
DG,
While the action in some miners gives some hope, I wouldn’t call this day constructive considering that AGQ seems to be closing near the lows of the day.
Nevertheless, I hope you are right.
UUP has a hollow red candle on heavy volume. Looks like past bottoms to me.
USO also crashed the BB today.
Silly question, what is the black candlestick in stockchart.com’s displays?
I bought AGQ when it was about 8% down this morning. I just sold it again at -10.5%. I don’t like doing this sort of thing; it’s nonsense trading, but I cannot convince myself yet that it’s good to jump back in here. I am all cash now, after trading out of DGP this morning.
My physical silver is untouched and remains so for the time being.
speculativeM,
If silver does drop to 30, this would pretty much be the D wave as that would take it very close to a 50 percent retracement of this entire C wave (from the 2008 low).
alex
just trying to put things in perspective for those unforntunates who are hurting.
basic things I have learnt from the blog over 2 years PM’s on the blog,
# Pay NO attention to unverified statements e.g. we are all doomed.
1/ don’t panic and sell into weakness
2/ have or develop an exit strategy incorporating gary’s
3/ don’t take on uncomfortable leverage
4/ there are a lot of smart cookies out there and I am not one of them
5/ keep a weather eye on the experienced traders here
LOL team SMT
MrMiyagi,
That would be a close thats lower than the open but higher than previous day’s close.
DG,
Playing devil’s advocate here… What did your gut indicator tell you back in the early 80’s when you blew up your 600K account? Was is not working then or is that the one time it failed?
Bill
Yes , for the metals
Basil
I am thinking that like the past, miners will LEAD the metals. They lead them down, now I am looking for reversals and up. If its light volume up…it would be possible that the bottom gets retested and Metals bottom in a day or two.
Thanks YLD.
Basil—Just my take on it: This seems like the reverse of what happened at the top. At the top, gold and silver went higher but the miners lagged. That’s in part why I sold 1/2 my AGQ. Now silver is lower and the miners are arguing with the metal again. I have seen this p[pattern in oil as well (XLE and OIH refusing to drop even when USO does, for example). The companies tend to be a tell for the commodity, IMO. I think silver may even drop a bit more but if SIL and GDX hold up that’ll be my cue to put in the rest of my funds. I’d love to see silver down modestly tomorrow and the miners up for the day.
Hey Alex: You read and posted my post to Basil before I hit “publish.” You’re an anticipatory plagiarist!
Many of the hammers turned into doji’s – meaning, indecision, neither here nor there. The $HUI did put in a key low it seems though. Let’s hope so.
If GLD busts down further, I think Gary’s right that SLV will fall further, but that GDX will just retest the lows – GDX started tipping over way before GLD/SLV did, so I expect them to bottom early as well.
Right now everythings on a sell signal in my book. It looks to me that the dollar bounce could last weeks not days. But I don’t predict, I just follow.
Am just learning about cycles, and hopefully you all and Gary can make me a better trader.
FWIW, Here’s my prognosis for the next couple of days as the daily cycle bottom is being formed. Thursday – consolidation, narrow range day. Friday first 90 minutes, one more drop down to: Gold 1497, Silver 38.85, Dollar hits 73.48 then clear sailing for the C-wave finale!
FATBOY
All except for #4 😉
JAYHAWK-love those charts as usual
And UUP and ZSL…huge volume, and it is out of place for me to dive in here when that is going on ( yes, it would normally concern me),I think it affects the Metals Now, but I will ‘trade’ miners OR ‘buy and ride’ for now.
There is no way we can go straight down into a D-Wave, we will hit a cycle low here, the timing band dictates we will. The oversold bounce will come, you should be assured of that.
This will provide a cycle low to base our future trade stops and will provide simple and tight stop protection against a possible failed daily cycle, which is what you would expect in an unfolding D-Wave.
We really are VERY close (already there IMO) to a low risk entry area. Many of you need to get your heads out of doomsday thoughts, stopping looking at your daily P/L and recognize there is an opportunity in front of you.
Disclaimer: Of course, just an opinion.
I was a moron. It doesn’t work for complete morons because you get that sick feeling and you are just totally wrong.
I had a smart trading friend and whenever he was in pain on a trade I’d then take it; it just meant he was early. But that’s because he was smart. A moron can get that sick feeling and it just means he has lost a lot. Doesn’t mean a turn is near. I felt it off and on the whole way up. I then burnt my moron membership card (I hope!)
that post was for PC…
FYI I say the dollar looks like it could bounce for week based on the weekly chart – it’s stretched far from the 20 week EMA, same as in Nov ’09.
But I also don’t believe that the dollar and gold are always correlated (like I used to), so I don’t care about it as much lately. I just watch the animal I’m after: the PM sector.
DG
your post at May 4, 2011 1:08 PM to Basil is like what I feel I am seeing ( and have seen before) 🙂
BTW: today is my 31st anniversary. Know what I got my wife? DGP for her Roth IRA. Isn’t that romantic?
i’ve given up already
at this rate silver will be $5 in 2 weeks
we’re gonna get a bounce (hopefully before silver goes to $10) and I might just sell into it
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Jay,
Thanks for the silver chart. You gotta love how it pretty much closed right on the 50 dma.
The cautionary note is, the 50 dma is watched by pretty much everyone. And you better believe Da Big Boyz know that.
So….wouldn’t it be cute if they ran silver down a dollar or so below the 50 day either tomorrow or Friday BEFORE the correction ends?
It just looks too neat and tidy for a bounce off the 50 day to end the decline. I think it needs to move below, if only for a couple hours.
Dollar index is touching its downtrend line at 73.13. If it breaks that, 73.30 is in the cards. The metals could drift lower until then.
73.30r is also the top of the waterfall decline midpoint consolidation range that I mentioned earlier, and the dollar should be rejected there.
That touch could be the last touch of the line as it will fall back, and hopefully break the lower end at 72.70 convincingly giving us a nice bounce in the metals.
If that happens, the dollar index will see 70.40 in a few days and provide a boost to the metals.
AGQ down $140 in 4 days…
will we get back to the highs?
Blogger Bill said…
Many of the hammers turned into doji’s – meaning, indecision, neither here nor there.
BILL, I know the dogi,(correct, at tops it almost ALWAYS reverses), sometimes at bottoms , also reverses… look at GPL yesterday and look at EXK April 28th. Same dogi look near the bottom, sometimes a battle of buyers and sellers AFTER excessive selling leaves no sellers left.
gold silver trolls:
I find it hard to believe we will get back to the highs we have seen formerly with AGQ (approx. $370). It will probably never recover.
Gold-Silver Troll,
You should close out your browser, you’re freaking yourself out.
After a massive 4 day collapse like this in Silver, you’re going to get a bounce back, there is no doubt of that. JUST as many here should have realized when Silver hit the $45 area on the way up, it was going to drop hard at any moments notice.
This bounce should be a good for 3 to 7 days and tack on at least 30% of the losses. It’s at that point the cycle will have to show us the money. If the cycle is destined to fail, it will be right there, not now.
eeelove,
AGQ can retake $370, but silver’s going to have to hit $52-ish to do it.
Interesting how this article hits the press after silver takes a 21% correction off the highs.
http://www.marketwatch.com/story/soros-sells-gold-silver-investments-report-2011-05-04
“Soros sells gold, silver investments…”
thank you David, that provides a good estimate of the whole daily recalculation issue with the leveraged etf.
It is hard for me to swallow losing 40% in 4 days and still not selling. I am having my doubts silver will ever see 48 or 50 again.
HEEEEEEEEEEEY
HAPPY 31st DG and DG’s WIFE!!
Miyagi,
FWIW, Victoria has the lowest yearly rainfall on Vancouver Island. I looked at the Comox Valley, but it gets considerably more rain that Victoria.
DG, Your wife will love what she can buy someday with the Roth!
MrMiyagi,
I lived in Nanaimo for about a year many years ago and my Mum still lives close to that city. You may want to skip that town. Seriously negative vibe. Lotsa drugs, petty crime – a sad place IMO. The north end, near the mall, is alright, but I could never recommend Nanaimo.
Gary,
Looking at all that has happened in the last few days…it seems it would have been better to sell and then
rebuy at the lower levels. Holding silver and gold and then agonizing over the downward plunge seems to make no sense given the intensity and time…have not yet seen the c wave so I have no experience with that…but losing some getting back in may be preferable to the losses involved with holding? I am not watching my accounts on your advice but with slv in the 38’s vs 48’s says a boatload…comments welcome
Congrat’s DG!
My wife and I just had our 30th last week.
Take her to Tiffany’s.
There’s still a gap at 225 for AGQ.
Could get filled in the next day or so if silver takes a quick dive.
Just be mentally ready for one more quick 90-minute draw down.
DG,
You are a hopeless romantic. Now let’s see DGP double in value over the next 3 weeks, your wife will really like that.
Go out and celebrate!
eelove8-
In both the 2006 and 2008 C-Wave tops, Silver had a double top, with the second peak slightly above the first. Not predicting it will happen this time, but it is possible and there is precedent.
2006 Link:
http://i53.tinypic.com/n63p6o.png
2008 Link: http://i56.tinypic.com/20hohvp.png
Hi Alex,
Good point and examples on doji’s.
An up candle tomorrow would confirm what you are saying.
I’m just wondering now what Gary will say with the cycles stuff, plus GLD’s RSI and the BB.
He’s probably holed up on some cliff with a beer, watching the sunset and not a care in the world. Zen masters over here in Japan could learn from Gary.
Look at this link and the 2 first post about Usd and Silver.
http://www.forum-monetaire.com/
Any thoughts ?
Here’s a true story…
we have DG’s gut calling bottoms, and I have one too..
My wife said last night…”Hey, you took our picture down and replaced it with our Aruba trip,why?”
I said, ” Its a ‘happy picture’, it’s the restaurant on the beach that we ate at.”
She said, “yeah, but your metals have been tanking since you took us down , you better change it!”- then she just laughed
So as a joke…I changed it back last night ( and you can see that I posted last night with the old pic , and then this morning pre mkt with the new).
Today my portfolio is green 🙂 ,and I KNOW she will ask when she gets home 🙂
— and if miners bottomed today- and I think they may have, (they may retest lows again, but only on light volume-but so far a reversal is in…in my book)I will be told ..”See, I thought that was the problem”
…so when I sell for the D-wave-should I put up a picture of my ‘ex’ , and tell my wife that the ‘Ex’ jinks it?? 🙂
james r, I have trouble w/gaps. I’ve read that HF’s target them, but esp. regarding the metals, since they trade 24×7, gaps in these are different than in US equities aren’t they? I see gaps in AGQ all the way down to the Jan low. See 140 on Feb 7/8. But, HF’s do target them so maybe you’re right.
73.48 is the price to watch on the dollar index futures. 4 times it hit that price and pulled back, so serious resistance there. (on 4/28, 5/1, 5/3 early morning and 5/3 late evening).
My guess is that DX will break lower out of this trading range of the past 5 days (or maybe first a flase break slightly above it, then reverse lower and break below it). Once it breaks below the trading range, I think a move down to 70 would be a slam dunk. Lower than that, I don’t know. Also, that move down to 70 should not take very long 2 or 3 days max, maybe happen all in one day.
The thing I don’t like about this scenario is that it doesn’t give PM’s very much time to rally.
