Altrernate strategy posted

An alternate strategy has been posted to the website.

1,563 thoughts on “Altrernate strategy posted”

  1. Farm Girl

    Matthew – What exactly did you mean by “Gary has already crossed that line”

    He can write what he wants as long as he doesn’t give peronalized, individual advice.

  3. Vish

    Always ready to step up for your subs. Even the whiny ones.

    Thanks Gary. Appreciate EVERYTHING you do.

  5. YesLetsDiscuss

    Yes! I love these alternate strategies by Gary. They come at bottoms when there is panic on the blogs and Gary feels as if he needs to give something to alleviate it. The bottom must be very close.

  7. alysomji

    Gary, are you going to follow the alternate strategy?

    I really think we’re so close to a swing low that this will probably not be worth it…of course you never know.

  9. Strat81

    For all of those who are looking for Miner strength as some sort of leading indicator for a Metals bottom, I would be cautious. It was clear to me during Silvers run up that the popular trade amongst the large trading desks was to go long the Physical and go Short the Miners as a hedge (It worked beautifully in hindsight). Now that is appears those trades are being unwound you are seeing support for the Miners through short covering.

  11. Farm Girl

    Gary – was the turn in the dollar within a day plus or minus of the employment numbers due tomorrow the upturn we saw today?

  13. james r

    I bought in yesterday at 235

    (thinking great bargain)

    Never do that again, wait til the swing low or gradually scale in…

  16. fubsy_cooter

    This is priceless experience. We are experiencing the backside of a parabola in real time with skin in the game. If you’re losing, make it count, take lessons out of this that cover the cost of entry.

    By the way, this will definitely bounce, and hard. The question remains, will it make a new high or roll over?

  17. Jayhawk

    Qualitystocks-

    You seem to be enjoying this too much. Can you elaborate? Seems like you were an older sub…Maybe you missed the ride and are now rubbing it in?

  18. Shalom Bernanke

    Hard to believe, but EXK under $9 and SVM under $11 now.

    It feels like more downside in the near future, but I hope these stay around here for another day or two.

  19. catbird

    I’m one of the youngest and least experienced traders on here, but I (think) I have common sense.

    Let me just throw this out there, and then I need to step out.

    Don’t lose faith in Gary. He is right FAR more often then he is wrong. I think he WILL make us a lot more money in the months and years to come if we stick with him.

    Ah, but what do you need to stick with him? (well, other than the annual membership). You need CAPITAL.

    Your capital is your “chips” in this game. If you lose so much that the demands of living life in the Ben Bernank’s banana republic prevents you from trading with Gary, you are OUT OF THE GAME.

    You can always make money if you preserve enough chips to trade, and Gary will more often than not make us money.

    For me, I trimmed today because of my personal life constraints….I would still be up big, PLUS I could rest easy knowing I had enough cash to pay loans later this year. Simple. Not dictated by panic, but by my PERSONAL situation.

    Again, think of your PERSONAL situation. Think of how many “chips” you will need to keep playing along with Gary.

    Hope that helps some people as you decide what to do in the coming days.

    Now, I need to run an errand.

  24. Sandy101

    This is a tough one. I feel we are very close to atleast a major bounce in silver after the carnage of last week!

    What is everybody doing. Gettng out or waiting for bounce.

  26. niven

    I was one of the new members who bought at the top.. well technically I bought silver when it was 42 dollars and held on till this massive drop. Just sold all my agq positions which accounted for 50% of my portfolio and now waiting for that swing low to confirm that this correction is over. I wish Gary would’ve mentioned this earlier but thanks for the advice anyway.

  29. Vonda

    Jayhawk – I’m also thinking of Kal (and his beautiful family).

    My hope is he wasn’t too extended and is riding this out elsewhere–somewhere fun–or at least not staring at the screen.

  31. YesLetsDiscuss

    at ease,

    Its a “good” afternoon only if you like getting kicked when you are down….or…if you sold at 48 and have stayed out since then.

  33. Vonda

    Hey, if Shalom’s buying, we must be close as my experience of him has been that he has nerves of steel in patiently waiting for buying opps.

  34. LowTax

    Puked. Sold all AGQ. I was no more heavily leveraged than Gary but as leverage decreased with rising price, I bought more to keep leverage at 140%. That helped kill the trade. Decent sized loss. Still own SIL and SLW.

  35. pimaCanyon

    T&J,

    The way I read the post was that its purpose was to show what was accomplished by following Gary’s calls.

    You, however, just assumed the post was all about bragging. Or maybe your blog lie detector gives you a reading on intent as well?

    Very handy tool, that thing is. Although it doesn’t have a whole lot of practical value really, unless you just enjoy taking potshots at other people’s posts here and elsewhere.

  36. Gold Era

    This is my lesson.

    Silver:
    buy @ 29
    buy @ 33
    sell all @ 47.5 ( what a great trade)
    buy again @ 48.5
    sell @ 44.5 ( great drop in pre-market)
    buy @ 41.5 ( thinking 30SMA will hold)
    sell @ 35.7 (today)

  37. niven

    Gold Era,

    Looking at your history…seems like you should always wait for a swing-low before you rebuy. I just learned a hard lesson today too after selling half of my positions (AGQ)

  39. pimaCanyon

    SB,

    I followed your lead, picked up a small position in SVM. It’s the only silver miner I now own. Have small positions in GDXJ, AXU, and NG as well, but those are primarily gold miners (except GDXJ does have some silver miners in their mix, I believe).

  41. Tim and Jeanene

    Pima –

    He could have easily made the point without disclosing that he had made $8 million is the point.

    It’s not so considerate either reading here that a lot of people are losing huge amounts of their accounts. It only solidifies in their mind that they failed since they too didn’t make millions.

    By the way – why are you the defender of the multi-millionaire? Only one taking potshots here would be you at this point.

  43. mdsn

    I know what many think of intrady patterns and it may be a bit of wishful thinking….but DX on an hourly sure looks like a rounded top forming. Look at the declining volume. There, I feel better now 🙂

  44. Blake

    I must say its a little disconcerting that this is the capitulation event that we have been waiting for and because the pain has gotten so extensive we are now going to take massive losses, dump AGQ and hope to jump back in on a swing low in gold.
    Hard to ride this wave all the way down (figuring it was a healthy correction) only to sell at the bottom…Sucks

  45. Gold Era

    BTW, in my trade, sell @ 47-79 will result buy @ 41 as a follower of Gary. still ride the drop from 41 to 35 as Gary said this only is a correction( I am not blame to Gary, just my personal decision based on SMT, and I will do it). For me, I will hold tight as Gary didn’t make any move and result in selling @35 today.

    What should I improve my plan and learn the lesson? Riding this drop is the most bad feeling in my life.

  46. Jonas

    I know that I’ll definitely sell one lot of silver futures if/when we cross 34.90 (which when I put the trade on at 48 seemed very unlikely that we’d ever reach).

    As for the rest, it’s also starting to hurt badly since gold too is in free fall now. I’ll most likely sell more of my leveraged positions tomorrow when European markets are open again. I don’t want to leave myself without any capital if this turns out really bad.

    This has turned out like getting on a Six Flags ride, prepared for your standard rollercoaster thrills and instead getting a f#€&ing moonshoot.

  48. traderRob

    For the record, Rick Ackerman (hidden pivot trader… very successful over the last few years) has gone crazy bullish bullion along with Peter Grandich. Grandich happened to call the decline within minutes of the top, and he’s all in, noting that what he’s seen over the last few days has triggered a buy indicator that he’s only seen a few times in his entire trading career.

    Interview is as follows http://www.contraryinvestorscafe.com/peter-grandich/

    I would not be selling AGQ right now and will not.

  50. T.J. Rand

    As I read through the T1 document again (at Cory’s suggestion), and then looked at the silver charts, I was struck by 2 things:

    1) the consolidation zone to which we need to correct is 31 ish.
    2) the two T1 retrace examples in Gary’s Terminology document occurred during the initial stages of a D-Waves.

    Haggerty-

    You can always buy AGQ back…the current silver selling shows no real sign of abating…although I’m hoping.

  51. pimaCanyon

    Seems that one way to play this to reduce the bleeding is to dump the double long etf’s like AGQ, DGP, and UGL, and give yourself similar (or less) exposure by using in the money call options on GLD. But not too deep in the money, delta of .7 to .8, for example. If GLD goes back to its recent highs, you’ll do almost as well as you would with the double long etf’s, but if it continues to drop, the options will not lose value as quickly as the etf’s. If you do this, be sure to give yourself enough time on the calls. After dumping part of my UGL position, I picked up the equivalent exposure in GLD July 134 calls. I also dumped most of my SLV position, but I am not planning to buy any SLV calls. I think Silver is toast for a while, although it might do a 50 percent retrace of the drop (taking it back to 43 or so) if/when we get a bounce.

    ‘course if we just keep dropping, buying the calls will just be another way to lose money, just not as fast, that’s all.

  52. Mike

    Gary’s discussion Friday and the weekend report convinced me to buy 5% allocation to silver puts to hedge my gold position for the eventual parabola collapse of silver. After seeing the gap down on Monday I froze and decided not to. I had no idea it would commence this week.

    That would have been an epic trade in hindsight! Oh well, live and learn.

  53. Matthew

    farm girl.. you haven’t been at this game for very long…Gary is giving investing advice…and has crossed the SEC line..Right from the SEC Website

    Who Is an Investment Adviser?
    Subject to certain limited exclusions discussed below, Section 202(a)(11) of the Advisers Act generally defines an “investment adviser” as any person or firm that: (1) for compensation; (2) is engaged in the business of; (3) providing advice, making recommendations, issuing reports, or furnishing analyses on securities, either directly or through publications. A person or firm must satisfy all three elements to be regulated under the Advisers Act.

  55. David

    Gary,

    You have got to be kidding me. I am a fairly new subscriber and I went with Gary instead of my gut. My lesson learned through this is never, ever trade without some kind of tailing stop.

    Dave

  56. DG

    Trading thoughts: What is absolutely paramount is not to lose much of your stake. Please, memorize that thought, and NEVER forget it. There is no recovery from zero capital. I do not generally speak in absolutes, as you all know, but this is one (perhaps thee only one). For myself I never let a position that was well in the black go into the red (remember my break-even stop idea?)

    If you get out it clears your head. You can always get back in. 90% of the resistance people have to getting out is to avoid the horrible feeling of having the sold item take off as soon as it is sold. GET OVER THAT FEELING—IT WILL COST YOU MORE THAN YOU CAN IMAGINE OVER THE YEARS. It is pure ego that can’t accept having blown it. Very expensive.

    It’s funny, I had just starting selling my AGQ before Gary posted. I am ahead for the year now, my mind is clearer, and I can start fresh. I should make lots of money the rest of this year. Why open myself up to damage here? I lost my entire bankroll years ago and made it all back and more. I ain’t doin’ that again. Let’s learn and go forward. Hang in there guys!

    Poly and Fubsy: I have really been enjoying your level-headed posts. It’s great to have you both here. Thanks!

  58. Bob loves Hawaii

    This is the biggest weekly loss of SLV in five years. also, I have a fib chart that traced out the 08 lows with the Dec 31 high. $30.99 is the number.

  61. Farm Girl

    Matthew – there is an exception for newsletter that are perioducals of general circulation. SEC vs. Lowe

    The only newsletter editors that are registered are those who are borkers or money managers.

  62. Ryan

    First off I can’t believe people can’t own up to their own trades and feel the need to blame someone. I sold out today in the morning and believe me it was a massive hit but no one forced me to buy in the first place.

    Another thing, if you do believe there’s still a c-wave to come, I don’t see a problem with selling here and buying back on a confirmed swing? I’ve learned my lesson from 2X leveraged ETF’s before and you DO NOT want to keep holding if it keeps on dropping. The decay will kill you. I’m not here to scare you or recommending you to sell.

  66. Jayhawk

    TJ-

    Interesting…That’s right where the 200 DMA is, as well as the channel low off the summer rally. And where the 78.6% FIB level is for this current intermediate cycle.

    http://screencast.com/t/8iruxnyqMiw

    So, what happened in other D waves from your research once it hit that point?

  67. pimaCanyon

    T&J,

    I am calling YOU out for presuming to know that another person’s post was either a lie or bragging. How can you possibly know what a person’s intent was in making a post?

    And why does it bother you so much if someone took 2 million and turned it into 10 million? I find that inspiring and hopeful. Apparently you do not. But that’s no reason to assume the worst about why they made the post.

  69. Shalom Bernanke

    Matthew,

    No offense, but you sound like a baby. I’ve been getting the same advice from Gary as you have, so how do you explain my results?

    The SEC might just laugh at you. 🙂

  70. CMT

    James r said:

    “Lot of traders just mentally and emotionally defeated…”

    Perhaps that should tell us something.

    Having said that, DGs comment above about preserving capital is RULE #1.

  72. traderRob

    Putting my prediction on the line: Dollar rally to 74.5 in response to tomorrow’s “news”, followed by continuation of the waterfall decline. Then, it’s off to the races again. Yeah, I’ve seen my account balance blowtorched this week like many here, but I have a feeling it will be short lived. I didn’t sell into the ’08 decline either, however, and (outside of some option position expiring OTM), came out quite well. I especially liked doubling down on my SLW around $4. Ah, those were the days.

  77. Gold Era

    Great post DG

    Once we didn’t die yet, OPs are spread around the world. So, do not worth to take that risk in case gold really in D-wave.

  80. james r

    Larry,

    I hope so. I ready to puch the trigger if this baby reverses.

    I did sell some AGQ to lighten the load margin.

  81. PST

    Matthew,
    Gary hasn’t crossed any SEC line. He is taking compensation for providing a newsletter. He is not acting as a registered advisor or taking compensation for providing investment advice.

  82. Tim and Jeanene

    Guys –

    Don’t be so enamored with trying to catch this falling knife and calling bottoms. What you are witnessing is a crash in the silver market.

    The scary thing is that the market can drop to the low to mid $20’s and still be in a long term up trend. After crashes like this, you might see a quick bounce, but rarely will it go to new highs. It will probably trade in a range after this carnage, giving you ample time to get back on for another ride up if that will happen. After big drops, everyone mentally is so worried about missing out on the retrace that they think will happen just as quickly.

    Things fundamentally changed with the massive CME maring hikes. A lot of speculators who helped ramp the market are getting blown out, and may not have the juice to rip it right back from where it came.

  83. St. Deluise

    piling on: i’m out of PSLV a dollar less than i paid for it yesterday. don’t like how the 1PM candle closed on /SI. pointing to $32-33 according to my jazz.

    this thing will probably bounce here but i do think we’ll get lower prices before Thee bottom. all i know is that this morning i was feeling more “hopeful” than satisfied with this trade and that was enough for me to pull the plug.

  85. pimaCanyon

    TJ,

    Good plan about trimming. (I believe you directed a post to Jennifer that suggested she trim.)

    I did a little of that today. My only regret is that I didn’t start earlier, as in yesterday or the day before. One thing that prevented me was fear of selling at the bottom. But guess what, you don’t have to sell everything! Sell it piecemeal, stop the arterial bleeding, slow it down to a trickle. You can always put back on the positions you sold and maybe even at a better price.

  86. Blake

    Just sold everything I had (AGQ,DGP and some DITM SLV Calls). Will wait for the swing low to jump back in but man what a beating. Have to preserve the capital so that you still have chips to ante into another game…

  89. Avann

    I am not a savvy trader … no Ta, no cycles no charts … just my gut and Gary.

    I scaled in early (all silver) and scaled out on the way up converted HZU to HBU near the top and continued scaling out of silver on the way down.
    Sitting with 100% cash and my PM trade still up almost 100% … could have been 150% but I can live with that.

    Thank you Gary

    I have be around long enough to know that parabolic rises never end happily.
    My timing ALWAYS sucks but that just means I never make as much as I could and I never lose as much as I should and I am very pleased with that.
    I will wait for a swing and do it again hopefully …
    Gary I think your timing is amazing and no one could have predicted this drop in silver …
    Thanks and looking forward to the next run

  90. Jonas

    I don’t know about you guys, but my biggest lesson learned, and one that I think I’ll respect for the rest of my life is nothing but a simple trend following truth: have rules for entry and exit – and then follow them.

    This is the second time I go deep in the red, the last was the summer slump of 2010. Both times a daily correction turned into something much more serious than expected.

    So even if it means missing a few points here and there I’ll be inclined to get out on every daily swing high and not enter until there is a daily swing low.

  91. Astrella

    Sell now? You have got to be kidding me!

    Well, if Old Turkey Savage has capitulated, then we most be near a bottom.

    Sheesh.

  98. Vonda

    Eamonn, I might have to send my dogs out to hunt for all of us!

    Just kidding. I’m weathering this one fairly well. But, as others have said, I feel just sick for anyone who’s wrestling with an intolerable threshold.

    For me, it’s not the literal losses as much as the loss in confidence. FWIW, I had the same sick kind of feel that Sunday night silver thrusted higher — something I will pay more attention to in the future.

    Glad to see you are still here, Eamonn!
    (Send dog food!!)

  100. Farm Girl

    Matthew – from http://www.seclaw.com/docs/RIAOverview.htm

    Newsletters

    We are often asked if the publisher of an investment newsletter is required to be registered as an investment adviser. As noted above, Section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-2(a)(11)), which is a key federal law, defines “investment adviser” in part as “any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities.”

    However, expressly excluded from the definition is “the publisher of bona fide newspaper, news magazine or business or financial publication of general and regular circulation.”

    Section 401(f) of the Uniform Securities Act, upon which the majority of state securities laws are based, similarly excludes from the definition of investment adviser “a publisher of any bona fide newspaper, news column, newsletter, news magazine, or business or financial publication or service, whether communicated in hard copy form, or by electronic means, or otherwise, that does not consist of the rendering of advice on the basis of the specific investment situation of each client.”

    Since a bona fide newsletter publisher is not an investment adviser, registration as such is not required.

  101. CMT

    The May GLD 160 calls that I paid $.02 for now have “N/A” for the bid.

    That’s kind of funny I suppose.

  103. KAL

    Hey Vonda and others! Hope you are well.

    Yep, have about 90% of the retirement in AGQ. My choice for personal reasons, and I gladly own it. It’s great to live in a country where I am free to invest. This has been a good education.

    I will be fine… I’m young still and I know that after learning from Gary retirement is possible someday. If I had stayed in mutual funds and self-picked stocks, that never would have happened with the small salary I make.

    Gary didn’t force you to invest, you chose to. Own your decisons and your gains and losses as well, and move forward. That’s my goal here.

    Be safe everyone!

  104. Larry

    Farm Girl – you have sufficiently blown up matthew at this point. If he thought he was making a legitimate point (he wasn’t with the SEC stuff), then he should be gone…

    if he keeps it up then he’s just here to stir up trouble… i’d ignore from now on

  107. DG

    One other point: A swing low just means a possible rally has started. AS swing low means yesterday’s high was bested without the low being violated. It assures you of nothing. East to have a swing low and then plunge…just for the record. If it happens during the timing band for a bottom the presumption is that if a rally gets started that’s it, but it is just a presumption. (If I have hits wrong someone please correct me)

    Unrelated:
    Damn Poly! Every post of yours has me nodding my head. “Show some respect and civility, it’s during a “crisis”, ones true colors are revealed. Well said.

    On Gary’s behalf: This is a brilliant investor with a load of integrity. I am and have always been impressed. I have always felt, however, that the market is lilke a heat-seeking missle. It finds your weakness and homes in on it, and one day, Bang! Every single trader (and person) has weaknesses. the question is how we compensate for them and build a strategy that takes them into account, IMO

  109. T.J. Rand

    Pima-

    I’m not a particularly good trader yet. But I do have the ability to sell to stop the bleeding – that’s got to be a talent, of sorts. 🙂

  113. Eamonn

    Vonda, I bailed out at silver spot = $41. I needed to protect my core capital. I lost all my profits though.
    I am hopeful that this crash will portent a huge rise again in silver.
    In any case, I have learned a lot from this.
    Its been a hard few days

  115. DG

    O.K. For the first time in 35 years my stomach in a knot has given a bad signal. First time for everything, unfortunately. Vuvvy’s signal not doing much better.

  122. Vonda

    Eamonn,

    So glad to hear it!
    Seems you have internalized the primary wisdom: protect capital. Excellent!

    Going out to walk with said dogs. Hope I don’t miss too much excitement, but if the PMs would like to put in an EOD reversal, ok by me.

  126. oa92000

    gary
    I am looking at $HUI at July, 2010. The chart looks similar. Does that mean we have to wait for another 2 weeks before $HUI take off?? does that fit your cycles analysis?

  127. CMT

    Zero is too high. I’m holding out for someone paying me to haul away all their heavy physical.

    Anyone?

  128. Aleatoric

    Hi all,

    I subscribed recently and have lurked around the comments section as silver went up and came back down. I’d like to add a few things from my perspective, take it for what it’s worth.
    1. AGQ – Leveraged ETFs decay. Silver may drop from $50 to $35 and then go up to $50 again. If/when that happens, AGQ won’t be $380, it’ll be much lower. Read this article if you’re not familiar with this concept. http://seekingalpha.com/article/119316-double-and-triple-etfs-decay-their-value-faster-by-design
    2. You may take analysis from anywhere but at the end of the day, YOU trade your money. Every trader is different. Some people can take massive drawdowns and patiently wait out a counter move as long as they know they’re right. Others, like myself, can not. Which is why I closed my positions on Monday. When I first started trading years ago, I almost blew out my account under similar circumstances. It was tough at the time but I learned from my mistakes and have been better off because of the experience. It is important to know your trading style and trade according to that.
    3. Lastly, gold is currently battling with support at $1475. I hope for everyone’s sake that it holds. But in case it doesn’t, the next stop is $1440.
    For people who are taking a loss, I hope that you can make it back in the coming weeks.
    “If you have a losing position that is making you uncomfortable, the solution is very simple: Get out,
    because you can always get back in. There is nothing better than a fresh start.” – Paul Tudor Jones

  132. Jo-Shi

    I did what someone proposed here and pulled up a lt. chart of silver and went to the back of the room.
    There is still much space to the downside before I would consider a trend support.It comes in around 32,50$. We sure dont need to go there but I will be waiting a bit longer with adding more.

    But as Future traders are the gods de jour, I think we will,(IF), get the bounce over night.
    And dont forget to look at the euro/dollar pair with the euro beeing more than 40% of the DX basket. Next resistance should come in about 1% lower from here (1.4400)so there is still downside space which can be filled.

    And my two cents: Garry has done an outstanding job and everybody is responsible for their own accounts.
    I guess lots of people here which dont trade for a living still have to learn how to manage risk. That is the most import thing when you play the markets. I have to admit I although got caught big time, blinded by greed for more $$.
    But I dont use leverage and still have, even after a 30-40% haircut in my PM positions,profits left. And that is Garrys genuine work.

    Thanks Garry I hope if silver bounces back I can drive over to swiss in June and invite to a German Thank You beer.

  134. Cory

    When I got hit hard in fall of 08 (before I found Gary) I did all of the common things (short bull markets, overleverage with OTM options, use too much leverage in general, rely too much on indicators) and I had traded for 4 years consistently.

    What I was trying to say (specifically to T&J) was that going long a bull market, adding at intermediate cycle lows,and holding Old Turkey is the only way I’ve made the kind of money that I think we are all trying to make, and it’s because of the lessons Gary has taught me and time (you won’t make money overnight).

    Even in a bull market, in the intermediate term there is only one buying chance guaranteed to make you money, and that is at a low like right now:

    At a low: weak hand, invest capital and wait to reach strong hand status, then add margin

    In a consolidation: weak hand, invest capital and be willing to live thru wiggles in account balance, and even after a good run up, it might retest consolidation and you might be dead-even, this is where you add margin and becom strong hand

    In an uptrend/top: weak hand, get some capital in the game, but if it retests the consolidation or has a daily or intermediate low, you are most likely going to lose before you gain, but at the swing low this is where you go 100% and once you become a strong hand then add margin within reason.

    I lost my account balance twice before I did ok, and then got hit with that in Fall 08. Gary is the only way I’ve done as well as I thought I could, and I know this is a tough time for everybody, but look at where we were in the charts where you first invested and where you added margin before you get on Gary, because he has the best approach of anyone I’ve ever seen.

  135. pimaCanyon

    TJ,

    This is yet another lesson for me in the category of take small losses so you don’t let them turn into big losses. (I did this very thing with a VXX position last summer. I am a very slow learner.)

    Fortunately I am still well up for the year, but the this week I gave back about 1/3 of this year’s profits.

  136. pimaCanyon

    Cory,

    Thanks for the post.

    You wrote: “Even in a bull market, in the intermediate term there is only one buying chance guaranteed to make you money, and that is at a low like right now: …”

    So how do you know that right now is a buyable low, that we don’t have much further to drop here? For example, what if we are just at the beginning of the move down into the next IT low?

  138. YesLetsDiscuss

    At least everything has leveled off – dollar, silver and gold. If it breaks down lower for silver, as it seems to be, I will take my massive loss and be out. Whoever is still in can enjoy the ride up then.

    I bought a bunch at almost the exact low yesterday was scared to buy yesterday having never bought a falling knife before. Well, serves me right. My orders are in place.

  139. Blake

    Anticipating the C-Wave finale only to find that we were in the midst of the D-Wave… The markets continue to baffle, even with all the tool’s at our and Gary’s disposal.

  140. Shalom Bernanke

    traderlady,

    Tough call. If I don’t see some sort of strength before the close, I’m inclined to sell 1/3 to 1/2 my miners. They are still sick if they couldn’t follow through higher (at least a little) today.

    They are all bargains long term, but I don’t see any reason to hold when I can buy back.

    Let’s see, but I’ll be sure to post when I do something.

  142. Jonas

    I just remembered that Pres Obama only a few days ago proclaimed that he had put together a task force to root out the evil oil speculators.

    Apparently crude and Brent are plunging as fast as the metals now, so one has to wonder if there is a connection. Could the unlimited Fed money fueled and algo powered TBTF banks act as a catalyst to bring down the entire commodity complex?

    I’ve ceased to be amazed by the level of intervention going on so I wouldn’t rule it out.

  144. Shalom Bernanke

    I’m starting to think there is a surprise rate higher of a token 1/4% or so in the offing.

    Somebody is selling, and selling a lot, into weakness.

  147. Shalom Bernanke

    Well, that settles it. While I was typing I was stopped out of almost half my NUGT.

    SVM still not close to stop out.

    That makes it easier, I suppose.

  150. kevin

    Well I just sold the last of my AGQ, only 25 shares. Therefore the bounce can begin.

    A few lessons learned by me…………again.

    Stops always need to be in place.

    The draw down was result of poor trades, chasing in the last two weeks = Greed

    Triming and selling into the moves worked very well, but my moves over the last two weeks negated a lot of success.

    Again the market is not my worst enemy, I am.

    Just my thoughts.

  154. fubsy_cooter

    Looks like we have 2/3 of a head and shoulders top on GDX, GDXJ, and SIL. Haven’t checked the other charts, but if the second shoulder peek develops I’ll sell my GDXJ there and wait for a break to new highs to get back in, unless it rolls over, then I’ll get back in sometime in the future.

    f

  158. pimaCanyon

    Well, there are a few PM related ETF’s on the BoW list today, maybe offering a little hope that a bottom might be near (or maybe it’s I’m just smoking hopium).

    GDX, SLW, SIVR, and DGP are on the list, but the numbers are nothing to write home about.

  161. Trader H

    when cnbc has “pros” that tell you that this is a temporary pullback and you should be buying and looking to the long term, I think that would be a pretty good indication that we need to get out.

    this would almost seem like the perfect scenario where we would expect a bounce from this huge selling pressure and everyone loads onto the boats anticipating a bounce back while the big money is gladly selling to the eager buyers thinking it will go back up. imo

  164. Matthew

    long term not worried I can hold> short term july slv calls and any doubled derivative security..pretty much done for…short term we hit 35 like I said earlier, probably break down to 31. 85% chance..and worse case scenario is they release bad new about euro and we go back to 26..don’t worry I am not a evil troll I own a lot of PM’s

  166. Romeo Bravo

    If the un- employment report is grim tomorrow, which is just might be AND they raise rates? Hah, the entire market is going down!

  167. traderRob

    Trader H? Big Money selling into $35 silver when they could have been selling into the high 40’s all last week? That doesn’t seem particularly intuitive to me.

  168. Daniel

    OK– Capitulated my AGQ–
    Had no margin— Had large holdings
    Had not looked at acct since Friday
    Not as bad as I had envisioned :))
    TERRIBLE TERRIBLE FEELING!!
    Anyway, since I capitulated we can get ready for liftoff :))
    Live to fight another day! (Will have no problem getting back in when the swing forms–(IF EVER))

  169. David

    This is forced liquidation, like in 2008.

    Somebody big — probably several somebodies — are going to float to the surface soon.

  170. John

    Now that I’m now out, I can see a little clearer.

    I think I’ve been here before…

    This does has the feel of big players trying to flush as many people away as possible so they can grab bargains before a big rise.

    I venture to join those who believe that there will be a strong recovery from here – which we can jump onto when it looks safe.

  171. LowTax

    Something learned:

    1. When the dollar is falling hard and miners refuse to repond, listen to them.

    2. When things go parabolic, sell them.

  172. Tim and Jeanene

    “If the un- employment report is grim tomorrow, which is just might be AND they raise rates? Hah, the entire market is going down!”

    Based on today’s unemployment claims being horrible, you might be right.

    What will eventually happen is the pullback will hit stocks, then QE III will begin to be anticipated, and off to the races again.

    Have to be careful to not let a silver drop to $22-$25 blow you out though.

    Leverage always cuts deeper when it goes against than for.

  176. Tim and Jeanene

    The time to try a silver long again will be when we get a huge puke day on massive volume.

    Then the bottom will be in short term. Don’t play around trying to guess where “support” is.

    There is none at this point.

    Large puke on huge volume will be your trigger to dip a toe back in.

  183. Tim and Jeanene

    Volume is large – but not that much larger than the spike in volume that occurred near the highs. I would guess SLV will see a 400mm share print into a large puke.

    Just my worthless opinion on the future.

  184. Jonas

    Well, with everyone bailing left and right, it really adds insult to injury knowing that JPM is laughing all the way to… er… while being at the bank.

    There went my minilong stop loss at 34.90 by the way. A decent chunk of money going poof. 🙁

  185. Taurus

    I’m still in with LON:LSIL but can’t sell until tomorrow – I’m down 40% on that trade after buying in with silver at 46, probably be down 60%+ by the morning.. ugh.

    Been long on PMs since 2005, but never used leverage till last week. I feel like such an idiot.

  186. Patrick

    I am going to wait for the nightly report and make my decision tonight for what I will do with my positions. Too emotional right now to make a rational decision.

  188. pimaCanyon

    1445 on the gold futures is a significant price level. If it’s breached, it would invalidate the obvious wave count that would support a move to new highs. Not saying that new highs would become impossible if that were to happen, it’s just that the obvious wave pattern would no longer be in play.

  191. David

    By the way, the SoCal SMT C-wave finale get-together has been cancelled due to inclement weather.

    New date TBA.

    😉

  192. ALEX

    This looks like major capitulation…Gold down $50+
    silver down $4+

    I say buyers come in NOW! 3:15 p.m. Everyone likes to call a bottom, but that was CAPITULATION!!! 🙂

    Hey, here’s a positive “wish’ for tomorrows Report. IF SLV gaps open , and ZSL gaps down…Thats very positive as a trading pattern.

    see ‘Island Top’ and ‘Abandoned Baby’ ( if thats the real names…my buddy used to call it a dumpster baby, but THAT was way wrong). Anyone familiar with those?? Gap down, gap up…they usually Rocket out of there.

  194. Cory

    I’m putting my neck out here, and I’m admitting that I bought miners too early, I’m down 15% ATM, but this is the buy point with no margin. The only problem is people with no skin in the game don’t go looking for pm blogs/newsletters at times like these, but this is a true Rothschild moment right here.

  195. rapper

    razvan- I am with you. I think we are lining up with a low in June. Long term still intact you just have to climb a bit higher up the mountain to get a look. Of course don’t listen to me. That’s not advice.

  197. pimaCanyon

    HUGE move on the dollar today, biggest green candle in almost a year. And on more than double the average volume on DX futures.

    UUP huge volume as well.