Bill,
I agree with you re gaps in the metal etf’s, especially the double long etf’s like AGQ or DGP. I think they’re pretty much meaningless. However, it would be nice to look at any studies that have been regarding these gaps.
Gaps in stock indexes are a different story. But GLD, SLV, AGQ, etc. are not stock indexes!
Glenn-
In hindsight, if anyone had known that this is what these past 4 days would look like, he/she would have been a fool not to sell…but no one has a crystal ball. And no one knew that silver and gold would fall this far.
You play the odds, and with the C-wave top still to come, Gary wanted to keep us focused on the road ahead. Gary is awfully good at what he does, but he can’t predict every move with precision…noone can.
My big error was in not taking $ off the table at 47-49 – I thought about it but did not do it. This oversight has cost me dearly.
BILL
Gary will go by the GOLD and the DOLLAR, so when they put in a low…it will really be safe to get back in.
To All
I WANTED AGQ, but the miners didnt do much while ‘metals & AGQ’ ran to silvers top.
so I chose leaders today, feeling their downside is limited, possibly bottoming first. ( I mean…Gold down $21+ , silver down $2.30 , HUI/GDX green??)
SO I still think AGQ wasnt ready (down -$30.00), still following silver.
Maybe next week, I will think about sell something and get AGQ?
I like your story, Alex!
With yours and DG’s confirming each other, we can only go higher from here!
The Fast Money boys just pumped silver.
Terranova just said that silver would move below the 50ma, and then catapult (his word) higher to above 50. I’ve never heard him so bullish…
BILL!!
I didnt realize I was talking to BILL IN JAPAN this whole time.
I remember THAT day , and you popped on here.So glad things are getting better over there, although probably quite slowly). Nice to have you with us! And F.Y.I. , I trade and am in front of a p.c. quite a bit, so I can buy miners today, and sell if need be ( though I dont think I will).
-so wait for Gary and it’ll be more of a sure bet bottom for miners then.
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Happy Anniversary, DG!
Alex, yea Gary’s waiting for the dollar to bottom, but what get’s me is that silver has led gold all the way since like last August, so maybe that dynamic has changed? Plus the miners may have bottomed today. And I agree w/pima that the dollar looks to be doing a sideways correction, w/the next move down, although it could take more than a few days to go from 73.11 to 70.
I’m a buyer of PM’s again when they get above their 20d EMA’s on a closing basis.
But Gary’s been right about so much here – if GLD does drop another 2% to hit it’s lower BB w/a low RSI, that could make silver and the miners make a lower low, that is divergent.
oops – typo – meant “Gary’s waiting for GOLD to bottom” (not the dollar)
TJ-
Do you have a membership to stock charts?
If so, can you update this chart from 03 that Mach posted on Doc’s site a while back? It’s not updated, but I’m pretty sure the top of the channel was exactly where price was rejected. Looks like the blue line in the middle may have caught this decline.
http://www.screencast.com/users/Mach9Cruzr/folders/Jing/media/9486a572-a441-4b60-9612-20cae65fb2a2
Since we are so late in this extended daily gold cycle aren’t the odds good for a quick reversal?
Jayhawk-
I do…let me see what I can do.
TJ Said,
“Silver had a double top, with the second peak slightly above the first. Not predicting it will happen this time.”
I agree, this is a very common pattern with many big parabolic tops too. I also strongly feel that the all time high set 30 years ago needs to be smashed this time around. I could see a picture where Silver crawls its way higher, similar to 2006 all the way back up.
TJ
Thanks for the feedback….I am a newbie and I agree…thats why I signed up with Gary…an educated experienced PM trader but the cycle theory that Gary follows seems to add some certaincy…timing is an issue but Gary was right on this prediction and its pain…wish now I had sold and watched it fall as an outsider and I would be buying now…gut feeling we are there. Thanks again
Anybody know if you can place charts side by side or overlay using stock charts.com?
Glenn,
Your absolutely right about selling and rebuying lower –IF– you know for sure that that is what will happen. But who knew? Just a few days ago Gary thought it was likely we were in a runaway move. What if you had sold at 48 and today silver’s at 58? There’s risk either way you go. If you hold, the risk is having to weather a larger (HUGE!) drawdown and even the risk that the C wave is done. But if you sell anticipating such a move down, the risk is the market just keeps going up and you’re sitting there with no position.
CME raised margins AGAIN…even the Fast Money Boys are questioning it.
Alex, You keep pictures of your ex? My wife took a pair of scissors to mine.
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TJ,
What do you mean “the fast money boys just pumped silver”? It’s been creeping lower for the past 2 or 3 hours, no?
Poly, not sure if this is what you’re looking for but try the “CandleGlance” view (vs. 10 per page, Edit, etc.) on Stockcharts.
Poly-
You can stack charts for different symbols vertically – but must have the same time frame. And only the top symbol can get MAs, RSI, MACD, etc.
I have not been able to figure out side-by-side, or overlaying 2 lines on the same graph
You can also so relationship between any 2 symbols…i.e. the gold:silver ratio, etc.
‘show’, not ‘so’
Alex, in your picture there you look like a linebacker for the Dallas Cowboys, or a Navy Seal. Which is it?
Glenn, take heart that Gary is still holding, and also that the SECOND he sees something different he’ll tell us. He’s not attached to anything, and is very flexible.
Pima-
Both Terranova and one of the other guys (not Adami- the new guy) seem to both be silver bulls. I had never heard them be bullish with such conviction.
pima,
Fast Money is a show on CNBC featuring “traders” rather than investors.
Regarding the dollar ranges, what I mentioned in an earlier post was based on exactly those intra day highs the past few days. However, that number is 73.30 in my charts. I don’t see it being higher at anytime. Either way, we are talking about the same setup.
It is probably not going to be a single day action to the 70 area. But either way, no one says thats where it stops.
CandleGlance kind of works, thank you kindly guys.
Alex,
Do you have any thoughts on PZG? It seems to have taken an extra-special beating the last few days.
Broken momentum stock, or just consolidating?
Silver margins going up to 18900 tomorrow; on monday rates rising AGAIN to 21600
TWO hikes on two separate days in a single email notice
Blogger TZ(8155) said…
Silver margins going up to 18900 tomorrow; on monday rates rising AGAIN to 21600
TWO hikes on two separate days in a single email notice
May 4, 2011 2:38 PM
W
T
F
Can we really win with this type of rigged game?
RICK 4779
goooooood point. I was thinking facebook, but boy would THAT open up a can of woms.
thx for the heads up hehe
TOS already set the Silver margins at twice the CME Margins, so SI’s margin is 30,037.50 and YI’s is 6,007.50.
Has Gary commented on these CME hikes? Of so what did he say?
These are not the margin hikes you’re looking for.
Seriously, in CME’s defense, you have to admit the volatility should scare the crap out of any broker. I wouldn’t let my best friend borrow my money to play silver.
OOOH DAVID
PZG! thats actually quite interesting…not broken ( not quite ready yet tho) let me get back to you shortly tonight.
USERX UP!
Don’t know how, considering Pit closing so sharply down. Plus TGDLX was down.
Gurvir
There are two more margin hikes. One effective end of day Thursday and another end of day Monday.
http://www.kitco.com/reports/KitcoNews20110504AS_silvermargins.html
Jayhawk-
Here’s the updated chart of Doc – not quite there yet…
http://i54.tinypic.com/2841z5.jpg
To me, these margin hikes where the other shoe to drop and the reason silver got hammered again while miners were able to strengthen.
Getting these hikes out of the way might just be the catalyst to put a bottom in the metals.
And for those that don’t believe conspiracies exist (especially with politicians or criminal bankers), ask yourself how somebody would know to sell their silver today after many days getting smashed? I would not consider selling into this, but a couple hundred million shares had no problem doing it.
Well the margin is set by volatility, this exists in down markets too.
Maybe these margin hikes will help settle the price a little and back into an orderly rise. The spec’s got crazy and out of hand and they got pummeled.
I fail to see why anybody is surprised to see Silver down $10 in 3 days after such a run. Reversion to the mean, nothing more.
Do you suppose somebody had advance knowledge and acted on it?
Anyway, I’m happy that it’s coming together for the longs. Get this out of the way and we could get the bull back on with more veracity than before.
http://www.cnbc.com/id/42904523
Is Carlos Slim selling to the sheep
TJ, that would indicated around $37.50, no?
I wonder if these two margins hikes are already built into today’s decline.
O.K. Nap over. Thanks for the anniversary wishes everybody…
Poly: Yep! I posted earlier about the shot USERX had about being up. It is composed of miners, so is like what SB and I have been talking about —metals down and miners up. Vuvvy said this has been 90% accurate since 2001 and is good for 15 points over the next 2-3 days. Heck, that’ll get us going.
Truth is, anybody could have guessed these hikes were coming (though perhaps not quite so many of them).
I’d seen a lot of commentary on silver demanding that the exchanges raise margins because of the danger that an exploding silver “bubble” could cause. Contagion into other markets, etc.
This was ridiculous, of course, since silver is such a tiny market. But the point is that there were many who thought that the hikes were overdue.
TZ,
Can you explain further why you are out?
Thanks TJ. Good job.
Looking at the longer view, I’d be shocked if prices reversed to make new highs. That is one ominous looking candle. 🙁
They surely wouldn’t be raising the margin if there were not a strong demand for silver.
Just bought more DGP in the AH mkt.
Anyone watching for the spikes today?
Jay & TJ – thank you for that chart but as you say, it looks ominous
Shalom,
If someone had prior knowledge wouldn’t they have sold before today?
Any tips on buying stocks AH DG?
Last post on previous page:
I just bought more DGP in the AH at 47.69.
Jay: Thin and you need a limit. Don’t chase. If you like the price grab it. If not go in the middle and wait. Market closes at 8:00 pm ET. I usually can get what I want but not always. Don’t save 3¢ a share trying to be cute, but if the spread is really too big, or the offer is too high above the close, wait for tomorrow or hope someone hits your bid.
Just to clarify, my point is not so much that the margin hikes are a conspiracy to squash silver, as they prove people had inside information in advance and acted on it (and at the expense of others).
Either way, this bolsters my confidence in the silver story going forward. It could blow the roof off! 🙂
Yesterday’s news was that Soros was selling his silver. Today I get an alert on my phone from CNBC that Carlos Slim has been selling futures. Now the two margin hikes. If this isn’t the bottom, I don’t know what is. 🙂
And maybe sooner than we think.
DG,
i just noticed a slight bump in the gold price…that was you:) Thank you
SB
Why does it bolster the silver express? Because it smells of desperation or such?
Nike: I am a microbe on a flea on a whale in this market, I assure you. Maybe someday…!
Do people think these margin hikes are built into the the price? Should they just cause even more weakness over the next week?
DG.
You notice USERX up.
DG,
Since we are so late in gold’s extended daily cycle, don’t you think that we will burst higher from here?
should Gary’s rubber band theory plays out (silver is down 33% in 3 days) silver and silver miners are GOING TO EXPLODE HIGHER
I thought this daily cycle was soooo over extended that correction would be quick and relatively painless.
SB is correct. The whole world works on “inside” information. Regardless of what the business is, those who get the “inside” scoop do better. It not a conspiracy or even to the point of being illegal, its simply reality.
new York,
I’m not sitting in the room with them so don’t know exactly when the info makes the rounds. Criminals cheat criminals too, you know? Some will share the inside info ONLY after they’ve acted, for example.
I’ve bumped into many criminals in this business (some that have seen lengthy prison sentences), and I can guarantee you that if there is any way to cheat, somebody will do it. I’m sure it’s the same in other areas too, but I know it here.
Steven,
I believe the margin hikes in silver are a reaction to the price action and not vice versa. With the ATR of silver moving up so rapidily it makes sense for exchange to move up margins. The volatility in silver is what is causing the margin hike not the otherway around.
This board is living in fantasy land…silver was over 1.7X extended over it’s 200dmva (a new record) and it has now crashed over 20%, just like the other half dozen times it’s had parabolic runs since this bull market began in early 2000s. And now most here are predicting that, unlike ever before, this thing will roar back and make new highs?!? Study some historic charts guys. This thing is going to have a dead cat bounce very soon, as stocks are already holding better than the metal, that will last anywhere from a couple days to a few weeks (5-15%) and then it’s going roll back over until it hits the 200dmva around $30. This is how ALL other parabolic runs have played out and it is highly likely that is how this one will play out.
The argument that this hasnt ended because gold wasnt “extended enough” is just plain silly and goes against history, fact is, gold does not need to be extended! Again, if you study past parabolic runs you will see this for yourself. It’s obvious most of the speculative capital went into silver this time around…some years it’s PM stocks, some years it’s gold, this time it was silver. This isnt the ballet, markets don’t move in perfect unison.
2006 was a complete different ball game than today, it was essentially a one day panic washout…while this will now be entering its 5th day. Big boys today have actually put some thought into this before selling their positions. Furthermore, in 2006 the dollar started its decline from a very neutral point and went down for dozens of days in a row and believe it or not, back then the dollar still didn’t end up being as oversold as it is today (0.9X 200dmva)! The dollar has historically always bounced at 0.9X its 200dmva, just like silver has always topped out by 1.7X 200dmva. Not to mention that the dollar bull sentiment readings are at records lows. So to bet the dollar is heading much lower is again going against history with limited odds of success.
And to add a cherry on top of all this, we are now in May…weve got some of the worst seasonal months dead ahead of us. They dont call it summer doldrums for nothing.
Furthermore, for you conspiracy theorists, the margins are already going up daily almost daily….care to take a guess what the CME would do to those margins if silver now all of a sudden reversed and started head to back up?? Ha!! That would really be something to see!!
Put this all together, are these really acceptable conditions for a re-birth of the “C-wave”??
Hey, who knows, maybe im wrong and maybe “this time will be different” and the bubble that has already burst will suddenly inflate all over again, its possible, but so is winning the lottery.
To each to their own, from reading this board it seems the more experienced traders sold early and missed most of this first half of this roughly $20 “d-wave” but I truly feel sorry for the beginners, who didnt use any stops, especially those naive enough to be holding decaying derivatives like agq through this crash.
Smartest thing anyone could do now is wait for the bounce, then buy some put options if you wish to speculate, and simply wait for the price to reach the 200dmva. We are no more than a couple months from a very safe entry point.
Nike
The fact that silver is down so much after being stretched so far illustrates the rubber band theory, no?
So step up and sell, Dan. Don’t forget to tell others so we can follow your experience. 🙂
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I have to say, while extremely unpleasant, this dive in silver price has been a great learning experience for me. Its difficult to be subjective with your own emotions, but just looking at this blog and its sentiment as the price dropped is a really great tool and indicator. I am becoming more seasoned and learning new things every day. Thank you SMT bloggers!
RobL,
yes..action reaction..works both ways
Dan,
maybe you will be right, but we’re due for bounce VERY VERY SOON (15% in silver at least)
Dan,
Just want to mention one thing: After AGQ came down from 380 to 250, you come here and say “I told you so”
why didn’t you SAY this when AGQ was at 380?
hind sight is always 20-20 🙂
Dan,
The action in the dollar will dictate what happens next.
If the dollar is done going down, then all PMs are finished.
If the dollar breaks through its 2008 lows, then it’s game on for gold, and by extension silver.
DAVID
Too many negatives along with many positives for PZG would have me leaving this one for now. Maybe on a watch list , it could improve and run hard. These small miners often make up for lost ground in SHORT time.
It has closed gaps and retested high volume breakout, has support @200sma approaching, but other ‘not ready ‘ signs yet.
http://www.screencast.com/t/igXceGdiAsD
http://www.screencast.com/t/25kRTaHYgt
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Thanks, Alex!
I agree..Silver’s parabola has burst. Gold however is trading in a completely different manner. I suspect gold will have a parabolic move as their has been a lot of money put there over the past couple years that is not as yet unloading. From my experience, big money unloads on little guys in a parabola as the volume and momentum become favorable to them exiting into strength.
Also, with the move gold has had, its hard to imagine it just falling away.
f
To Alex’s point, I also feel that the larger miners will do comparatively well to juniors after this recent beating. I reached this conclusion after I contemplated buying something like GDX a couple days ago, when I’d typically try to narrow down to the best horse.
Their gains might not outpace the juniors, but people are more inclined to pay for the relative safety which will draw at least some funds away from the more speculative names. I know I’m playing it more safe for the end of this C-wave, and I can’t be the only one.
Poly – are you saying in your opinion a bounce is coming that will recapture 30% of the losses? As in silver at 43ish?
Dan: What about sentiment. Sentiment in gold on the day of the high was dead neutral. As well, “Parabolic” is not well defined. I have seen parabolic runs before and while this was arguably one, it is not of the size that would convince me that a challenge of the highs is not possible. “Dead cat bounce” is also not well defined. We will see what the rally looks like. A crappy rally is easily distinguishable from a genuine one. Are the miners out-performing? Is the volume there? Are the pull backs orderly? I am also concerned, but if the dollar really does tank, I can;t believe gold will make new highs and silver will not get back to at least 50ish. Beside if we get the “bounce” the stop is the low we are printing now and if the bubble has burst the damage from here will be minimal. We don;t need to know or argue. If the low being set now breaks after a rally we are out.
I think we are getting there. Dan’s post is a clue. Another very respected trader I follow, just decided to go double short silver WITH long SLV calls as a hedge (he is good). We seem to be accumulating the shorts which will help us launch the crescendo.
GDX bounced of the 62% retracement and the trend line of the Jan lows.
SLW also got a good bounce.
I really want to reiterate something. Gary has a different style of trading and holding. He can take HUGE draw-downs. Most people are not like that. Though we all hope that we get that blow-off rally getting everyone wrong, remember that it does not have to happen.
I urge you to use options, especially bullish ratio spreads. Example of some trades I did
GLD Ratio Spread: Short 1*July 152 AND Long 2*July 153 Call
SLV: Ratio Spread: Short 1*June 40 AND Long 2*June 41 Call
UGL: Ratio Spread: Short 1*July 82 AND Long 2*July 23 Call
These captures almost all the upside if we get the parabolic move but have very limited downside. They allow you to get the same exposure as long calls or long outright but protect your downside.
Once we get the move up buy puts to protect the gains, and finance them by selling calls. You will sleep much better.
TOS (thinkorswim) has an excellent platform to plot these trades and take the uncertainty out of the game. You used to be able to download it on your PC even if you do not have an account (you need to register though)
Silver may well be broken.
Markets usually choose the path of maxiumum frustration. The most frustrating thing now would be for silver to come within $1 of its old highs, fail to conquer them, then spend years consolidating.
Of course, it would then slice through $50 effortlessly on its way to $100.
In the meantime, gold is only 12% over its 200dma. The XAU is already at the 200dma. Plenty of safety there.
QUALITY STOCKS said..
Is Carlos Slim selling to the sheep
IT SURE LOOKS IT!!
http://www.screencast.com/t/xAlxCJPRqL
BILL
No, its just because “in that picture…” my wife is 4′ tall 🙂
Dan,
Your fears are warranted and its great to be guarded. I think you make some valid points to consider. Using price targets are dangerous, they can box you in, I fall victim to that too often.
All we need is a bounce out of deeply oversold levels to form a low which will provide us with stops for another run. The next cycle will have to stand on its own merit from there, but we should be protected and don’t need puts as we will have stops.
The problem here was NOT the cycles, Gary had that coined perfectly.
The problem was the trade and being 140% exposed solely to Silver, after it had gone parabolic and was sitting on Day 33! The cycle was late and due any day for a cycle correction that Gary himself said could bring Silver back to $40-$42. The gains were astronomical at that point and a big part of the line should have been brought in and protected at that point. The waiting for $50 when it was already at $49 and severely stretched was not warranted. I questioned it last week and Gary said it was a physiological trade ($50 would hit) and not a cycles based trade.
I know DG feels likewise and please don’t take this the wrong way, but that trade was visible in real time. I know Gary will never admit to it, but I wish it would be analyzed so the trading strategy could be tweaked. SMT portfolio took a margin related 37% hit, it least as a trader, pays to analysis loses of that magnitude. IMO.
SB, I see I did better in NUGT today than GDXJ. May swap out of GDXJ. 🙂
Just hope earnings in miners help as EXK and ANV report tomorrow for a start
The waiting for $50 when it was already at $49 and severely stretched was not warranted. I questioned it last week and Gary said it was a physiological trade ($50 would hit) and not a cycles based trade.
And what in the world does this mean? I feel foolish for not selling at $49ish and waiting for another $1 but I was waiting for Gary’s go ahead (and he got us here but I just didnt understand the neeed to wait for another $1-$2 dollars). It may have come if he had not been sick that night (thurs) b/c it did come over the weekend but it was a little too late that that point.
I spoke to a couple of other subscribers they didn’t listen and sold. I hope Gary’s right.
aviat,
Thank you for those spreads and bringing them to my attention. While I know conceptually how they work, I have never done them. Never sold an option in fact. I will have to read more about spreads and become comfortable with the concepts before making them work.
Have you used these for most of this C-wave?
Poly,
Thanks for the support…
I still feel like we’re going to 35 then bounce to 38 and then tank to 20
is this game over?
JAYHAWK
some good charts today and “relatively painless” could mean compared to the absolute painfree feeling you’ll have in 2 weeks 🙂
Nike Boy,
I did.
Steven,
If you recall we hit $49 twice, once early morning after hours and the 2nd time 3 days later, it came within less than a $1. Both times the trade was to take out $50!
I’m just saying, with a VERY stretched daily cycle and Silver so far stretched, it wasn’t the time to get cute.
Sorry, it’s not intended to be offensive or to put anybody down, it’s just how I see it.
I completely agree and that was my point! Yes I didn’t do it b/c we wer waiting for $50.!?
DG,
My argument is the most of the speculative capital went into silver this time around. If you study previous peaks you will find that the moves relative to the 200dmva vary vastly between gold, silver and PM stocks depending on the year. You can even find examples where silver was by far the biggest under performer of the three.
Dan,
Sorry..didn’t see that
In that case, awesome 🙂 you did warn everyone
Both Gary and you agree that silver was going to have an ugly correction and now we have.
and so, now we will see what happens. Gary is predicting another parabola and you are predicting a dead cat bounce…will just need to wait and see 🙂
Good luck to all of us
traderlady,
GDXJ should be fine if we’re right. The juniors will do best, but not by the same margin as usual is my guess.