  198. St. Deluise

    i’m about 90% sure the majority of lows are put in in the AM hours and would not buy PM dips EOD.

    i think what we need to look for is a very large gap down w/ strong fill on some bad-for-PM news. tomorrow or monday seem good.

  200. Daniel

    Just as an FYI– Also sold NUGT when I sold AGQ– Kept SIL SLW and a little DGP (and a couple small options SLW and SLV)
    Gut less knotty— (Food still not staying down well) :))))
    Good Luck all!!

  202. T

    I think we should start a thread of “best quotes for signs of capitulation”.

    Here’s mine “Ay dios mio!”. (And I don’t speak Spanish)…

  203. Ben

    I felt lucky to get AGQ for 120 a while back. I didn’t realize I might have another chance, although I wonder if it would just tank after that.

  204. Jonas

    Over this trading day, looking at the gut-wrenching relentless selling, I’ve actually come to believe that we’ll indeed see 31 before this is over. Why? Simply because the post-parabolic chart patters give all the algo-running big guys the alibi to make that happen. Noone will question it since it’s deemed par for the course. And I’m pretty convinced that by 31 they’ll have rooted out 99% of the paper invested small fry like us.

  209. james r

    People need to be mentally ready if and when the reversal comes…

    Clear your heads, the reversal maybe violent!

  210. James

    Matthew said “don’t worry I am not a evil troll I own a lot of PM’s”

    lol. Just how gullible do you think we are?

  211. catbird

    I’m all for riding out fear, but I think when gold dropped below 1490 with conviction and stayed there….and then kept dropping to the 1470s it was a sign that we had transcended fear.

    As bodies float to the surface, hindsight will bring everything into 20/20, but as Doc likes to say, our “framework of expectations” was shredded to bits. That’s why I sold. (and for personal financial planning reasons unique to my needs)

  214. Ben

    Smells like the dollar printed its 3-yr low at a much higher level that anticipated. End of QEII and many foibles in Europe I’m sure contributed to the better than expected performance.

  216. Dan

    Glad to see everyone is seeing the light finally…good news is we are only a few dollars away from the 200dmva then we have summer doldrums and by the end of the year we should test the highs again. All simple patterns from studying this bull.

  217. John

    There’s always something to be gained from seemingly bad circumstances.

    I feel this has made me stronger [again!] … and feel it won’t seem long till I’m back where I was [feeling rich] at a higher level than a few trading days ago.
    I got myself levered nicely for the last couple of dollars to 50 … so lost painfully!

    Usually I had to go through the agony alone … as I didn’t know any other traders.
    But on this site, with Gary, this feels like a good experience – strengthening.

    And good to share it with you all.

    The last few days on this blog has been like riding a roller caster down in slow motion. [I did prefer the slow grind up, though…]

  218. Shalom Bernanke

    I sold because I was stopped out.

    I use such wide stops that I am rarely stopped out 2x in a row. Only happens every 2-3 years, and typically an “event” follows which explains the atypical movement. We’ll find out!

  219. Arun

    When is the next A-wave starting? Don’t show the weekly candle on SI to the children. Another day left, any buyers left though!!

  221. Slumdog

    I have deep pockets and a low basis.
    I ain’t selling Jack at this point.

    At 43-45, I’ll sell half, if that range appears soon. If not, screw’em. There will be a massive physical shortage in SI and that means this price range is a lot more solid than those who are fretting over their greedy leverage and now trapped situation compulsion to sell.

    This is the selling climax, obviously.

  222. Shalom Bernanke

    Unfortunately, all the charts have so much damage that a rally might be very sharp BUT short lived for the next few days.

    It usually takes awhile for things to resume. Sure was a lot more fun making 5% every day while sleeping in! 🙂

  223. Cory

    We have gone back to the consolidation area (T1), there is capitulation and volume, and as long as you don’t use margin risk is low long term. This is where the Buffetts of the world buy and hold.

  227. GottaHaveIt

    Poly,

    If you are around, are you still holding your GLD options that you bought last week (June 140 & 160)?

    Or did you bail out when the market turned against you?

    Again, I’m trying to learn from the master.

    Would you buy a DITM GLD call option today? If so, what strike and expiry?

    Thanks!

  228. Return to Resistance

    Low of the day was the 61.8% retracement from the last daily cycle low in March; it also coincides with the trendline off the March cycle low.

    The next best level of support imo is the $1440 level which was the last breakout level.

  229. Jonas

    This is the second time in my life that silver has reached up to touch $50 only to be viciously butchered right after.

    I wonder if it’ll happen again in 2040.

  232. PST

    I worked for an individual who had tremendous success in this game and he had the best advice when in this situation. For starters, turn off the computer and go home…your trading day is over. Then do exactly what you would’ve done if you just had the best trading day of your life – pop champagne, drink some cocktails, have sex with your spouse, whatever. For me, it’s playing with my son. It’ll put you in the right frame of mind and give you some perspective on what’s truly important.
    Give it a shot…it works.

  235. Elaine

    Little story, I’ll keep it short…

    I bought AMZN last spring right before the earnings report. It went up the next day, thought I was a genius. Then of course we all know what happened, it retraced all the way to something like 50% of what I paid for it. At the time I was not a sub, but was following Gary. I emailed him and asked him what to do. At that time he could answer emails. He told me to hang on, the market would probably correct.

    So, I did, and I wound up selling AMZN for a profit before getting into PMs.

    Moral of the story, Gary does know a lot more than I do, so I guess I’ll keep following his advice, ’cause so far it’s been good.

  236. ALEX

    GPL on a 10 day chart…it’s bouncing off this bottom repeatedly , as silver rockets DOWN daily. They CANNOT break that bottom 🙂

    today GPL just retested the March 14 low on less than 1/2 the volume. sellers seem to be gone. Stochastic is OVERSOLD buried. Can I borrow some cash anyone? 🙂

  242. sophia

    SB, I agree with you, a move like that must be hiding something like a surprise rate hike or an info that we will read in the news over the w/e….

  244. Done

    Whats the reasoning for Gary’s change?

    Does he believe we’re entering a D wave? Or is he just protecting against margin call?

  246. T.J. Rand

    Jayhawk-

    Assuming this is the D-Wave, Silver at 30.75 would be 50% retracement of the move from the March ’09 low to last week.

    Past D-Wave retracements of silver (roughly, since my crummy eyes are eyeballing the fibs):
    2004:61.8%
    2006:61.8%
    2008:Over 100% (110% ish)

  249. pimaCanyon

    Cory,

    The fly in the ointment is the dollar. It’s hard to look at the dollar chart and not believe that the 3 year low is in place. If that’s true, PM’s will go nowhere but down until the dollar’s rally is complete and that could be months.

  250. Dan

    Gotta.

    No I wouldn’t buy more, too late am really debating selling here cause we may bounce hard tomorrow but on the other hand I think we will hit the 200dmva before my options expiry so I should make more if I hold.. Have slv July 46s, 43s, 39s and October 31s…. Most of it is in July 43s. Funny how they were all worth only 2% or so of my portfolio and now there probably around 15%. All cash otherwise.

  252. T.J. Rand

    Jonas-

    When the Hunt bros were hosed by exchange rules which were changed to allow only liquidations, I believe that I read that several of the exchange directors were short silver in their personal accounts.

    Thieves, all of them.

  255. Frank

    A pretty constructive bounce back in gold miners here from the 200.

    I think people here got too caught up in the silver mania. I think this also illustrates why you should stay from instruments like AGQ unless you have very good selling into strength discipline.

    Goodnight.

  258. Blake

    CNBC just said that the CME is raising margin requirements again tomorrow and Monday on silver! More bloodshed to come.

    It seems in hindsight that this precipitous decline can largely be attributed to the persistent margin hikes in silver

  259. Brent

    GLD just lower by 7.4%
    That’s 0.2% more the same as the daily cycle correction in november.
    Less then three weeks later we had a new high.

    Just staring at the red numbers doesn’t help you a lot. I just took a warm bath, and was rethinking the fundaments. With the new unemployment claims Ben will have to start printing quicker. The rally up will be quick.

    Fasten your seatbelts .I am going all in know, a good cocktail call mix in SLV, GLD, AXU, EXK, GDX, GDXJ, SSRI & SLW. Now just wait & see…

  261. Poly

    @Gottahaveit,

    Sorry been trading my accounts. Honestly, I don’t feel comfortable saying what to buy at this point, we can all agree the action has gone beyond expectations, even for a cycle low.

    I had to reduce a lot of my exposure added the last two days, for decent losses. I’ve kept a lot of the OTM in play as these should do well on a bounce back. I’m into damage control mode, preserving capital to live another day.

    I hope to capitalize on a short term bounce to re-capture much of the last two days losses and will then assess where we stand then. Sorry if that is not more helpful.

  262. voltaire

    I thought I was getting past my PTSD brought on by the massacre I suffered in SKF. I was holding that one when the SEC decided that bank stocks could no longer be shorted. Never again, just became let’s do it all over again.

  263. DG

    My opinion: Be careful about jumping in. As TZ said, that’s what cooked him in 2008. You think it can’t go lower and then…oops! Keep your capital warm and safe until we get a clue as to what the hell is going on here. If you want to take a shot with an intelligent tight stop, maybe o.k. But the gap can kill you the next morning even if you are in the black at the close. Better to save the capital.

  265. Shalom Bernanke

    Also cleared out SVM, leaves me flat.

    It’s been some ride. I’ll look to enter again either when a news event breaks that gets this action behind us, or at a cycle low.

    I will say that the damage will take longer to clear than most of us will want to wait.

  266. pimaCanyon

    Brent,

    You’re going all in? (Or were you joking?) Today, or tomorrow, or wait for the swing low?

    Poly,

    I am also in damage control mode, probably should have trimmed more. Seems unlikely that after a day like today, the market will just head straight back up. I would expect first a slowing of the rate of descent, then some sideways action, then maybe we head back up.

    Or we could just bounce quickly, but I would read that as a dead cat bounce and look for lower lows after it completed.

    What are your expectations for tomorrow and Monday?

  267. Jay Lin

    Does anyone here think silver can go to $26 by Monday??

    Why am I asking? Because last weekend, silver at $34 by Thursday was also unthinkable.

  268. Farm Girl

    Didn’t do anything today. I want to see what Gary says about the dollar changing direction one day before the employment report, and then I want to see the employment report. If gold comes back faster than silver (at first) Ill have time to redeploy some DGP and my cash into AGQ at better relative prices.
    It’s the dollar that crashed all the commodities today, so the future of the dollar is key. My gut is that Gary is right, and there’s one more big tumble in the $ and a big run in gold, silver and the miners ahead of us. But maybe it starts in June when those employment numbers are reported.

  269. Shalom Bernanke

    I’m not trying to talk anybody out of getting involved, but I’ll get paid sooner or later if I respect my risk tolerance.

    We didn’t get a respite that lasted more than a few hours the entire week.

    I’ll still only consider the long side of metals (no shorting these), as the secular bull is intact.

  270. Jay Lin

    Have a nice weekend, everyone.

    For me, this is a good time to dive into the Bible to get some eternal perspective.

    Be well.

  271. gusto

    When silver goes up after there is a margin hike, that will be the all clear. I think that will be tomorrow or monday. Given how crazy this market is, silver could be over $40 by the end of next week. If Gary wanted everyone off the bus for the big spike, I think his wish has been granted.

  272. TheBookGuy

    Staying the course, following Gary, I don’t know enough to claim I know anything about what is happening. I do hope this is the pull back we have been expecting.

    I can tell you this, I was reading the board yesterday thinking, not enough people are crapping their pants, people are elated. This thing will likely go lower. I have a sick sick feeling and hope this drop ends Friday or Monday.

  273. torero91

    Pull up a weekly candle on silver if you dare. We will not be hitting new highs on silver for awhile now. Assuming we hit a trading bottom today, there should now be significant resistance on silver around $41. I will be exiting any remaining core silver positions in that area on what will now become a dead cat bounce. Seasonality is here. There will be no PM’s in my beach bag. 🙂

  275. CMT

    I think “enough” people are crapping their pants now. Ugh. Time for a cocktail.

    And agreement with SB, as ugly as things look, I don’t want to short anything here.

  276. St. Deluise

    well while we’re all waiting to buy in again (erm?), i would recommend this PDF by martin armstrong about gold:

    http://www.martinarmstrong.org/files/how%20and%20when%2003-01-2011.pdf

    he does a lot of looong term macro cycle stuff (PI cycle) and when he wrote that in early march he said that for the bullish case for PMs to continue he wants to see a low put in around early june. he also put a cap on gold around 1530. not bad.

    so in the back of my mind i’m preparing myself to see a steady drip lower all month. that would seeming jive with gary’s work if this is indeed the “D wave”.

  278. DG

    Bear markets often end with:
    1. Violent up move recapturing a week’s losses
    2. Record bearish sentiment
    Sound like the dollar. i am not convinced the 3 yr low is in, but it well may be, in which case it is game over for PM’s. We should know by the middle off next week. I am long some DGP and no silver; nothing I can’t easily handle till next week now.

  281. Brian

    I sold out of everything today. That move in the dollar was too large to be ignored. I will probably go back in 25% agq with a tight stop once a swing low is formed. If the dollar rolls over and makes a new low I will invest the rest of the portfolio and assess the strength of the up move.

  283. Alex in Montana

    St. Deluise,

    Martin Armstrong has a very important cycle low date around June 13 or 14, 2011 in that article. He calls it a “Economic Confidence Model Turning Point’. they are very infrequent.

  284. Brent

    The dollar rally should be over by tomorrow as there is option expiry tomorrow with loads of strikes around 1.49 They just want the € not to blast through… yet.

    EXK just reported 14x profit increase in Q1.

    With all this kind extreme sentiment and even people thinking of starting to short right know, the bottom must be in. The funny thing is just playing out as Gary predicted.

    @pimaCanon
    i was in for 50%, today for 100%. (i brought back more GDX, EXK, SLV and GLD, today & yesterday)
    I sold last week all SLV around 46-47-48. Because i only had calls, i decided not to catch the last upside and to sell 2/3 on monday and the last third on friday. Even then, i made most of the money just by going all in at the intermediate low and waiting. I allready made the mistake last may, sometimes it better to take somepart of the table, just for peace of mind.

  285. rapper

    st. d- we did go through 1531.19 (his level) and his thinking was that if we did we might hit 1775 and as high as 2k-2500 in June with a pullback in the fall. As he writes, the price isn’t the issue it’s the pattern. We don’t want an exhaustive phase transition which silver obviously experienced.

  286. Edwin

    sorry to hear you guys chalking up the loses..

    there’s blood on the streets for sure today.

    gold is a definate buy right now.

    it’s right on target 1470.

  287. Beanie

    Imminent Crash In Silver?

    Just in case silver may get an epic crash I re-entered ZSL at the close, to hedge my silver positions. An awful close like this usually indicates more downside.

    ZSL represents 25% of my long silver positions.

    Sorry bulls, I’m now hoping for a CRASH.

  289. pimaCanyon

    Brent,

    Nice job. I wish you luck on going all in today. I still have some positions, haven’t given up completely yet, but I think odds are high that the drop is not over.

    The dollar is the most troubling. Hard to believe that it could have such a huge rally on such huge volume and still have more downside in store.

  291. Aaron

    People shorting silver is even more suicidal than going long silver futures.
    What is wrong with you people? Dont you know that you should never short a bull market?
    Tisk tisk tisk

  294. David

    Beanie,

    We just had a crash, genius.

    And if ZSL represents only 25% of your “long silver positions”, then you are net long silver.

    BTW, the true tell was when Beanie declared himself long silver. Now he’s declaring himself short.

  296. T

    Have the fundamentals in the dollar changed? I can’t think of any… Only thing that I can see as a real threat, something to cause continued commodity crashes, is if China is going to crash (or people think it will). China wags the commodity tail IMHO. We saw wide-spread commodity weakness today, and a 1.15% one-day move in the dollar caused that???? Seems that the commodity performance is not in line with a 1.15% up-tick in dxy. Just the thoughts in my head…

  300. Romeo Bravo

    Anyone remember what day it was that Beanie came here to tell people proudly he was long gold/silver? That was probably the best day to sell. What was that day? Last week I think.

    And now he is short via ZSL? Mark my words, this is probably the lowest it will go for while. In fact, I am am much more hopeful for a rally now! LOL!

  301. ALEX

    JAYHAWK

    WOW! Crazy chart..yes, jawdropping!!

    I looked at the silver weekly candle TORERO91 mentioned. If this was Friday…that would say ALOT!!!

    It still says alot, but $4 down today…if it could go up $4 tomorrow after the report (with some short covering ) –

    – that candle would be more acceptable as a bounced off of the 20sma wkly ,reversal candle. At least for a bounce into next wk.

    $4 would also regained the 50 sma daily that it crashed through today. For me, tomorrow will tell a story.

  302. St. Deluise

    montana alex & rapper – yep. i hadn’t read it in a while, just typed the fuzzy details i remembered.

    thought people might like a bright side to turn to.

    my system is still bullish on both silver and gold but i am going to be a hell of a lot more conservative regards to waiting for a clear swing next time.

    taking tomorrow off, crappy week. happy cinco de drinko.

  303. MG

    If Gary wanted everyone off the bus for the big spike, I think his wish has been granted.
    (Gusto)

    LOL – that was a good one

  304. T.J. Rand

    Pima-

    Yes, but with 2 caveats:

    1)In 2008 there was a several month consolidation and upward move off the 50% retracement (which reclaimed 50-60% of what was lost) before prices headed down into the final D-wave low. I’m no cycle expert…but I’m assuming that the late 2008 plunge is part of the D-wave, even though it goes much longer than Gary’s guidelines.

    In 2004 and 2006, Silver pretty much just headed down.

    In 2008, Silver tracked Gold. In 2004 Gold led silver, and in 2006, it appears that silver led gold.

    2) T pattern retracement offers bounce zones. There seem to be 2 options for this – we blew through 1 today and the other is at 31.50. I’ve put these in a chart at the below link:

    http://i53.tinypic.com/3150lrs.jpg

  308. pimaCanyon

    Thanks, TJ. Based on your chart, we’re headed lower. Hey, you posted a chart! Cool! (You’d said yesterday I think that posting a chart was way too technical for you. Looks like tinypic is the way to go, I should learn how to use it and stop using Jing.)

    I’m taking a break for a while, may get back on later and do some charting myself. If I find anything interesting, I’ll post.

  309. rapper

    st d- I have a bunch of the sections taped to my wall. good long term stuff to focus on. need the capital to get there! happy drinking.

  311. Nike Boy2008

    now that the d-wave is almost over, I am recognizing and saying that this is the d-wave

    what frustrates me the most is that, not only did I miss making money on the d-wave, but also coughed my my profits from the C-wave

    This is completely MY fault..lesson learnt for me..

    this has been some week for me..I’m glad I learnt this lesson early in my life

  314. james r

    I still think we have one more leg up. If the dollar reverses hard tomorrow there’s your answer.

    It would be ashame for most subs who think this is the D-wave and miss the final leg.

    But one has to be mentally ready for anything in this arena!

  316. basil

    Silver will, of course, continue to be a great investment. However, to me all time frames and price targets for this summer are off the table. Right now it’s not even worth a guess.

    Apart from the possibility of a bounce, perhaps a violent one, in which AGQ might outperform all other PM vehicles again – AGQ is no longer the investment of choice. Not only is that apparent now in a downdraft, but I also wouldn’t choose it to buy any upcoming ‘bottom’. That is, because I just don’t think it is reasonable to expect a bounce here sizable enough to be worth the risk.

    Silver might very well tread water for a while, and if so, AGQ is going to underperform in comparison.
    I am still in physical – I don’t care about the ups and downs, I think it’s the best and most stress free PM investment, long term. Temporarily, whenever we think there is a bottom in, SLV would be an ok investment too. One wouldn’t have to be as accurate with picking the bottom as one would need to be with AGQ. As for the miners, I remember 2008; they couldn’t make up their mind for a long time. They teased you to buy into their up moves only to disappoint immediately. They were all over the place. They then exaggerated the downward spiral in silver and outran silver on the way down manifold, so I’d be watching them with caution. SLW is still the best silver stock, and it has clearly been showing the way – then and now. Up and down. It’s the best windsock we have.
    AGQ will steam up again only once a new, durable rally is in the cards. I don’t think it’s in the cards now. A bounce might, but if the trend isn’t clear, AGQ will be a killer, and I mean that not in a good way.

    To me there is no question that this is what should be labeled a D wave. Whatever it is called, it’s fine with me, but it is a collapsing parabola, that’s what counts. And buying this collapse is catching the proverbial falling knife. To me all these definitions (D wave or not) are all semantics at this point. You can call it all you want, but this is the end of this rally; but of course NOT the end of this bull.

    I think it is possible that the PMs have yet to see the high of the year, but I think that’ll only come after seeing the low for the year first.

    Also, it is unlikely that anyone will miss the next party if they just let the dust settle first. I, for one, will wait for the dust to settle.

  320. Robert

    james r,
    One day a trend DOES NOT MAKE…. yet today’s action in Crude Oil, Gold, Silver, Copper, Cotton, Sugar and other commodities reflects how important it is for all of us to get the currency patterns correctly…..even if you don’t trade them!

    The Dollar was very near levels that it is today, back in 2008….Anyone remember what happened to the majority of assets back in 2008 when the Dollar took off?

    Down they went–we better all pray for a lousy jobs report tomorrow and have the dollar drop or all hell could break loose

  321. Ben

    D-wave…

    maybe. I was really hoping to miss the D-wave this time since I mostly did not in ’08. I have much more in PM’s than in ’08 so this has bitten much worse.

    It’s looking to me like margin rate pressure has been used to initiate the D-wave to create a whole new set of bag holders. Must be great to go short to the hilt when you are holding all the cards like that. Not manipulation, of course, that’s just crazy talk.

  323. basil

    Also, keep the big picture in mind. For the speculative investor this is a shocking moment, but for the PMs this is actually a healthy process, mid-term and long-term. And so is the fact that margin restrictions were implemented. All it means is that some steam has been taken out now so that silver has more steam to run in the future. Taking off the speculative edge only means that silver remains a solid and genuine investment for some time to come.

  325. DG

    At Ease: I posted earlier. I sold all my AGQ at a little over 200. Got out. Cleared my head. Starting fresh. I am ahead for the year and now have the luxury to wait and pick a spot. Kept a chunk of DGP but that will be gone if DXY doesn’t tank by Monday. What a fantastic learning experience. I am going to make a lot more in 2013-14 now (and hopefully between here and there). This is a long distance race. i hope people here can lick wounds, recover balance, and do even better going forward.

  327. David

    I think silver will be damaged technically for years to come. This week is going to be remembered for a long long time.

    Gold may continue to do well. Keep in mind that gold has risen in the past even in a rising-dollar environment. Gold is probably looking very attractive to our Euro friends right now.

    The gold stocks are absurdly cheap. They are at the 200dma and the Gold/Xau ratio is 7.6:1.

    So, even assuming this is the D-wave, you can swap all your leveraged ETFs into GDXJ, shut off the computer for the summer, and expect to see higher prices in the future — probably in the fall.

  331. David

    This is the time to rediscover “Old Turkey”.

    I think we wandered a long way from the true path over the past few months. I include myself in that.

  333. basil

    DG,

    if I may, I wouldn’t be too married to any time frames. I like the idea of being able to schedule my investments according to cycles that imply a 2011 to fall 2012 bear, followed by a 2013 – 2015 rally; but it sounds too good to be true. If it is though, I am all for it… 🙂

    I am glad to read you remain up for the year!

  334. Shalom Bernanke

    I agree with David on the damage down to silver.

    3 tries a picking the bottom in miners, and 5% capital lighter, I’ll let this sort out before taking another try unless a news item reveals the reason for indiscriminate selling.

    I thought we had that yesterday with the 2 additional margin hikes, but today was no different. Bottom line is that somebody(s) with a LOT of metal has been dumping hard and until we get the reason behind us, I’ll preserve capital.

  335. GottaHaveIt

    DG,

    I bit the bullet and went to 50% cash today to preseve capital, as you suggested. Up until now, I’ve stayed 100% invested for the whole ride … just moved from stock to stock as I made adjustments.

    What % are you in cash vs. invested right now?

  339. Ben

    basil, too true about room to run. Now we need nearly a 50% advance to crack the old high that was just a whisker away last week.

  340. DG

    Basil: I was just throwing that out as a “maybe” spot for the next PM blow-off. I will do that one better! I never marry time frames or scenarios. I’m a trader at heart. For me a reasonable time frame is a whole day. I just sort of married one two weeks ago and…er…it didn’t work out so well.

  341. YesLetsDiscuss

    Basil,

    Well said. I’m with you and I really don’t care how many times Gary, Poly or anyone else insists that Gold is the one that determines whats going to happen in the cycles and waves.

    Silver was the leader this time. It led gold. It determined the gold cycles and not the other way around. It went parabolic and crashed. It is in a D-wave by definition.

    Gold may do something different, but whatever Gary has told us about D-waves is here for silver. It is unlikely silver highs will be regained for a while.

  342. Shalom Bernanke

    I’m not a cycles expert, but if this isn’t a D-wave (forced or not), I don’t know what is.

    If the Fed can screw up cycles with QE, then why can’t a D-wave take hold without a blowoff top to the C-wave?

  344. DG

    Gotta: I am 75% cash. 20% DGP and 5% GDX (approximately). I may well be 100% cash by Monday if the buck doesn’t tank. If it doesn’t I am as sorry to miss the beginning of EUO as anything. Europe is junk and FXE is going down.

  346. New York

    I thought the D wave is a 50% retrace event to the mean?

    It appears as the volume spike on the dollar Gary was expecting has come, also, no?

    Lastly, I thought we never sell into a cycle low but now the alternate strategy doesn’t seem to adhere to this? It also doesn’t appear to be alternate strategy since Gary sold his AGQ position?

    Thoughts welcomed.

  352. Felix

    Former large PM trader Bob Chapman says his contacts tell him that DC invoked the liquidation to cover JPM.

  355. bamster

    That motherfucker carlos slim. Folks, when you have alot of money like he does, you can do whatever the hell you want.

  356. Clarkatroid

    guys,

    we pick ourselves up off the floor, we dust ourselves down, we take a couple days off, a step back, a deep breath(or 2)……..

    then we start over with a fresh clean perspective

  357. Poly

    Alex,

    Nice charts.

    Jessie has been updating his Silver weekly chart with ongoing channel this entire run (from last year).

    It was that initial break in early April that got me out of Silver at $42. Every time it broke that upper channel it promptly dropped back in. Now it finds itself back on the very lower level.

    http://2.bp.blogspot.com/-57m0NH30r0w/TcMK7TNuA3I/AAAAAAAAQrU/DSLV5z73hBo/s1600/silverweekly5.PNG

    Without sounding like a broken record, you would expect it to find some decent oversold support right here and hold that channel. At least for some time before deciding which direction it will take.

  360. Jonas

    Felix

    No surprise there. If you think about it, there were no news items whatsoever to catalyze this carnage (except for the rapid fire cartel controlled margin hikes). And the little dollar spike today is completely irrelevant as an explanation for this.

  361. T.J. Rand

    Basil- great comments. I only hope that silver is not damaged for years. And I suspect that physical shortages may.

    DG- Well said – I’m of the same mind set. Clearing the slate offers an amazing perspective.

    Ben – Before the economic/social hurricane headed for the US is over, a number of the bankers will, IMO, be hanging from lamposts, certainly at least figuratively.Interestingly, it seems that SLV Put volume was 22x normal last Friday – before the plunge

  364. David

    Jonas,

    No explanation is needed. The silver parabola exhausted itself, as always happens, and when that happens, it collapses, as we are seeing now.

    I don’t think the margin hikes had all that much to do with it. That’s more a case of closing the barn door after the horses have already left.

  366. GGuy

    Gary,

    have you ever thought about the implications of an evetually Daily cycle started on 26th April?

  367. YesLetsDiscuss

    The only thing you can say about the dollar is that it stopped falling this week. Its not like it has been shooting up since Sunday night.

    It did rise a lot today, but gold and silver just needed an excuse to sell off this week.

    Gary and Doc did predict the sell off, but not to the extent it happened. The primary reason is that gold was only a follower here.

  368. basil

    I’ll stick my neck out and say this…

    Silver will not go lower than $31 (not withstanding perhaps an intraday flush).

    This is not even 10% down from here. I don’t expect a quick recovery, but a more time consuming one where we might even revisit the low more than once.

    Also, I believe that reinvesting at that price will have minimal risk (unless we have another major global financial crisis in the very near future, worse than what we have already seen – I don’t expect that), but will provide a great position for various time frames in which silver will climb back up to 50 and beyond. Then it’s just about going back to sitting old turkey style.

  369. Felix

    Basil,

    Thanks for that good news. That’s about all I feel capable of, actually. (Sitting with SLV for two years made me the tender profit I used to make my losses today.)

  370. David

    Basil,

    I think $25 is a distinct possibility.

    Most D-waves bottom out below the 200dma.

    The 200dma for silver is at $27 and change.

  371. basil

    PS: Whether that time frame is 6 months, 12 months, or 18 – who knows…
    The beauty would then be that we wouldn’t have to know. We can just sit.

  373. basil

    David,

    setting a price target for the bottom is, of course, guess-work; particularly when we are still in the collapsing process. I think you might be correct, I am just saying that would be my comfort zone for a long term investment (until the next C wave top).

  374. David

    Meanwhile, the XAU has already sliced below its 200dma.

    As far as the miners are concerned, the D-wave is nearly over.

  376. YesLetsDiscuss

    David,

    The 200 dma is at 28.29 today, still rising, and will continue to do so for a while. Also D-waves typically retrace half the C-wave. 25 is certainly not out of question, but unlikely.

    Lets see where this first bounce takes us.

  377. aviat72

    It all started with the Trichet press conference. His tone was dovish (his statement did not use a set of words used before). Prior to the conference I heard a tweet saying that the future of the USD is in Trichet’s hand. I should have paid more attention to it, given that we were in the coil and as doc posted the risk of the 3-year low being done was high.

    The Euro broke down. Then Crude oil broke through 105. And then the mass liquidation trade started. It took all commodities down with it including Gold which had been holding up relatively well till it gave up the 1492 pivot.

    There was too much speculative interest in Crude and it unwound today. Some trades made their year in crude today. Others lost their account. They removed the $10 limit down for crude today. Changed it to $20.

    I should have closed my positions on the break of 1492 but did not. But getting ready to pull the trigger. I was using ratio spreads so the damage is limited.

    In retrospect it was happening right in front of us. First /SI double topped last week. Then /GC double topped. The DX was forming a coil. There was news about Soros/Slim selling silver (Slim owns mines). The divergence in the miners. The seasonal weakness. It was happening right in front of us and was so evident in the price action but we missed it; getting to caught up in finding the daily cycle bottom for the parabola in gold.

    The irony is that Gary really paid a lot of emphasis on getting out prior to the D wave’s start. /SI topped at 49.82. 18 ticks is the difference between a 300% gain and a loss of capital. The lesson is that when moves become parabolic, pay very close attention to what the market is saying.

  380. gold silver troll

    there is not even ONE blog out there claiming that the rally is still on

    talk about clearing sentiment…sentiment is at like minus 100 now

    if ever, now would be the time for gold and silver to start rallying higher

    I still am hoping that we rally into June 🙂

    I’m with Alex, let’s stay positive- ZSL chart now looks parabolic (time for it to crash)

    we start rallying tomorrow…tomorrow is the day to buy

  381. David

    Larry,

    I don’t care whether you call it a C-wave, a D-wave or a Z-wave. We just had a 33% crash in silver.

  382. San Diego Jack

    Larry,
    I sure hope it’s not. Have stayed put in my positions, taking a severe beating.

    Troll,
    Need to see the bottom of the cycle so I can put the remaining powder to work and get that proverbial homerun!

    God, I am mentally exhausted…

  383. ALEX

    Blogger YesLetsDiscuss said…

    ALEX,

    Nice charts! How neatly it all fits!

    Gives some hope, but there’s been way too much damage.

    Yes .L.D

    Thats when people need the most hope…if theres been too much damage and they’re still in. 🙂

  384. Salty

    Maybe we should wait for Gary to weigh in before declaring the C wave kaput. Remember, it’s always darkest just before the dawn. ..

  385. rapper

    SDJ- pretty incredible test of mental fortitude. It’s like that navy seal exercise when you lay on the beach and let the tide roll in on you.

  386. Larry

    Me either Diego Jack – stayed put.