Instead of being up 2-3x what a major does, maybe just 1:1 so no need for the added risk?
True. There’s no way you want to be 140% margined, 65% AGQ, with SLV calls on top of it at $49.
There should have been a plan in place to phase out in stages — at $42, 44, 46, etc.
Dan: fair enough. I respect the points you have made. We will get the bounce and the stop at this low will protect from further damage. As this is being driven by dollar printing it does not make sense to me that gold will stay this moderate.We will see…
Whatever the debate, I am sad I lost all those profits! BUT, I do still have the shares and shall be more alert to follow my gut next time. 🙂
Thank you for your wisdom SB.
FYI just noticed that $TYX (30 yr bond yield)just went below the March low, both intraday, and on a closing basis. So now we have rates making an official lower high and now a lower low.
Bullish for PM’s.
DG,
Yes it possible that we go break new records and go below 0.9X 200dmva for the dollar and the dollar sentiment could from the current multi-year low in the teens % down into the single digits. All records are meant to be broken I suppose.
Also regarding PM’s seasonality, what Dan says is true of course over 30 yrs, but last yr, and the year before that, $GOLD rallied in May.
Although I still don’t believe in cycles, I do believe Gary’s dead on right that we’ll see a parabolic rise in PM’s soon.
With interest rates declining, debt growing, and QE still in 5th gear, what else can we expect?
Dan,
The question would be when to start selling in such a move. Silver was stretched almost all of this intermediate cycle.
If you say at 1.5X 200dma, then should we have sold at 35? What do you gain by selling there?
It’s also possible that the dollar could stage a massive rally this close to its 2008 lows.
We are all betting that that number — 70.70 — gets taken out, thanks to all the QE we’ve seen in the past two years.
But who knows.
… further, I think all the volume in ZSL will be the fuel to launch AGQ to new highs. It’s not over yet.
Question for the futures traders, it looks like you need 25% of the contract to trade silver, is thatt he case, and if so would that amount of leverage be attractive to hedge funds, et al.
Thanks.
PS I like that silver did not sell off at the close, although still under this algo at the 10 EMA on the 15 minute shorting every pierce of it.
DAN
I feel that the silver miners may %-wise fair very well once we get going here. IF they start to taper off in volume as they approach old highs ( or their way there , maybe they tire out sooner) , we can trade into Gold stocks if we see them ripping out.
Previous highs for silver, then re- tests while gold went to new highs..were tradeable
http://www.screencast.com/t/0p8cPcj79C
but honestly…thanks for the heads up, if you’re trying to help us, that thought may keep us alert to possible changes.
we are a flexible group 😉
Safest way to play it is in gold and gold miners.
Those of us who are still 65% AGQ might contemplate looking for a spot in the coming rally to switch some funds to GDXJ or the like.
Don’t sit around holding out for AGQ to take out $380.
Enough said right here: http://smartmoneytrackerpremium.com/wp-content/uploads/2011/04/silver-06.png
Dan:
I agree in principle with a lot of what you’re saying. Common sense really. However, in a lot of prior blow out tops it turned out that the bubble had no real reason to exist – e.g. lack of profits in internet stocks or ill advised loans to people who couldn’t actually afford homes.
As for the gold and silver tops in the seventies, those where broken by huge interest rate increases, which are much less likely today. And remember that $50 in 1980 is much more in today’s inflated money.
So the case may be made that there are still solid fundamental reasons for rising PM prices (as many others have also said in previous posts).
Whatever the outcome, it sure is a great learning experience.
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YesLetDiscuss,
Yes but thats where other factors come in such as length of the preceding consolidation etc. If silver corrects at 1.5X its extremely unlikely it would crash 20% overnight as it did in ’06 and recently so you can just wait for the trend line to break to sell. Problem with runs where it gets to 1.7X is inherently you keep developing steeper and steeper trend lines until one day it crashes so you just have to scale out slowly. Or you can buy late summer (july/Oct) puts because however high it ends up going, you can be confident it will inevitably crash and reach lows by the end of summer.
Jonas,
I don’t think Dan is questioning the bull case for precious metals generally.
He is questioning the wisdom of holding on after a parabola has broken in the hope for a return to the highs.
Jonas,
I agree but I dont think we are in the final 2-3 years of this bull market. Once we are in the final parabolic stage then yes it will go up without reason or logic.
Jonas
You got some silver futures..Minilong..Stoploss at 36 something..Still got them?
Getting very close to the stoploss..:-/
I think Gary tried to protect us, but he was to late..
I dont know why he wanted the price to go to 50 when we was at 49..Maybe he expected higher prices?
Like 52-53? I actually dont know..?
SB
I have repeatedly seen the sell off and heard you say in the heat of the dip things like ( no quote really)-
” This looks like a good sell off, but I’m not ready yet. patience.”
then again a day later,
” We’re really getting taken down here, I’m almost ready to nibble”
3rd day, ” boy , its really tempting here , they’re selling everything, but I dont feel it yet. ALMOST.”
I thought ‘patience’ or ‘fear’??? Will he really ever buy?? haha
Then today you began buying in the heat of this crazy sell off and I swear I said to myself…IT WAS PATIENCE!! Chomping at the bit daily , yet restrained …
Nice Job
And great blog newbies and old , naysayers and friends.It helps me to think of things at times, that I wouldnt really think of. Great debates that I could take either side!! 🙂 gotta love that!
Goodnight for now
Dan: After all this IS the worst currency crisis in modern history. fair enough to be cautious betting that way, though.
Dan,
Did you warn everyone here when silver was at 49? If so, I missed that warning (lots of comments here), but I did sell my silver then and put some of that money into gold, but a few days later repurchased 1/4 of my silver position.
I think if you had warned SMT traders with a post like the one you just made, quite a few folks here would have sat up and listened and maybe even acted on it. Not sure though, Gary’s track record is hard to beat, so it’s difficult for many to go against his advice.
Clarkatroid
Are you there? Wonder if he is still alive?
Can you see the daily cycle low from the other side of the room?
http://www.finviz.com/futures_charts.ashx?t=SI&p=d1
Moneyman:
Yeah, I have one lot with 34.90 (I wrote 35.90 by mistake in the previous post) and another lot with 29.50 stop loss. I chose them based on having scanned various sources’ predictions of how far down we could go. And 36 seemed to be a general lowest target at that time. So still hoping to sweat through this ordeal. 🙂
I also have a bigger bunch of gold minilongs with stop loss around 1,380.
Pima
Nice point..A lot of people step forward today. A bit late I think!
I never thought that silver would fall to 39..:-/
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All who commented:
I too think holding all through 50 was a mistake, but seriously, who expected a decapitation the second we opened in Asia that grim Monday morning.
I also understand that we’re not yet at the peak of the currency crisis. But the storm clouds sure are gathering! And the anemic dollar seems to agree…
And so the hammering continues by the way: we’re now under 39. Damn – this is relentless.
Funny how when we go down it’s “manipulation” but when we went from 40 to 50 in eight days it was just “Whee!” Markets always go down faster than they go up, so up in 8 days and down in 4. I don’t need a conspiracy to understand it.
Even a blind person can see the daily cycle low now by hearing us gnashing our teeth.
DG – True and agreed but 5 margin hikes in 1 week!? This made ifor a very disorderly decline.
From Dan Norcini–I
suspect however that there is more here than keeping the integrity of the clearing houses. It is too much too fast given the already steep decline in the market. It smells like a deliberate effort is being orchestrated to take the metal lower and rescue the shorts who as I said previously, are voting members of the exchange and who could no longer handle the bleeding of their accounts.
oF COUSE GARY THERE IS NO MANUPULATION IN THE MARKETS –WHAT A JOKE THE WHOLE THING IS
May 4, 2011 4:44 PM
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Pima, its just good practice to critic trades, especially when the “paper decline” is so great. I hope people don’t take offense or take it as bragging. But if we’re to perfect this craft or avoid such events in the future, open dialogue should be encouranged. Yes Gary has done wonders and his analysis and timing with cycles are truly world class, i mean that.
But that should not make the trade immune from discussion, especially since so many follow.
Come to think of the trade some more, he nailed the outcome perfectly, just didn’t avoid it until it was to late. Maybe he just didn’t follow what he always preaches, “never try to pick a top”.
I’m done with this conversation, not going to beat it anymore. Hopefully been here long enough for Gary to
know it’s out of compete respect.
Let’s hope we start “swinging” higher.
What if this is d-wave and not cycle low part of c-wave. I m confused , worried, nervous and angry on myself.
silver is being beaten while it’s down
the sentiment has sure changed 180 now
most are calling a top and shorting any bounces
GARY SAID THIS WILL AL HAPPEN
only reason that i’m still hanging on
only thing is it’s getting too overdone here
Thank you for your comment, Poly. I am agreement. I know Gary doesn’t want us getting “whipshawed” but seriously, the decline without stops in AGQ has been completely ugly. And, SIL, went lower today than what I bought it on February 15, so it’s not like I got into the market last week.
Elaine
Wes,
Care to add some of your thoughts behind your coming moves here?
E,
If it’s a D wave, then the next daily cycle will fail and we will stop out at the coming cycle low prices. It WILL bounce first!
all the trendlines in every single gold/silver stock has been broken…UGLLIER by the day
is that too much technical damage?
is there any hope
I just mailed the CFTC:
Hi again,
I know that you have little time to answer mails like this, but when the CME now hikes the silver margin for the FOURTH time in a few short days, I have to ask: is this warranted in a commodity that has just fallen more than 20%?
Clearly, small investors are getting slammed by the margin hikes that coincide with sharp price drops. It’s pretty obvious that the beneficiaries are the big bankers with their endless supply of free Fed money.
Best regards,
Jonas
The interesting response:
I’ll look at that. We usually leave margins to them, but you raise a good question.
Thx,
Jonas, I’m not on board with the conspiracy wagon, BUT…
re: “I’ll look at that. We usually leave margins to them, but you raise a good question.”
Don’t hold your breath. I am ALL ON BOARD with the fact that our regulatory agencies don’t do a damn thing.
CMT
If I were to hold my breath waiting for the CFTC to act decisively in favor of the general public I’d be stone cold dead a long time ago. 🙂
Still, it somehow feels better to direct my criticism directly to them rather than only whine on private forums like this.
FYI I am one who doesn’t have the funds to support the margin calls on this portfolio as it weathers a 40% hit give-or-take. I’ve stuck it out while puking, but I may have actually little choice but to liquidate and buy back into DGP when a “bottom” is called…. I can’t be alone in this. I’d rather hold with hope but it’s such a loss already, is that what I’m supposed to do, really?
As for the conspiracy talk, why is it so easy to accept that many governments, including the American, is manipulating their currency in relation to other currencies – yet so hard to accept that the same thing occurs with the only age old universal currencies gold and silver???
“The waiting for $50 when it was already at $49 and severely stretched was not warranted”
My exact thoughts last week.
Silver hit 49.5 2 weeks ago on Sunday night’s open and immediately broke 10%. It then spend the next few days rallying to 49.5 and 49 in regular trading hours only to get rejected. Given the circumstances, the risk of being 140% leveraged in Silver plays for that .50 or 1 dollar is a bit naive.
Felix
Personally I’m hanging in there, but I have no idea what your margin call situation looks like. It certainly seems more likely than not that we’ll soon have some kind of bounce – even if only the dead cat variety. I’d at least rather wait and sell into that. (But I’m the first to admit that the pounding is pretty relentless, even as I type this and look at the 1 minute chart).
Getting very late over here in Europe, so I’ll hit the sack now.
I hope I’ll wake up to nicely rising blue candles tomorrow – that would be a welcome change.
Laters,
J
Gary, do you think the ridiculous series of margin hikes will send more money towards the miners/gold, instead?
Also, what do you make of the deflationary talk this week?
“I am one who doesn’t have the funds to support the margin calls on this portfolio as it weathers a 40% hit give-or-take. “
Leverage is a double edge sword. When you’re on the wrong side of the trade, it can blow your account up.
To take 40% hit in 3 trading days is simply mind blowing. Your account would need to rally 69% to get back to where it was 3 trading days ago. That’s like watching GDX rally from the current price of 58 to 98.
Poly,
As we neared the $50 mark, I sold all stocks and replaced the leverage with DIM SLV options. With these I was 140% leveraged, but with very high cash levels.
Was that smart ? Well, obviously not as smart as getting out would have been.
I have sold nothing. Again, this was not too smart.
On Monday, I set a personal record of the highest loss I’ve ever had in a single day. So far this week, I have the highest loss I’ve ever had in a week.
I have added AGQ options twice, once at $280 and again at $230.
And yet, in spite of all this carnage, the cash I’m still holding exceeds my entire account balance on 1/1/2011.
So I’m mostly ready for the cycle low.
DAN,
I agree with many of the comments you are making here tonight. You probably already know that.
STEVEN,
I’ll elaborate a bit later when I get some time on my decision for selling out and going back to core position. (Selling gold futures. I was already out of silver.)
I think the C may be over.I think it may be possible, as dan has said, that the speculative frenzy went into silver this time instead of gold and that you won’t get a wild runoff in gold this time.
Clearly this is speculation only. I could easily be wrong and people should follow what makes sense to them. A bounce here (whether we continue up or not) is not out of the question either. But being out I dont’ have to agonize over that anymore. Conservation of mental capital.
I’m happy with the profit I booked for now and I’ll evalute as new info comes in. I don’t view taking a position here as a strong risk/reward bet. And the actions this week (and today mostly) broke my expectation of what was going on.
When what is going on doesn’t make sense, it is usually good to get out as I see it. I can no longer convince myself of a strong and quick return to the upside for a multi-week blowoff in gold (let’s not even go there with silver).
Anyway, I’ll try to explain my view later in more detail.
With George Soros taking profits in Gold and Silver, will that negate our C wave?
Thanks TZ. Look forward to the more detailed explanation.
From Jesse’s cafe , an excellent blog-boy he really nails it–what a crime.Also forget the CFTC they have never done a dam thing to protect the small investor-its all about protecting the big boys
From Jesse–
CME Raises Silver Margin Requirements for the 4th Time
I’m trying to remember how many times the Fed raised stock margin requirement during the tech bubble, or mortgage down payment minimums and bank reserve requirements in the last credit bubble.
The spin machine and demand dampening campaigns are well underway in an attempt to rescue the pampered princes of Wall Street and the City of London from yet another overleveraged paper asset scheme gone wrong, wobbling the Anglo-American banking system.
It is the duty of the central banks and the government to preserve and protect the privileged few and their financiers not only from justice, but any pain of loss or minor inconveniences as well, no matter the cost to the public trust.
Now if only they could magically create some substantial new bullion supplies for the Comex to forestall what appears to be an approaching default on delivery, at least based on identifiable inventory and assets represented by paper in customers’ hands.
As Daniel Drew once famously observed:
“He who sells what isn’t his’n, must buy it back, or go to prison.”
In case anyone needs some perspective:
http://3.bp.blogspot.com/-DAC4qPsfXso/TcH1TYUS6cI/AAAAAAAAAU8/5Nktte6WJQc/s1600/2011-05-04%2BSilver1
http://2.bp.blogspot.com/-TkHdl-fBFvg/TcH1TgRY-fI/AAAAAAAAAVE/wDEnyAFGNGk/s1600/2011-05-04%2BSilver2
NEW POST
This comment has been removed by the author.
I don’t see a post?
Deleted my comment cause david said new post, but don’t see one. Reposting again:
—–
I believe I did say to people a little while ago that I saw almost everybody here looking “up” instead of down. And only holding and buying and adding. Even today.
It may work. But it may not.
You always have to ask yourself “what if I’m wrong and what damage does that cause”.
Clearly I don’t know people’s positions, leverage, options or whatnot. But it appears that many haven’t examined and prepared for the ‘what if i’m wrong’ scenario.
Today we hit the level where I said “I have a good suspicion that I’m wrong, and I’m no longer willing to suffer the damages if so” (which also means I won’t benefit from any further upside if right).
So I sold. Bang. Done.
It was mostly cold and calculated and I had that exit point in my head (and constantly adjusting) for a few days now.
Too many times in the past I rode down these type of situations only looking *up* and believing I couldn’t be wrong. Not again if I can help it.
Now I try to look down as often as possible and say “what if THAT happens?”.
We may still be heading up violently. I don’t know. And if you sell on my comments and we do then that is your risk.
I’m just saying I asked myself that ‘what if’ whenever I can and my trigger got hit today. I’m no longer willing to risk more downside in exchange for an upside that doesn’t make sense anymore as I see it. (I lost a not insubstantial profit before getting here today, so I’m by no means immune to what everybody else is going through. But I want to keep what’s left instead of risk it trying to make more at the moment.)
Hopefully we bounce and resume going up. You guys can clean it up and I’ll re-engage if I can get back in safely. Maybe I miss most of the gains. You are taking risks and I’m not by buying/holding here. Maybe I’m one of the indicators of the bottom like gary says. No worries. I can accept that and I’ll just handle it from there as best possible.
Jonas –
Thanks for your sympathy – and I will not say I wasn’t warned. Just wish I’d set some “stops at the tops”. I’ve learned a valuable lesson. I’m going to read tonight’s report and then decide whether to liquidate or pray, or both.
USERX/gold trade is on! I think the bottom is in or very close and I will be adding a bit tonight.My system sold today and will be back to a full blown buy at 1571 with that number moving down over the coming days. I think that buy signal will be the green light for our parabolic move.This last trade yielded over 100 points on gold:)
NEW POST
TZ-
Thanks for the comments. I have been wrestling with exactly the issue that you have expressed (and resolved) – what to do as regards the apparently ongoing move to the downside. Sell now and get back in at a swing low, or grit my teeth and bear it.
Not sure where I’ll wind up, but it is helpful to hear your thinking.
I do know that the fundamentals haven’t changed – there is a metal shortage and (in my view) an effort to shake weak hands out of the metal. So long term holders will be rewarded. The real trick is to arrive at the long term more or less intact.
I’ve just skimmed the board, so if this has been said already, I don’t mean to rehash….but noone can blame Gary or anyone else for how you trade and how your portfolio has performed. Gary provides analysis which should be a supplement to your own due diligence. He even goes as far as keying us all in as to what he is trading and why, which is extremely beneficial for newer traders. However, to just follow someone blindly without forming your own opinions is just not a smart way to trade. Gary never told any of us to wait until silver hits $50 and then to switch over to gold. What he said was that was what he was planning on doing. If you chose to follow that trade, then that is a conscious decision that you made. I know it doesn’t feel great right now giving back profits, but please don’t look to blame someone else for what happened to your account. No disrepect to anyone here, but we all are accountable for our own actions.
I hate gold..I hate silver..I hate having to deal with these metals because of the FED and the US tax issues. I would love for a strong dollar deflationary policy…A plan where your money appreciates just by putting it under your pillow.
Instead the FED needs to f**k with people and try to steal from them anyway they can. Nothing is as evil as someone stealing from a starving family, and the FED does this with calculated daily measures. The true terrorists are here at home, not abroad.
Adam,
That previous drop stopped short at 38.2% retracement. This one’s close to 50% almost, which is $38. I will put the other half then. If we break that level, it should only be intra-day. Anything more, I’m out.
No new blog post!
Veronica, i was looking out for Userx today, had a suspicion it would be positive. Nicely done considering the drop in gold. The miners being so strong is a positive tell, Gary picked it up tonight too.
Thanks Veronica, good to see you back on!
PST,
Most of the people asking questions are those who were out entirely or who had switched to gold already, so they aren’t blaming anyone for losses they don’t have.
There is some value in asking what the “lessons learned” are, to be used in the future. That’s not the same as Monday-morning quarterbacking or assigning blame.
TZ
That is just what I needed to hear, regardless whether I do the same or not. A decision for which only I am accountable, as with all the rest I’ve made. Thank you.
Poly,
The nightly post is on the premium site.
Some very interesting charts on the miners, from my blog.
http://arum-geld-gold.blogspot.com/2011/05/miners-are-getting-interesting-here.html
Arun,
Yields are also correcting after a massive run up. My time projection puts an end to the long-bond yield correction at May 17th. That’s a good time for people to start realizing, “Oh shit, the Fed isn’t gonna be buying this anymore, huh?” When that happens, we will probably see yields move higher and yields are positively correlated with metals.
http://4.bp.blogspot.com/-szC-fhmeb9Q/TcH5tTxbHqI/AAAAAAAAAVc/ZeA2ZjJbEr4/s1600/2011-05-04%2BTYX.png
Also worth noting is that there is a annual tendency for Treasury bond prices to bounce around April for a quarter or two before they head lower and form a new higher low. If our macro outlook is correct and Bernake’s printing coupled with austerity measures across the globe change things materially, we may see a left translated cycle in Treasury bonds and the start of something new. If this is the case, metals will benefit – big time.
David,
Fair enough. I’m not pointing fingers or accusing anyone in particular. People should absolutely question the moves that they made and try to take away any lessons that they can. I got out of silver at $42, and need to rationalize why I made that decision and figure out how to avoid it in the future.
I hope my post isn’t misinterpreted as attacking people who are doing this self-reflection. It is more geared to those few who are wondering why Gary didn’t get them out sooner.
Dan,
Thanks for invoking “real”discussion” no matter opinions. This is how we get to the “truth.”
One of the points you made is the main reason why I posted my “the D wave may be here” post. I wasn’t just doing it for superstitious reasons. Looking back at 2008, 2006, etc. what is happening now is completely unprecedented. Yes, if you go based on purely history, maybe we are in the D wave or a mini one.
However, at the same time, history writes a new chapter every time. Just because silver went down X % in one day in 2006 and it isn’t doing the same now doesn’t mean much.
Here’s a toast tonight to better times.
If anyone wants a little “cheer up” video, here is Ira Epstein’s metals report today.
http://iraepstein.linngroup.com/videos/midday-metals-report.html
Definitely some good news out of this.
David,
My lesson learned was not being patient to determine if this was a runaway or cycle low coming.
I swore last intermediate cycle down, I would sell before going back down. Instead I sold some good DITM GLD on Monday when the price was up on GLD and took some nice profits, but not wanting to be out, on the day low bought back in on not so deep in the money GLD options. I wanted to spend time with the family this week, so wasn’t expecting the cycle drop this week. But now just happy to be distracted this week while everything sorts itself out.