    It’s been crazy to watch almost everyone everywhere go so negative in the course of a week.

    Someone earlier said it… when everyone else is fearful, be greedy, when everyone is greedy be fearful….

    I positioned myself at the beginning to not lose more than I could afford. I’m still up… still believe we are due one more cycle up.. the big one.

  387. Jayhawk

    Going WAY back for some chart action.

    Noticed this gold channel from last summer with our trusty 144 DMA right at the bottom at 1399

    http://screencast.com/t/tQtAIXkEKa6

    MONSTER gold channel from 2008. That is a bull market. Notice the 144 catching price all the way up. Notice how it hates when you get too nutty to the upside like we just did?

    http://screencast.com/t/tQtAIXkEKa6

    If that was the cycle top and a D wave is coming. 50% min retrace of the whole move or 1220 gold

    http://screencast.com/t/kRHAd8krhow

    Silver will puke harder. I’d say 61.8

    26 bucks
    http://screencast.com/t/afs2ScWmb9

  389. ALEX

    POLY

    i just reached your post WOW what a chart that was…i didnt know where to begin- I do see that support…nothing below really , it SHOULD hold. 🙂

    – I agree with your statement and I think Tomorrow will say alot. I really want my wkly chart to close with a reversal, bouncing off the 20sma and close on the 10sma….

    -and a gap down and a close up on Miners is a bullish engulfing pattern ( I think?). Its bullish.

  390. DD_Ing

    Good sign?? Yahoo Finance showing AG up over 7% after hours….just a typo? Have not seen any news so not sure if this true or not…..

  391. james r

    If the dollar begins to crash(praying that it does) then margin hike be damned!

    Silver and gold will make new highs

    Yes I am mentally tired but not defeated.

  392. Greenspansconscience

    People going short now are absolutley nuts. Silver RSI is extremely oversold on 5, 10 and 14 days. We are still above the March low.

    We are very close to putting in a bottom, IMO. If it already isn’t in.

  393. DD_Ing

    Good Sign?? Yahoo finance showing AG up 7% after hours, however could not find any news so still scratching my head wondering if it is accurate……

  394. DG

    DD_Ing: That AG price was a “last sale price” posted out of order I suspect, because the current after hours offering is at 16.88

  396. Poly

    Alex,

    I feel like a chump saying it over and over again, but these types of oversold conditions more than often result in a counter rally for 3-9 days. That would also work in the cycle context, printing a low and getting to Day 6-9 of the cycle on a decent rally back.

    BUT, that is where the test and character of this C-Wave will be shown. Will it be Left translated and fail into a D-Wave? Judging from the action today, possibly, but I will leave that to Gary and Doc to determine.
    I’m preserving capital, but I’m sure as hell not going to capitulate right here. My Silver exposure is very minimal and I’m looking for gold to cycle low here so we can recover some of these losses.

  398. ALEX

    DD ing

    I looked on a different chart system and it reads AG @ $18.15 ..up $1.32

    Thats back above where I bought…PLEASE HOLD!!! Suddenly I dont mind GAPS!

    Thanks for posting that…now I can eat Dinner 🙂

  399. Glenn

    Any thoughts on stops?
    Ridden this down so far…hanging tough…BUT
    If this is the D wave brought on by the CME…shouldn’t we cut our losses and bail?
    Comments welcome.

  400. Mike

    Food for thought:
    Gary mentioned a 5% put allocation to SLV for the parabola collapse last weekend.

    Assuming 5% of the principal were allocated (of 100%, not 140%) – If that were done Friday using June $34 SLV puts (the last daily cycle low), the SMT portfolio would be up 8% right now instead of down 37.3%.

    Had this happened after going to cash at the top and then buying puts Friday (that was his eventual plan), it would be up 47%.

    Timing, as always, is the key. The plan was perfect. Had it gone this way everyone would be back to talking about yachts and carrying a mattress under everyone of Gary’s climbs 😉

  401. Poly

    Alex,

    “I looked on a different chart system and it reads AG @ $18.15 ..up $1.32”

    It’s true! BUT, it’s an AH print, there is a $16.88 Ask out 🙁

  402. Larry

    Great charts guys… it actually does make eating dinner easier…

    I’m keeping the faith. Big Ben won’t get away so easy. Debt ceiling will have to be raised next week and QEIII is for sure.. *my opinion so I guess I shouldn’t say sure*… likely.

    I’ve got all the time in the world – and I feel like the dollar doesn’t. Bottom line for me. The dollar is on life support. Silver valued at $35 in a dying currency… it’s laughable.

  403. MrMiyagi

    DG,
    In regards to AG, the 18.15$ price was one transaction of 3000 shares at 17:30EST. It has been followed by two other transactions so far of 150 shares each at 18:32EST at 16.88$ and 16.90$. Look at it on nasdaq.com
    Don’t read too much into afterhours.

  408. ALEX

    POLY

    I hear you..and I think a bounce out of here ( wouldnt 3-9 days be great!) would tell alot. If its a light volume 50% retrace of this move down…I’m out and will see if a D-wave is in force, or maybe a slight pullback from there and more upside. Trading is the way to go for me.

    You still got your AG? I got (along with DD’ing) a few different reads that its up $1.35 to $18 +…I think you got $17.50?

  409. Avann

    While on vacation last week I overheard a conversation in a hotel between a husband and wife about gold and silver and whether they should consider getting into that market.

    That was last Saturday night … on Monday I sold most of my HZU and HBU.

    I wonder if they bought any …

  411. Poly

    Alex,

    Some reaction is expected, let’s see.

    I still have my AG and a few other miners in 401k, don’t trade these accounts too much and no margin/options, so I’m in no hurry there 🙂

  414. gold silver troll

    The “Who is Toby Connor” posts always give me chuckle.. especially the posts that say that “Toby is copying Gary’s posts”

    BIGMACM,
    Toby and Gary are the same people

  416. DG

    Mr. M. You are confusing me with someone else. My system shows the offer at 16.88 for AG, just where it should be

  418. Poly

    @ fubsy_cooter

    Shout out to you!

    Well played my friend. Big lesson for me today, played way too much on the expectation of a cycle low to catch more of the ride. Combination of over-confidence and greed took hard won cash away.
    Waiting for the swing would have saved huge.

  420. Rich

    Silver’s parabolic rise meant a HARD crash was inevitable. Remember oil at $147 and the crash
    back to $40??? Thats a 70+% drop!

    Think about where a 70+% drop will take silver.

    Personally I’m looking at the $27.50 area as the next major support.

    This mkt is going down before it goes up. Mark my words.

  423. Jonas

    And it looks like the drop has resumed again…

    Going to bed now and not at all looking forward to tomorrow’s hard decisions.

  425. Driven!

    Outside of Gary answering to someone on the blog that he sold all of his AGQ, anybody aware of it from his May 5 write up?

    He did say it is an alternate strategy, but he did not give indication that he all sold out….

    Any reason why he did not clearly stated that in a subscribers write up?

  430. Nike Boy2008

    Aaron,

    A lot of us (including me) are still playing…I will give it a few more days before I take my loses

    I still think that gold will make new highs and silver will double top

    All depends on the USD now…the next 3 days will seal our fate

    Someone I know is very deep in the gold/silver market…He told me on Monday that Friday (tomorrow) is the day to buy…I didn’t listen and I kept buying since Tuesday and have been bleeding bad..I should have listened to HIM..I will buy my last but tomorrow…

  432. Aaron

    I actually increased my leverage today to 5X and added silver options. I have a little dry powder left incase gold drops ( I need to have plenty of cash to avoid margin calls).
    This is the first time that I have dipped in silver.
    There are way too many signs (to me) that this will reverse, and we will head higher.
    God speed.

  433. james r

    I’ll be in tomorrow…

    If the price start going up rapdily I’m jumping in and I will not wait for the swing low.

  434. Driven!

    Gary or someone, can you answer questions below…I am a new subscriber and maybe missing something…somewhere..

    Outside of Gary answering to someone on the blog that he sold all of his AGQ, anybody aware of it from his May 5 write up?

    Gary did say it is an alternate strategy, but he did not give indication that he all sold out….

    Any reason why Gary did not clearly stated that in a subscribers write up?

  435. Rich

    To the (hopeful) silver bulls:

    Trade what you see, not what you think. (I will stay short silver and take the other side of your trades).

    Silver will go up again, but not yet. Remember the mkt can stay irrational longer than you can stay solvent.

  437. gold silver troll

    let’s be nice to trolls…

    Thank you Rich for taking to time to post 🙂

    I have NO DOUBTS anymore that we have a bottom and we rally to a 46 in silver

    someone actually took the time to sign in and then make a troll post

  439. Dan

    As I keep repeating, buying before this thing before it hits the 200dmva is just a waste of money unless your short-term speculating. This thing will bounce at some point for a couple days to a few weeks and then it will roll back over.

    Wasn’t it albert Einstein that defined insanity as doing the same thing over and over again expecting different results? Well in this decade long bull market weve seen parabolas over and over again and ALL of them have not ended until the 200dmva was reached. Don’t think you will get a different result this time!

  441. Rich

    james r – why am i trolling? because you’re long in a heavily falling mkt and losing??? Let me give you some advice: don’t average down.

    If silver goes up, then sure, buy.
    Right now it’s not been going up.

  442. deshy

    Just thinking…

    The site talks about cycles, waves (…and recently apparently tsunamis).

    …but I wonder for those who ‘watch’ the news could it get any worse?
    ‘-Soros out, Slim out, dollar up, CME margins up and huge whack on head for all us silver holders

    News is always worst at the bottom.To confirm it, I’m going to sell my position tomorrow and watch the market go up. Trust me I’ve done it hundreds of times before 😉

  443. Rich

    @Gold Silver Troll – yeah keep buying silver – it’s been a great trade this last 5 days. Well done.

    @traderRob – lol. Have a nice day.

    @Dan – at leats someone is talking sense.

  445. Shalom Bernanke

    Wow, nice trading Rich. You’re GREAT! It takes a bona-fide risk taker to appear only after a big move and tell people how he has been taking their money.

    Why not state your position when you take it? I know why. 🙂

    Come here the next few days and share with the readers when you’re adding yo your shorts, if you don’t mind?

    Btw, I’m entirely in cash.

  447. San Diego Jack

    Deshy,
    I don’t pay any attention to what those whales say. Soros, Slim & even Warren Buffett say one thing, and do another.
    When Soros speaks, you can count on him doing the opposite, just to take advantage of the media, and the dopes that follow it (or him).

  452. David

    Come on, Rich. I’ve got scarier trolls in my garden, for Chrissake.

    Put a little more conviction into it.

    We’re all counting on you here.

  453. Rich

    @Shalom – I’m not adding to shorts, I wouldn’t advise it here to be honest.

    Sorry my opinions bother so many of you, but I don’t think its helpful to hold long positions through this type of fall.

    Do I think silver will go lower before it takes out $50 – Yes.

    Do I think silver will resume it’s climb after this correction – Yes.

    Does my opinion matter – No.

    Will I trade what i see, not what i think – Yes.

    Does that help? (I’m sure half of you will answer “no” lol).

    Signing off now.

  456. Driver

    Re. the markets: both the spx and the ndx (& a number of other indices) are forming weekly key reversal bars to the downside.

  458. Dan

    james,

    Except I posted my trades real time and warned people how stretched the the silver price was over the 200dmva. Although I didnt sell at the exact top and took a hit, my account today passed what it was at the peak price of silver. And im still over 80% cash despite my puts soaring. So add me to whatever list you choose but im just trying to save beginners like you money. Mark my words, this will not bottom until the 200dmva is hit.

  461. Robert

    Tonight, the CME announced a doubling of margin requirements for oil even though WTI traded down to below 100.00 dollars today. The CME crooks used their same modus operandi on oil as they did silver.
    Harry Organ

  462. Poly

    Dan, maybe it’s just your obvious condescending delivery that gives you away. But then maybe not obvious to you.

  463. David

    Rich,

    I have silver ticking up slightly, and the dollar falling slightly. Nothing to write home about, certainly.

    I think Dan is a helpful presence here, BTW. If the tone were a little less patronizing, that might help the message go down. That is, assuming he wants to be helpful, as opposed to just spiking the football.

    Keep in mind that a lot of folks here are flat or in gold at this point. Not a lot of people left who are all-in on AGQ. So perhaps the gloating should be a little more muted.

  464. DG

    Dan: You may have a secondary motive of trying to help (maybe) but mostly you are trying to puff up your own ego by cutting other people down. If you showed some compassion for the losses experienced here I might believe you, but your tone makes clear you are trying to show you are superior. Wow, you’re my hero. Better now?

    No one on this blog ever minds an alternative position. People seem to mind arrogance and ego-strutting. Imagine that. Weird, huh?

  465. Moneyman

    Polly

    What to say about the gold chart..A lot of people are looking at silver but gold doesnt look that bad.

    Dont want to say anything about silver. :-/

    Oil was ready for a cycle low, also the stockmarket. Then margin hikes in silver. All this was maybe to much and the cycle low in silver went out of control. Gold doesnt look that bad actually..

  467. funmike

    I am still in agq. I got home to a 20% loss after all the markets were closed. What now? Wait or get out at a loss tomorrow. It kind of feels like shutting the barn door after the horse got out. I know that in the future I have to have a stop in place. I thought I had learned that lesson last summer but evidently not.

  469. David

    Mike,

    I would see what tomorrow brings. We should have a rally for a few days, even if it’s a dead-cat bounce.

    You could sell that rally and move the funds into cash, gold, miners, or whatever combination suits you.

  470. Moneyman

    Gary told us that oil could go to 100. Gold to 1480 and silver to 38.

    Oki yesterday was really bad but if we start moving around now and the dollar moved down again this will be very interesting. We might not get to 50 in silver but there will be a massive rally and we can at least get some money back.

  472. AGQ

    A feel for you guys. It’s been a tough week for everyone.

    Hang in there. This will eventually end. imo, very soon. I still believe with Gary that this C Wave is not done until I see confirmation. But you will need capital to take advantage of that. I’m still up thanks to Gary. I already trimmed off my leverage. But the red on my account is painful.

    Alex, thanks for the chart. Feel alot better.

  473. Jayhawk

    Nice reaction off the intermediate gold bottom channel. (Gold’s pattern is almost identical to what silver was doing…Gold is just a step behind. I would imagine from here a tag of 1/2 to 3/4 of the gold sell off. From there, that’s where silver plunged on it’s chart. Something to watch.

    http://screencast.com/t/v42yqgJ0BM9A

    It would make sense that gold would be next after silver, oil.

    These are the big three people watch and trade.

    Politically, they can’t extend QE2 with soaring commods. They need to keep up the program without the spiking oil, gold and silver flashing “WARNING”.

    Jesse had an interesting post on what might be going down on silver.

    http://jessescrossroadscafe.blogspot.com/2011/05/interesting-theory-on-silver-for.html

  474. Poly

    Moneymen,

    I’m mainly in gold, it’s limited the downside. I say we print a cycle low and recapture these paper losses. We get a chance to sit back and think the market without the panic and hysteria. Despite the doom and gloom this will rally, IMO. What happens after that we will have to plan for in the near future.

    That’s my take. Others are free to post theirs 🙂

  476. David

    Moneyman,

    You don’t have to get that money back in silver. You can do it in an asset where the psychology isn’t broken.

    Remember, hope is not an investment strategy. You will get the money back, as long as you are patient and exercise good discipline.

    Ask yourself: would you buy silver today, after looking at a chart? You’d probably wait to see it settle down first. Simply holding on in the hope of a monster rally that makes you whole is trading based on emotion, not reason.

  477. Driven!

    Once again, for people who are following Gary advice, do you not find it worrysome that Gary did not mention him selling all of the AGQ positions in the morning report?

    How would you know he sold it?

    I am astonished that noone cares about it..it was the largest position he held …

  478. DG

    I agree with SB and Poly. We will get a sharp rally out of this and then see. How’s the volume in it? Are the miners lagging after the first day or two? Is there a pullback that gets bought or panic again right away? Etc. I am not convinced that gary is wrong. IIf this were a D wave i think gold would be down a lot more. Let’s see what the dollar does and how the rally looks.

  479. Dan

    I apologize if I offended people as it is not my intention. I get emotional about these things as I have been through these parabolic crashes and I have been burned severely before. I try to get my points across to people as it all seems so obvious to me but when I see people going full speed ahead in the other direction I am in utter shock because it appears the only reason they are doing it is cause one guy is telling them to do so. Biggest and most expensive lesson I ever learned is never to rely on one source and always search out counter arguments to what you are doing with your investments. Its the only way to keep yourself and your emotions in check.

  480. Rick

    I haven’t posted before, but felt compelled to (possibly because it is cathartic to me).

    I am hurting like so many on this blog. I am disgusted, with myself, not Gary. I have lost all the gains that were so painstakingly made this year.

    I started tracking the SMT portfolio when Gary made is second “all in” call in mid-February. I didn’t go all in because of baggage and fear from past losses. I wish I would have! The SMT portfolio that Gary put in place in February had more than doubled (105%)as of just last week. Even today, with all the carnage of the last four trading days, it is still up 19% since that mid-Feb call. Not alot of investments that can boast those kind of returns in that time frame.

    We all are experiencing different levels of pain depending on when we started following Gary and our own investment timing.

    Have I learned something. Absolutely. I understand greed, paralysis, and fear much better than I ever have.

    But I have also been exposed to the powerful potential that this market sector can deliver.

    I can think of many things that I could have done differently (all with the benefit of hindsight).

    I sit here tonight with a sense of defeat, but also with a sense of hope that we can do it again.

    Gary, help us to put our defeat behind us and regain the confidence that we need to win in the end.

  481. David

    Dan,

    For what it’s worth, I think you saved a lot of people money yesterday and today. There is definitely a groupthink mentality that takes hold, and someone had to say what you said, if only to get people to consider the vast downside that had opened up, and that people were choosing to ignore.

  483. Frank

    Rick,

    Thanks you said it so well for me. All my paper gains evaporated and then some. But it’s so clear to me that following Gary is my best hope of crawling back.

  484. Rich

    I’m hearing Germany is trying to push Portugal to sell it’s gold reserves (circa $21bn). Wonder who else is selling…

  485. AGQ

    Driven,

    I and others dont follow Gary’s plan exactly. I use him as a guide for cycle analysis and I make my own decision when to buy and sell.

    If Gary’s wrong on his analysis, I don’t blame him either. No one is going to get all the trades right. But what I do know is that I made alot of money since last year. Gary has been more often right than wrong. Even after this bloodbath, I am still up decently.

  487. Driven!

    No responses to previous questions..strange..if you follow Gary advice and he sold largest position but did not indicated it anywhere in the reports …are you not curious why you do not know about it?

    (In more gental manner then it sounds))If none of you care about it, why are you on the Gary’s blog?

    P.S. I have full cash position, ready to go in…just not sure why i did not know about Gary selling his largest position..

  488. Patrick

    I thought Ashraf Laidi had some interesting words in his Intraday market thoughts.

    “As the dust settles on todays volatility, the focus will shift to central banks, as it always does. Markets are coming to the conclusion that: a) Growth is a bigger problem than inflation b) Central banks of the world will remain dovish ad infinitum.

    If we separate the day-to-day noise from the underlying story, the losers are any central bank where any measure of tightening is priced in; the winners are JPY, CHF and gold. This is a story that has the potential to explode in the coming week; especially if tomorrows NFP report is soft. The market is pricing in a number close to 160K (about 20K below the economist consensus) but if we see a reading below 100K, the market will be overwhelmed by talk of QE3. Although the initial reaction for a soft NFP reading will be risk aversion (USD higher except vs. JPY/CHF), this may only be a one-day trade. After the knee jerk reaction, the dollar will resume its decline, especially against gold.”

    http://www.ashraflaidi.com/forex-news/

  489. Larry

    I’m not aware that he sold his position – he publishes all trades in real time.

    His update gave people an alternate strategy today if they couldn’t take the heat in the kitchen.

    Am I missing something?

  492. YesLetsDiscuss

    Dan,

    I welcome your posts, and hope you continue to do so. However, do it at all times in real time, not just when you are right and feel validated.

  493. YesLetsDiscuss

    Driven,

    Gary’s post today was not in the morning, it was in the afternoon. He sold his AGQ probably after he wrote the post. He clearly said so in the blog comments here. Absolutely no reason to doubt his statements about his actions.

  495. CMT

    Larry, apologies, my response wasn’t meant to be as snippy as it reads (to me now). I just saw several people questioning it and knew it had been answered before by DG.

    Nerves still a bit raw after today and giving up a good chunk of my gains this week.

  496. Poly

    No shortage of fun 🙂

    Let’s not forget it’s just a trade, learn from them. Thousands more trades will follow, some you win some you lose.

    Good night all.

  498. Driven!

    YesLetsDiscuss, show me in his morning report, where it clearly states, that Gary will sell his full position today…I bet you can not find it..but he did sell…and his subscribers including me are unaware of it based on the main report that we read..

  502. Matt

    Driven!,

    You have to understand that Gary’s advice is just that… advice. More than most newsletter’s, he give his opinion – sometimes it’s a conviction. Gary tries to let you make your own decisions. He is very confident in his analysis, and I for one, appreciate this fact. Now… if you were a Doc subscriber, you would see the difference. Doc will give you a technical perspective on both sides of a trade without any real targets. Doc is highly skilled at his analysis, but for the most part, leaves his opinions at the door.

    I appreciate Gary’s style, because he gives it to you straight… as he see it. There is no wishy-washy answers and you choose to follow him or not. It’s your choice.

    Gary post many things on the blog and assumes his readers are following both sites. If you are not; well, you are missing out on the full SMT experience. He called it an alternative for a reason…

    @Aaron, I’m still hangin’ as well, but the dollar should tell all tomorrow.

  503. Dan

    YesLetsDiscuss,

    Thats a deal although my trading is no mystery, I simply play the historical patterns with stops and use trend lines for short term trading. I will start to buy in once we hit the 200dmva and either (1) hold old turkey into the winter or (2) play trend lines and buy in and out. By late summer I will apply leverage and by winter we should be at the highs again although I dont think this year will see big new highs…atleast not in silver. The next massive “C-wave” move as Gary calls it probably wont happen till next year.

  504. Driven!

    Gary, if you would be a new subscriber, would you expect Gary to post that he sold his largest position on the main subscriber board and not in response to another blogger on general and free blogger site?

  506. YesLetsDiscuss

    Driven,

    Ok, one more time…its not in his premium post from this afternoon (he did not post this moring). He simply stated it on this blog. Perhaps a misstep on his part that he did not post it there.

    However, it is in his latest post. Check it out.

    Everyone,

    A NEW PREMIUM POST by Gary!

  507. E

    does this tell the real story behind collapse.

    The fastest way to collapse a recent run up in prices is to choke off the ability of those with leveraged long paper positions to raise cash. Another way is to rapidly hike margins; those with insufficient ready cash will be forced to liquidate. As they liquidate to meet margin calls, prices fall, and it creates a cycle which feeds on itself. I have no explanation for the recent ramp up in silver prices any more than I have an idea of where spot silver prices eventually hit bottom.

  508. Driven!

    YesLetsDiscuss …this is my last comment on this….I totally disagree the way this situation was handled…now I and many others not sure if we ever see staight up signal from him or should we continuiosly monitor 400 or some comments each day to find Gary’s sells/buys…

  509. Natanarchist

    Well, I certainly feel lucky that I took the Gary’s call a few weeks ago about the scary correction. I sold at 40.75 and 42.91…then watched as Pm’s went higher, jumped back in with small position at 44, out at 46.50..then thought I was being smart buying at 41.90 the other day. Underwater on that position. I don’t have to sell, so we’ll see how things play out tomorrow and monday.

    If this turns out to be a D wave, then we will have a buying opportunity that don’t come around often. If the C wave continues, then folks, the correction coming will be bigger than what you are watching this week.

    I feel bad for those suffering losses. I know the feeling. it f*&king sucks. But pick yourself up, regroup, take smaller positions, less leverage if you want to trade PM’s. Remember the biggest and most powerful money on the planet wants you in anything but PM’s. The safest way is to buy physical and you will never be a victim of the Banksters crimes like you are witnessing this week. Every ounce is a punch in the face to the enemies of the people. it will take a lot of punches, but we will get there.

  510. Larry

    I have to agree with Driven on this – for a paying subscriber it should be posted as soon as possible to the premium site as a new post. That way it sends out the twitter/email updates to everyone.

  513. Natanarchist

    @dan…with all due respect, there is no way anyone could know when the parabal in silver was going to end. Clearly the commercial Silver shorts were in trouble, so much trouble that they needed the CME to step in and save their worthless asses. Saying you knew this was going back to the 200day MA doesn’t mean much. Shit I knew that months ago. I think we all knew that when the C wave was done the PM’s would crash down. Only this time, it was a manufactured crash. Unless you are a friend of the CME heads or Jamie DIEmond, or Llyod BlankSHIT, you had no idea this was coming.

  516. n1tro

    Anyone want to swap war wounds from the last few days to better ease the pain and help healing process?! LOL.

    I started with $13K in the account…built it up to $133K since Jan low. Between Tuesday/Wednesday, I’ve lost $87K. Sitting at $40K right now. Not sure if I want to laugh or starting crying. Maybe a little bit of both.

    I personally think we miss counted a cycle or the combination of rate hikes, Soros selling is what did us in. Hopefully I am wrong and gold/silver goes parabolic from here so I can short the crap out of them at the top.

  517. RQ

    Nitro I feel your pain. Lost 40% since Friday. Ouch!! Puking helps a little but not much. LOL
    I will have to work another year to make up the loss.

  518. Benjamin

    Sold most of my leverage/futures into this bounce… With regrets… I don’t mind losing paper profits but I don’t want to go below my starting balance at the start of the year….

    Protecting capital was the name of the game now. Waiting to buy after the swing… Took huge risks & leverage with markets money… Market giveth, market taketh away… What a week..

  520. Dan

    Natanarchist,

    Your absolutely correct, I did not know when it was going to top out. I took notice when it went passed 1.66X 200dmva(the previous record) and when the dollar got 0.9X 200dmva and record sentiment readings but other than that, I had no idea. I kept selling bits as we went up but sold a lot of it with a loss on monday afternoon. However, I did buy puts as we kept going up and thats what saved me.

    No one has a crystal ball but you can study historical patterns to improve your odds.

  522. T.J. Rand

    Another data point on the dollar.

    A few weeks ago, in his nightly report Gary included a chart of UUP. He indicated that sharp increases in UUP volume is one ‘tell’ for future dollar strength. Not conclusive, but another data point.

    I recreated the chart back then, and stumbled across it tonight. The data shows, as you might guess, sharply higher volume the past few days. It’s at the below link:

    http://i56.tinypic.com/k2n6ut.jpg

    Off to bed. The next few days will be interesting.

  523. aviat72

    Larry/Driven et al:

    Gary tweeted about his alternate strategy at 1:27PM (Eastern). That post was up on the premium site. This is about the time he also posted on this board that he is following the alternate strategy.

    What more do you expect? Do you want him to send orders to your broker?

  524. YesLetsDiscuss

    n1tro,

    Ouch! What a ride! Really sorry to hear that.

    However, if you forget how high it went, 13k to 40k right now is much better than most people here, forget about rest of the trading world.

  525. YesLetsDiscuss

    Dan,

    That is a good strategy. Something you bet, I will implement if I get a chance to do it again.

    I’m curious about your term “dmva”. Most people just use “dma” or “sma” for the day moving average.

  526. n1tro

    Yes,

    It’s been a day now since I got out and I do feel a little better. But what pisses me off is that I didn’t catch the slide down on silver. That would have been another +$100K in 4 days. 🙂 oh well, next time.

  527. Casey

    The majority of my holdings are AGQ and I’m down alot. I didn’t sell anything and won’t at this point until I hear we are definitely in a D-wave. I potentially have over 25 years before I’ll have to touch this money and I still believe the big picture has not changed one bit regarding our country’s debt problem. When our country gets that under control, then I’ll think about selling my silver and gold. Until then, this week is just a minor bump in the road to early(hopefully) retirement. Time to pop another beer.

  528. 86d4life

    I truly believe there is a special ring in hell for the banksters. And man are they gonna sizzle when they hit the hot oil.

  530. YesLetsDiscuss

    n1tro,

    Can you clarify what you mean when you say you didn’t catch the slide down?

    Were you thinking about just going from long to short or buying puts?

    By the way, I went to and 4X down to 2X now. But been something I will always be aware of.

    Thanks for sharing your story.

  531. Natanarchist

    @ Dan..I too sold on the way up and then kept regretting as it continued higher…I am overall up for the year and up huge since starting with gary 3 years ago. I think I will wait to sell my underwater position after we see friday/monday..it could be a bigger loss or maybe we get a bounce and i get out even, or we blast off to finish this C wave. Who knows. All I know for sure is I am putting 30% of all my profits from the last 3 years into physical at the D wave bottom.

    Anyway, the key thing to take away is proper position size and risk control.

  533. Gary

    Driven,
    I posted the alternate strategy this morning to stop the pain. I chose to follow it also.

    But what I do is kind of pointless. Everyone has to decide for themselves if they wanted to exit by how much pain they were willing to take.

    I took as much as I was willing to take and at that point I decided it was better to just wait for a swing before doing anything else.

    Let me say this again. What I do isn’t necessarily right for everyone. My circumstances are different than most people. My level of leverage is probably unacceptable for 99% of subscribers. Also I can lose a big chunk of my portfolio and it wouldn’t affect my lifestyle.

    Most people can’t say that and if they can’t say that then they have no business copying exactly what I do.

    I gave everyone a reasonable option this morning. It’s up to you to decide if you want to change course.

  534. Larry

    I love the condescending tone aviat…

    No don’t need to him to send an order to my broker. But I would like him to say in his alternate strategy… that he posts… that he is doing that… it’s written like it’s for other people and he’s not doing that. Why call it an alternate strategy if that is what he is primarily doing?

    Expecting us to roll through 400 posts to find confirmation to a premium post is… I don’t know… silly?

    I don’t feel like I’m being unreasonable here…

    And honestly, it wouldn’t of changed my decision to hold. I just wanted to agree with Driven that I think he should of clearly stated that in the same post premium post.

  535. Ben

    You can pick on Driven if you want to, but Gary says over and over that he makes his trades known in real time. Another time he didn’t, and I and a few others chided him, and he said he’d do better in the future. With 500-1000 message to wade through each day, it’s not reasonable to expect somebody to ferret out his comment (which I happened to spot). He’s also been inconsistent of late with his current position data on the nightly updates and people have often asked for that information.

    Today I know he was traveling and it might have been a time bind (this week’s been a blur — that was today, right?).

    In the time it takes to post here, however, he probably can post a quick update to the board. He’s posted many alternatives before, the vast majority of which he’s had no intention of following. It is a change of premium site quality in my view if something like punting 50%? of one’s holdings during a market plummet is not clearly conveyed to the subscribers. I saw it, but why not be consistent with trades and report them so we know that he actually takes the decline very seriously versus giving weak-kneed people a convenient pressure valve?

  537. n1tro

    My plan was to short metals for the D wave. If this turned out to be the D wave, I missed a good chunk already since I sold at the top that Sunday night when it popped to $49.75.

  538. AGQ

    There are risks to both sides of selling too early or holding on too late. I too sold too early and missed a good chunk of the silver move. I was furious at myself because there was no pull back to get back in. Fortunately I was able to sell my leftover tiny core near the top.

    Then the pull back came and I was eager to jump back in. Waited for weeks and caught that falling knife on down.

  539. Glenn

    Can anyone tell me how to get emails when Gary posts to the premium site?
    I looked in subscription, profile, etc….no boxes to check?

  542. Gary

    Hits to the blog today: 21,000

    Got to be close to a bottom. That’s almost double any other day except this week.

  543. Blake

    I have to jump in here and say that only when a blogger had asked Gary this morning if he had sold his AGQ position, Gary responded that indeed, he had.

    It was a post solicited by another blogger, which I was lucky enough to catch in real time. I can understand those SMT Premium members who wanted a post to the premium site.

  544. Driven!

    Gary, I understand your point…however I also guarantee you that 90% of your subscribers did not know you sold your largest position today, as it was not indicated anywhere on alternate post and we, as subscribers, do want to know about it..