So I too had a good take down. But still all in all, have more than I started with in February, so no complaints and hoping to finish off this C wave as we all planned.
38.07 is the line in sand. hope we dont go there or bounce quickly from there.
Here’s my take away: First, I have learned more from Gary than any other single source in my entire trading career. I never appreciated cycles before but I can now see what they can do and can see what a master he is at them. I do not say this lightly.
That said, there are other aspects of his work that are tactics and not based on cycles. . There is lots of wiggle room around this idea vis a vis trading tactics. If the top traders on this blog all sell between 50 and 100% of a position, I don’t care what Gary says, that is worth noticing. “We’re going to tag 50” is just a trading idea, and is not based on cycles. I personally would not argue with Gary about cycles; he is far, far superior to me there. But trading tactics…? His edge is not nearly so great, to me at least.
I think this is the maturation of SMT. If we can get through this together we are going to own the planet by the end of the next C wave. I agree with virtually everything Poly has said. No axe to grind whatsoever on my part. but if we don’t learn the difference between cycles and tactics from this we will have entirely wasted the experience. I never mind scars. I hate scars that serve no purpose.
In the evening 24th April while silver surged, i hedged my silver long position with a 40k oz put at 47,80 strike. (costed 36k$) Bit too early since silver continued up to 49.50 and the value of the put scrank to only 5k$. Unfortunately I put the expiry date at 28th of April(10 am) 3,5 days later, to get it as ‘cheap’ as possible and in anticipating that a crash would be of similar swiftness as in 2006 and 2008.
As we know this time it took longer. Maybe that had something to do with the fact that the ascent this time was slower, as documented on the 2011/2006 similarity charts posted last month. But even if the dip this time had taken more than twice as long time as in 2006, it would still have been ok. -However it expired valueless.
If the dip had been faster, or if the expiry date had been some days later, at 39$ silver the put would presenty been worth 350k$.. Anyway I’ve become more wise after this and will change some details next time 🙂
DG,
I couldn’t have said it any better. Although I was not one of the lucky ones to sell as I was waiting for the tag of $50. I kept asking myself why is Gary waiting but I trusted him this far and I continued to trust him. I will also continue to trust him moving forward but the differences you bring out are great examples.
To add constructive inputs, maybe we should ask Gary to add a “what if the opposite occurs” section at the bottom of each night report in the future.
If people know the down side is so serious, maybe we will less greedy.
To add constructive inputs, maybe we should ask Gary to add a “what if the opposite occurs” section at the bottom of each night report in the future.
If people know the down side is so significant, maybe we would have been less greedy.
Well said DG. Perhaps my post wasn’t as nuanced or as subtle as it should have been.
I respect and have learned alot from everyone on this board and I appreciate the diversity of the views expressed. I was just rubbed the wrong way by one post in particular which I felt implied that Gary was responsible for their losses. To all the others, I meant no offense.
Gary and his work are amazing and I am glad to be on board. This is a completely forecast hiccup and I should have been prepared for it based on my own risk tolerance and account details. I have learned that I need to set stops even if it’s a bother for me getting in and out like that. I must take a longer view.
I think that also determines my actions for tomorrow. It has been very helpful to have some discussion on this board about it, for a new cat like me just stretching his claws. Thank you all for the talk.
I suggested to Gary that he make it required reading to all subs his friend Doc’s article at The DOCument called “The Mentality of the Successful Trader”
I think it may be helpful for some…
I just ran into the person who introduced me to options trading which really got me interested in trading for a living. She was astounded that I was focused solely in the precious metals as volatile as it is, she jumped out months ago. I told her that I had to choose a sector of trading I was comfortable with and her tip that got me into gold last spring led me to where I am today. I told her I have a great gold/silver cycles guru and blog I follow with great traders. I thanked her again, for her tip and told her since that tip and following STMP my accounts have increased more in 6 months than I made in 10 years in the mutual funds. She could tell I was very happy and I repeatedly thanked her for her single tip that has me focused on this sector now. And this was with the week we are enduring right now, she probably walked away shaking her head, thinking I must be nuts.
dg, nicely written as usual.
I rarely comment although I’m here frequently. By no means am I a seasoned trader but I do know a thing or two about psychology.
Adam, I like the way that looks. Reassuring!
TZ, I always respect your posts but I do recall your getting emotional at the last draw down. Or was that jayhawk?
Either way the emotional frenzy on this blog seems to me to be exactly inline with what one would expect.
Disclaimer: Old turkey.
Bosco,
I like your idea. I feel that we should look at different game plans for different situations. We should be able to discuss these situations with Gary.
I feel those of us who subscribe to the premium service should have a separate board where we can ask Gary a question that he can answer and not be afraid to give his material away.
I’m glad you brought it up.
I said this earlier in morning and I’ll say it again.
In hindsight one can say I should have got out at $49. It was so obvious. But in real time that’s pure nonsense. In real time one doesn’t know whether the top is going to occur at $49, $48, $47 or $45 or it could have just as easily occurred at $55. Then if you had exited you would be chasing right now.
Folks for as long as you trade the markets you are going to have timing mistakes. It’s just a part of the business and is unavoidable.
If silver had just opened flat I would have converted to gold. Unfortunately that day silver chose to start melting down premarket so we never got a chance to convert.
One rule I learned a long time ago is not to sell into a daily cycle low. Even if you have to ride out the correction you almost always end up getting a better exit if you wait for the bounce as the next cycle begins.
Once we got caught the odds were better to wait for the bounce out of the cycle low and I dare say none of us without a crystal ball could have guessed at how hard silver would sell especially since we have none of the hisotrical signs of a C-wave top.
Now maybe this time is different and the largest C-wave of the entire bull will top with a whimper, maybe it will top before sentiment reaches bullish extremes, maybe it will top before open interest on gold spikes to new highs, maybe it will top after only two daily cycles instead of the normal 3 or 4, maybe it will top with gold a measly 16% above the 200 DMA, maybe it will top before the miners ever get stretched above the mean, maybe it will top without the dollar making new lows, and maybe it will top before gold ever enters a final parabolic move up.
The problem is how can one tell before hand that something that has never happened before is going to happen. The answer is you can’t. And if it’s never happened before then you would be a fool to bet on it because 9 times out of 10 you will be wrong.
So gold is only three days into a daily cycle correction. I have no problem waiting for that correction to run it’s course and I have no problem betting that gold is going to top similar to every other C-wave for the last 11 years.
And if that is the case silver has followed gold up into that final top during every major C-wave so I’m going to assume it will do so again and at the very least it will tag $50 before this is over.
Gary sure said “maybe” a lot, hedging bastard. 😉
I just want to point out that Gary predicted this. ALL of it. Yes, he decided to stay with silver in the hopes it would tag $50.00 — but he also warned us of a cycle low, one that would be scary and very painful and would cause people to question whether we are in a D-wave. He said all this, and now it’s happening. He said we’d go until Thursday at the earliest and maybe through Monday. Folks, it’s Wednesday night. I think we need to remember that he hasn’t been proven incorrect on this call, yet. Hold off on the post-mortems.
he is not hedging, just showing different scenarios that can occur.
Sentiment reset
Well, in the markets there are no certainties – only probabilities.
Yeah, deep, I know.
Also, for anyone remotely pissed at Gary, take a look at the 4/26 report and shut up: http://smartmoneytrackerpremium.com/wp-content/uploads/2011/04/silver2.png
Anyone pissed at Gary is an idiot. You’re responsible for your own trades. And Gary provides the most cost effective guidance I have ever seen.
CMT so true…”Gary provides the most cost effective guidance I have ever seen.”
This comment has been removed by the author.
Muttonfish – my thoughts exactly!
Even if Gary did get his timing off on this severe silver correction, he did warn us beforehand that it was possible!
It helped me take proper precautions portfolio wise and mentally.
I sold more that half my silver holdings near 49 and converted some to gold at 1520. This is thanks to Gary.
Now I am buying back at lower prices slightly uner 42 for spot silver. Probably should have been a bit more patientbut if it goes back to 50 it is not really going to matter much.
But my other half of silver is in AGQ and I rode that down. I still feel the pain. Even when I know it could happen, handling my emotions is a challenge and am glad to have Gary and this board to help me learn.
PST,
I agree, is there any market out there that is not manipulated -don’t think so–
Gary,
Thank you for posting.
Gary,
You are absolutely correct.
Forjan
I feel bad for the folks who are leveraged here, or maybe just on margin and not heavily leveraged. Leverage scares me, and heavy leverage scares the crap out of me. If there’s a lesson here it’s this: When you take on leverage, calculate what your account will look like if the trade goes against you, and figure worst case scenario. If that scenario is too bleak for you to stomach, then you have two choices: 1)Don’t use as much leverage (or don’t use any), or 2) decide at what price you will reduce your leverage by closing part or all of your positions.
I know no one wants to sell at the bottom, but the problem is that no one knows where the bottom will be. Was it today, or do we have another day or 3 to go?
This is a tough business. Most of us are small fishes swimming with sharks.
Another great post this evening, Gary. Thanks. Nice to see the alternative scenario on the buck.
looks like we all agree that the bounce out this low will determine EVERYTHING…
I will sell if I sense any hesitation from gold during this bounce
also, i just noticed a huge cup and handle on GDX
i know Alex and Jayhawk really like those patterns
I’m seeing a beautiful thing in this community… I feel I know a bunch of the regular contributors intimately after spending some time on this blog in the last few months.. Many thanks for all your posts, you know who you are….
Newbies, this is a great place to learn!
And of course, many thanks to Gary for being a true beam of light. His advice is the best I have ever seen. Other than that everybody should know their risk level and should act like they are investing THEIR OWNN MONEYYY
I kind of like the “smartest guy in the room” game here and the recent debates… Keeps us flexible and honest… Also, I’m noticing huge nr of posts today so the bottom must be close :))
waiting for the dead cat bounce that might take us to new highs… and for the Switzerland trip…
Clarkatroid, I hope you still have some clean pants for tomorrow man… This drop has been tough on you…
Gary,
I agree with all you just said, yet I have to say as DG and POLY point out that there are other tactics to employ along with cycles. In my experience a parabola puts one on watch for a spike in price on volume to exit. Sure, it may not be the top, but when a spike in price and volume occur, it tells me that big money is unloading, thus the volume, and momentum traders are eating it up, thus the rise in price.
As far as tactics go, for me that is the time to sell, and I and many others with years of experience bailed. I think what will make us even better as a blogregation is to develop tactics that can be used in real time to avoid a drop when parabolas occur, as they are unsustainable and always end badly.
No, none of the things that mark a C-Wave top occured in gold or miners, but they sure occured in silver.
The main reason I sold “early” is because there have been countless times in my life that I “missed it by that much” just like the intention you had to get out Monday morning. It seems that you were thinking what many others were thinking, as well. The goal in a top is to front run the masses.
Anyway, I also need to echo what DG and POLY said, which is that I have learned more from you and your blog than any other single source in my trading/investing career, and I don’t say these things to make you wrong, only to make us better as a team, which I really feel SMT is becoming.
Thanks for everything you do! You rock, and are a true genius.