  545. captain

    I am a newbe and would like to know in regards to AGQ is it possible to hold on to it until sometime in the future with the thought that it will recover up to a level to decrease some of the lossincurred or will it erode to the point of no value.
    I appreciate the input received from this blog and the premium site.
    you don’t need to point out that I am clueless as I have already discovered that on my own. lol

  546. YesLetsDiscuss

    Ben,

    C’mon…this service that Gary provides is not an absolute timing service. He is good about what he does. He explains why he does things.

    When its an alternate strategy, its up to us more than ever.

  548. 86d4life

    Something just ocurred to me that I haven`t thought about in a long time. I remember hearing a while back that the goal was not the money but to trade well. If we trade well, the money will take care of itself. I see that in the best traders here. And it`s inspiring to watch those who move easily and flow with conditions and adapt. And they trade well. And thank you for sharing that with the rest of us. Some of the best lessons are easily forgotten.

  549. coolkevs

    Sorry to hear about everyone losing some money. I have not been in any of the metals for some time. I bought a couple of AGQ puts here and there and made a little money (surprisingly didn’t lose anything), but not the 1000%+ money made by some in the last week (or ZSL calls or SLV puts). It was just like the SKF trade in March 2009 all over again! Oh well.
    Indeed, it is all about the dollar right now. I follow DeMark analysis, and the DXY did not hit 72.5 yet to satisfy a MONTHLY sequential 13 BUY signal, good for 1 year after it records. So, probabilities lie for one more leg down in the dollar. Given the parabola that silver was in and how many people got burned, I’m inclined to say we won’t get $50 silver again even if the dollar “collapses” below 72.5. But that’s just my opinion, and just like an anus, everyone has one 🙂

  552. Natanarchist

    YEAH…..Gold up 16 and Silver up 90 cents..were rocking here boys and girls…

    just trying to bring back the good ol days…last week…

  554. Beksachi

    Oh boy- what a week! lots of war wounds but I will fight another day.

    The BIGGEST headache is that family member or brother in law that one may have dragged into this – and he came in late on silver (once they started beleiving…)

    Had to triage him out (with some ZSLs etc) to minimize losses.

    He’s cool.

    But the blowback from other family members……will be a tough Thanksgiving.

  555. aviat72

    Larry, Ben et. al:

    For the last time. Gary made a new post on the premium site AND tweeted about it. You did not have to come to the message board to know that Gary has another strategy in place. So I am not getting the angst.

    Are you upset that he explicitly did not say that he is going to follow the alternate strategy? In that case you are in the wrong place. Gary is not an investment advisor and it would be illegal for him to give explicit investment advice.

    He is nice enough to share his perspective, real-time via twitter when the need arises. He did not have to do anything but announce in the nightly letter that he decided to sell AGQ once the 1492 prior swing low was taken out.

    The carnage in commodities was there to see. Crude was down $10 and they actually changed the limit down rules real-time and allowed trading to continue! They are raising margins on all commodities.

    There are many posters here who have posted alternative investment strategies including scaling out, using options spreads etc. which follows Gary’s logic and analysis, but execute the trade using a tolerance level consistent with their objectives. You guys ought to take responsibility for your own trades; stop nitpicking. Would you be complaining if AGQ had gone to 500 today and Gary sold at that level?

  556. Driver

    My $USD chart shows that we topped right at the ’09 low. To me that means good resistance to an additional rise from here.

  557. Driver

    Nice post, Gary. Thanks for keeping a level head and being objective throughout this turmoil. Much appreciated.

  558. aviat72

    BTW anyone watching the price action in GC? They are absorbing a huge chunk at 1490. It is the dividing line between the two high volume areas from today and also the 50% retrace of the last swing down. Also the 23% retracement of the last fall. So far the retracements of this o/n waves have been 23% and we have a P shaped profile indicating shot covering but heavy offers at 1490. We just might see 1505 if the stars are aligned. If we gap up tomorrow by 20 handles a lot of the late to the party shorts will be scrambling to cover into the weeekend.

  559. ...at ease

    Gary, I hope you had a nice trip and some good climbs, but sure glad you are back home now. 🙂
    Thanks for keeping up with updates while away.

  562. aklaunch

    I think i am going to read the book on options tonight.I made a ton of profit on AGQ on its way to a little over 40 and got scared. Then i watched it go through the roof and kicked myself the the entire time. I really should have held. I learned that these things don’t drop over night. They drop in 4 days:)

    Long story short i got greedy and bet the farm at 47.80 again and they won’t even give me the shed now. Luckily the fianc’ee still wants to get married next year….

    I am thinking of taking the money that i can spare in 10-20G increments in options seems safer than going all in on ETFs (at certain times)

    Any opinions or experiences on this method when the timing is close to right?

  563. Ben

    Aviat, Gary has said many times that he posts his trades in real time. Don’t yell at me for thinking he is doing that. If the policy going forward is that his trading timing is a mystery, that’s cool; just say it up front versus what has been said in the past. That you don’t care if he does what he says he does is irrelevant to me.

    Exactly WHAT I do with that information is, as always, up to me. It isn’t exactly difficult for him to be consistent, you know.

  564. YesLetsDiscuss

    captain,

    No, it (leveraged etfs like AGQ) should be a one way investment. Only in the up direction. In a downturn or sideways action the losses are a lot more than double the return of the underlying.

  565. YesLetsDiscuss

    coolkevs,

    I know you have been derided at times by even the best posters for posting Demark analysis. Forget them, and please continue to do so….and keep adding your interpretations of it. Many here, including me appreciate it.

  566. james r

    I don’t think for a second the dollar will just bounce from here.

    With QEI and QEII how is that possible?

    Yes Ben announced the ending of QEII. So what? It still doesn’t change the fact the impact QEI and QEII had on the dollar.

    This reminds me back in 08′ regarding the announcement of TARP. Congress passed TARP but the markets continued its slide months after TARP was passed.

    I expect the dollar either to start creeping lower or reverse violently, then ultimately breaking the 08′ low.

  567. Jayhawk

    A potential strategy for those in silver or AGQ.

    I noticed the 90 MA caught the January sell off. Assuming we have a short term low in, one could wait until silver gets back to the 50% Fib or right around the falling 10 & 20 MA’s which had held up both intermediate cycles (Fall and this Spring) until this week.

    At that point, you could switch over to gold if things are looking healthy, or just go to cash and wait for break outs or break downs.

    /SI chart

    We need to get a game play in place for future cycles.

    I was thinking something along the lines of-

    1. Play miners, silver to start intermediate cycles.

    2. As daily cycles mature (even towards halfway points) sell miners, scale into gold…sell silver and convert to gold for daily cycle top zones. This way,”runaway” moves are not worried about as we can catch the gold move at least.

    3. As daily cycle bottoms, go back to miners, silver and primary core holdings.

    Repeat as necessary.

    4. Towards end of intermediate cycle…move to all gold investments. Buy small put protection on silver or miners.

    I know there are other complex hedging strategies, and those are other options.

    Just wanted everyone’s feedback…Let’s not let this happen again.

  568. fubsy_cooter

    The dollar will bounce when it runs out of sellers. Keep an open mind. Let price action speak, not biases. With so many shorts to unwind< it will have a sustained rally eventually. Perhaps its already begun.
    f

  569. Ben

    Here’s a good update from Pater T. (Heinz Blasnik) about today’s market action and some perspective and thoughts going forward. He has a very long track record, he’s not a market timer but extremely knowledgeable about the sector for many years:

    http://www.acting-man.com/?p=7488

  571. Beksachi

    At Ease,

    Agreed- I am very confident we will make lots of $ again with the upcoming D wave…but the family/in laws were using their retirement acct which renders “options” unavailable….rate of return may be limited.

    But no worries, I’m planning to use this week’s learning and Gary/this Forum to make so much $ that I’ll cover their losses and more – I will have a spot at the table!

  572. Jayhawk

    Nat-

    He and I talked…Pretty somber. In the past, the emotion was real and irritable (with some tongue in cheek…he and I are big believers in the macro story so deep down we moan and complain, but have faith that things will work for the investments).

    This week is going to crush a lot of silver bugs for good I predict. He’s hanging on to his physical, but only by a thread.

  573. YesLetsDiscuss

    By the way, I just added some gold and silver futures a few minutes ago with tight stops. Very small position. (I know…perhaps I am a sucker for punishments).

    I like the risk/reward ratio here. If they go up significantly, I will probably sell before the morning session. If they go lower, I sell as well. The ideal scenario would be an open tomorrow slightly below or above yesterday’s close.

  574. Bob loves Hawaii

    From Jesse’s web site. Quoting WSB

    CME Margin Hike won’t matter, The CRIMEX Clowns got stuffed yesterday
    wrs – Wed, May 4, 2011 – 08:48 PM

    I think I know what happened. I kept thinking that if OI increased on the kind of price drop we saw yesterday, then longs didn’t capitulate because if they did, OI would have shrunk.

    Here is what I think happened, the Commercials have been decreasing their net short in this latest run up, in other words, they helped it go up by covering short and going long. I believe they were doing that to accentuate the rise and to be able to liquidate their profits and accentuate the drop and cover short when the spec longs gave up. They wanted silver to look parabolic and then fail in order to scare everyone off.

    Well it looks like the large specs have held tight, the COT report on Friday should show that the large long specs increased longs and are more net long while the commercials are more net short. Yesterday it was the commercials selling at a discount to the spec longs who just soaked up all the selling the commercials could do.

    So today they raised margins again because I bet that the OI didn’t drop much today if they had to raise margins again.

    This is setting up for a huge snap back rally if my conjecture is close to correct.

  576. Bob loves Hawaii

    One more from Wall Street Bears

    20 million ounces (625 tonnes) left SLV yesterday , 10 Tonnes have left GLD in two days
    wrs – Wed, May 4, 2011 – 10:00 PM

    The Silver in SLV is being removed as the big players that can, are taking delivery and running for the hills with it.

    Same thing appears to be happening in GLD. 10 tonnes is 320,000 ounces.

    This might be where some of the silver deliveries are coming from, instead of COMEX silver, they are being paid in SLV shares.

  577. fat boy

    Been out all day
    What a day to miss

    I will bail out in the am, preserve capital and down 6% on the year could be worse

    I hope I have learned as a 50% hit in a few days is a big lesson

    No whinging here though just got to be smarter next time

    good job and congrats to those who played it smart

  578. YesLetsDiscuss

    Jayhawk,

    You are assuming something big here…that silver and/or miners will lead the way in the next bullish cycles. They may, but no one knows that yet. And if you read my posts, you will see that I am going to differ from Gary about gold leading and determining the cycles. My approach is to determine the leading element of the PM complex and use it to gauge the cycle extent.

    Your strategy to rotate funds is a good one. However, you can’t know which one’s to rotate from and into until at least the first daily cycle execution.

  579. Blindweb

    Been lurking here for a while. Moved from AGQ to UGL and gdx at silver $49.25

    Hard for me to believe Gold is going to D-wave back to August 2010 prices with all that has happened since then. That would put gold potentially on track to have one of its worst y-o-y in 2011.

    Self fulfilling prophecy on silver anyone? The internet put silver up on the big stage. Then the internet ran and hid under the bed; turning a correction into a rout. What did some of the top PM bloggers do… Mish went negative. Eric Jansen Negative. Jessecafe went neutral. Trader Dan went from cautiously negative to negative to super negative. Goldprice.org went negative to super negative. Ben Davies went super negative. What did people think was going to happen?

    Could the silver pop have snowballed into gold and oil, snowballed into commodities, snowballed into an extra bump to the dollar rally?

    Personally I’m buying some gld calls tomorrow

  581. Jayhawk

    Yes-

    Let’s discuss.

    I’m all ears! 🙂

    I’ve watched the last 3-4 intermediate cycles pretty intently. I do notice miners lead out normally and rocket higher during the mid points of dailies. They also get hammered extra hard towards the end of cycles.

    We should all put our heads together. Next time we can do better.

  582. Robert

    As Gary has stated a bad jobs report should cause the dollar to go down, but just the opposite might happen. logically and rationally the Dollar should go down if the jobs report number is a bad one but what seems to have been happening of late is that whenever we get something that tends to reinforce the idea that the economy is not improving and growth is slowing, the hedge funds, instead of selling the Dollar end up buying it, the yen and the bonds. That is what is called risk aversion trade. It makes no sense but that is what they have been doing. Perhaps that will change at some point and the Dollar will move lower as one might expect. We’ll see in a few hours

  583. Razvan

    i love how all these people i never seen before come here and post about how they went out of silver right at $49 and are buying gold now for a retrace. Holds very little credibility and frankly take up space on an already crowded blog.

  584. YesLetsDiscuss

    Bob loves Hawaii,

    Thanks for that post. Its such an interesting dynamic…it does make sense this time. Although sometimes, I think an interpretation is forced from a limited knowledge.

  585. CMT

    “i love how all these people i never seen before come here and post about how they went out of silver right at $49 and are buying gold now for a retrace. Holds very little credibility and frankly take up space on an already crowded blog. “

    :thumbsup:

  586. YesLetsDiscuss

    Jayhawk,

    Yeah, we need to group-think, but in a different way than what we have been doing. We can’t assume all statements from Gary as the ultimate prophecy. We can make Gary’s cycles work in a better way. Need to determine how each component acts (gold, silver, miners) independently of each other and within the cycle theory.

  587. Gary

    If the next time is exactly like this time then yes we will all be prepared.

    Unfortunately this time has never been before.

    Let’s face it we all knew there was a decent chance of a daily cycle correction. What none of us knew or could have known ahead of time was how hard silver would get hit in such a short space of time.

    If you think you can prepare for that all you will do is become so flighty that you will never be able to ride a full C-wave again.

    And you will miss almost all of the final bubble phase.

    I faced the fact a long time ago that every once in a while the market was just going to catch me and there is nothing I can do to avoid it. This was one of those times.

  589. Elaine

    Gary, will you discuss recommendations for those of us that can’t do puts, calls, etc., when the time comes?

    Thank you.

    Elaine

  590. Brian

    Dan, Your observations are cool with me. I guess it is natural if you are right to brag a little. I posted a monthly of silver that showed it peaking, but few liked it until after the fact. My friend Jay even had somebody else copy it!

    I think this experience is going to enable traders like yourself, Alex, DG, SB and others to be able to help more here. This fact is really going to become important because Gary will most likely quit posting his portfolio if he continues to get heat about it.

    This complaining happens at every low, but I can give nothing but thanks for how Gary has changed my thought process in regards to the markets.

  591. Natanarchist

    @ Jay…If your friend has physical then he is fine. He owns it. unless he needs cash now, he will be make 5-10 times what he paid a few years from now.

    send your friend this article

    http://silverstockreport.com/2011/dip.html

    here’s a part of the article

    “Silver is not in a bubble in terms of prices.

    The bubble in stocks in 1929 was caused by debt financing.

    The bubble in housing in 2007 was caused by debt financing.

    You cannot borrow money to buy silver. Thus, silver is NOT in a bubble.

    Exceptions: Yes, you can borrow money to speculate in silver, but no silver is ever purchased at the time that you purchase futures, or options on silver. And the futures market is known for having an overall open interest of over 800 million oz. of silver, while less than 40 million oz. of silver are available for delivery!

    Yes, also certain private firms, who have horrible reputations in my opinion, will let you borrow money “to buy silver”, but you must keep the silver with them, and it’s doubtful that they ever actually purchase the real silver either.

    In silver’s case, the availability of debt, and use of leverage is used to prevent you, distract you, dissuade you, from actually buying silver. This makes silver an “anti-bubble”; the opposite of a bubble……
    …Again, silver is the opposite of a bubble.

    People have not yet learned that silver is payment in full. Silver is not a promise to be paid. Owning a promise to be paid in silver is about as bad as owning paper dollars — the value of both of which has (primarily and fundamentally) only one way to go, which is down.

    Government is in a bubble. US paper money is in a bubble. The US bond market remains in a bubble. …”

    worth reading and taking into your thoughts

    Enjoy.

  592. Gary

    Elaine,
    There isn’t much I would suggest if you don’t know how to use put options. I don’t suggest shorting for the reasons I gave in tonight’s report.

    With puts your potential gain can be huge and your risk is clearly defined when you buy the put.

  593. Elaine

    Gary,

    I am not sure I am able to do puts in my IRA. That is the reason for asking.

    Thank you for your answer.

  594. Blindweb

    People who made good calls start speaking up now, because now is the time the blog needs new input. The group think was broken with the big down day many of the regulars here had. I’m sure many many people actually did sell around $49, on a Friday, before breaching a record high.

  595. Jayhawk

    Nat-

    Thanks, I’ll read it in the AM.

    Brian-

    Sorry, I didn’t know you posted that one too. I had seen it on Doc’s blog posted by Mach. If you did post it, I may have seen it but told myself “this time is different!” I’m sure.

    The support on that longer term channel is low 30’s FYI.

    You still think I made a bad call selling DGP a few days back? I did load up on miners last week and have gotten crushed. HUI hit it’s 200 MA! today. Unreal. I figure it’s got to bounce soon.

  596. jhnewman

    Jim Sinclair and others keep saying that gold and silver, rightly understood, are currencies, not commodities.

    And I believe the best way to describe the financial crisis we’re in is that the global currency system that was put in place in 1944 is collapsing, and will collapse over time. As a consequence, all fiat currencies are falling against gold and silver. Rightly understood, it’s not that gold and silver are skyrocketing in their giant bull market, it’s that all fiat currencies are crashing v. gold and silver.

    Anyway, this is a long-winded way of saying, if we want to be better gold and silver traders, we should think of our selves as currency traders, and try to understand all the factors that go into currency movements. (Gary keeps stressing this by saying follow the dollar and its cycles.)

    So, following one of the best currency experts in the world should help us become better gold and silver (currency) traders, right?

    One of the best in the world is Ashraf Laidi. He has a great Web site which I don’t visit enough: http://www.ashraflaidi.com

    I’d recommend checking out his “Intraday market thoughts” every day, as well as his articles and all the other great resources he has on his site.

    Here’s one of his intraday market thoughts for today. PLEASE NOTICE PARAGRAPH 5 ESPECIALLY, where he says that a soft jobs report will probably cause a brief bounce in the dollar (because of risk aversion), but that the dollar would then probably resume its decline, especially against gold:

  597. jhnewman

    **********

    Intraday Market Thoughts

    Commodities Routed, Central Bank Attitudes Shifting, RBA Stmt Next

    May 5, 2011 18:02 ET : Broad worries about economic weakness combined with a rush to the exits in crowded trades like oil, silver and EUR led to a rodeo-like day of trading on Thursday. We explore emerging shifts in market sentiment and what it means for currencies and gold. Later, Japan returns from holiday and the RBA releases its quarterly assessment.

    FOUR HEADLINES TRIGGERED bulk of the abrupt change in sentiment in the past two days: 1) very weak ISM services report 2) yesterdays comments from Rosengren/Williams 3) Trichets omission of vigilance. 4) an 8-month high in US initial jobless claims at 474K vs. 410K exp.

    Behind the headlines, there are two stories: 1) Paper wars, position squeezing and speculative flows overwhelmed some resource markets. 2) Central bankers and markets are starting to see signs of economic weakness. These stories are obviously not mutually exclusive, but they collided today and created a wicked round of risk aversion. The euro was easily the laggard, losing nearly 300 pips against USD and JPY. Brent crude fell $10.39 in the largest one-day decline since Jan 18, 1991. Silver fell another 11% for a nearly 30% weekly decline. Gold fell $40 to $1475. The 19-commodity CRB index fell the most since Dec. 2008.

    As the dust settles on todays volatility, the focus will shift to central banks, as it always does. Markets are coming to the conclusion that: a) Growth is a bigger problem than inflation b) Central banks of the world will remain dovish ad infinitum.

    If we separate the day-to-day noise from the underlying story, the losers are any central bank where any measure of tightening is priced in; the winners are JPY, CHF and gold. This is a story that has the potential to explode in the coming week; especially if tomorrows NFP report is soft. The market is pricing in a number close to 160K (about 20K below the economist consensus) but if we see a reading below 100K, the market will be overwhelmed by talk of QE3. Although the initial reaction for a soft NFP reading will be risk aversion (USD higher except vs. JPY/CHF), this may only be a one-day trade. After the knee jerk reaction, the dollar will resume its decline, especially against gold. It will also continue declining against JPY but the risk of fx intervention is acute.

    Asia-Pacific Preview

    Japan officially returns from holiday on Friday but liquidity will be well-below normal with many traders extending the Golden Week holidays into the weekend. Pay particular attention to talk of intervention in USD/JPY from the Japanese Ministry of Finance with the pair is hovering around 80.00. The risk of actual intervention in a holiday week and ahead of NFP is minimal. The market, however, will be looking for hints of what the breaking point is. Also keep an eye on EUR/JPY as it threatens support at 115.99.

    At 0130 GMT, the focus will shift to Australia as the RBA releases the QUARTERLY STATEMENT ON MONETARY POLICY. This should offer some valuable insight into how the central bank sees inflation pressures developing. In Tuesdays decision, the RBA continued to say that policy is mildly restrictive and that in the year ahead inflation will be close to target. They warned, however, that upward pressure on longer term inflation is coming. We will look for clarity on these points and suspect that the report may be more hawkish than the market is expecting. But even if it is, the upside for AUD is minor given the current climate and yesterdays weak retail sales data.

    By AB – AshrafLaidi.com Staff

    **********

  598. jhnewman

    By the way, he has a relatively new book out entitled “Currency Trading and Intermarket Analysis”, which looks very good. I haven’t had time to study it yet but chapter 1 is: “Gold and the Dollar” and chapter 2 is: “Oil Fundamentals in the Currency Market”.

    Anyway, sorry for the long posts. I will check Ashraf’s reaction to tomorrow’s jobs report and post it here.

    All the best,

    JHNewman

  599. Wav_ridah

    Elaine,
    You should call your brokerage and ask. I have options with my Roth through Fidelity. You should be able to buy options with your IRA.

  600. Beksachi

    Elaine,

    I face a similar situation- one of my accounts is retirement etc.

    Experienced folks like DG have mentioned “EUO”- 2x times shorting of the EURO.

    I plan to enter when DG gives the call out.

    If one of the factors driving the D wave is US dollar going up, the EUO should do well.

    I’ll let forum folks correct me.

  603. Brian

    Jay,

    Me and Mach are one in the same. Seems to me cash is king at the moment The big question is will there be 3 daily cycles in this run.

    I really find it hard to believe the buck will not break the 08 low. Smarter people than me believe it has to happen now. In the back of my mind is another intermediate cycle in both PM’s and the buck. This would give the double top in silver and allow miners and gold to catch up. This would fit history. The reason for this is commodities usually top after stocks at the end of an economic expansion.

    I really appreciate your charting, keep up the good work.

  604. Keys

    Gary,
    I am not one to say ya or nay…looking forward though, I think that this upset does merit some knowledge. We have so much to look forward to…and you are the man with so much to give! If this is a d-wave, so what!….the real money is made in the final c-wave anyways…can we please learn something from this…Ie know when to go all in and when to scale out….
    Only my thoughts! But I only trust one more c-wave drive before this thing is over…and I am expecting at the least a 10x from the bottom..3-5 years is not a long time……I really think we should be focused on the next drive, not this one….anyways what the f**ck do I know…
    I know I don’t give as much good info as the rest of the gang here, but this rally is dead….even if we surge…dead…..I am a patient guy…10x over 5 years sounds good to me…but then again what do I know!

  605. Bob loves Hawaii

    What happens if we get a strong employment report? The birth/death adjustment is strong.

    The ADP report is usually more bullish, but trying the think around this a bit.

  606. Brian

    What I mean here is that I would not at all be surprised to see triangles form on both the dollar and gold. The end result being a move up in gold, down in the buck to complete the cycle. Very hard to trade this though. We have seen the meat of the move IMO.

  607. Jayhawk

    AHHHH! Cool, good to know Brian.

    I asked “Mach” over there to post an updated chart but he blew me off. So I had TJ duplicate it over here so we could get a real time read on where things stood.

    My gut was to dump those miners when they could not break out of that high level consolidation over Gary’s triangle. The break down was so severe and swift, I just looked at the charts in stunned silence. Hard to rival that kind of power and unrelenting 4 hour candles pummeling a position. I figure if we can weather this sell off, anything down the line will be a cake walk!

    Thanks for your input and charts too.

    Have a good night.

  609. Keys

    The US cannot get out of its garbage. It does not matter what the report says, we already know…So we tank, the USD surges, and the bs about deflation starts again! And then QE3…and we restart.

    Look facts are facts…The USA is a shithole dream…dead and gone…if you want to protect your family get used to the ups and downs on this butt blast the FED wants to give us…..

    Sorry for the words, but I am pissed off that so may people need to lose so much while it is plain as silver what a f’ing beast the US gov is to its people…….!!!!!

  610. Brian

    Jay, I would not blow you off bro. That just meant I didn’t see your request. I have a job that keeps me away from the boards a lot. I was surprised how prescient that chart really turned out.

  611. Richard

    Silver Sell-Off or Harvest? We forget, there can be no sale without a buyer. Interesting article…

    http://www.ibtimes.com/articles/141851/20110505/lear-capital-silver-sell-off-or-harvest.htm

    I’m still struggling with whether to sell my AGQ or wait for a few more days to see what happens.
    Bottom line, the pressures that pushed silver prices up are still there. Except the slight rebound of the dollar which will probably be short lived.

    Any comments are welcome. Thanks in advance!

  612. makutaku

    My recommendation – and what I am going to do – is to follow Gary.

    If he says it looks like a D wave I will wait for his exit strategy.

    Otherwise I will hang in there.

  613. Sasa

    After a night sleep i think i have a clerer view of where i am today. My thoughts are..

    If i completely forget about silver crash for a moment and just look at gold chart it’s not that bad. What worries me was the selloff past 1490 into the low, but today after a rise back to 1480 it seems like selling exhaustion candle.

    Gold bounced off quite important supports at around 1470. If you put up Gold in EUR chart (i’m from europe so i look at it more often), it looks like just another week crawling up higher. Nothing special at all.

    As far as emotions go i cleared out greed from yesterday. Greed that pushed me finding solutions how to catch a super quick ride back up to where my account was last week. I think this is irrational.

  614. Sasa

    So now my plan.

    IF this is D-wave. There’s plenty of opportunity to earn some money (forget how much i lost!, i take it as new profit making from scratch). IF this is D-wave, we can follow gold all the way back to below 1300. Think of that.

    IF this is still C-wave, it means that you might as well wait for gold to go back up to 1550 and enter only after numerous confirmation that infact it was just a shakeout and earn big above 1550 to final blow-off top.

    BUT not trying to gain back amazing profits. Alot of people here would need to do 100% profit in next daily cycle and that would be pure gambling. Let it go that you will probably not get back to last weeks account level and picture gets better.

    Biggest danger i see now is buying into a fake bounce. Wait until picture clears. There’s no need to be invested all the time.

  615. Sasa

    I think following days are FULL of opportunities because i dont believe we’ll just consolidate sideways after such a move. My plan is to wait and see today where it will turn on major supports from so many angles and put my money in that direction.

    Also i will not trade silver from here on. It’s just too unpredictable for me. In fact all last week jumping multiple dollars daily felt more like a penny stock, not something i would like to have my money on.

    This week was HUGE learning experience. Even if you’re under water since Jan, i think everyone should be thankful for such experience because you’ll learn from it, and if you actually do have objective perspecive on what caught you and are true to yourself, it probably saved your trading career 3, 5, 10 years from now when you’ll remember this week.

    what a week. Also thanks to Gary and the great people of this SMT blog. What i learned here in the past year and past month especially is simply infinitelly valuable. This perhaps saved me from going broke 3, 5 maybe 10 years down the line!!

    Trader’s reality check.

  616. Ryan

    Thanks for your thoughts Sasa. If I had more of a strong hand status I would have been able to hold on a bit longer and see how it plays out but I had to preserve my capital. It hurt to see those big gains disappear in a matter of days but you’re right trying to chase it and get back to where my account was would probably destroy it. I’m going to be a lot more patient before I jump back in to see if it’s the c or d wave. I also will probably get into gold if the c wave continues.

  617. seethruskin

    Thesis:

    The fundamentals for PMs are still intact, nothing has changed.

    The silver crash was driven primarily by rate hikes, an unwinding of leverage, margin calls.

    On a weekly chart gold appears to be in a pretty typical daily cycle correction.

    Thus, if the fundamentals haven’t changed and if gold is completing a normal daily cycle correction, then deep pockets (China and other gold hoarding countries) step up soon and gobble up PMs at discount levels.

    As more people realize the silver crash was mostly a policy-driven over-reaction, they pile back in (albeit with less leverage than earlier) and momentum-driven rally yields a retest of 50.

    Crazy talk?

  618. pepper2009

    There is no free lunch everbody knows. So if there will come a parabolic move to the upside in silver only a handful of people will be in the boat. The discussion here now clearly supports this view. I only remember Gary´s statements week´s before this move where he decribed exact this situation. I (as a newbie) did not understand what he means when he said everbody will be paralyzed.

    By the way I cannot subscribe via paypal. I login via Gary´s link to my account and then immeadiatley the process is always rejected by paypal?

  619. hkc

    Jay:

    As to next potential game plans, I agree that we might want to do something different. I am thinking a simpler approach: as we get near a daily low, switch out of the double into the single, and ride it down the cycle low. Gary is really good at calling bottom, even though you don’t need to catch it perfectly, but at that time you can go back to the double. And even though I kept telling myself this, I got rope into the emotions of the day: cycle analysis is the core of Gary’s trade, and it (mostly?) will happen!!!

    This will not get the most gain, but maybe simple enough to follow, and minimize the loss if we are wrong? I would consider the miners to be in the same league with the double in terms of volatility, so out of the single miners into either the basket or straight metal, which ever one was the least volatile one.

    Any comment? Thanks.

  622. Sasa

    “I only remember Gary´s statements week´s before this move where he decribed exact this situation.”

    If we were all only in gold. We would now start to contemplate whether this is D wave after yesterday’s move down. That would scare us to hell. That would be it.

    What happened to silver was a
    crash. I think it crashed hard enough it might be a game changer to how silver reacts in the future.

    If i came to the market just today. For the first time. I would approach silver only with ‘lottery play’ attitude and portfolio.

  623. Sasa

    Also my thought on looking at previous C waves and finding clues how current one will act.

    I guess right now that favourite is 2006 double silver top, while gold not correcting much 🙂

    So far it seems that you’re the closest to prediction if you look at all of them and conclude that none of previous scenarios will re-play this time.

    If you take that as starting point, what new possible scenarios do you see?

    I think it will be very important in following weeks to do very very good risk management.

    In hindsight it might seem stupid and lost profit in the end, but i guess we all learned something about greed.

    Tryin to time blow-off tops of C waves with full leverage is not prudent no matter the potentially lost profit if everything went ok.

  626. Strellsy

    Phew! What a week.

    I don’t see any reason to sell today. Gold has hit a strong support level, and will either consolidate here for a move higher or build a bear flag for another move lower. Eiter way, now is not the time to sell.

    Silver could well drift lower as Gold consolidates, but I don’t see a lot more downside to this move.

    I mean if Old Turkey Gary has sold out, then surely we must be out of sellers now?

    Gary predicted everything that has happened, but underestimated the strength of the reversion to the mean on Silver. What should have been a profit-taking event was magnified by the margin hikes which turned it into a de-leveraging event. No-one could have forseen that.

    The plan now is to lighten up on any bounce and see how this plays out.

  627. Strellsy

    What is interesting to note is how people are already crying off Silver. That is exactly what is supposed to happen. The market crushes your spirit to ensure that you miss out on the next move higher.

    So you promise you will never invest in x2 Silver ETF’s again. And you watch from the sidelines, as SIlver rockets higher. And you wait for a pullback to get in. But it never comes, so eventually you jump in at higher prices, just as the smart money is exiting. Wash, rinse, repeat. It is how the banks make money from the 95% of retail traders that lose.

    Someone has been buying all this silver on the way down, and it is exactly the same people that were shorting it on the way up.

    Smart money has deep pockets and it never sells at a loss. Silver is going back up at some point, you can rely on that.

    Whether it takes 2 weeks or 2 years, nobody knows. But smart money has no deadline or retirement plan. It just grinds away making endless profit.

  628. Jonas

    The problem is that it’s not smartness that gives the short bullion banks the upper hand. It’s being in control of things like margin hikes.

    They have certainly used them off and on during the previous stages of the bull market, but the effect has been foreseeable. A manageable dip and then the upward trend has resumed a few days later.

    But this time, FIVE consecutive hikes in a few days! I’m sure you can mathematically model the effects of cascading forced sales, exacerbated by some helping hands from short selling banks.

    In short, we (supposedly smart people, coached by an experienced trader like Gary), where fully prepared for a major correction. Instead we got an account obliterating slaughter.

  629. Aaron

    Gold low is in, silver is a tad more damaged and will require a little more time to get going again, me thinks.

  630. HPX

    I have an alternative analysis of what just happened. Either one of two things has happened :

    1) We had the worst correction possible, but Gary was still right and things will go completely bonkers soon

    2) They just averted a dollar collapse. When I say “they”, I do not mean it in a conspiratorial way, I mean that market participants did what was in their best interest, and this happened to be the outcome.

    If this was the three-year cycle low, it is now all hanging on one thing – US monetary policy. I do not think for one second that this can go on for another complete dollar-cycle. Basically, I think we are going to have a failed cycle in the dollar coming up, unless someone does something to stop it.

    Even if the “inflation trade” was briefly halted, that does not mean that prices are going to stop increasing. There is already way too much money in the system, and I doubt the dollar can withstand more than a couple of more hikes by the ECB and other central banks.

    So, if somehow the cycles did something no one expected at this time, and this is the D-wave, I think we have something even bigger coming up. If I were to guess, I would think that after a shortened D-A-B movement in gold, with the dollar climbing, we are then going to see a failed dollar cycle sending gold and silver into the stratosphere.

    Obviously, this is just my personal take. But I do know one thing, and that is that the US dollar is toast very soon, unless someone does something to prop it up. Even if the EUR crashes temporarily due to the PIIGS situation – this is not euro-negative in the long run. As long as the ECB keeps tightening, and the euro-core remains – the euro is a stronger currency than the dollar.

    So, lick your wounds, and try to stay alive a week or so to see which scenario plays out.

  631. John

    Best way to succeed: have a lover/close relative/etc who is a high ranker in one of these organisations and get the tip off.

    It wouldn’t surprise me if these large financial entities collude with each other to get richer at the expense of the ‘ignorant’….. it’s human nature, I’m afraid [in an imperfect world].

    I tend to agree with the idea that the intention is also just to get rid of the middle classes – so that in the new world it is easier to govern.

    As I said before, I was apprehensive before May 1st [Illuminati start date] as these dates often have significance. It felt surreal to see that massive drop in silver in half an hour during the quiet wee hours [New Zealand trading] on Sunday 1st May!

  632. Jonas

    I think that we’re at a very precarious point right now. Clearly there’s a confluence of hugely powerful financial and political undercurrents that are unfolding:

    – Shift away from USD as reserve currency
    – End of western central bank PM suppression
    – Risk of enormeous leveraged commodity volatility
    – Potential resumption of global recession
    – Break-down of the Euro project
    – Potential breakdown of EU itself
    – Uncertainty of political future in the Middle East
    – Realization that peak oil may be for real

    I could go on but you get the picture.

    I don’t believe in any Illuminati or other New World Order conspiracies (people aren’t that organized). But we have to realize that all the super wealthy and politically/financially powerful elites will fight with whatever weapons they have to stay on the top.

    That’s why we small fry have to be careful about swimming in the financial maelstroms that will only increase in power in the unfolding crises. This isn’t just about gold and silver in isolation. Although arguably the safest assets, they can still be dragged down in a liquidity crisis.

    So I for one will never again put my entire net worth at risk by using highly leveraged futures when such powers are at play. It’s like walking on 20 feet stilts during an earthquake – you will fall hard.

  633. Haggerty

    I’m just looking at a couple of things here

    1-27-11

    AGQ 120 SLV 26

    4-28-11

    AGQ 365 SLV 47

    If AGQ gets close to 100 bucks I might just load up and turn the computer off for a long time

  634. Shalom Bernanke

    Good morning. Glad to be on the sidelines and regain some perspective. I do not have any answers yet so will most likely sit tight through the weekend unless I buy some physical today (likely, but not whole lot), as well as some PHYS which now trades at a slight discount.

    The thing I find most disturbing is that “somebody” (those that dictate margin requirements) got rich off this collapse, and it had nothing to do with trading ability. More irritating to me is that the regulators are in bed with Bernanke, Washington, etc. Makes me wonder if they do this to other commodities just as effectively in the future, leaving those seeking protection no place to protect from a rotting dollar?

    It also chases people into other paper assets like the dollar and stocks, which is where they need people to keep the ponzi alive.

    My inclination is to buy some solid miners for the long haul, but I believe I’ll have plenty of time to do this if it’s what I decide. After all, the shorts will have to cover to realize profits.

    Silver will get a bounce, but to rebuild momentum will take time and patience.

  635. Haggerty

    Shalom

    Well said. The game is definitely rigged but that can only work for so long, eventually the free market will win. No matter how much it’s suppressed.

  637. Jonas

    Since this morning (in Europe), I’m out of everything on my trading accounts. Still have a batch of CEF in a retirement account and a bunch of physical that I won’t sell.

    What is very uncomfortable is that there are quite a few bottom callers out there who project numbers around $27 for silver. In my view (which I know isn’t shared by all – and certainly not Gary) that gives the bullion banks a “mandate” to push the price all the way down there. And believe me, if they want they can. I think both small speculators and hedge tech funds are pretty battle scarred at this time.

    The only potential hindrance would be if a glaring divergence between paper and physical price levels would develop.

  638. Rich

    Well silver is still heading south – my view is that silver will head to the 200MA around the $28 mark. However, I don’t trade predictions – I trade what I see.

    Gold has bounced off the 200MA, but is now looking weak again. I’m not comfortable buying here.

    Folks this blog is very pro-PM, which is fine, but maybe we’re all talking ourselves into the wrong story. I buy the PM story, but when the mkt proves us wrong (at least temporarily) shouldn;t we exit positions, preserve capital, and then get back in when the price action confirms our view?

    Silver is in a down-trend.
    Gold is in a down-trend.

    I can see no reason to be long PM here.

  639. Jonas

    By the way, look at the chart pattern from the last 3 days (the standard Kitco 3 day chart). So far, it looks like it follows the same trajectory as the last two days.

    I hope it won’t play out the same way, but my gut feeling is that it will.

  640. Rich

    Shalom asked my y’day to post posns:

    I am short silver @ 42.30. 5/3/11. Still short, with trailing SL.
    I am short EUR/USD @ 1.4573 (trade put on this morning). Still short circa +70pips, with trailing SL.

  641. Rich

    Motivation:

    Whats my motivation for posting? Well its not because I’m lucky on a couple of posns, I have my share of losses & missed trades too. Its simply this – I believe many on this blog are caught up in a (currently) incorrect self-reinforcing view. Namely hope and fear. With silver etc heading south, many don;t want to believe what the mkt is telling us. I’m playing the role of taking the other view, that the mkt will keep heading down until it heads up.

    Please don;t try and catch a falling knife. Don’t average down.
    Please protect your capital.

    At some point you’ll be proved right again – then you’ll have capital to put on the line and make all your money back AND MORE.

    I wish you all the best.

  642. Shalom Bernanke

    Not exactly, Rich. I asked you to post your trade when you take them, not after a 30% move then come in blowing your own horn.

    have you no confidence to post at the time of trade?

  643. Shalom Bernanke

    Rich,

    I was more or less trying to shut you up from gloating to people that need to regain balance, not here “I told you so” from somebody that didn’t even tell them so. 🙂

  644. Jonas

    Based on the latest postings from Rich, my trusty troll detector says that he isn’t one.

    No gloating, no mocking, just what’s actually the same type of advice you’d get from any half decent trend following trading book.

    I don’t think that we can demand realtime trade information from anyone who happens to have a conflicting view of what’s unfolding.

    Folks, we aren’t a religious sect here, right? So as long as the tone is civil and the arguments made in a sincere way, I think we’ll all learn more in the long run by allowing a free discussion.

  645. Rich

    Shalom – you are correct I never posted my silver trade in real time. I never even posted here at all until recently.

    I DID post a short EUR/USD trade this morning in real time. This was based on the USD rising. This trade (& the silver) is now locked in to profit via trailing SL.

    If my trades sound gloating, then not my intention. I’ll post losers as well if you like (they’re not so impressive). My motivation is as just described – to try and point out why many people might be short silver, long USD etc right now. Thus hopefully helping others here by giving a balanced picture.

  646. notGreedIsGood

    anyone here still holding agq? yesterday was rather brutal, i’m going to ditch the rest of my agq at the open… right now i’m barely making money on agq right now… hopefully i can at least break even 🙁

  647. Shalom Bernanke

    Nice, open-minded approach to posters Jonas. Surely you can respect my opinion that Rich is a troll, no?

    And as far as giving him credit for trend-following, where has he been for the last 9 months while trending up?

  649. Jonas

    I respect everybody’s view Shalom. I may have missed some post since I don’t read them all, so you may base your judgment on something I haven’t seen.

    Be that as it may, I don’t think that in order to express your opinion (in a civilized way) on the board you have to have a prior track record of post with documented trades.

  650. Rich

    @Shalom – lol. You’re perfectly entitled to call me a troll.

    Where have I been while gold&silver trended up? The honest answer is insufficiently long (small long posns) – I didn’t catch the whole move. Yes I did berate myself as the mkt went up and up and wished I was long bigger size – but thats just my greed. I’m sure many here did better than I on the rise up.

    I’m sure many will make big money again – but they won’t if they stay long and the PMs keeps falling.

  651. T.J. Rand

    Another Dollar data point:

    Sentiment Trader posted a chart this morning that looked at all the instances (21) where the dollar had a 1 day rally of at least 1.25% while near a 52 week low.

    There were no overwhelming trends that emerged, but the dollar was positive the next day 1/3 of the time, and 1 month later only 43% of the time. On average, however, it took 33 days before the dollar traded at another 52 week low.

    If you don’t subscribe to sentiment trader you may want to consider it – every day they mine topical nuggets like this.

  652. Urban

    Jonas,

    I noticed that you also using Mini Longs. What brooker are you using? I’m in Sweden too and using Avanza but are missing the alternative to buy options. How do you do?

  653. notGreedIsGood

    for those of you who found out about the silver margin increases before the CME announced it, how did you find out? from friends in the industry?

  654. Gary

    Rich,
    It’s way too late in the daily cycle to stay short. Out is perfectly acceptable and I exited AGQ yesterday waiting for a swing before I want anything more to do with it.

    If the D-wave has begun then there is big money to be made on the downside over the next two months and even bigger money to be made riding the A-wave.

    But we will have a violent rally out of the cycle low. When that happens then one can position for further downside.

  655. Rich

    @Shalom – the 300% rise is better than the 30% fall no doubt. I never said otherwise.

    However I remember oil at $147 and a friend (who worked in the industry) calling for $200-$300. The oil went to $40. ALL his profits on the trade (which were impressive) vanished.

    I sincerely hope this doesn’t happen to people here.

    I’m not wedded to my silver short – believe me, if silver reverses heavily I will be out – I have stops in the mkt.

  656. Rich

    @Gary – I think you’re probably right. To be honest your predictive/analytical ability is a LOT better than mine.

    However, with respect, the mkt will tell me when to get out by taking out my trailing stops. I can’t break my rules and exit because I think the mkt will reverse.

  657. Jonas

    Urban

    Hey, another Swede! I was beginning to doubt that there were even another European on the board. 🙂

    I trade the minilongs on Avanza as well. For options on US assets I use OptionsXpress, which has a presence in the Netherlands. No broker based in Sweden (to my knowledge offers that service). The big downside of that is of course that they don’t have any “Kapitalförsäkring”, so I had the pleasure of itemizing around 40 options trades with currency conversion and all for the tax statement.

    What city are you in? I’m in Stockholm.

  658. Shalom Bernanke

    Rich,

    If you’re short, then you DO hope these longs sell. Come on, you’re talking your book.

    That’s fine, but refrain from acting as if it’s for the love of others here.

    Now, since I’m flat, I hope your short does work in case I want to buy again. 🙂

  659. ALEX

    T J RAND

    I like to have info like your post on past dollar occurrences , history on gold/silver facts etc…but who has time to look them ALL up??

    So thanks for that post, thats one I hadnt thought of

  660. Jonas

    Shalom, you can’t seriously believe that our board readers’ selling based on Rich’s advice will move the market?

    It’s not like we have the audience of CNBC here.

  663. Urban

    Hi Jonas,

    I’m in Jönköping and been doing my trading using a “kapitalförsäkring”, I think the correct word would be life insurance wrapper or something 🙂 Hugh benifit to do the trading tax free!

    Yes I was looking for a way to trade options in the KFS, but maybe that is not possible?

    Have you ny ideas of how well a Mini Short would work instead of a put in a D-wave?

  664. Rich

    @Shalom – I do affect prices. 5 of those lots on the mkt are mine! I am the butterfly flapping my wings and making hurricanes on the other side of the world. Or maybe I’m just a small time guy about to get whipsawed by the jobs report 🙂

  668. T.J. Rand

    Alex-

    Absolutely…and agreed, there is way too much data and too many articles to go through them all.

    The bath I took this week has caused me to crank up my data sorting/sifting efforts. I want to figure out both what I missed and what may happen next. As I surface stuff that may be of interest, I’ll continue to post it.

  670. Peter

    TH .. i think the big tell whas the divergence in Miners with the metals. I saw the same thing last time in oil, and once again, didnt react to it. I was really hoping to have learned from that mistake.

  671. wmp

    Jobs report better than expected..why should that surprize us?…BUT unemployment still going up..???

  673. Rich

    @Peter – I was betting on the dollar rising, EUR/USD whipsawed (which is common), my view is if dollar continues to rise, PMs will continue to fall.

  674. funmike

    I had read last night in a marketwatch article that a very strong number would be US dollar negative and may even reverse the recent commodity slide. They were expecting 175,000; the number was 244,000 with unemployment at 9%. That seems pretty strong to me. We’ll find out shortly if they knew what they were talking about.

  677. Gary

    For me to believe again I need to see the dollar roll over and make new lows, otherwise we have the three year cycle low in place and that move down into that low was what was driving this in the first place.

  681. ALEX

    S&P futers up 10 after jobs report
    DJIA up 100 nasdaq up 50

    Maybe the miners can piggyback on an up mkt today

    I also have Dollar up .15, Gold up $8+, Silver down .50

  683. Gary

    Sure I believe in the C-wave. But I also believe it might be over.

    We will know shortly if the dollar continues to rally.

  684. funmike

    It seems to me that the manipulation in the silver market caused by the margin hikes has temporarily disabled the cycle analysis.

  685. Francisco

    Classic…per ZH:

    Today’s BLS of 244K is great… until you exclude the 62K from McDonalds hirings, and 175K from the Birth Death Adjustment, and end up with…. +7K jobs.

    And yes, the “McDonalds” is to be included. Per Goldman:

    McDonald’s Corporation said that it hired 62,000 people during an April 19 promotional event.

  689. Gary

    Fun,
    You really need to get this out of your head that markets are manipulated. Margin hikes are completely normal.

    Cotton had 14 margin hikes.

    We always knew the silver run would collapse at some point. I just thought I would see a C-wave top similar to every other C-wave top. I also thought printing trillions of dollars would drive the dollar to new all time lows.

    Now maybe it still will. But if it doesn’t it does me no good to blame some mysterious cartel for my error in recognizing the top.

  690. Poly

    I like this action. Jobs comes in OK (in terms of expectations) dollar rallies and Gold along with it. That tells me the selling pressure has abated. It might also mean that a cycle low is forming.

    Let’s see what today brings, I’m feeling a metals rally.

  695. Rich

    Better post (for Shalom) that I was stopped out (for a profit) of my EUR/USD short as half-expected with the volatility post jobs numbers.

  697. Gary

    Folks there’s no need to get excited until the dollar breaks to new lows. If that happens then we have a dollar cycle that topped in one day and yest we will get our dollar crisis.

    But until it makes a new low it is in jeopardy of having put in the three year cycle bottom.

  699. funmike

    Gary,
    Don’t you agree that the silver slide was caused by the margin hikes? The margin hikes were designed to drop the silver market. That, in my mind, is manipulation.

  702. Poly

    Funmike,

    Have you been paying attention to the entire commodities space? They ALL crashed. Silver was up $20 in a few month, almost doubled, it fell further as a result.

  704. Gary

    There’s no way in hell the silver drop was caused by margin hikes. The slide was caused by gold dropping down into it’s cycle low and silver followed. It was severe because obviously silver was in a huge parabolic move and when the profit taking started at $50 longs started to get spooked and everyone started to take profits.

    Nothing evil about that.

  708. Bullion Baron

    Just wanted to say how much I enjoy this blog, commentary from Gary is great, some amazing calls and its an active little community.

    Anyway I have only posted a couple of times before. I’m posting on this occasion because I read someone suggest that we may be looking at similar trading setup to 2006. I started digging up some 2006 articles and found some events eerily similar to today. I’ve written a blog post that may interest some here:

    http://www.bullionbaron.com/2011/05/did-increasing-margins-break-silver-in.html

    Cheers
    BB.

  709. Gary

    Ra,
    I will ride the rest of the move if there is one in gold at this point.

    The better play is probably in silver because it got beat up so badly but just like everyone else I’m too shell shocked to take the trade.

  712. funmike

    I agree with the concept of the cycle low but it also seems that multiple margin hikes exaggerated what was to be a moderate slide according to the cycle theory.

  713. John

    “…What city are you in? I’m in Stockholm….”
    Jonas and Urban, the poster calling himself HPX is also in Stockholm.

    I often look at posters’ profiles to see where they’re from.

    It’d be nice if more people gave some info, then there’s a feeling that we’re not just virtual people. 🙂

  714. Russell

    Seems like the jobs created was ineffective in keeping the unemployment rate from ticking up. Maybe that will cause the Fed to seek QE#3

  715. RA

    I noticed that the previous highs of the dollar daily cycles all tagged the 35 dma.

    If it fails at the 35dma, we may get the final leg of the c-wave after all.

  716. Gary

    Fun,
    There’s no way to determine that. When a parabola starts to collapse who’s to say who would or wouldn’t have sold and if a margin hike would have made the difference.

  718. GottaHaveIt

    I went all into cash last night so I could start today with a clean slate and not be wedded to my positions.

    Should I get back in now or stay on the sidelines?

    Opinions please …

  719. ALEX

    GARY SAID..”I just thought I would see a C-wave top similar to every other C-wave top. I also thought printing trillions of dollars would drive the dollar to new all time lows.”

    I agree–I too thought the top should have been more gap- gap- gap-exhaustion…so as for the charts I posted . They may double top…dollar does crash to new lows.

    It has to be a flexible plan at this point. A weak or strong bounce may show us what the markets will do.

  721. kmisak

    Is’t possible? Do I detect the dollar falling? Has silver actually turned green this morning? I am still 30% HZU/AGQ at this point.. no, wait, after yesterday I am now only 25%..!

    In the time it took me to figure that out, silver moved to $35!

  722. Poly

    This is either the start of the swing back into a new daily cycle or just an oversold rally. I believe it will be impressive either way today, big gains back.

  725. Gary

    At this point all I need to do is focus on the dollar. We clearly have a cycle low in place. If it rolls over to make a lower low then we have another extreme left translated dollar cycle and gold will put in a normal C-wave top like every other as it goes parabolic when the dollar crash climaxes.

    If it doesn’t make a new low soon then the odds are high the C-wave has topped.

  726. Rich

    @GottaHaveIt – I totally agree with Gary. Until the mkt confirms, it could go either way.

    I’m short silver, and will undoubtedly have my trailing SL taken out at some point – when I look at the daily chart i think it will be soon, but when I look at the weekly i think the mkt could fall further. That’s why I’ll wait for the mkt to tell me.

  727. DG

    YOu know how you hear something and it doesn’t make sense and then at some point it does? I have a friend I was in the business with who is a solid experienced trader. He is always scaling out of positions on a stiff run, certainly on a parabola. I have always been more of an all or nothing guy thinking “Look, it going up or it isn’t. I’m selling it all or none.” Well, his approach makes more sense. You don’t make as much but I feel like an ass losing as much profit as I have. For those concerned going forward, don’t expect Gary to change trading tactics, but some people here will post when their tactics are different . from his. Heed the alternative if you like. He is the best I have ever seen at cycles, but there are a number excellent traders/tacticians here. We’re gonna nail this thing next time! Make sure you have some capital!

  728. Gary

    There were margin hikes all the way up shorting in front of them was a great way to lose money. So no I don’t believe anyone shorted expecting the margin hikes to collapse the parabola.

  729. pimaCanyon

    markets remain a mystery to me… why does a better than expected jobs report cause the dollar to spike and then pullback. Seems like the dollar would go UP if jobs report looked good because that would imply QE3 won’t happen right away.

    However, just looking at the wave pattern on the dollar, yesterday’s strong advance has the look of a classic impulse wave and it topped this morning on a spike up, so a pullback to 38 percent – 62 percent of that advance would be a normal pullback. If the trend on the dollar has indeed changed, once that pullback completes (probably take all of today and part or all of Monday to complete), then dollar would head higher.

    Waiting is the hardest part.

  731. funmike

    It seemed clear that the intent of the margin hikes was to drive down the market so it seems that they did have some effect in that. Never-the-less, I’m not going to beat a dead horse. But one thing to learn from this massive slide is the need for a stop. That has been the thing I have been most uncomfortable with. There needs to be some kind of stop in place to guard against a parabola retrace. That seems logical. But knowing when to get back in becomes the next challenge.

  733. Gary

    DG,
    After this one I think I will change tactics 🙂

    Of course scaling out could have begun at $30 and been done by $35.

    I’m just going to write it down as a curveball I just wasn’t able to hit.

  734. pimaCanyon

    Gary,

    Is there a price on the dollar that if that price gets exceed, that would convince you that we have seen its 3 year cycle low?

  735. Poly

    I’m not suggesting anybody jump in, but after a 4 day slaughter and the level of short interest, a $2 dollar silver rally today is well within MY expectation.

  736. DG

    BTW when I said “we” are gonna nail this next time I meant the SMT board. I believe the good traders as a group will get the right answer.

    Also, dust yourself off. If the dollar does cave we need to be prepared to go back in in size (into gold at least). Gold hit its lower BB and the RSI got into the mid 20’s! A dollar cave-in here will give gold quite a run. Maybe a silver double top a la 2006?

  737. eeelove8

    I am confused, Are we now saying that the silver bull market is potentally over or just on hold?

    I understand that depending on the dollar next move you say it could go either way BUT if the dollar gains strength are you saying that silver is done. 49 is the all time high and we will never see silver at 75, 100 or higher?

    Please advise

  738. Gary

    PC,
    The reason is what I said in last nights report. At some point big money is going to try to re-establish the trend in the dollar and gold.

    That was a huge rally in the dollar yesterday. Perhaps they are ready to get back to trend now. If the three year cycle low still lies ahead of us then the dollar will go lower. If the trend has changed then the dollar will ultimately repelled attempts to get back on the trend.

  739. deshy

    So can some one explain to me (beyond cycles) why an above expectations job report leads to a lower $USD?? Still in leveraged silver etf and about to pull sell trigger this AM (before next down wave). But now kitco showing silver up?? Now I’m really ^%^%&^% up!

    Suggestions? Help!

  740. ALEX

    Blogger Farm Girl said…

    S&P futures up about 15. My charts say the next 100 points are up, into mid-June.

    May 6, 2011 6:04 AM

    Do you ever post any of your charts?
    thx

  741. Gary

    E,
    This is just one ABCD cycle. We should have at least 2 maybe three more complete cycles before this secular bull is finished.

    I have little doubt silver will be above $200 by 2017/18.

  742. Peter

    Gary, so lets have some plans in place for either $ scenario. If the dollar does roll over, should we re-establish our positions ? Also, at what levels do we feel this isnt a dead-cat and a real rally into a c wave blow off ?

  743. funmike

    Pima,
    Here is my thought on the jobs data. How can there be inflation if no one is working? Without jobs there is no spendable money to fuel demand which fuels inflation.

  744. RA

    Gary,

    I am shellshocked with silver too – gave back almost 2/3 my profits from Jan.

    Would prefer to ride gold. If everyone is thinking this, maybe gold might outperform silver 🙂

  745. DG

    Gary: Fair enough. I have always felt that the game is asymmetrical. That is, you can wait for the perfect spot to enter, but once in you have to make a sale/no-sale decision every minute until you are out. Not fair!

    But , silver didn’t really start looking parabolic until $44. Getting out “early” there looks pretty good right now! What I fault myself for is that the first break and then recovery is a typical pattern. That is, we had been zooming, then there was a bad break on 4/26. That was a warning that money was starting to run out (this approach only works during a baby parabola or better) That’s why I switched 1/2 on the run near 50; the warning shot had been fired. The break in early April was too early and we had not started a strong enough run for it to matter. My take at least. Run, break, new high is a typical topping pattern. Switching just takes something off the table (and was frankly a great idea of yours).

  746. Sang

    deshy,

    you are wondering why the USD is falling when the jobs report is good.

    sounds counter-intuitive (fed won’t have to print as much, shows strong sovereign economy so currency should be strong)

    the bigger point that eclipses the above is that the USD is the largest “risk off” bet.

    since jobs market is doing well, “risk on” bitchez!

    hence, get out of safe trade, which would be the dollar.

  747. funmike

    I am still all in, having suffered incredible loss this week. I would appreciate having plans in place for those of us who were unable to get out.

  748. Jack

    Gary,

    I sold all my miners yesterday but still have 50% of my capital in DGP. I’m thinking of selling this AM, but kept hearing that I should at least wait for a Bear Flag bounce. I’m not an expert in TA but know that means a few up day with light volume. I don’t seem to be able to see volume on Gold itself. So should I look at GLD instead, and if yes, what is consider light volume? <50% of the volume from previous down days? Thanks

  749. ALEX

    and EEELOVE8

    If you meant just this C-Wave of the silver bull…its kind of 50/50 right now.

    may have topped, & may just bounce

    or

    may go higher to new high. Watching the dollar here.

  750. Poly

    “shows strong sovereign economy so currency should be strong”

    Those numbers are not strong, forget the CNBC spin, the market knows such slow growth spells trouble for the buck.

  751. ALEX

    RICHARD

    That article you posted was worth reading…I have read a couple of his in the past and he is pretty in tune with things. I TOTALLY agree with his comments on ‘AG’

  752. Gary

    DG,
    All that is true and I myself was pretty sure silver would not get above $50 on the first try. But every bit of historical precedence said that the C-wave wasn’t over and it was late enough in the daily cycle that the correction should be brief.

    So armed with historical precedent the correct move would be to ride out what should have been just a mild corrective move before further upside.

    What none of us could have possibly seen was the extent of the damage that would be inflicted in less than a week.

  753. deshy

    Thanks Sang.

    No if I could only answer my bigger question…since I’m still in do I wait or bail? But then I guess that’s why stop loss orders were invented 🙂

  755. Poly

    Silver off to the races, took a really big chunk of AGQ @$184 as a DAY TRADE and will ride it as far as it goes today. Close out today and stop @182.

  756. T.J. Rand

    Poly-

    Hope you’re right about Silver moving today (although I am largely out). If we have a relatively stable day, traders may not have big worries about carrying positions through the weekend.

    Interesting that as I look at the green candles in silver/gold, I have to suppress the urge to chase. I’ll wait for a swing low.

  757. Strellsy

    funmike – there is a plan outlined in Gary’s report of last night. the nightly reports will let you know when to exit,.

    Either we will exit all positions on a bear flag or we will load up for another upleg in the Gold C wave.

  759. Jonas

    Well, the market actually looks a little bit more perky now than in the last few days. But I agree that caution is warranted still until more substantial (dollar driven) proof of a bottom is here.

    Meanwhile, as we lick our collective wounds, we can always seek solace in the fact that trading perfection actually is attainable – if you’re a banker:

    http://tinyurl.com/5sjg2kw

    How nice it must be to be “smart” money.

  761. ALEX

    DG

    I have done both approaches to your discussion. I have traded the Metals for years , and my problem with what you said is this.

    You said maybe you’d have scaled out at $44, it started looking parabolic there. I agree, but I MY WEAKNESS is that I start to scale out there..it goes to $46, I scale out more…it goes to $48 and I start to think

    “is this a new trend? Anew steeper channel? Am I missing great gains because I am now only down to 30% invested?

    So that didnt work for my personality. i am ‘all in’ like you , not big on leverage when things get hot, and I cut losses when a chart changes to…Hey, I wouldnt buy this here…why stay 100%.

    Still, this time I rode 50% down..and i thought I was over that!! 🙂

  762. Poly

    TJ,

    It’s just a trade on a possible snap back rally, it wouldn’t be unexpected. It’s easy to forget how BIG Silver can move to the upside too 🙂

    The stop is next to break even, so it’s a stab.

  764. Gary

    Folks there’s no sense beating yourself up because you rode this down. The reason we rode it is because it happened so fast. If the move had been more orderly all of us would have recognized it a long time ago and got out with most of our gains intact.

  765. Aaron

    Exiting or entering the PMs based on the price of silver is just silly. Everyone needs to just concentrate on gold and basea silver trade on that, if they want to.
    If its too volatile, then trading silver is simply not for you, stick with gold.

  766. ALEX

    DG

    That wasnt clear..I didnt finish my thought..I meant that as it goes up and I scale out, IF it keeps going up I say..

    “is this a new trend? A new steeper channel? Am I missing great gains because I am now only down to 30% invested…THEN I GO ALL IN , closer to the top (and since I wasnt ALL IN on the way, I didnt have as much gains to lose, so that first drop hurts more.”

    So I was just saying that I’ve even scaled out, but thought I was seeing a new steeper channel , and jumped in near the top 100% and got burned. SO it takes a lot of discipline (which I have , but not in that situation).

    It may work for you though…just sharing my faulty thinking in situation ‘real time’ as I try to do that 🙂

  767. pimaCanyon

    funmike,

    if your position size is too large for you to weather more drawdown, figure out how much you need to cut your position to be comfortable. Then put in a stop on the number of shares you need to sell. If the market goes up during the day today, adjust the stop upwards as the market is moving.

    Stops are tough though, because if you play it too tight, you risk getting taken out, followed by a move up and away from your stop. But if you’re using the stop for the purpose of actually taking you out (because you want to reduce position size), then I’d use the trailing stop technique I just described. You’ll probably get taken out, but that’s what you decided to do anyway. At least this way, you have a shot at getting a better price than just selling the position right now.

  768. Jonas

    Urban

    I generally much prefer mini futures to options, simply because they have no deadline, no volatility component and no time decay. Much simpler instruments to manage as a non-pro.

    However, if there’s a certain stock that I want to trade in a leveraged way, then options is the only way.

    HPX also a Swede and Stockholmer too, hunh? Any more?

  769. Shalom Bernanke

    I feel we’ll have time to get involved before any sustainable rally.

    I’m not referring to sharp intraday bounces, for which we’re long overdue. But for the move I want to play, these rallies should be capped even if the downside is finished.

  770. Bob loves Hawaii

    Gary, you keep saying there is no manipulation, but that is incredulous that you think that. We had a very concerted effort to drive the price of silver down through capricious margin hikes that show no resemblance to the cotton margin hikes.

    Also, these margin hikes occurred right after stand for delivery when there is a mismatch between open interest and supplies in Comex.

    Your faith in cycles that require manipulation by the big money monthly, quarterly and yearly does not match your disbelief that they would not manipulate the markets to suit their other purposes, like covering naked short positions that are massively underwater.

  771. Poly

    Gary,

    I appreciate your words regarding the trade and looking at strategy changes for the future. Humility is much more admirable.

  772. Shawk

    Without scaling out, you could try a strategy where you tell yourself you will sell and stand aside if the correction is larger than any previous correction in the run up from lows.

    So with silver, it corrected ~16% in january. Once we had 16% (about $41), then maybe sell and stand aside until a swing low. Even if it forms a swing low at $41 and you get back in $43-$44, no big deal. You just regain confidence. If it continues to panic sell you at least saved some capital.

    I saw this in an article in parabolic moves that once a correction is greater than any previous correction on its way up, the odds of a panic sell become great. I did not follow this advice, but will use this any other time I’m in a C wave move like that.

  775. funmike

    At the close last night I was down $150 since becoming a SMT sub in Feb. Of course today, so far, we are back in the black. I just don’t want to cut into my working capitol.