THat’s it. Nuff said.
f
“Now maybe this time is different and the largest C-wave of the entire bull will top with a whimper, maybe it will top before sentiment reaches bullish extremes”
Gary, Silver went from 17 on July 2010 to 49.75 on April 24th. That is almost a 300% move in 9 months. At the peak it was stretched over 100% above the 200 dma. Prior to the top, Silver closed above the the (20,2) Bollinger Band an unprecedented 7 straight trading days. I did some digging and some of the great commodity runs over the past century didn’t even pull of this feat.
Just food for thoughts…
Worth noting: if you look at a gold chart, we have a mirrored rise and fall from Thursday until now. We hit new highs after the Bernanke speech, and we went up very fast without time to establish a base. On the way down, it’s those levels that are sliced through easily. Air pockets, some of the more seasoned traders call them. Interestingly, gold stopped its decent precisely from the levels at which it took off on Bernanke Day.
Also worth noting (and it’s been noted elsewhere but I think it bears repeating:) The miners are often a tell — they are the canary in the proverbial mine. They were warning us of a decline, and look at them now — many of them holding their own today amidst the carnage. Even more impressive when you consider the general market was down and they often trade in tandem with that.
Two good arguments for a bottom hereabouts. We’ll have to wait and see, but it’s food for thought.
so..we could top in two weeks..
great!!! i’m soo screwed
Eric,
Silver doesn’t drive the sector, gold does. You’re wasting your time trying to make decision about the sector via silvers action.
At the top silver was 80% above the 200 DMA not 100%. I’ve seen assets stretch 200% above the 200. There is nothing that says 80% is the limit. As a matter of fact at the final bull market top I won’t be surprised to see silver 200% above the 200 DMA.
If you exit at 80% you would miss 120% of the move.
Again it’s easy to say one should have done this or that but in real time it’s just not possible.
The fact is people have been calling a top in silver for months. Those people missed almost the entire move.
Now I’ll say it again. No C-wave has ever topped with gold and miners at such low levels. No C-wave has ever topped without silver following gold.
Even in 06 after a viscous correction silver came back to make a double top.
So I’m going to assume that gold isn’t done yet and if that’s the case silver will follow it back up at least to a double top.
Unfortunately I suspect almost no one will be on for the ride because the correction will have knocked them off. I doubt anyone was able to hold on for the double top in 06 either.
Let me point out something else. Big money tends to drive gold above a big round number so they can trick the little guy into buying what they are selling.
Without the benefit of hindsight the most likely scenario would have been for big money to drive silver above $50 and convince everyone that a major 30 year breakout had occurred and then sell into panic buying.
That was what I was expecting to happen. Unfortunately this time it didn’t happen.
This is really really tough!
I am worn out.
I follow another forum/ subscription that I respect very much over the years (itulip): on friday he made the rare call to sell his silver (although he failed to call out the stunning rise in silver in last few months. He however does not focus on gold or silver investing)
He is celebrating this call, and now King World News KWN) has Ben Davies blabbering about scrap silver coming into market and causing temporary oversupply. At same time KWN has Turk saying $50 by end of June.
I’m just thinking even if we get a bounce tomorrow, folks like my self who are “true beleivers” may be so worn out that we may just exit some positions (AGQ#!$@$) for peace of mind…..
nice post, Benjamin. And lucky you to be going on the Switzerland trip! The beauty of that area is mind boggling, and you’ll get to me Gary and some of the SMT folks in person. Should be a great time!
Pima, U coming too? Or some other time?
last comment: get to “meet” Gary and…
Gary said “Unfortunately I suspect almost no one will be on for the ride because the correction will have knocked them off. I doubt anyone was able to hold on for the double top in 06 either.”
Understood- surely my state of emotions must mean we are close to a bottom- I’ll be hanging in!
I wish. We have a family reunion to go to on one side of the country (Virginia), then later in the summer a trip to Washington State. Right now I don’t have the funds to finance those trips AND a trip to Europe. Hopefully I’ll make an SMT gathering before this bull is done though.
Have a great trip!
Great post Gary.
By Friday we should have our swing.
James
Poly,
I wasn’t trying to criticize Dan when I asked him whether he made a post when silver was up near 50. I asked because I didn’t know AND because his post was quite thorough AND if he had made such a post, I suspect more than a few SMT readers would have sat up and listened.
So my intention was not to blast Dan for his post, but to ask whether he’d made a post like that before, and if not to suggest that such a post could have been helpful to some here.
I agree with you and others that post mortems are worth doing. I certainly want to develop better trading tactics, and examining how each trade has worked out is one way to improve tactics.
We’ve got green next to silver. Something I haven’t seen in a while.
Gary,
Hypothetical question based on some trends I saw in the Ichimoku Cloud formations of past C wave tops…
Is it possible that the C wave top for gold can be pushed out to September, meaning we have many more months of daily cycles and grinding higher? If this does happen (lets use cycle theory to back into and reverse engineer) what cycle timings would it take? Could we have a whole new intermediate cycle for USD?
So I decided to check Dan’s assertion that there have been times where one of the three basic items we track peak while the others lag or show weakness. The charts do not seem to bear out his assertion. Decide for yourselves.
http://www.screencast.com/t/kx3zEanP4mu
http://www.screencast.com/t/fmsz7A6Pn53Z
http://www.screencast.com/t/J5gbXdvL5yj8
http://www.screencast.com/t/VGF3M8ZZgquo
I tightened up this years chart time wise to zoom in a bit.
http://www.screencast.com/t/tRpb3X2P
Gary and Bloggers,
I have followed Gary’s plan all along. I have not sold anything. Silver could fade like oil and move on to the next big thing – gold. Since there is more upside potential with gold, what about converting 50% AGQ shares to DGB after a bounce?
What number are we looking for to form a swing?
THis may be a stretch but here goes.
I’m seeing some similarity in the Gold/silver/USD formation right now to the time period of March to December 2007:
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&st=2007-01-01&en=2007-12-31&id=p32782737588&a=233342407
Gold had a big consolidation and made a nice run up (sort of looked parabolic) in Sept and Oct. THen in early Nov, gold got hit (silver not as much as today, though) and the USD did a little “bottom feeding.”
Ok, now here is a chart with 5 more months added on:
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&st=2007-01-01&en=2008-04-31&id=p86840679925&a=233342407
Maybe you can now see my thought process here.
In late Dec 2007 Gold took off again and ran the final C wave top to March.
Another key here is the trend on the USD here and potential similarities. In Nov 2007 the USD bottom fed around 75. Then at the C wave top it was at 72 (give or take).
Fast forward to 2011. We are at 73 now. What if it stretches and takes 3-5 more months to fall to 70 and we can made another more organized run here?
Another possibility is that the raid right now is re-playing the late Jan 2008 dive (where you can clearly see people would have thought the C wave was over). If so we have another 1 1/2 to 2 months left.
gary
great post and im hanging in there . thankyou for everything.
question
are the margine rate hikes out of the norm? gforce for instance puts out a report and they are saying ” even if you have a 7 figure account do not touch silver with a 10 foot pole”
gforce increased their margin to 25000 while dainels is still holding theirs at 16000per 5000oz contract
Have been in a conference the last three days, with only occasional glances at market (the distraction has likely “saved” me.)
Not pretty; no indeed. In fact, today’s/tonight’s levels reflect what I anticipated as ultimate worst case scenario.
So revising my expectations and playing with what could be worse than worst?
Thinking of others here, whom I don’t know but paradoxically(?) for whom I feel, and hoping the metaphorical or literal whiskey is seeing folks through.
Nice to see AG and GDXJ in the green! A guiding bright spot resonating with Gary’s guidance?
Guiding guidance?
Oy, must be tired.
Please, c-wave, just replenish the coffers . . . xxoxo
Gary” Unfortunately I suspect almost no one will be on for the ride because the correction will have knocked them off”
Well ive copied your portfolio gary and i can tell you 100% I’ll be all in, all the way. Im mentally prepared to give back alI of this years profits . And if that happens then so what? It’s only money I didn’t have 12 weeks ago anyways. So I’ll still have a smile on my face and a thankyou for one hell of a ride to boot.
I Won’t however be thanking you for crapping my pants on an hourly basis though
I am intrigued by the posts regarding exits out of blow off tops. There were a couple of strategies suggested and I would welcome the wisdom from the board on the pros and cons of each approach:
1. Look for exhaustion signs. This is what Gary plans to do.
2. Gradually scaling out. someone suggested this I think. Fubsy?
3. How about using stops to be triggered when a swing high occurs?
Would really welcome your insights on this.
Now I’ll say it again. No C-wave has ever topped with gold and miners at such low levels. No C-wave has ever topped without silver following gold.
It looks as if this one has for silver.
wow silver hit 38.7..i wonder how much lower it will go
Hi Clark – good to see you haven’t jumped off the tower [it’s not open yet after refurb, anyway! 🙂 ]
I had a limit which got hit on that Sunday – so exited most trades … but got back in quite big a couple of days later with all the enthusiasm here.
The good news is that I just noticd that today’s level puts the silver price right at support of the channel going back to Novemeber. Here’s a chart someone posted yesterday without the channel
http://www.finviz.com/futures_charts.ashx?t=SI&p=d1
BTW .. a thought for conspiracy people: I tread carefully around certain dates … May 1st is one. I wondered if silver might get hit then [the anniversary of Adam Weishaupt’s Illuminati!] 🙁
Well, I’m buying this morning. Silver at the 50DMA is a gift after this panic selling.
Silver at 50 is a gift, but it was there and below a bit in Jan – but I will wait reversal day, in case it get’s even cheaper.
There was more volume on SLV these past few days than on SPY. Although silver is oversold, there may still be panic sellers out there.
Niven,
Get it in your head that silver isn’t going to reverse until gold bottoms. I really doubt gold has any chance of bottoming until at least Friday.
Elove,
So do you have a crystal ball? Do you know for sure that if gold goes to $1650 (I figure that is a minimum for the C-wave) or $1700 or even $1800 that silver will not follow and will continue down?
Let me make this suggestion again. If you can’t control your emotions and are constantly checking your portfolio you need to turn off your computer and do something else for the next week and let this correction run it’s course.
For anyone being tempted to use the Minilongs that I’ve promoted recently, just a piece of hands-on experience:
My main positions are at stop-loss levels that I still view as prudent although 34.90 starts to feel less comfortable every day.
However, I tried a new experiment, which involves making a trade very close to a stop-loss limit, based on the fact that it was sitting just under what appeared to be a resistance level. The price of course sliced right through the resistance and breached the stop loss level. So far so good – it was a calculated and minimal loss. But the downside I hadn’t counted on is that it’ll take me 10 bank days to get the proceeds of that forced sale.
Conclusion, don’t wait for the automatic stop loss sale to trigger unless there’s a very good reason. Better to sell ahead of it.
This is going very well. Today a lower low, with 1522 as its high will make putting a swing in a lot easier.
Today should mark the low.
Silver looking like a forgotten child.
Pima-
Virginia’s my neck of the woods…where you headed for the reunion?
Here’s a piece of advice from ShalomBernanke last month that resonated with me and I think is well worth keeping in mind now:
“One rule I’ve always followed since I became profitable is to let whatever analysis that got me into a trade be the same analysis that gets me out.
In this case, Gary has been as accurate as is possible by any trader. He got us in, I’ll let him get me out.”