  777. pimaCanyon

    D. Saul,

    That’s the way I’ve used TL’s in the past. However, Doc and Gary both expect a TL break to confirm a daily cycle. So if the dollar has made a daily cycle low (which it almost surely has), then we would expect a TL break.

    What is unknown at this point is whether the daily cycle low that the dollar just made is also the IT low AND the 3 year cycle low. And we won’t know that right away. Obviously, if the dollar rolls over today or in the next two or three days and goes on to make a lower low, then the daily cycle low it just made was not the 3 year low. That doesn’t help us much right now though! Tough to trade based on what may or may not happen in 2 or 3 days. 🙂

  778. Robert

    funmike,

    i agree with you 100% that these markets are manipulated.Even the reports put out by the government are fudged and manipulated .Take today’ jobs report-
    BLS of 244K is great… until you exclude the 62K from McDonalds hirings, and 175K from the Birth Death Adjustment, and end up with…. +7K jobs.

    And yes, the “McDonalds factor” is to be included. Per Goldman:

    McDonald’s Corporation said that it hired 62,000 people during an April 19 promotional event. Despite the striking number, we do not expect a major effect on nonfarm payroll employment. Last year, the industry referred to in the payroll statistics as “limited service restaurants” added 209,000 jobs during the seasonal upswing in employment from March through June in seasonally adjusted terms. Given that McDonald’s has a 17% market share of the US fast food market (as of 2009), around 35,000 of the new hires can be accounted for by seasonal variation. In addition, according to our equity analysts, US growth in the number of McDonald’s restaurants is limited. Therefore, it seems most likely that the hiring resulted from natural turnover and seasonal demand, rather than a broader business expansion. For the hiring event to have a major impact on the April employment report, a large majority of the new employees would have had to begin receiving a paycheck immediately. More likely these hires will be phased in over time.

    A history of Birth Death adjustments which ultimately get washed out in the annual massive downward NFP revision which nobody really ever cares about though

  781. DG

    Alex: Even if it had been a new trend and was going to $60—1. You are scaling out not going flat. 2. The goal is to maximize expectancy, not shoot for the moon (at least that’s my goal). Losing all the profit is an absurd result. 3. More for Gary I suppose—We have had a host of unique events since Bernanke started fiddling. Heck most of 2008 was unique. We probably need to have a contingency plan in place most of the time. Scaling out a) with silver sentiment at an all time high b) a baby parabola and c) and alternative (gold) makes sense to me.

    Anyway, for those wondering about both this and when to get back in now, this excellent board will just light up when a move of consequence is happening and you will see your choices. SB is a little longer term than some of the more active traders here, so may not be quite as helpful in that arena, but he obviously knows what he is doing, is worth paying attention to, and I’m sure will post when he starts to go back in.

  782. Shalom Bernanke

    Actually Poly, I believe you are playing it the correct way, or at least how I would play it, with the shortened holding times.

    Referring to the solver you bought for a stab/day trade. The moves will be sharp, but I’m just not expecting too much follow through at least for a few days, maybe longer.

    No need to be mean! 🙂

  786. Brad

    Hey James,
    Last week you were asking about SLW and I pointed out that the weekly chart did not look good – it had closed in the lower half of the trading range on very heavy volume. That is not what one wants to see in a healthy stock. Well, if it can close above 35.81 (I think that is what I came up with the other day) then it will be in the upper half of the trading range for the week on very heavy volume and I think that would bode well for earnings next week.

  787. Peter

    im not the smartest trader here, but SLW seems like a smart play at these levels. You hopefully get the leverage on the metal, but not the extreme volatility of an AGQ. 36$ also seems to be a support/resistance line. Any opinions ?

  790. Poly

    Gary,

    Regarding the trade, if I may, I believe a large part of the problem was that your tools (cycles) are gold based and SMT was flying leveraged in it’s Silver sister.
    What should have been identified before the collapse was Silver’s remarkable out-performance to Gold and applied this out-performance ratio to analysis in preparation for the long overdue cycle low.

    Silver was outperforming Gold by at least 3:1, for example, so this should have been the expectation for the decline. If an expected Gold decline was 5% in any given cycle low, then you can easily see how Silver could drop a good 15% and thus AGQ 30%. Now we obviously got more than that, but when the cycle count hit day 33 and the potential for a drawdown of 30% plus was fairly evident, it was too late to be holding.

    I recall you clearly stated you were not making a cycle trade, I believe the error was in that you departed from your cycle tools and as you stated, you made this is “physiological trade” to $50. That in itself was also a “top call”.

    It’s just food for thought, take it for whatever it may be worth.

  791. DG

    Alex: Just saw your post about not quite having the discipline to let the mkt go if you have started to scale out. AA few things.

    Yes you need to know yourself. Work on that discipline though! 😉

    Scaling out odes not mean winding up at 30%! That seems low to me Maybe down to 60%

    Selling some makes it easier to sell a little more if appropriate. I have seen this often in myself. If I have 5,000 shares and sell 1,000, selling an additional 1,000 becomes much easier.

    But you are right discipline is key! And we need to know where we each break down and build a strategy that takes that into account. Just some thoughts…

  792. Wes

    Am I the only person who posts here who didn’t sell ?

    I’m feeling lonesome. Maybe there are others.

  793. macro2011

    Well, a left-translated cycle in the dollar, which (per the terminology document) leads to the biggest percentage declines, would line up well with a parabolic blow-off top in metals and miners.

    I’m just worried that in the short-term Wall Street will throw a tantrum (by allowing equities to go bidless) to show Bernanke that more QE is needed (or give him the political cover as mom and pop are aghast at getting into the market at the recent top). Such an event would likely not be positive for gold et al.

  795. CMT

    Wes, I still have my SLW, GPL, EXK, DGP, and GDXJ. I sold my last bit of AGQ and was stopped out of NUGT and SIL.

  796. DG

    SJourney: Evefrything you would want is at sentimentrader.com. His service is the best there is. Period. Tracks all commodities, stock sectors, and bonds. I believe the service is not very expensive, but is well worth it. When Gary said silver sentiment was at a bullish high, it was this site that provided him with that data.

  798. Peter

    Wes, still sitting on my biggest position SLW … sold GDXJ/SIL prior to the collapse … dipped my toes in AGQ once 2 days ago and took a big hit and sold off.

  800. ALEX

    DG

    Oh yes, I get it..but I was just saying that for me…if it went to $60…i would DEFINITELY scaled back to 100% 🙂 ( but I use stops anyways for partial positions).

    I got back to 100% 2 days ago, so a good bounce would bring me back and I plan on watching for a

    1)double top / retest of highs?

    2) weak bounce to trade?

    3) New highs with a gap-gap-exhaustion SELL 100%

    yup, hoping for #3, but any will get some gains back:)

    Did you see my posted charts this morning for possible bounce areas?
    no reply necessary, just letting you know what I am looking for 1st is posted this morning.

    good day mate!

  801. Frank

    I am also half Swedish and speak the language fluently.

    I am surprised because Sweden is not very gold friendly. 99.99% of the population believe that real estate and buying stocks being pumped in DI are the road to wealth.

  803. funmike

    Any thoughts about what is going to happen this weekend? That is the trouble with Fridays; its a long time till Monday and lots can happen between now and then.

  805. ALEX

    ELAINE

    ha ha, good point. How strong will this economy be if we all worked at McDonalds starting wages 🙂

    AHH, no offense to anyone who does, or who’s kids work at mickey D’s Its definitely a big player in the world of $$

  806. Poly

    I signed my both my kids up to the MCD dividend distribution plan and contribute just $50 per month each. You don’t miss $100 a month, but you would be amazed at how much MCD my 6 yr old son has. I hope he appreciates it later 🙂

  807. Elaine

    If the C wave gets back on track, let’s hope AGQ has $40 up days to make up for the $40 down days.

    Wes, I am still holding SIL, SLV, GDXJ, and AGQ but I bought most of it in February.

  808. Jonas

    Frank,

    Welcomec to the Swedish sub-section. 🙂

    Very true. I’ve failed completely to convince ANY of my friends to actually invest in PMs. Unfortunately my dad caved in and bought a week before the collapse.

  809. Sentimental Journey

    I guess I am asking, “Does anyone know anything about sentiment besides what sentiment.com tell them”? Who knows a lot about sentimenet?

    I am looking for alternatives to canned solutions like sentimentrader.com. Do they have anything for free?

    sentimentrader.com looks rooted in TA for the most part; although, I do see some money flows.

  810. New York

    Wes,

    I’m with you. Haven’t sold, but considering it now with the bounce today.

    Obviously the tricky part is the emotions telling me what if this runs? But, to be honest, one of my close firends is on the desk at wall street and tells me hedge funds are selling and continuing to sell with a target of 27 for silver at his firm.

    I think 34 is strong support and maybe 1445 for gold. However, I think right now may be a good time to get out flat, preserve capital, and regroup to see another day.

  811. DG

    O.K. Alex I’ve had it with you. I happen to work at McDonald’s and am calling you out! I’m going to give you a piece of my mind an a private email to you! (Oh yes, and would you like fries with that?)

  812. Elaine

    Poly, my dad pretty much lives comfortably in retirement from dividends off Dominion that my grandfather bought. The dividends paid all of my grandfathers bills in a nursing home for years.

    You are doing a great thing for your family.

  814. pimaCanyon

    D Saul,

    I think have the TL break thing backwards. The TL break confirms the daily cycle low and happens before or on the day of the low. TL break afterwards is not relevant as far as confirming the low.

    So you may be right, that if the dollar breaks the downtrend line, it would raise odds considerably that the 3 year low is in.

  815. Dave

    Wes, I am riding it out, and in fact have not been looking at my account balance as I watched the panic unfold this week around here. I got out of AGQ when silver hit 48 or 49, being a little more conservative than the posted plan, but otherwise am still invested as I originally was in gold, gold miners and SLW. I guess if we really are in a D-Wave (will refrain from posting my thoughts on how we could have got that one so wrong) I am still a long term gold bull.

  817. Urban

    So Jonas,

    your plan for a D-wave would be to buy some Mini Short with high leverage for say 5% of your portfolio?

    Heading but will check in later.

  818. DG

    sentimentrader is all about measuring sentiment and uses no charts. It measure sentiment using Rydex switch fund levels, surveys, put call ratios, etc. Pure sentiment stuff. I am not sure what you mean by TA there. I don’t believe much is free, but it, Gary, and a Stansberry package are the only things I get. I have gotten sent-traderfor many years.

  821. Poly

    OK,

    Looks like we’re going to get that $2 snap back rally, maybe more!

    If you’ve been fretting and afraid of losing big bucks in further declines, the bus will be making a stop for you today!

  822. Wes

    DG

    >>>I believe the good traders as a group will get the right answer.<<

    The “group think” on this board was to sell out after 4 huge down days. It’s hard for me to think that is correct.

    I believe individual analysis is far superior to “group think”. The group is way too emotional.

  824. Patrick

    Gary and others…what do you think of the action in PM’s today? I am still holding AGQ…should one trim these positions into this bounce or hold over the weekend?

  828. New York

    By the way, for anyone that doesn’t follow Franklin Sanders he seems to have a very good read on the metals as he’s been doing this for some time longer then most.

    He doesn’t do cycles and has been wrong to the upside but usually is on point calling a correction.

    Last week I chose to ignore his call for $34 silver…

  829. Jonas

    Not sure tbh, Urban. Last time I checked, RBS didn’t have a single short silver future, which in itself is a bit odd since they have around 10 longs.

    Haven’t looked at gold yet.

  830. Wes

    Funmike,

    >>How can there be inflation if no one is working? Without jobs there is no spendable money to fuel demand which fuels inflation. <<

    Boy, am I ever glad you said that. Of course, you’re correct.

    I think the biggest flaw in this entire adventure is that the board, as a group, has the fundamentals wrong.

    But watch the usual flack I get for saying this again.

  831. Poly

    Gottahaveit:

    That was true, until a few minutes after that. 🙂

    I will now go with a rolling stop as it’s up $15

  832. pimaCanyon

    Wes,

    I am still in at a little over 50 percent. I did some trimming yesterday. Today I have selected a bit more for trimming, but I am trailing stops on these as the day goes on. If I get taken out on these, fine; if PM’s continue heading up most of the day, then my stops won’t take me out. If everything I’ve put stops on gets hit, I will still be over 40 percent invested. And some of those are GLD calls, so if I figure the equivalent in GLD shares, I’m up there in the 70 percent area.

    You have lots of company. 🙂 A lot of us who sold still have a pretty big stake in this game. I hope your holding pays off handsomely for you!

  834. DG

    Wes: I didn’t mean the board as a whole, but the majority of the most experienced traders here (in my opinion) took something off the table, and some got out entirely. Experience teaches one to look down instead of up, and only experience can do that. It was clear to me on the blog that some intelligent traders were getting uncomfortable and not just “never going broke by taking a profit.” (a damaging aphorism if ever there was one.) That’s at least how it looked to me.

  835. T.J. Rand

    Poly-

    I couldn’t stand it…was thinking about your AGQ daytrade, and agree there’s a good chance of a bounce. Joined in at 193 with a stop at 190.

  837. Gary

    I don’t think anyone with a straight face can suggest that we don’t have commodity inflation.

    It’s pretty easy to see how and why it’s occurring.

    The Fed is giving the banks free money. In order to get a return on that capital they are putting it in asset markets producing asset & commodity inflation.

  838. fubsy_cooter

    Ok, So what can we learn from this?
    1) We need to recognize that a parabola is a high risk formation. THus, forget price points, but look for a climax move to exit positions. THe first climax move of the parabola was April 25th. Silver increased its price and volume more than it had to that point and the parabola was clearly visible.

    2) If we exit a parabola in one metal and shift to the other, lighten up on position size until the C-Wave climax is clearly underway or unless a low risk stop is in play.

    3) As a parabola develops, scale out. Sell 10% chunks as the rise accelerates. If the metal corrects into a daily cycle low or breaks out from that load, the positions that were scaled out can be added back. (These moves need only pertain to parabolic advances).

    4) Most importantly, and as Gary has repeatedly stated, we each need to manage our position sizes based on our own risk tolerance and experience. Having a 100% position ina 2x ETF is crazy unless you’re playing with capital you don’t mind losing.

    More to come. THese are stream of consciousness, and as such are just drafts. They can certainly be improved upon.

    f

  839. DG

    Wes: I agree with you and also have my doubts about inflation. I have been hearing excuses for for years as to why it has not exploded. But clearly gold is in a bull market, and clearly it is in response to the dollar dying. Inflation…we’ll see.

    But can’t there be stagflation? Weak economy and high inflation? We have had it before, no?

  840. fubsy_cooter

    BTW,
    I highly suggest reading anything by Jesse Livermore as he was the King of riding a trend to the end. Not that he never got it wrong, he did, but his strategies are phenomenal, and helped me get out on the China news.
    f

  841. pimaCanyon

    So Wes and funmike,

    In general would you expect a good jobs report result in the dollar going lower? That is, if you looked at the jobs report for each month over several years, would you expect that when it’s good, the dollar USUALLY goes down, and vice versa?

  842. Poly

    Fubsy,

    You probably didn’t see it, but i posted a shout out to you yesterday. Well done my friend, avoiding the drop AND unlike myself avoiding searching for a cycle bottom. Congrats.

  844. GottaHaveIt

    Poly,

    I was thinking about doing the same thing today to catch a quick bounce on silver. I figured you might have the same idea, so that’s why I asked.

    When you said you weren’t buying anything today I chickened out.

    Then when you posted your AGQ buy, by the time I checked the price on AGQ it was already too late.

    You snooze, you lose. LOL

  845. Gary

    Before one gets excited about upside potential we need to see the dollar break to new lows.

    Until that happens we need to be cognizant of how D-waves act. By that I mean they will rally violently convincing everyone that the move is still intact and then roll over again. It’s how the D-wave keeps everyone holding on all the way down.

    For now all eyes should be on the dollar it has to break down quickly if the C-wave is to continue and this not be a fakeout to keep everyone holding.

  846. Richard

    Wes:

    I’m full in AGQ… not selling anytime soon. AGQ was just up +10.34% today a few minutes ago. I’ve been riding it since March. I still believe AGQ isn’t done.

    Please see article links in my recent posts as to why I don’t think AGQ is done.

  847. T.J. Rand

    Pima- Not all cash- still have a small amount (15%) in some miners – SLW and SIL.

    Amazing, though, how starting with a clean slate on agq changes your perspective. No longer thinking about ‘getting back’ what I lost. Instead focused on executing this trade well.

  848. Aaron

    Gary, in my opinion the dollar will reverse and make lower lows, but by that time gold could be near its all time highs, it will be hard for many to buy.
    Its truly the perfect set up for a blow off top, everyone chasing after having sold out.
    Just my 2 cents.

  849. Vonda

    Can’t help it: Am buying SLV puts with some of today’s proceeds. Purely an insurance play. Am not going through another week like this last one.

    Just need to determine risk/benefit ratio. If anyone has any thoughts . . .

  850. Gary

    Aaron,
    I doubt that. Gold has a lot of ground to make up and the dollar could lose that entire rally in a day or two.

    Besides if it does move to new lows quickly then we should have the entire month of May and maybe a little of June to ride the rest of the C-wave.

    No need to get greedy. We already got a spanking because we got to greedy last week 🙂

  852. jlinks

    @Gary

    I think what a lot of people are missing about inflation/hyperinflation is that the real damage occurs not from the fed printing money, but from fractional reserve banking.

    So far the numbers show that the banks store all the new cash as excess reserves with the fed (in fact the charts for QE2 and excess reserves look almost alike)

    So until the banks start lending those reserves 10X QE2, inflation is not a big threat.

    (I’ll look look up the charts later, I’m mobile)

  853. ALEX

    Fusby

    I can agree with your *notes at this point.
    Also I was just reading Jesse Livermore on my March Vacation. It puts me into a good focus mind set.

    Wes said…The “group think” on this board was to sell out after 4 huge down days. It’s hard for me to think that is correct.

    I believe individual analysis is far superior to “group think”. The group is way too emotional.

    MAYBE Its was still a good board indicator, thats 20 % of why I went to 100% 2 days ago. Everyone knows that herd mentality is to sell at the most pain…the bottom 🙂
    Even Gary ALWAYS says most people cant hold on and will sell the bottom.

  855. Gary

    Vonda,
    Wait for the bounce out of the daily cycle low before you buy puts. If the rally is violent you will just end up selling your puts for a loss and compounding the problem.

  856. funmike

    In order to sort through my thesis for being here I am asking the question, Have the fundamentals changed? I still believe that Gary is right and that the three year cycle low should go below the 2008 level. Are we any better off now than then? We have had massive input through QE and very low interest rates. Those are inflationary tactics and will have to bear fruit sooner or later. The big question is when and what it will look like to get there.

  858. Vonda

    Thanks Gary,

    What I’m hearing is this should be more than a one-day show and I ought not fear the weekend–too much.

  859. niven

    Hey Gary,

    I just logged on and saw slv go up 4%? Holy cow I sold yesterday.. whats the plan now? Should I wait for the swing low and dollar to depreciate?

  860. Vonda

    Thanks Poly,

    I’m either hungrier or more frightened than (and not as seasoned as) you: I’m right on its arse!

  861. Ben

    DG, if you have any doubts about inflation, I suggest you go to the ER or look at tuition for the past few years. My kid’s at UW went up 30% in two years, then leveled, and now, two years later, it’s expected to go up perhaps 15% a year for a while. Or food.

    Mish has a good piece today on demand destruction in oil, I need more time to read it but worth a look in my view since if oil collapses in cost, then the double dip may not occur, in my view.

  863. pimaCanyon

    jinks,

    If what you say is true, that all the QE2 money is just sitting at the banks as reserves (just as deposits with the Fed or in Treasuries?), then none of the QE2 money has gone into stocks and/or commodities, right?

    But even Ben himself has said that QE2 has been successful because it has kept the price of stocks UP. So how could it do that if none of the QE2 funds are making it into the stock market?

  864. ALEX

    POLY

    you held that beautiful ‘AG’ buy @$17.50…right? 🙂

    Gold up $25
    Silver up #1.52

    Dollar up .18 too

    HMMM

  865. Gary

    Vonda,
    Don’t make an emotional trade that you know isn’t warranted by the length of the cycle.

    We will clearly see the cycle low and there will be an attempt to re-establish the trend in gold and silver. The Bolllinger Band crash trade signaled at about $42. The bounce should at least take silver back to that level. That’s where you can hedge.

  866. trond56

    History’s biggest running-the- stops operation disguised as a breakdown? Big money obtained all sorts of commodities cheaply.

  870. Tajir

    I like the points that DG, fubsy and Alex are making and making notes of those in my log. Thanks for your healthy discussion, it is helpful for new traders. I understand that no one can catch exact top and exact bottom. However, a question for experienced traders is, does it make sense to scale out while going up (ex. scaling out of AGQ during the month of April as things started showing parabolic signs in silver and then regretting missing the move), or scale out on the way down (ex. last four days of fireworks in AGQ and regretting not taking the profits at highs). Thanks again

  871. pimaCanyon

    TJ,

    Have fun!

    When you get back, I’d like to know how you handle the AGQ trade now that you’re going to be away all day. I was thinking you were treating it as a day trade where you’d need to adjust stops during the day. Maybe you’re using a trailing stop or maybe considering it a little longer term, like holding for a couple of days?

  872. Richard

    Gary,

    A LITTLE spanking every every so often could be very exciting… but this one was the mother-of-all spankings. IMO

  873. fat boy

    today

    1/ day traders pushing up silver?
    what time do they generally cash in

    2/ is the dollar going to roll today / monday

    3/ do i stay or do i go now ?

    any ideas on holding over the weekend?

    poly it looks like you are just playing the bounce today are you just trailing stop or watching?

    oh the joy the joy

  877. Peter

    Massive volume in SLV already. Plus, there was massive volume in ZSL yesterday, so you have to assume there will be a fair amount of short covering going on.

  878. fubsy_cooter

    Thanks POLY!
    I haven’t totally avoided the drop, but it was not devastating. Sold out of all silver related positions, but holding a 30% position in GDXJ and DGP. Waiting for the bounce to see how to play it.
    f

  879. Jonas

    Alex

    I think the problem is not when people sell to avoid account destruction – should. (And I did that too).

    The problem is to not sell earlier. You don’t want to sell because of angst, but rather due to trading discipline and a healthy sense of caution.

    I (as some may remember) scaled out at 41.50, got greedy at 45 and jumped all the way back in on the first correction, scaled up when we had the second run up to 48-ish. After that I was blinded by visions of 60s and 70s and simply let greed and hope prevent me from selling again – until I was backed against a wall called capital destruction.

    I’ll do my best to avoid it again.

  880. Gary

    The problem with scaling out is that it works great in theory after the fact but is next to impossible to accomplish in real time.

    If you scale out to early you end up sitting and watching as a massive move unfolds and you aren’t on it. Invariably you will panic back in close to the top.

    AND ONE ALWAYS SCALES OUT TOO EARLY.

    Trying to say we can defeat our nature is like trying to claim one can stop a bubble. It simply isn’t possible.

    There was no way to avoid what happened in the housing market because it’s impossible to regulate human emotion. That’s why we are destined to create bubbles for as long as humanity survives.

    And it was virtually impossible to scale out of silver because our nature would have forced us back in when the pain of missing the move became too great.

  881. ALEX

    TAJIR

    That question is tough to answer in advance, much easier to answer in Hindsight 🙂

    On the way up, I cant tell where I REALLY would have started scaling out ( and would I have been disciplined enough to stay out if I was too early). I am always looking for new trades and ‘set ups’ , so cash aside in my account is always ready to buy if something looks good.

    I Do scale out on the way down. A large reversal on Heavy volume (in a stock I own)can get me to cut 1/2 free , but again…if they drop for 2 days and start back up…I have a tendency to trade..buy another good looking set up or get back in if it looks good.

    I guess I’m a juggler…not advisable near tops maybe, b ut this didnt look like other exhaustion tops?

    hope that helped?

  882. Jonas

    Heading out for the evening.

    Good luck to all: daytraders, keepers and shorts. (If that statement is even possible).

  885. aklaunch

    Same boat as you Jonas. Big learning curve….

    I have noticed more often than not there is a big correction in Silver between 9:10 and 9:30 everyday. About an hour to go before the “they” start taking profits. What happens after that is anybody’s guess.

  886. ALEX

    JONAS

    You just described exactly what I would do if I scaled out on the way up and everyone was making a run to 70 seem possible. Who would want to sit out at $42 when it could almost double.

    Thats why I try to get heavy on the way up, and then its Cut losses if heavy selling comes in. i only lighten up though, I rarely sell everything, unless i felt an exhaustion top was in…then I’m 100% out (or play the downside a bit).

  888. Jayhawk

    Great discussion, comments, ideas for a lot of smart posters last night & this morning.

    Alex-Like the charts on a potential way this may play out. I have the same thoughts.

    One of the most EPIC beat downs ever this week and we are all hanging in there.

    BobLH-

    Totally agree with you about the blatant margin manipulation. Gary will never buy into it, so we just need to let it go with him. I have a feeling Gold is next on their target list.

    They want to portray this as evil speculators driving up price to get the brainwashed masses eyes off the true ball. I knew this would be a battle, but this week a nuclear bomb was dropped on PM land. It’s going to be interesting to see how things pan out in the coming weeks & months, years. (I deep down think they will outlaw PM’s somehow or castrate them in some way.)

  891. Bob loves Hawaii

    Jayhawk, true that on manipulation. I had a nice overnight trade on EXK, and bought SLW for the earnings on Monday, holding AG calls, as well.

    I am trailing stops on GLD and SLV with OTM sold calls as a hedge.

  892. grimweasel

    I sold half my silver at $48 based on a target of $50. The huge volatility on that first down bar scared me. Looking at silver the short was obvious. Top then retrace into a lower high with an inside bar (short) next day. Bar broke to downside then got smashed. I held my other half of silver ETF thru the drop until it reached my max loss tolerance of 20%. I’m looking to get back long. What kept me out of shorting was my rule based on trend lines. Never take a counter trend trade unless there has been a significant prior TL break.

    AL Brooks in his trading price action book states that one of the best RR trades one can have is the rally back into a trend after a significant TL break. Gold and Silver (with the cycle low) are in that band now and I think many people will get back long to see if the trend has any strength left. I’m long gold today based on price action.

  893. aklaunch

    After getting the spanking for 4 days i have to remove some money from my account so i can pay the rent and take care of some other business. With the money i have left i would need to make 800% on it to break even from last week.

    Maybe a pig will land in the back yard and fly me to work?

  896. Tajir

    Thanks Alex and Gary. It seems like there is no correct way, its all embedded in emotions. I am writing this in my log; If I regret selling too early or too late, than I need to work on my emotions of greed and fear. It’s okay to lose, but it should be according to the plan, not by emotional decisions. I cannot get greedy after scaling out to get back in especially in extended markets. (even if I miss the move).

    One person, I follow (CANSLIM type investor) is Joe Fahmy, who has mentioned this several times, that he does not care where the stock goes, after he has sold. There are always opportunities in the market to make money. But don’t break your rules in emotional decisions.

  898. Aaron

    The Aussie dollar is up 2 percent, thats absolutely massive. The Euro is currently lagging and in my opinion the only reason why the dollar hasnt given back more gains. It will happen next week. A small delay.
    I almost want to go long Euro here, its a great trade.

  899. Fundamentalista

    grim, what’s going to happen to the $USD? Will it set new all-time lows? How long will the uptrend continue?

    Is the EURO dying?

    How can I keep up with foreign currency fundementals and/or forex?

  900. ALEX

    Well I think this day is going to stay green, based on the morning buying volume

    Beautiful day in New England and after this week, its time to get out and enjoy a nice bike ride. Have a great day all.

    Try not to chat tooooo much–it takes me 4 EVER to catch up on this blog these days 🙂

  901. Aaron

    Anyone else notice how Agriculture didnt participate as viciously as everything else in yesterday’s commodity sell off? Wheat and Corn have been on a tear since last fall too.
    Its not over yet in my opinion.

  902. GottaHaveIt

    Alex,

    Nice call on AG!

    I love that company but got out of that stock a few weeks when the miners sucked.

    You are 100% invested now, right? Mainly in silver miners?

    Is that for a long-term hold or just trying to cash in on a quick bounce in silver?

    The last couple days I have turned bearish on silver short-term, but looking at today’s action has me rethinking my position.

    I’m siting in almost all cash right now … watching and waiting to make my next move.

  903. grimweasel

    Tajir

    Sound advice. Different people have different objectives etc – that’s what makes a market. As long as u have a trading plan and set profit targets, stop losses etc you have won and beaten the market by trading your plan. Montier has produced some good stuff on behavioral investing and worth a read. Also read Brett Steenbergers books blogs etc. Also Mark Douglas. Trading is 95% psychology. It’s all about beating the man in the mirror!!

  909. jlinks

    @PC

    QE2 buys bond.
    Everything is up because the economy is not allowed to crash.
    QE2 sends enough money around to lower interest rates.

  910. Poly

    We’ve reached a fork in the road for the AGQ day trade. Silver has been flirting an upside break out for well over one hour. Let’s see if she has the character, could be worth another $0.75-$1 move or the top for the day.

  911. William

    I think my re-entry hinges on the dollar, if we get a swing high in the next couple of days hinting at a left-translated cycle I will take a stab, then if the swing in gold materializes I will grab some more.

  913. grimweasel

    Fundamentalist – blimey!! I have no idea and no crystal ball and anyone who tells you otherwise is a liar or an economist 😉

    All I do it follow the market and trends. The simple use of the 20 and 50 daily moving averages and trend lines with high and low analysis is all one needs. Technical traders tend to dismiss ALL news because it can cloud your view. If u trade a chart just trade the chart and the price action signals it gives you. Ditch your fundamental based view because you will never be smarter than the market – what’s your edge, and what do you know that the market doesn’t? That is why trend following works. Don’t try to massage your ego by trying to pick tops and bottoms. Be humble and trade what the market is telling you.

    Based on the USD index and Gary’s excellent coil work I would say the USD has further to go based on my view of the chart. I would only get long if there had been a significant TL break and test of that break. Let the market show you the way rather than gazing into a ball!!

  916. n1tro

    One more tip that may be an indicator for potentional strong tops or the moves down. I did notice on my forex platform that when silver was jumping up to $49.xx that Sunday night, there were pauses on the platform where I couldn’t press the button to buy/sell and then when it was falling on Osama’s death, same thing. My take away from this is to use that as an indicator to at least get out of huge leverage for profit or loss.

  920. Gary

    LOL people listen to yourselves. If the powers that be wanted or could take down a bull market they would have done it long before silver reached $50.

    Now this is getting completely illogical.

  921. aklaunch

    Does anybody on here have a chart link of another industry or company that had a big parabolic move up like silvers and then a correction of the same magnitude as this weeks and then a rise out to make up even part of the losses?

  922. Poly

    Fatboy, what dirt?

    Before the open I said there was a chance we rallied back strong today. So i took a large “day trade” with a very tight stop in case it did.

  925. Gary

    Bob,
    The only expectation I have is that some time within the next week gold will put in a cycle bottom (maybe it did today). The rally out of that bottom will be strong enough to convince everyone the rally is still intact whether it is or not.

    The dollar will determine whether the rally is for real or not.

  926. Clarkatroid

    Yesterday was one of the worst days in my life.

    I had a dream Wednesday night where I was kidnapped in my sleep, when I woke up, I was in a dingy damp basement with one light bulb hanging over my head, strapped to a wooden chair, jack bauer stood over me with a dirty Rambo style knife accusing me of crimes against America. The bernank is there, with reams of paper, citing my dealings in Agq as proof of treason

    Bauer then starts ramming 1 dollar bills in my mouth, I’m choking, bernank is laughing uncontrollably, stroking my nipples with the bowie knife,and I’m choking on dirty bucks

    “take it boy, take it you little back stabbing bastard, this is where AGQ gets you, you filthy piece of shit”

    Little did i know when i woke up Thursday morning the nightmare had only just begun ……….

    This where AGQ gets

  927. Michael

    Gary,

    Doc has sold all of his silver futures at the top (in real time). What did he see different that you didn’t?

  929. DG

    Gary: I rarely disagree with you 180 degrees, but saying it is impossible to “regulate human emotion” is simply false. It may be impossible for a SOCIETY to, not an individual trader. I guarantee you that if i scale out i will not find “the pressure to get back in too great.” I just won’t. Silver can go to 1,000 for all I care. If it dips and a see a spot to enter that’s one thing, and it will be reasoned, but pressure to get in simply because it is going up. Preposterous!

    I have emotional trading weaknesses, but 1. I work on them 2. I know what they are 3. I have made huge progress on them.

    This is also akin to when you say “no one can perfectly catch a bottom.” No one is talking about perfect. Can progress be made in mastering one’s emotions. Of course. Look at Navy seals! Can you make ENOUGH progress to resist the pressure to but something simply because it is going up? Of course. I have. You sometimes put out an extreme, then say it can’t be done, and then dismiss the whole idea. No one can completely master their emotions, but can they enough to avoid common pitfalls and trade better going forward. Yes. You have mastered your enough to buy at IT lows when others are too scared. if you have not mastered yours enough to avoid chasing, that’s fine, but don’t tell me it can’t be done.

    That all came out a little strong so forgive me for not editing it. You know how enthused l am about your skills, but you start getting into psychology and emotional mastery and you are in my world 😉

  930. Gary

    Michael,
    I was set to sell but the crash started premarket and I wasn’t willing to sell into that kind of a big gap down. Of course if I could have looked five days into the future I would have gone ahead and sold the gap.

  931. thedocument

    pima,

    A cycle trend line break only confirms the cycle is in its primary decline, meaning on its way into a low. It gives no information regarding the timing of the low.

  934. Vonda

    Poly,

    I owe you a beverage of your choice — followed you in the AGQ trade and now can feed the kids for the weekend. Thank you!

    And thank you, AKALUNCH, for the first hearty laugh in some days. I think I see your pig’s belly overhead.

  935. Gary

    DG,
    Ok I’ll concede that maybe one in 100 traders can completely master their emotions But clearly you and I are not that one. If we could have done it then we would have.

    Trying to say after the fact that it could have been done is completely meaningless because if we could have we would have.

    So with the benefit of hindsight we know exactly what we would do in that situation because we just did it.

  936. DG

    I expected this dip in silver (sorry I was on a long phone call or would have suggested Poly take his profit (sorry, man—not that you’d have taken the thought.) There are a LOT of scarred and scared people who didn’t want to sell at the low who are bailing here. Now it can do anything from my perspective, but the bounce and pullback are standard. NOw we may fade into the close or rally—no idea. I am not trading it. Juggling hand-grenades is not my style. Holding my DGP and a little GDX.

  938. Francisco

    I think people are kidding themselves if they think that, either indiviually or collectively, you’ll come up with a strategy to “nail” this one every time around. Sometimes scaling out might work best, when other times you’ll exit too early and will be watching from the sidelines. The market is unpredictable and will always throw you curveballs when you least expect it. All you can do is play the tendencies and probabilities and hope for the best. Sometimes you’ll nail it, and sometimes you won’t.

  941. DG

    Gary: Different situations press different buttons. No trader can or can’t master them. It depends on the situation. And you can’t tell by what they do. Their decision might have been wrong because they got emotional or because they just mis-analyzed something. Or emotions might have cause the mis-analysis. Or not. Doesn’t matter and doesn’t need to be labeled. If we each just keep working on them we will get better at this, which is all that matters to me

    And I did sell 1/2 😉

  943. traderRob

    All I knows is, recent trading has been disastrous for most everyone holding AGQ “old turkey”. I’m expecting a bit of a bounce next week, and I’ll use that to unload. Still, wish I had played this one significantly differently.

  944. fat boy

    poly

    funny before you said stop at 190 i followed suit with all my long agq position
    filled at 189.55

    guess wait for the swing conf now, bottom must be close as i sold (taking one for the remaining longs – wes) only solice is i didn’t sell this morning

    🙂

  945. Ben

    Gary,

    Everything you’ve ever said about making decisions in “real time” is spot on. Anyone with any experience and an accurate recounting of their own emotions can confirm this. When silver was going ballistic at 40-48, imagine how much would have been left on the table had it kept going to 60? AGQ at 500? 550? Tell me nobody was thinking that was possible. Aye, there’s the rub.

    But I will continue to digest and think of how to handle the terminal blowoff stage for the future. It’s very unlikely it will come up soon, because so many fingers are burned. But the reality of today’s markets is that corrections are faster than ever before, because you have multi-billion dollar hedge funds gaming with *each other.* I’m starting to think that for the FINAL phase of a rally (as we thought we were entereing), it’s better to scale back to 125% half way between the low and the expected turn point (maybe on the first SOS day?), and then back to 100% on the next SOS day, still using the trailing stops (which ironically we’d just removed). Something to account for the reality that the turn will be sudden and erase two weeks’ gains before hitting a stop anyway.

  946. DG

    Last point: It was, frankly, my ability to avoid greed that has me well ahead for the year when so many here were leveraged, in options, etc. Fubsy and I were the old coots who were “too conservative.” Old coots rock! (at least this week).

  947. Gary

    DG,
    I would have sold it all if it wasn’t for the big gap down.

    If I had any inkling of the severity of the decline then I would have sold the gap anyway. But I didn’t see anybody suggesting at the time that silver was going to drop 30% in 5 days. It seems like all the best traders missed that one.

  949. Poly

    Thanks DG. The trade stopped out and was good for 8%, 15% would have been fantastic. I was in with half my funds, so it takes some of the sting out of yesterday.

  950. Francisco

    Glad I could help G :0)

    If people haven’t, I suggest reading the market wizard series. The best traders in the world are happy if they get 60% of their trades right. In fact, one trader said that he could have a very profitable year if he could just get 51% of his trades correct. After that it came down to position sizing and risk control. He’d let his winners run and would cut his losses short.

  952. Supermalc

    Sir Isaac Newton, who bought into The South Sea Bubble, sold and made a mint, bought in again when it continued rising and then got caught in the collapse, said:

    ‘I can chart the motions of the heavenly spheres, but not the madness of the people’.

    So even a genius can’t get his timing right.

  953. DG

    Notice how every time someone wants to dismiss what I am saying they add a silly qualifier. “Nail it every time.” Who said nail it? Who said every time? It’s all just a straw man. The point is to get BETTER at this not perfect. Every time an aspect of trading is brought up someone says “You’ll never MASTER it or get PERFECT at it.” So what. So give up improving on it? Does each person here think they cannot improve their tactics? That would be sad. give up now. I know I can improve mine and every day is a chance to try and learn. Every day. While I will never be perfect, I think I am a better trader every January 1st than I was the Jan 1 before.

  954. Driver

    GLD’s LT channel bottom is about 136. Coincidentally, I see that that level is where an astrologer said to be long above it and short below it months ago.

    There, I’ve done it. Trendlines and astrology. eeek

  956. Poly

    Gary,

    There were many calling and traded it to drop to $39-$42. Hindsight’s a bitch, I know, but it was possible.

  957. Gary

    If the dollar makes a higher high that would be a very strong sign that the three year cycle low is in.

    The coil if it’s going to work should start to roll over within the next couple of days.

  958. ...at ease

    DG, are you all out of DGP? Or just half? Reason I ask is I sold at mornings high in hubby’s account to secure remaining profits. Just couldn’t handle the emotions of losing his funds. But still deciding what to do in my accounts with that DGP to back out a bit.

  959. Shalom Bernanke

    I did not expect silver to get clobbered as much as it did, but one simple tell that something was wrong was the silver miners being down several % while the metal was smashing into new highs by several %, and this continued for several days.

    I was not in AGQ, but I did dump the miners on that behavior and it saved me from losses. Sitting in cash I had intended to buy the metal, BUT ONLY on the next daily cycle low. I would wait for that to occur, but when it did it got messy very quick.

    I typically ignore normal or reasonable divergences, but this was a screaming red light to me. Not that silver was going to crash, but at a minimum the miners were done going up. That’s my story.

    The only money I lost was the first couple days (while in miners) of underperformance from the highs, and then the 2 stabs I took buying a bull market pullback but getting stopped out for tolerable losses.

    Btw, I still think we have plenty of time to get long for the bigger move higher in metals, perhaps a few weeks, maybe less.

    The BIG money will not be made probing for the bottom after a washout, but being able to get heavily invested “safely” once the metals are in gear to the upside.

    We’d all like things to resume immediately, but there will be plenty of time and potential left even after letting another mini-washout (test the recent lows in gold?). As always, patience will reward.

  960. Hot Rod

    It seems like these crossroads we have right now we’ll have to get used to….

    option a) run up fizzles and we’re ready for a sharp take down or
    option b) BTFD

    P.S. – I do agree with Gary about the real time trading emotions. I was a victim to everything he preached from both sides of the trade. I got lucky and thank god that I was using Gary’s info for timing and direction, not the by the T.

  961. Gary

    DG,
    I’m not disputing that. As a matter of fact I think the combination of cycles, sentiment and experience have done wonders for me.

    It allowed me to ride the entire silver rally while almost no one else did and everyone was calling for tops all the way up.

    But I think something like what happened this week will almost always catch me. It’s just one of those curves I can’t hit.

    Even so I would have hit it if it wasn’t for the premarket move.

    I suppose the lesson is that we can probably expect turning points to come premarket from now on and trap us in positions.

    So if it’s time to buy or sell we will have to be willing to do so into gaps.

  962. Shalom Bernanke

    For longs that are stuck, don’t despair. Just because I think the solid moves higher (that hold) are a little further off than others here, does not mean I think the crash will continue, either.

    This is the bottoming process that we’re in right now. I would not be a big, long-term buyer, but I also would NOT be a seller here. The worst is behind us, IMO.

    Stay patient. 🙂

  963. DG

    I never can tell how far something will drop. I had no idea it’d be 30% in 5 days. but I knew from the sentiment, parabola, and volume that the risk was huge (20%? 30%?). In real time. Knowing the percentage and number of days it would take ahead of time is irrelevant. Im afraid that’s another straw man to get people to think “Of course that’s true. Who could have known that.” But knowing that is irrelevant to our discussion. Knowing there was huge risk was not subtle. Tagging 50 was not part of cycle theory, but was an educated guess is all. A guess coupled with huge risk is dangerous. That’s where scaling is a good idea. “Maybe we go up sharply, maybe we crash, I’ll take something off the table.”

    You get the last word if you like…it’s your blog!

  964. jmenoy

    Heads up… SLV is back below its 10 period EMA on the 15 min chart.

    It followed this all the way down from the top as someone (my apologies, don’t recall who) pointed out yesterday.

    We jumped above it this morning, but have since fallen back below. If we make new lows today, we’re likely starting a new leg lower, imo.

  965. DG

    My last post crossed in cyberspace with yours. Thanks, Gary, this has been a great discussion. I hope it has been helpful to everybody. Certainly interesting for me.

  969. Shalom Bernanke

    And I’m not referring to price, but time when I say “here”.

    Prices are very attractive, but I won’t expect a sustainable run for awhile.

  970. Poly

    Gary,

    We obviously printed a new daily cycle on the dollar right, but does the dollar IT cycle really afford or allow for another new daily? Looking awfully long.

    Obviously we can NOT have a new IT dollar cycle and have the first daily within it fail, because that would negate the 3yr low!

  971. Gary

    Poly,
    Remember the last it cycle was very short. This current cycle could go till June and it would just even out the prior short cycle.

  972. Francisco

    DG,
    I’m not adding a qualifier or saying that you can’t improve. You absolutely can and should. I’m simply saying that what works this time, might not work next time around. Gary played the high percentage trade based on his knowledge and historical perspective. And unfortunely, he missed it by $0.20. He might hit that trade 9 times out of 10, but he wasn’t so lucky this time.
    Now I hear you when you say there were signs that we should have listened to, but there were warning signs at $42, $46 and $48. I applaud you that you got out at $48, but your system may not work out so perfectly next time around.
    My general point is that what worked best this time, may not be the best next time around. The market is unpredictable by nature and it will catch us all at one point or another. Learn your lessons, apply them next time around, but don’t be surprised if the market tricks you again.

  973. ...at ease

    Poly, what are you investing in for dividends? My son started doing it years ago when he asked his Godmother for stocks for Christmas when he was 8 years old. He still gets quartely checks (small ones, but they come regularly).

  974. jmenoy

    also, I don’t expect a significant new downleg, but 32 on SLV wouldn’t surprise me.

    on the positive side, if today’s/yesterday’s lows hold and we reverse, we’ll likely fill the gap at 37-38 quickly.

    anyone else seeing this?

  980. DG

    Francisco: Yes, absolutely, What worked this time may not work next time. Agreed. I am always doing mental risk/reward estimates and can see several errors I made, not just because of what happened What happened highlighted the errors is all. Glad I didn’t get away with them. (Sort of glad).

  982. David Kafrick

    If you have a price target at which you will sell your position, then you should always trail a stop so that it is never at a greater distance from the market than your price target is. That is just pure money management, has nothing to do with cycles, trendline, crystal ball or any other kind of analysis. You don’t have to predict a crash in order to do that. And money management is the most important aspect of trading, it comes before any kind of analysis.

    So if you know for a fact that you will sell silver at 50, as it gets to 45 your stop should be at least at 40, regardless of any other kind of analysis, when it gets to 49 you should have a stop around 48. If you don’t do that, when the market is at 49, you are putting yourself in the weird situation where your upside is 1 dollar and your downside is wherever your stop is based on some kind of analysis. It could be 10 dollars below market price, which is just completely irrational. If you are playing for 1 dollar upside while risking 10 dollars, sooner or later you will go broke.

    If you don’t have any price target, and you will just close your position based on subsequent price action, than what I’ve said does not apply. But if you know for a fact that you will sell at 50, then when the market is trading at 49.80 you better have a stop at 49.60.

  984. Gary

    Michael,
    In order to form the swing we need gold to make a slightly lower low and a narrow range day…or it has to trade above $1521 and negate that big down day.

  985. Francisco

    DG,
    From what I read, I think you’re a fantastic trader and I look forward to your posts. We are all human though, and we will all continue to make errors. The best that we can do is try to learn from them and hopefully not make them in the future.
    I was by no means trying to discredit your view, I was simply highlighting the unpredictability of the market and why she humbles us time and time again.
    Now lets go make some money!

  986. Gary

    David,
    9 times out of 10 that trailing stop will take you out long before your target is ever hit.

    There just is no fool proof way to play the market.

    I accepted a long time ago that from time to time I was going to get caught and there’s no way to avoid it.

    When it happens I pick myself up, dust myself off and get back to the business of trying to make money without losing sleep over shoulda, coulda, woulda’s.

    If it coulda been done then I would of done it.

  987. pimaCanyon

    Gary,

    Does the size of the break after a coil give any indication of how likely it is that that break will reverse?

    If you look at the daily chart of the dollar index, the coil lasted 4 day, it broke up yesterday, but that up move was huge. And there is followthru today. I would think that at some point the move up in price would negate the possibility of the break being a false one. That is, couldn’t we use a price move here instead of time?

    (Instead of waiting 3 or 4 days to see if the dollar reverses, couldn’t we say that if the move up exceeds a certain amount, then the reversal if off the table even if the 4 days have not yet elapsed.)

  989. Shalom Bernanke

    Knowing the worst is behind a trader allows them to hold through these little pullbacks (like right now)while markets find equilibrium.

    Anybody that has held this long can start to look for the recovery as long as they remain patient with reasonable expectations (silver isn’t going to run to $50 next week).

    Kick back and know you’re in it for the bigger move when it comes. 🙂

  990. Gary

    PC,
    The only thing I can say from experience is that the initial move usually only lasts about 3-5 days at the most.

    If it hasn’t started to turn by then then it probably isn’t.

  993. funmike

    David,
    That makes good sense to put the stop in when you are getting close to your target. It would have been good for us this time. But when would you re-enter?

  994. William

    Did anyone else feel like their favorite dog died last night? Still rehashing this week and re-examining my trading strategy and I think that going forward I will take a bigger chance on the intermediate lows, Get more of the portfolio in DIM options to conserve as much cash as possible while still getting the exposure, and then scaling out the principle the cycle matures. In looking back over this experience I think this gives you the best opportunity to ride the wave and sleep at night knowing that going into that possible third daily cycle you had no real skin in the game, only profits but still a substantial position. At AGQ $350 I had a double and I had significant gains on all of my options positions. I got greedy and rode the whole thing down. Taking capital off the table would have prevented much of this pain, allowed exposure for the rest of the ride and perhaps now I would feel like I just had to take my dog to the vet instead.

  995. Poly

    @at Ease

    I do it all through ComputerShare, they make it easy.

    https://www-us.computershare.com/investor/default.asp?cc=us&lang=en&bhjs=1&fla=1&theme=cpu

    I rotate the kids custodian DRIP plans every year or so. Between the two kids I have them EACH in 3 DRIP plans at $50 each per month, so it’s a $300 per month investment.

    I alternate plans, currently they are in MCD, Intel, Verizon, AT&T, Johnson & Johnson.

    I quit smoking 3 years ago and figured I spent around $250 per month on cigarettes. When I quit, I started a Dividend plan with Altria, as I smoked Marlboro. That account has over $10k in Altria stock and I didn’t spend anymore money getting it.

  996. DG

    Good news!! I just got a buy euro/short dollar signal. These are not 100% but they are very, very good. Does not mean the $ needs to tank today, but it does mean the next move is DOWN. I am going to have a very relaxed weekend now. I am tempted to buy more DGP but will wait a bit.

  997. Tudor

    William, that is exactly what I’m thinking. Use DITM’s for exposure at IT bottoms and to keep some cash on the side to take advantage of the inevitable dips and special ops.

  999. jmenoy

    DG – What’s the time frame to validate that signal? Are new highs/lows likely before?

    Just curious what you’re thinking. Thanks.

  1000. notGreedIsGood

    @DG

    how did you get the short dollar signal? or is that a secret?

    well even if you don’t share the reason, I think you got good credibility 🙂

  1002. ...at ease

    Poly, I have heard Altria is a good investment. Much better than smoking, I know I gave it up 15 years ago, just think what I would have if I had invested the difference. Thanks! I think I will start going back to basics with some funds. Sounds like a good long term plan. With kids, they have time on their side. Best plan was to give up smoking either way. 🙂

  1003. oa92000

    Over the past “4” days: Soybeans have dropped: -6.5%; Corn: -7.8%; Gold:-7.3%; Silver:-30%; Euro-Currency: -3% & Crude Oil: -17%.

  1004. DG

    Jmenoy: The dollar should drop within 3-5 days. Normally it’s a trading thing, but given cycle expectations I am of course hoping for more.

    Not: Sorry, can’t share the guts of it. I have posted well over 100 trades here in real time and believe the huge majority of them have worked. Hopefully this one will too! We are going to get a dip. Whether it makes new lows and gets legs or not I don’t know…but I’ll take the head start!

  1005. ...at ease

    DG, thanks for sharing your signal on USD. I think I will just sit tight over the weekend and see where we end up on Monday on that. I can sleep now that today brought back some of Hubby’s profits and he is positioned to get back in if need be. I have time with my accounts. Have a great weekend DG.

  1008. Nike Boy2008

    DG,,

    THANK YOUUUUUUUUUUUUUUUUUUUU for sharing your sell signal on the USD:)

    Best news I could have heard today 🙂

    MUCH MUCH appreciated

  1010. DG

    Remember the signal is short term. Theoretically the $ could drop today, work off the signal, and rally all week next week, but off a 3 year bottom I’d expect the $ to rally day after day for a bit, so if it reverses or weakens a lot today it adds credibility to the idea that this is just a dead cat bounce.

  1011. funmike

    Thanks DG for that report. I know it may not mean too much but the day trend according to the macd is up. To me that is a good sign.

  1012. Charles

    US dollar is at the top of a downward trendline started Jan 10th til now. We shouldn’t see a higher high on dollar (74.67) from here. fingers crossed.

  1013. Elaine

    Poly, it’s funny that you talk about Altria. My father stopped smoking last year at the age of 83, he had probably smoked more than 65 years. My brother and I tried to get him to invest some of his money in Altria because the dividends are so good, but he now takes “the high road” and won’t invest in a company that sells cigarettes. 🙂

  1014. gusto

    I know everyone is freaking out after the past week but I don’t really see what has changed from Gary’s posts. We needed a correction to get sentiment negative. Gold is still in an uptrend. We are at or going to hit a daily low in gold within the next few days. You will at least get a healthy bounce. Silver is just a crazy market and I think the correction was necessary for us to continue higher.

  1015. Eamonn

    DG, I’ve lost all of my profits. Sure is nice to hear you are shorting the dollar. Maybe, JUST MAYBE, it will keep going down and we can make money on gold and its c-wave

  1016. GGuy

    I have signs that Oil has close, or is very near to close, an intermediate. I just bought it, with tight stop.

    We can guess what will happen to gold if oil bounce out of an intermediate bottom

    G.

  1018. rachel

    Watching .dxy closely, if it closes above 74.6, the next resistance will be 75.4 (50sma & mid April support). However, when it gets to 75.4, the technical picture of dollar index will change a lot

  1019. DG

    Eamonn: Sorry about losing your profits. You will be back! I am not shorting the dollar, but I am long gold which is very related. I probably would buy FXE were i not already long gold.

  1023. jhnewman

    Gold has bounced exactly off its intermediate cycle trend line.

    On a daily chart of GLD (nonlog format), draw in the bottom trendline back to the January low. Gold bounced right off it yesterday and today.

    I’m betting we’re still in the C-wave, and that what happened to silver was the 2011 version of that 2006 20% one-day plunge that Gary highlighted in a number of his reports. The 2011 version: -30% (roughly), over 4 days.

    In 2006, as gold powered to strong new highs and the top of the C-wave, silver recovered from its major chart damage and eventually made marginal new highs to top in the C-wave along with gold.

    Then the D-wave began.

    Just some thoughts.

  1030. Jin

    Hi, Guys, UUP is making higher highs. GDX is making lower lows. For today of cause. FWIW. Be carefull out there.

  1031. DG

    David: summary of what’s on sentimentrader:
    Dollar: tons of bears. Tons.
    Gold: A few to many bulls but mild
    Silver: Cooled off (shocking, right?) but still too many bulls

    These readings are not good for us but make sense if there is one more sharp drop in the dollar.

  1033. rachel

    Watching closely on dollar index. If it closes above 74.6, watch out! The next resist will come at 75.4 (50 sma & mid April support). However, if it gets there, the technical picture changes a lot already.

    very short term the .dxy is overbougth, with small negative divergence appears on hourly chart.

  1034. Robert

    David,

    Market Vane Bullish Consensus for Gold plummeted 6 points to 73. I don’t
    remember ever seeing such a one day drop. Silver dropped to 66 (it was
    recently at 96 when silver peaked). These bearish indicator levels (which
    are exceedingly bullish from a contrarian view point)

  1035. aviat72

    Looks like we will get our currency crisis. It is called PIIGS. I think Gold will get a bid. Not sure about silver. Did some GLD ratio spreads today.

  1036. St. Deluise

    haven’t been following the market much today but i’m starting to think

    1. dollar rally will last a while
    2. might not matter

    counter-intuitively the greek news today and the euro mess at large will just cement the fact that the fed must keep those dollars coming to avoid the next deflationary episode. eventually people selling gold and silver will realize this. since i’m flat now i’m hoping it takes them a while! at the very least would like to see one more fakeout dip to new lows in both next week before scaling back in.

    have a good weekend

  1037. fubsy_cooter

    Gary,
    Scaling works well for me. I’ve been doing it all along. I begin to buy at what I perceive as cycle bottoms with your guidance as support, and what I have found is that by the time I’m fully invested its usually time to start scaling out.

    I usually buy an inital stake of around 40 to 50%. Then add at 15, 10, 8% increments or so.

    Yes, i scaled out a little early on silver with appx 15-20% of my holdings, but scaled out of the remaining pretty close to the top. I did the same in December.

    I think that by using the tools you prescribe..cycles and sentiment, one can actually do very well scaling out on a parabolic rise.

    What I see as possible improvement for myself beginning with the next A-wave is that I will buy a larger chunk early. But, I will still scale out on strength, especially a vertical rise in price.

    As far a mastering one’s emotions I am learning that when i am compelled to sell out of fear, I now see that as a buy signal and wait for a reversal to add to positions. Conversely, when i start thinking about not wanting to sell because of all the money i could make if silver gets to 55 or 60, i go on high alert for the exit, which is what got me out when silver gapped up overnight by 7%, which was an anomoly at that point. I knew that big money was shifting its stance on a high level move in the midst of a parabola. It was a clear signal to get out, and forego any upside in order to avoid the backside of the parabola.

    BTW, This drop is not an anomaly. It is typical of a parabolic move.

  1038. fubsy_cooter

    To illustrate my point, Here’s an email I sent in real time to a couple friends stating just that.

    Subject: Silver update
    From: Mit
    Date: Mon, April 25, 2011 6:18 am
    To:

    Hey Guys,

    Silver is going parabolic. I sold all my silver related positions this morning with silver at 48 and change. I don’t know how high it will go from here, but my head was counting the profits I could have if it goes higher, and that is my signal to sell. Anyway, I was looking for a spike in the price to get out. There is a feeling of euphoria among the invested masses. Not good. Sure as I’m sitting here, there will be a sharp and deep correction soon.

    Gold on the other hand has been very orderly. I suspect it will also end with a parabolic rise. I have converted 25% of my accounts into gold.

    I’ll let you know if I add to it or sell it.

    Hope you are well.
    Brad meet Peter. Peter meet Brad My two doctor buddies.

    Love,

    Mitch

    So, to say it can’t be done in real time is not completely true. Yes, scaling will cause one to miss a portion of an uptrend, but the payoff is the risks of getting swept into a crash are reduced.

  1039. T

    Great Pro Dollar Article that makes a lot of sense from Mish

    “All things considered, anti-US Dollar sentiment is so extreme and fundamentals so poor for other currencies (as compared to widely expected actions and commodity fundamentals), a rise in the US dollar could easily last for months to the absolute astonishment of the hyperinflation fanatics.”

    http://feedproxy.google.com/~r/MishsGlobalEconomicTrendAnalysis/~3/WpnzZgQTrSI/trichet-backs-off-rate-hikes-us-dollar.html

  1042. traderlady

    DG, Thanks on your EURO/$ post. I need a relaxing week-end and I NEED to get into your book! This week was the first in my trading days to get to me!

  1043. DG

    Fubsy: You are a man after my own heart. I like that “counting profits if silver gets to X is a sell signal.” I did do that, and it was a perfect signal. Good clue! I also agree with buying more on the bottom call, and I also added on the way up (perhaps faster than you. My last purchase was at 155)

  1045. Rick 4779

    DG, thanks for the info on the short dollar signal. I am one of those that froze in my seat during the drop, and did not sell anything. Now every tick downwards on GLD and SLV has me ready to call my mommy. I was feeling like I might not survive this dreaded weekend without SOMETHING to give me some hope about what Monday might bring. Thanks to Shalom too for the comments about the market finding equilibrium, and that process playing out over time.

    I am still of the belief that the C wave has not topped off…it only stretched 16.5% above the 200 dma at its highest (that day I was on the internet looking at porsches). And then you have all the QE I and II, political unrest, blah blah blah. The dollar is the key. Good luck to everyone.

  1047. Ryan

    DG,

    From what I remember you’re still holding a large DGP position? I sold out yesterday and contemplating going back in now in DGP or waiting for a swing. Will you be adding to your position today since you got a euro short signal?

  1048. John

    Grimweasel
    Scuse me ignrance, but what do you mean by ‘high and low analysis, please?

    “..The simple use of the 20 and 50 daily moving averages and trend lines with high and low analysis is all one needs. ..”

  1051. funmike

    I was looking at a new computer. On hold for now. I hope I can remember this the next time I need it. It must be time to buy now because I’ve had my finger on the sell button all day.

  1052. fubsy_cooter

    DG,
    Did you write a book, or is Traderlady referring to you trading positions? Thanks for the compliment. I know that you observe similar internal workings.

    I see it as true contrarianism, being able to view one’s emotions as a mirror of what the masses are likely acting upon, and doing the opposite. I think the most important part though, is not acting immediately, but waiting for a confirmation through price action. That’s another piece I took from my interpretation of Jesse Livermore’s work, “Its the sitting and waiting that makes money”!! Awesome stuff.

    I really think that pateince manifests in markets as not guessing what is to come next, but letting the market show its hand, and using the pivots (reversals and breakouts) as mental stops.
    It has saved me a bundle over the past few years.

    f

  1053. traderlady

    Futsy: I remember when in Feb, I was a new subs, I felt concerned with how many here acclaimed,”We are going to be rich”

  1054. Rick 4779

    David, I think you are right. When I am looking for porsches, and when Fubsy is calculating future profits in his head, or when you start to really believe that you have this trading thing figured out better than anyone, its time to take something off the table.

  1055. pepper2009

    Well I know the SoS are not so predicitive. But at the moment they are pretty high for GLD and SLV. Does that mean the smart money is still in and who sold the last days with all SoS numbers being much lower the days before the “crash”?

  1056. DG

    Ryan: I have a good slug of DGP, but did not replace the AGQ I sold, so I have lots of dry powder. I am not adding to DGP, though tempted, just because when I take a pasting I back off. Knowing that I do not have perfect control of my emotions gets me to make fewer decisions. If you knew I had slipped you a mind-altering drug you’d make fewer delicate important decisions, right? Well, getting the crap kicked out of you this week is a drug with unknown effects! I am backing off until I get more clarity on the dollar and I let things settle a bit. I agree with SB: there will be lots of back and filling. It’s defense not offense for me right now.

  1057. Tajir

    I like the discussion that Gary, DG and fubsy are having. These are really gold nuggets for trading. Out of all the mess from last week, at least, one good thing that came out is a lot of wisdom and healthy discussion. I remember, couple of weeks back on the same forum, only discussion was how high silver can go, 60, 70, 80. As fubsy pointed out, in my head started counting what would it mean for AGQ, 500, 600, 700. Amazing, how things can shift in a week. AGQ is now sitting below 200, with all my profits wiped out and even little scar in my original investment. Looking at my logs, I noticed that alongwith DG, I also sold my half position in the gap open on April 25 with the *plan* to get back in at daily cycle low. Next day was gap down and then April 27 a huge move up. At that point most of the *opinion* was that gap down on 4/26 has printed daily cycle low and c-wave finale has begun. Well, greed took me over, I bought my sold positions back and some more. Result after that was not pretty 5 days later. Lessons learned. (Greed is bad, leverage is bad, extended market is bad).

  1058. fubsy_cooter

    @ Francisco,
    I trade anything, but I have learned a lot from Gary over the past couple years, and believe he is on to something huge when he says why mess with the stock market when you have a clear bull to ride.

    I do watch currencies, treasuries, stocks, and other commodities, and would trade any of them if the setup gave me an edge. Over the past couple years, the edge has clearly been in the PMs. I’m hoping we get a good setup at the onset of the D-wave to short the Euro, and ride the trend of a strong dollar in other ways..short commodities, long treauries, short stocks, junk bonds etc…

    f

  1059. DG

    Fubsy: My book is about mastering ones emotions and dealing with stress. Several here have really liked it, one guy absolutely hated it. That’s life, eh? If you pop me an email off my profile I’ll send details if you like. If you are not interested in self-improvement or examining what drives your decisions and actions, don’t bother. If you are interested in those things it could change your life (as several people here have said).

  1060. T.J. Rand

    Pima-

    Got back 20 mins ago…and found I was stopped out on AGQ while i was gone.

    I knew my little guy would only be up for 3-4 holes, so my plan was to keep the original stop (190) while I was gone and reassess when I got back. I figured that if there was much of a bounce, there might be a selloff into the close. So if the trade was working and depending on how Silver/AGQ looked, I would have either sold immediately or moved stops up.

  1061. fubsy_cooter

    I gotta go. Hanging with my little guy this afternoon while the wife gardens.

    I’m hoping for all of us, that next week brings some clarity. DG just gave pearl in stating that he’s on the defense.

    We all notice there are times when markets are clearly trending, and times when they make us scratch our heads in confusion. When confused, be small. Wait for the clear trends to emerge to get big again.

    Here’s to clarity.

    f

  1063. traderlady

    From Futsy:

    We all notice there are times when markets are clearly trending, and times when they make us scratch our heads in confusion. When confused, be small. Wait for the clear trends to emerge to get big again.

    Here’s to clarity.

    Thanks, this is now on my desktop:_

  1064. Francisco

    Thanks Fubsy.