A mistake that I’ve often made in the past is reading too many different views, which often contradicted each other in some way, trying to reconcile them into a plan of action and ending up with a bit of a dog’s breakfast.
After reading this blog for a few months, I became a subscriber earlier this year and decided to follow Gary more or less exclusively. It’s paid off so far and I intend to stick to his in terms of how he sees the C-wave finale unfolding.
Now if somehow this time is different, it throws a serious curve, etc, well so be it, I’ll let Gary make that determination if it comes time to change direction.
Nothing wrong with second-guessing things, discussing alternate ideas, etc – I find the discussion here interesting – but ultimately I’m going to let the analysis that got me into this trade get me out of it, as I think this is sound advice.
Can always do a post-mortem once we’re definitively into the D-wave, but until then I’m happy to keep riding with Gary.
Gary,
This looks to me that gold/silver will take a rest and consolidate lower for a couple of months to work off the froth. I’m not sure why the cycles haven’t taken this into consideration allowing for the continuation of the advance when seasonality is more condusive to the PMs.
Additionally, if I read your latest report correctly, the two dollar scenarios you laid out essentially call for a continuation of their decline. Isn’t a decent size rally in the dollar at this point more or just as likely coinciding with gold’s well deserved rest?
Although May certainly has some precedent for an upward move in gold, I’ve not seen on the charts where gold moves higher in the May-July time period when it has already advanced quite abit going into this period of unseasonability.
Thanks as always.
Hopefully Gary will live long enough to tell us when to exit – one slight false move in a snatch and his entire nervous system gets crunched like a xylophone – or one slightly sweaty hand means a ground fall 50 meter – either way we’re screwed!
Gary, how about bowling or something safe like that? 😉
’09 $GOLD was up Jan – May
’10 $GOLD was up Jan – mid-May
There is some precedent.
I think this is just a correction, as the money supply from QE is still persistent, plus $TYX made a lower low today (after a lower high) – so we’re in a downtrend now.
Spot silver just hit 37.98.
I know, I know, watch $GOLD’s RSI and lower BB.
Off to bed for me.
G,
That’s just not the way intermediate cycles work. If gold tops here then it will head lower for 7 to 12 weeks.
That would be an extreme D-wave at this point. But I just don ‘t buy a D-wave before gold and miners both get really stretched.
A D-wave is a regression to the mean event spawned by a parabolic C-wave finish.
We haven’t got the parabolic finish yet.
Cycle wise gold is due for a daily cycle low. It’s pretty obvious it’s working down into the low right now.
Oil and stocks are also due for a cycle low.
Once these have run their course then we should see gold’s C-wave put in the final parabolic finish. Oil should rally sharply enough to collapse the global economy and the stock market will likely make marginal new highs before rolling over into the next leg down of the secular bear market.
hi john
whats that other site you follow mate?
Good morning Gary et al. Your calm words, Gary, are gettin’ me through this, and I know the sunny days in my portfolio will come again. Great Panther was up 5.77% yesterday; in the past it has led every move, up or down. Let’s hope it’s true this time, too!
Gary, are not the massive spec longs in crude and copper, etc preventing a big rally from here in those commodities?
My main worry at this point is based on my belief that this is not a fair and well functionioning market.
Unless someone shows evidence to the contrary the indications poin to that:
– The bullion banks are massively short silver
– The Comex physical silver stocks are dwindling
– The bank cartel controls the Comex
– The CFTC is passive despite seeing the problems
So it may not really be a case of whether this is a C-wave correction or a beginning D-wave. My concern is that it’ll be whatever the bank cartel wants it to be. And they’ll use all the tricks in the book, including incessant margin calls, propaganda and shortselling to induce more long liquidations.
No entering the 37 range as I type this…
I’m gonna kill myself!
Does that ease sentiment enough to cause a bottom in metals?
Gold looks headed to 1475; no stops Gary? Then there is the 1440 b/o area. But lets not get too far ahead.
Gary,
don’t want to beat a dead horse; (coulda, shoulda, woulda) … but: you wanted silver 50/SLV 48.70; SLV was sitting at 48.00 for some time; why wait for the last 70 cents? Yeah, I know, hindight bla bla, but it was 70 cents up, $12.00 down, and counting.
If you’ve covered this, ignore.
We are at 38 now. This is 50% retracement from 24 to 50. Bounce time!! We’ll see.
Jonas,
You can’t seriously believe that nonsense do you?
If the banks were short and need silver down then explain to me how they let it rally all the way to $50.
Seriously people do you even listen to the things you say?
This is just a normal daily cycle correction. They happen like clockwork about every 20-30 days.
BTW gold is now getting close to it’s lower Bollinger band and the 5 day RSI should be oversold if gold can close in this area.
Arun, sliced thru 38 like butter.
Me thinks, just like there were no levels on the way up (till the big FIVE-Oh), there may be none till the big THREE-Oh on the way down.
But just more conjecture.
Fasten your seat belts.
If we can hold these lows into the open, I’m going to go out on a limb and start scaling in my remaining cash, about 45%, which I had reserved for a swing low. Yeah it’s a falling knife, but were printing a cycle low here and we should be just about done after 3 days and gold in the $1,400’s
Bruce,
If you knew SLV was only going to 48 then why did you wait?
I didn’t know ahead of time that SLV was going to stop at $48 because my crystal ball is in the shop.
BTW since you apparently do know the future please tell us where we should buy 🙂
Might I suggest you are a candidate for turning off the computer for the next week. You are just torturing yourself and your mind is convincing itself that this will never turn. At this rate you will sell at the exact bottom.
Bill – Gary is obviously an adrenalin junkie, just look at how much of his portfolio is in AGQ!
So bowling isn’t going to cut it.
Gary – are you feeling any pain during this draw down? I’d like to imagine that you are human like the rest of us.
Good morning all.
I smell opportunity all over the place and will be adding today.
It is not silver that is causing all the pain around here. It’s position sizing inconsistent with one’s risk tolerance and volatility of the vehicle traded.
Bruce, I will look for the close. For sure, they will run it below 38 to gun the stops. If we go close way below that level, then I don’t know where the bottom will be.
Well we officially hit low 37s, that puts us under the 50dmva so we should bounce soon for a few days atleast. Debating whether this has already burst or not it is just silly imo, there are no parabolic moves where silver crashes 25% and then continues upward after. Good news we are now only $8/9 away from the 200dmva so more than 50% of the pain is done. /jmo
Gary,
I’m very far away from being able to explain anything that’s going on at the moment.
However, unless the enormous short positions and the rapidly sinking Comex stocks are carefully manufactured lies, then you have to draw the conclusion that the banks are facing huge losses when they have to cover or deliver. Right?
As for what they’re capable of doing to protect themselves from those losses? I don’t know anything about that, but I know that I have very little trust in bankers’ honesty over their greed.
As for why they would let it run to 49? Well, how about drawing in as many speculators as possible and then paint a nice post-parabolic crash to get rid of the pesky Sprotts and Keisers and their followers for at least as long as they need in order to collect the 2011 bonus?
I’m still holding all my positions though, so I’m not saying that this is for sure how it actually is. Just that this is my main concern.
Anyway, even old time pros like Richard Russell believe that the PM markets are heavily influenced by banker manipulation.
Gary Gary, you misunderstood my question: All I was saying (to your immense credit, foresight & understanding) you rode a ginormous move in silver, and you were waiting for the last 70 cents up to trigger your sell. You rode AGQ from 150ish to 380ish.
Why wait for the last percent when you’d made over 150%?
Just a word about Oil:
I think Oil is not going to close just a daily cycle, but an intermediate one, and that should bring it under 100$.
How this will affects the aother commodities market, one should only guess, but i think it’s not good for bulls.
That does NOT apply to gold and silver. They pushed up despite oil retracements sometimes, they have no difficult doing that.
I as gary was waiting for a daily cycle correction that simply didn’t seems to come, and when it came, it found everybody unprepared. I was deleveraged at the top, I have 4 bullets to shot and just shot the 2nd now (first was @41). Will they go to 32? I don’t know, I don’t care.
The reason WHY gold and silver went going up has NOT changed.
G.
http://www.ellipsetrading.com
Where are gold and silver gonna bootom out????
Gary,
At 140% leverage there has to be some point where enough is enough because your account could be be in margin call mode. No?
Seriously guys, why the panic? Yes, it hurts like hell to see profits disappear, but with proper money management, no one should be counting any losses at this stage (anyone who just blew out their account has learned an expensive lesson about leverage)
I was prepared for a very nasty downturn simply because Gary said it would happen. Now, either this is the final battle, and those who stand firm will prevail – or we are currently experiencing some weird, unpredictable, out-of-space, negate-all-patterns event.
No one ever said these things cannot happen. Why are you trading if you cannot take the heat? Did you think there was going to be free money, without risk?
As a new subscriber, my idea is to invest in GLD calls that would not expire until 6 months from now. I might lose some pop that a June exp might deliver, but wouldn’t this protect from a D wave scenerio?
I could use more timeline info on the C, D, and A waves.
Any comments would be appreciated. I’m learning from all of you.
Dan-
I appreciate your analysis and continued caution – it makes us all continue to assess and think.
That said…
If this is the top in gold, it is not behaving like the tops in 2004, 2006 and 2008, all of which had post-parabolic spikes down. It looks much more like corrections on the way to the top of the past c-waves (the largest of which was 10% in 2004)
In each prior C-Wave, silver topped when gold did – actually within a week.
So my conclusions:
1) It is likely (but not certain)that gold has not topped. Sentiment supports this idea.
2) It is likely (but not certain) that silver will top when gold does.
The one thing I question is the multi-day decline in silver and it’s impact upon sentiment. Rather than a quick spike down, we’re getting a bit of a grind down, something that feels like it will take time to consolidate before moving higher.
TJ
Agreed on the multiple down days in silver. (Isn’t there even something called four day corollary?).
I was convinced that I’d use my dry powder to buy into lower prices, but with this constant sinking I can’t bring myself to pull the trigger. Just feels like we might just as well get whacked for another 10%. So I’ll just wait for a swing low instead.
NEW POST
Bruce,
That one is easy. Because in real time there is no way of knowing that was the last 1%. And if you will remember I was prepared to go ahead and convert but we got caught by a premarket sell off.
Now if I had a crystal ball I would have just gone ahead and sold into the opening gap. But I don’t have any special ability to see the future so I decided to just ride out the daily cycle since I was already caught.
Dollar just got stronger on the jobless report
He is a thought and a question? Is it possible that a big cause for this pull back is “hedging” by minners? I heard yesterday that Carlos Slim who owns a silver mine and is a bull on Silver has been shorting this week to hedge. I have to belive that most minners do the same thing and likely did it much more 47 -50 when they locked in rediculus profit margins. So wouldn’t it make sense that medium term minners will lead no matter where silver goes? I think SLW reports next week. So we may get a read next week from them. Thoughts?
where is the guy yesterday that said I was “scaring people” ?
Got caught holding the bag, and decided to keep holding… IMHO this “if I had a crystal ball thing is BS”. That is dang horrible way of admitting you made a devastating mistake. People keep bottom buying on here are going to get hammered some more. The hedge money is gone it went over to bonds. No bounce without them.
mathew
are you then saying that the PM bull is over ?
Do you think the dollar has bottomed and is heading back up to plus 80 and beyond effectively saying QE has no effect on the good old $