    I give you alot of credit, because your methodology requires an incredible amount of discipline and a willingness to forgo profits in the name of risk management. To use a football analogy, it’s like playing between the 20s. I’ve become better about not letting my emotions control me, but in hindsight I got caught up in this silver mania like alot of people here. I had the discipline to get out at pretty good prices and stay out, but my initial position sizes and lack of risk mitigation (no stops) on the way up were just not smart. I consider myself fortunate this time, but I really need to practice more discipline in the future. Hopefully I can emulate a strategy similar to yours.

    Thanks again.

  1065. Bob loves Hawaii

    Pepper, the problem with SoS with GLD, SLV et al is you must match it with short interest. If short interest is building it means a squeeze can come vs. liquidation.

    The key from my perspective is the persistent selling at the 10 EMA on the 15 minute chart. An algorithm is consistently selling on that line. Until we cleanly break that SLV is dead money.

  1067. Ryan

    DG,
    Thanks for your insight. I definitely feel at all time lows right now. I just wish I saw your sell your of 1/2 of AGQ when it was at the peak, I probably would of followed you. I sold out early morning yesterday before Gary issued the warning but only to preserve capital. This was my first parabolic experience in silver and what a expensive tuition price! I probably should let thing settle before jumping back in but hard to not jump on your signal 🙂

  1068. pimaCanyon

    DG,

    Your short signal on the dollar–you say normally that would indicate a move down that would last 3 to 5 days, is that right?

    How about price targets, does it give you that? If so, how big a move down is likely?

    Thanks for posting!!!

  1069. DG

    Things are shaping up. I just got a buy on oil. There are no guarantees in this business (I think we learned that one), but a short on the dollar and a buy on oil is pretty suggestive, no? Hopefully these are not just one-day wonder type moves, but let’s get started! We have some ground to make up! (No pressing your bets though. It’s still a time to look down not up.)

  1070. DG

    PC. No. The move should commence within 1-5 days, not last 1-5 days. It is short term and without targets. It just says “This is a top. Short here and put in a break even stop when you get ahead.” I take lots off these. I figure if I win or break even that’s pretty good. (Shorted UNG last week off this kind of signal and it got really pasted this week. Let’s hope the $ does the same.)

  1072. Ryan

    DG,
    I know you stated it’s just a short term signal for the euro/USD short and you’re playing it via long DGP. I’m curious would that mean you’re not going to be holding your DGP for very long?

  1073. CMT

    Fubsy and DG:

    Re: “but my head was counting the profits I could have if it goes higher, and that is my signal to sell.”

    That is almost precisely why I sold my AGQ and SLV calls last Friday. I know me and my emotions and once I start doing that, I am losing control. Time to get out.

  1075. T.J. Rand

    Bob-

    Just took a look at the 10EMA on the 15 min chart – that is really interesting. It’s now a fixture on my SLA chart.

    Out of curiosity, are 10EMA and 15 minute charts standard features of your desktop? Or did you look for a SMA/EMA that fit?

  1076. Leilani

    In trading, it is said that it is more difficult to know when to sell than when to buy. The lesson I take away from this is I better learn to be a better trader.

    I recently acquired a book recommend by Doc. WHEN TO SELL by JUSTIN MAMIS. Plan to read it this weekend. Also, I started reading the ORIGINAL TURTLES TRADING RULES. These Rules were posted by someone from this blog weeks ago. Wish I read it back then. Here the link this person provided (don’t remember who it was).

    https://www.bsp-capital.com/documents/turtlerules.pdf

    Gary provides a valuable service and at a nominal cost. He is one of the best cycle analyst out there available to me and I have the good fortune to have found his service. However, I am responsible for all my investment decisions. I did not sell at $49.75. I will learn from this not by hammering on Gary but to improve my own trading skills.

  1078. ...at ease

    Fubsy and DG, Thanks for sharing, that sounds like a good plan going forward. I also got out right before it topped, as my gut was telling me it was too good to be true on AGQ and my SLV options and my mother always told me if it is too good to be true, it is. So I took the money and ran. But the market got me this week when I sold my profits on Monday on DITM GLD options and bought ITM GLD options and more DGP. So if it doesn’t get you here, it will get you there. What works one time doesn’t always work other times. Going to stick to a stricter trading plan going forward. And your plans sound like excellent methodology.

  1079. pimaCanyon

    Thanks, DG. When you take one of these signals, do you go with a standard percentage stop, say 1 percent? And then how do you determine when to take profit?

  1080. wmp

    Poly,

    Suggestions on options still held: would you add to GLD June 160’s here to ave down from .88? Or, July 140’s to ave down from above $10. Didn’t get out and trying to decide to fold/hold or add.

    Thanks

  1081. Bob loves Hawaii

    TJ Rand, it is my standard chart. That is for short term trades and the daily with the same setup is for long term.

    I have 10 EMA, the 30, MACD, STOCHS, and RSI 7

    the 10/30 cross keeps you out of trouble.

    The trick is to follow it. When I do not or press early I always lose money.

  1084. MrMiyagi

    hmmm.. I don’t think that dollar is going to let up anytime soon. I believe we’re headed for new lows on silver/gold.

  1085. pimaCanyon

    Hawaii Bob,

    On my chart (of SLV using 15 min bars during regular trading hours only), the 10 EMA worked great until today. This morning SLV blew right thru it to the upside and then backed off and is now below it. Do I have the right setup? 10 EMA, 15 min bars, do NOT include after hours trading?

  1087. DG

    Ryan and Pima: I have no idea when I will exit. I need to see something as I am a tape reader at heart. If the short term signal feels like a kick off for a bigger move I treat it as such. I bought Q’s at the bottom in 2003 and held them for two years because I know a bull was starting. other items I am in for a day. Exiting is hard and I have no rules of thumb.

    Here comes the late day fade due to those exiting for the weekend and just thrilled to see some green. This is what SB and I have been talking about. Now we rally into the close or not. I don’t want to break big, but down or up a little doesn’t matter either way. It’s going to take a little time for people to regain their courage and buy even if the lows are in.

  1088. pimaCanyon

    Miyagi,

    Looks like you are right. DX just broke thru to the upside of the downtrend line that’s been in place since January. Maybe a false break, but if it hangs out above that TL for some time, that would raise the odds of the recent dollar low being the 3 year cycle low.

    DG,

    How far does your dollar trade have to go against you before the signal gets invalidated?

  1089. Gary

    Show of hands. For all those that managed to get out in time. Did you also try to sell every daily cycle top and consequently miss a big chunk of the move on the way up? 🙂

  1090. ...at ease

    CMT/Fugsby, I am going to use this cue for options: Re: “but my head was counting the profits I could have if it goes higher, and that is my signal to sell.” I usually chicken out and sell at 25 to 30% up on options, but GLD was just moving along and them bammm! So going to just follow my (chicken) instincts going forward.

  1092. DG

    PC. It doesn’t. Possibly it could rally a bunch, pull back, and the pull back would undo the signal (think overbought). the bottom of the pullback could theoretically be higher than where we are now. Very unusual, but I have seen it happen. Again, my hope is this is the kick off of the next leg down and not just a dip. I would not rely on this signal but it is nice confirmation of what we are hoping for/expecting.

  1093. Shalom Bernanke

    Miyagi,

    You could be right and we see new lows in metals, but at this stage they are likely to be marginal.

    Metals are probing for a bottom, even if it takes a few days or longer to form.

  1096. DG

    Fubsy: That’s pretty out there. I have a good school psychologist you might want to see 🙂

    Have a great weekend! Well played, my friend.

  1097. MrMiyagi

    Gary,
    Those that got out at the top had a combination of luck and foresight. As you have mentioned it, it could have gone up from the 49$ mark (silver).
    But it didn’t, so here we are. We can sit and talk about it all year long but it doesn’t change shit.
    We need to go from here, that’s all there is to it.

  1098. CMT

    …at ease, don’t follow me. I got lucky selling most of my AGQ where I did.

    There are some real good traders on here, but I’m not one of them.

    I do think it’s important to recognize when your emotions are interfering with your thinking.

  1100. ...at ease

    My hand is down on that one Gary, as it was Silver that scared me, only because I was not familiar with it’s ticks. I just figured we were getting close and looking too good to be true. I haven’t been trading or following you long enough to say I recognize cycle tops or bottoms or I wouldn’t have got hit hard this week on trade outs to realign my positions. 🙂

  1101. ...at ease

    CMT, I just was agreeing with your mention of how you were thinking. I can relate. When you start counting the profits and big $s, your eye gets off the ball and it will smack you in the head.

  1102. Shalom Bernanke

    I do sense that stocks in general are in flux right now, starting to soften and maybe looking to begin a longer term move lower. Not necessarily from this exact spot, but they’re testing the viability of a down move.

    This is a symptom of markets changing character, including the USD, bonds, commods, etc. I think metals have seen the worst of it, but it hints that maybe the C-wave continuation might not be spectacular or new highs.

    I guess it means that what the D-wave atmosphere would bring is definitely on the horizon. Not immediately, but I get the sense it’s on it’s way. I don’t expect the rampant bullishness to return to metals this round, even though they are a long candidate only and I expect to make money there before the “C” is retired.

    Time to shorten my holding times and profit objectives is the jist.

  1103. Shalom Bernanke

    Perhaps market participants are somberly awaiting a QE3 type annoucnement? We can’t know for sure, but my guess is the Fed will let things crack a little before coming to the “rescue”.

    Easier to justify this way, even though they would do it anyway.

  1105. fubsy_cooter

    @ Gary,

    Yes. I sold often at cycle tops…usu between 15 and 25% of my positions. I always got back in at reversals and breakouts. But, I am not swinging for the fences. My strategy is to target 30% gains per year in any market. So, I’m willing to forego some of the upside to protect from downside. I never was less than 50% invested, and usually between 65 and 85%. A couple times I was in the 90s, but got spooked becuase of my aversion to risk, and becuase by the time I got to 90% it was usually a good time to scale out a bit.

    My point being that its ok to miss upside. Swinging for the fences is very dangerous for most people in that it puts them in an unclear mental state which NO ONE can profit from over time. One has to stay mentally clear to profit.

    You have a gift. Seriously. You are amazingly clear even with a leveraged position. I marvel at it. I know that if I’m 140% invested with 2x vehicles, which actually equates to closer to 200% invested, then I’m going to be overly emotional and make some really bad decisions. Not mention lose sleep.

    So, miss some upside, miss some downside.

    My profit since July 28th…appx 80%. I’ll take it. And with much appreciation to you!

    f

  1106. DG

    SB: I had been thinking that we’d need to get rampant bullishness in gold before this is all over. What do you think? Maybe silver has done it already and that’s sufficient?

  1107. Shalom Bernanke

    looks good, Jay. Not to mention the HUI kissed the 200 MA yesterday.

    I like a lot of prices out there, but won’t commit capital until I think they are ready to move.

  1112. fubsy_cooter

    DG,
    I also wonder if Silver just took the reins of the bull and rode him into the dust. Either he’s shaking off right now, and getting ready to charge with nostrils snorting and hooves kicking, or its had the wind knocked out of him, and is going to go to sleep in the meadow for awhile. If a nap, probably a fitfull sleep though, with lots of twitching and rolling.

    Ok, I really gotta go now.

    f

  1114. Shalom Bernanke

    DG,

    I think we will get overbought in metals again before this is over, but think it might not get as heated as the last run.

    We’ll know more once metals and miners start up in earnest. Let’s see how strong and pervasive the rally is.

  1115. Avann

    I got out near the top on Monday … I was up 150%.

    The mistake I made was trying to pick bottoms all week … I only netted 100% because of that … lesson learned … wait for the swing low!

    That’s not a double of my account because I do not go 100% all in … I only use about 50-60% of my money on PM’s … still very happy

    Thanks Gary 🙂

  1116. DG

    f-yeah, that”s what I was asking SB his thoughts about.

    And yur typing is good enuf for me to undertand

  1117. fubsy_cooter

    AKlaunch

    I liked the typicality of a rally from these breaks that could typically take silver back to the 45-47 range. That would be a great place to be buying puts and getting out of remaining silver positions. Not saying its going to happen, but it is a distinct possibility.

    f

  1118. Poly

    Besides some Silver miners in 401k, I’ve transitioned out of the few remaining SLV calls today on this little strength. Added to some GLD and now exclusively tied to gold’s performance.

    Although Silver could easily rocket back to over it’s 50dma and into the low $40’s, I’m not going to play it. I feel any move in Silver must start with gold moving too. The volatility in gold is much less too.

    Many of you still feel Silver can make a move?

    What feels more predictable here is Gold clawing its way back towards the high’s, in the least. That will be by focus.

  1120. Wes

    Thanks to those answering that they were also still invested. In the words of Clinton “I feel your pain”.

    Of course the difference is that I really do. 🙂

  1121. Robert

    Short comment from John Williams of Shadow Stats
    Opening Comments and Executive Summary. The extreme volatility seen in the price of silver—exacerbated by tightened margin requirements—and the large swings in the price of gold, price of oil and in certain U.S. dollar exchange rates, do not in any way change the long-term outlooks for the U.S. dollar or for the long-term hedges against a collapse in U.S. dollar purchasing power. The current markets leave open the potential for near-term jawboning (official or through market intermediaries) and government intervention (overt or covert) to encourage relative U.S. dollar strength. Despite whatever volatility there may be, the U.S. dollar remains on track for an eventual complete collapse in a hyperinflation, and the roots of that hyperinflation remain imbedded in the system. The primary hedge against losing U.S. dollar purchasing power remains physical gold (and silver), with some funds outside the U.S. dollar. As discussed in the Hyperinflation Special Report (2011), I still like the Swiss franc, Canadian dollar and

  1122. Avann

    I also want to point out that Gray’s advice to switch from silver to gold helped save my ass.
    I had already converted a good chunk from silver to gold last week.
    So when I sold on Monday I only sold the rest of the silver and held on to the gold. Then trying to pick bottoms in silver all week is what cost me … holding onto the gold was no big deal.
    There are some amazing traders and analysts on this blog and they all contributed to my specific happy ending …
    Special thanks to Poly and DG

  1123. Elaine

    To all of you who are much better at this than I, if the dollar closes up today, does that mean the C wave is over?

  1124. jhnewman

    On my charts, I use 3 different momentum indicators. One of them I use in its standard format, and the other I’ve set to a very long period. This “long period” indicator helps filter out a lot of noise.

    Looking at the dollar (actually UUP) with these things, even with today’s up-move, this still looks like a bounce that’s going to roll over and then on with the downtrend.

    To give you some idea, using that long-period momentum indicator, the bounce of the last 2 days is only half the strength of the bounce which happened at the very beginning of the year (which also eventually rolled over).

    And I can’t help but also wonder: the last time the dollar put in a 3-year cycle low, back in 2008, it based FOR 4 MONTHS before blasting upwards. This recent dollar action has based FOR 3 DAYS (since Monday), before it moved upward. It seems very unlikely to me that a 3-year cycle low in the dollar is going to base for only 3 days before starting it’s upmove — which also makes me believe this isn’t the 3-year cycle low in the dollar.

    Just some thoughts.

    All the best to everyone.

  1127. jhnewman

    P.S. I was unclear at the beginning of my post.

    Should’ve said: one of those 3 different momentum indicators I use in 2 different formats: it’s standard format, and a much, much longer period setting.

  1128. diana

    From Jim Sinclair, 5/6/11:

    “Dear Friends,

    Today’s action totally eliminates all and any concern for the price of gold. Today’s action lights up the $1764 Angel in gold.

    Technical damage always requires technical repair. That type of price action is a perfect set up for a major launch of the gold price in June.

    Relax and enjoy your protection and insurance positions.”

    Is a launch in June, possible?

  1130. DG

    jhn: That’s interesting. When stock bottom they usually take out the entire last week or two of decline in a day or two. That is, the explode off the lows. Do currencies not do it that way?

  1132. Gary

    Elaine,
    Confirmation of the end of the C-wave will only come if gold drops below a prior cycle low. In this case gold is still trying to put in that pivot. Once it is clearly in place that will be the line in the sand that will tell us that the D-wave has begun if it’s crossed.

    I will include a chart of this in tonight’s report.

  1134. ALEX

    JHNEWMAN

    About your 3 momentum indicators…do they speak to you on the downside??

    I would ask you to check FXE for us and see how real that EURO crash is, since it moves opposite to the dollar.

    It just stopped dead on the 10sma wkly. I use that as healthy support on any weekly uptrend.

  1136. rachel

    The dollar index 2t 74.8, if it closes here, it would be the first time it closes above the resistant line from Feb. Also 74.6 is also the 61.8% retrace from 75.8 to 72.7.

    It is overbought short term, however, I do not see a clear “sell” signal yet. The conolidation or correction of the past two days’ big gain might give the commodities a relief rally.

    My $.2c.

  1137. Avann

    Gary, is there any play in this potential D-Wave to make some money for those of us that can’t use options?

  1138. Wes

    As far as strategies for dealing with extended markets that may become even more extended, the one I employed served me well.

    First, I sold all my actual securities including all SLV and all AGQ. This would have also included miners and GLD had I owned any.

    Then I replaced those with SLV DIM nearest month options. In this case I used the May 41’s.

    I created the same leverage as Gary while risking relatively little money. I would have used DIM options on GLD had I owned gold originally.

    Now this strategy has the dual role of keeping you 140% exposed to the upside, while limiting downside in the case the bottom falls out.

    Initially, the SLV 41’s fall just as much as silver, but as silver keeps falling, their rate of decent decreases dramatically as their delta keeps decreasing with price.

    I cannot think of a better strategy for dealing with the situation with which we were presented, and this is what I would do again.

    Alas, I made one mistake and one blunder. I owned May SLV May 32’s and I failed to sell these and replace them with May 41’s because I thought it wouldn’t matter. This was just laziness and a blunder that cost me dearly.

    My mistake was to make two purchases on the way down. You rarely catch a falling knife gracefully, and I knew this but made the purchases anyway.

    Had I stuck to the original plan without the blunder, I would have been hedging both my upside and downside as well as I can imagine, and I could have been somebody.

    I recommend this plan for the next time.

  1139. jhnewman

    DG: I can’t answer your question accurately. I’m not hugely knowledgeable about currencies. All I can do is point to what happened the last time the dollar hit its 3-year cycle low.

    Of course, overall, it was a different situation and had different dynamics than today. But, back then, the dollar based for 4 months, which helped cause a complex D-wave for gold and silver. I didn’t expect this 3-year cycle bottom for the dollar to base anywhere near 4 months, but I find it hard to believe it would base for only 3 days. Maybe I’m wrong, but that seems an awful short basing period for a 3-year cycle low in the dollar.

    If anybody has insight into “currency behavior”, please share it. Thanks. And if anyone thinks my observation doesn’t hold water, please speak up. We’re here trying to help each other find the truth of things.

  1141. Gary

    Avann,
    Nothing that I would really recommend.

    The reason to use options is because risk is limited to the amount of the original purchase and potential profit can be huge. One can’t make that statement with shorts or ZSL.

  1143. T

    So I am a relatively new trader here, but I have a couple of observations that I feel are pretty common sensical. First and foremost, I am extremely disappointed that Gary cannot seem to determine if this freefall is a correction or the D Wave. What good is the service, then? That is the entire reason I paid for a charting service such as this. Anyone can tell if futures are up or down, the charting service is supposed to tell if it is temporary or the beginning of a bear/bull.
    Secondly, I have read many subscribers say that Gary has made them lots of money. I bought in a little late, when silver was $38. However, I have folled the service’s advice to the tee. Never once was I told to sell even a portion to lock in some gains. So unless you bought in at $25 or less I can’t see how this service has made you alot of money.
    I truly hope this is just a correction, but it seems to me that it is anyone’s guess at this point, including Gary’s.

  1144. Gary

    J,
    Interesting observation.
    The 05 three year cycle low bottomed with a test and slight break of the lows.

    I’ve noted before how these major cycle bottoms often occur with a minor break that is quickly reversed.

    I’ll cover this in tonight’s report too 🙂

  1145. Shalom Bernanke

    As far as D-wave plays, rather than short metals I hope the S&P can be played short.

    Also, Bernanke will usher in the D-wave by withdrawing QE2 (at least on the face b/c he can never stop printing in reality). This will be his attempt to drive some into bonds so he doesn’t have to keep buying them for awhile. Bonds should be a long, although I hate the idea of helping them out of their mess. 🙂

  1146. GottaHaveIt

    Wes,

    For those of us who are new to options trading, please explain your blunder further. Why should you have sold you May 32’s and replaced them with May 41’s?

    Obviously, I know it’s because you lost money. But WHY do the 32’s perform so much worse than the 41’s?

    Sorry if this is a dumb question, but I’m trying to learn from the option trading experts like you.

  1147. T

    Aww shoot another guy with the name of “T” – I’ll have to change my handle to Mr. T now… I’ll change my avatar too…

  1149. ALEX

    JHNEWMAN SAID

    “And I can’t help but also wonder: the last time the dollar put in a 3-year cycle low, back in 2008, it based FOR 4 MONTHS before blasting upwards. This recent dollar action has based FOR 3 DAYS (since Monday), before it moved upward. It seems very unlikely to me that a 3-year cycle low in the dollar is going to base for only 3 days before starting it’s upmove — which also makes me believe this isn’t the 3-year cycle low in the dollar.

    Just some thoughts.”

    Thats worth looking into…nice point!!

  1151. Haggerty

    Jayhawk

    When I look at that chart of the HUI I say to myself that we definitely bottomed. But if this C wave has lasted 3 years then I guess we can go lower and break that bottom trend line

  1152. Brian

    Wes, Don’t you worry one little bit. You are somebody and be proud!

    Why did the May 32″s hurt you? Seems that deep in the money they would have been fine.

  1153. T

    So I am failry new to the service, but I have a couple of common sensical observations.
    First, I am extremely disappointed that SMT can’t determine if this freefall is a correction or the beginning of the D-Wave. What is this service for? The entire reason I joined a charting service is so that it will help me differentiate the difference between a correction and a change in the bull/bear market. Isn’t this the crux of the entire website? One day it is saying Silver will rebound and slice through $50, the next it is saying, Oops, maybe this is the D-Wave.
    Secondly, I have read many subscribers saying that SMT has already made them so much money. I bought in when silver was $38, I followed Gary’s advice to the tee. Never was I told to sell even a portion to lock in gains. And I am looking at a substantial loss right now. Unless you bought in when silver was $25 or under, I can’t see how this site has made you money.
    Am I missing something here?

  1154. Mr. T

    T, everyone finds different value in Gary’s commentary – I find his cycle reads to be the most important. If you want someone to tell you exactly what to do when, this is not the place, nor should you rely on any service that way, go to a retail broker instead, that way you can sue them for bad info… I joined a couple months ago, and I’m up so you are coming in during the time where it is indeed anyone’s guess. The beauty of Gary is when he doesn’t know, he says it. When he changes his mind, he says it, when the market turns on him, he readjusts… That’s dealing with a real person, not someone acting like a god…

  1155. ALEX

    Earlier this week I made a comment that basically stated that …

    If Silver returned to $49+ as a double top like Silver in 2008 , with Gold then making its run to new highs-

    Silver would have to now gain
    $33 + “50%” = $49.5

    SO , if Gold gained 50%, that would put gold at…

    $1480 + “50%” = $2220

    IF one doesnt think Gold can hit $2220 ( so it cant go 50%), WOULDNT it be wiser to re do the AGQ and Silver run??

    Feedback/Comments??

  1157. Gary

    T,
    Apparently you are a new investor. I had the same attitude when I started out. I wanted someone to tell me definitively what the future held. Eventually you will figure out that no one can do that for you.

    The simple fact is that we got caught and the speed and magnitude of the decline surprised everyone.

    If I had any inkling of what was to unfold in the next five days I would have sold into that large gap down last Monday morning.

    Unfortunately I just figured it would be a normal cycle correction possibly taking silver back to $42-$40. I was prepared for that. What I wasn’t prepared for was a move right past $40 almost directly to $34 in one day.

    So like I said there’s nothing to do now but pick ourselves up dust ourselves off and get back to business.

    There will be a recognizable rally out of the cycle low. Gold may even make it back to new highs. That will be the opportunity to unload positions if one hasn’t already done so.

    If you have then you need to decide at what point to you get back in. I have two suggestions. 1 on a swing low in gold or 2. if the dollar breaks to new lows quickly (left translated cycle).

  1158. W

    Wes
    Good post. I was doing much the same, but not by design…I see that with your method applied on purpose and to a greater extent, drawdown would be small with little loss of upside…now if I can just remember when to use what I’ve learned….

  1160. Brian

    You sure are T. So long as you rely on someone else to pull the trigger for you, you aint gonna get very far. Gary’s advice is an informed opinion. You gotta make up your own mind, place your bets and take responsibility for your positions.

  1162. Haggerty

    Alex

    I’m at 50% now miners. If we get a lower dollar I will scale in 25% AGQ then as the trade works out I will add he other 25% to AGQ then put stops underneath as I see fit

  1163. jhnewman

    ALEX: On the 60-minute chart, using that long-period momentum indicator, there is more weakness than I’d like to see in FXE. Using that indicator, FXE is showing a little more weakness than UUP is showing strength.

    But on the daily chart, the momentum indicators and their divergences show some hidden strength in FXE — that the drop is not as bad as it appears.

    I also notice on the daily chart that FXE is sitting right on top of the 50 Exponential moving average, which often provides support.

    Of course, this chart looks very similar to gold’s.

    Anyway, AT THIS POINT, my overall interpretation is that the FXE will probably recover its uptrend, just as it looks like the dollar will probably recover its downtrend.

  1164. ALEX

    MR M

    Thats kind of my point-

    If we think Silver rocket could double top
    then we think we can make 50% from here.

    If , as you say, gold cant do 50% , in your current thinking…

    Doesnt it make more sense to reload silver for the bigger % gain? IF IF IF , the dollar low is not in.

  1165. Canuck99

    Hey T,

    One guarantee for you – blindly following someone will put you in the poor house. Why do you think 95% of investors lose money.

  1166. William

    The other thing that I realise after 24 hours of thinking about this is that I was completely married to the silver trade. After I bailed on my positions yesterday morning I felt like I was betraying a friend. That is never good and it clouds your judgement significantly.

  1167. pimaCanyon

    jhnewman,

    Thanks for your analysis on the dollar, good observation about it basing for so long after its last 3 year cycle low.

  1168. Avann

    T … there’s your problem … waiting for Gary to tell you what to do …

    Gary’s service is the only thing that has helped me make money.
    I do not agree with his all in at the bottom and hold through all the draw downs (Old Turkey) … nor do I use leverage but if you take his advice for entries and then use some common sense (as well as his analysis) for exiting you will make a lot of money.
    Not too mention all the great advice from the members here.

    Good Luck

  1170. Jayhawk

    Haggarty-

    I know…I think it will finally break this summer.

    In my mind, there shouldn’t be a HUGE red candle this late in a potential blow off top for the miners. I don’t like it hugging the 200 & that lower channel.

    Also, RSI 7 weekly has only dipped under this green line 2 times since the channel started. Both were strong intermediate cycles.

    http://screencast.com/t/64Tae79ulT

  1173. Michael

    Gary,

    Let’s just fast forward to the future and let’s assume the swing low is in. At his point we’ll have two outcomes:

    a) A dead cat bounce
    b) A parabolic end of this C wave.

    What do you think the most profitable but yet safe investment we could make?
    I am personally leaning towards 90% DGP + 10% miners.

    I am not looking to make a killing. Just want to make more without taking too much risk.

  1174. Wes

    David (with the bug),

    The sentiment numbers I follow come out once a week on Wednesday.

    I think they are for results through the previous Friday. So Wednesday we will know how people are feeling about gold and silver, now.

    Remind me, and I will get them for you.

  1177. Brian

    I don’t believe I have ever seen that big a SOS number on GLD before…. At previous intermediate tops you would see 50 to 60m.

  1179. MrMiyagi

    Alex,
    My misanderstanding, I thought you meant that it had to recapture the 50% downslide which, of course, wasn’t the case.
    I don’t think gold has an upside to 2200$ at this time and did not think this before either, I think that if gold continues to rise to, let’s say 1600$, silver should make a return to the 45$ level.
    My reasoning;
    1) Silver is still “cheaper”.
    2) Silver has gone down 15$.
    3) Silver went as high as 49.50$.
    The above 3 points would lead buyers to conclude/accept/believe/think that it did it once, it will again. There are a lot of paper and physical holders wanting to dollar-cost-average.
    So, it hinges on the dollar I suppose but gold being up 18$ today is a good start even though I know it could be a profit-taking from shorts.

  1180. jhnewman

    Gary and pima: I’m just happy if I can contribute any insight whatsoever on this board. This place is full of very generous, insightful people, and it’s a pleasure to be a part of this group.

    We’re like a Good Borg Collective. (Yeah, yeah, I’m a “Star Trek” fan.) Everybody tries to contribute something to the Collective Mind.

  1184. DG

    Alex: I may buy some AGQ, but the volatility is too wild. I will more likely buy 2-3X as much DGP and call it good. Silver may possibly be damaged enough not to really double top. I have more confidence in gold this time. There is a lot of money that’s going to want to get out at even so silver has to fight its way up the whole way. It may well do it, but the down days are going to be UGLY. I went through 127 bottles of Pepto Bismol Monday through thursday. That’s enough, thanks.

  1185. Wes

    Poly,

    Sorry I was so long answering your question.

    I have only salvaged the remaining money in my failed AGQ 280 options and purchased GLD May 140’s with the proceeds.

    I’m holding high levels of cash, and will use the weekend to figure a strategy.

  1186. Avann

    Thanks Pima but I’m in Canada and 95% of my money is in RRSP’s.

    I’m not even sure if options are RRSP eligible.

    Any Canadians have any advice?

  1187. pimaCanyon

    Wes.

    I like that plan! You described a case where it’s actually beneficial to have options that are NOT too deep in the money because it limits severe downside risk. I will keep this in mind for future options purchases especially when there’s uncertainty about further upside and/or if we’re expecting a daily cycle low soon.

    Congrats, great job!

  1189. pimaCanyon

    I would still check with thinkorswim, they may be operational in Canada. If not, surely there are Canadian online brokers that you could open a small account with. You wouldn’t want to put a whole lot of money into OOM puts anyway.

    (Gary mentioned maybe 5 percent of his portfolio. I am more conservative and will probably go with 1 or 2 percent.)

  1192. Avann

    Yes good point Pima … here I am thinking I need to put a whole lot of money into this … but the 5% that’s outside should be enough to keep me happy.
    I will look into it … thanks

  1193. pimaCanyon

    yeah, end the day green AND we have a very interesting close on the dollar. After punching thru the downtrend line drawn off the January and April highs, it has closed slightly below it, leaving only the wick of the candle poking above.

    Have a great weekend all! As fubs said, let your wildman or wildwoman out!

  1194. David

    Wes,

    Thank you.

    Michael,

    The miners are cheap on an absolute basis, which affords you a measure of safety. The XAU is already at the 200dma, which is strong support in a bull market.

    DGP is a leveraged ETF, which makes it very unsafe to hold in a D-wave.

    I own both, but I will flip out of all my UGL/DGP at the “moment of truth” in a few days and go all-miners. If this turns out to be a D-wave, the downside on the miners is very limited.

  1195. Russell

    I’m preparing a strategy for the possibility that a D wave is defined by the gold action and the dollar. I got some great advise re GLD calls from Poly several weeks back and would like some advise re Puts if the d wave call is made. Any options traders care to comment?

  1196. Mr. T

    The Euro has fallen from roughly 1.49 to the dollar to 1.43 in a mere two days, which is a huge move. Many pundits have argued that the ECB’s newly accommodative stance is the trigger, but there may be additional forces at work. Most experts have deemed the idea that any eurozone member would exit the currency to be simply inconceivable, that it would be too costly and disruptive. But with the hair shirt that Greece is being asked to wear, all bets may be off.

    As of this juncture, this reports in Der Spiegel does not appear to have gotten traction among the Usual Suspects in the MSM. Headline: “Greece Considers Exit from Euro Zone” (hat tip readers John M and Illya F).

    SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou’s government is considering abandoning the euro and reintroducing its own currency.

    Alarmed by Athens’ intentions, the European Commission has called a crisis meeting in Luxembourg on Friday night…

    Sources told SPIEGEL ONLINE that Schäuble intends to seek to prevent Greece from leaving the euro zone if at all possible. He will take with him to the meeting in Luxembourg an internal paper prepared by the experts at his ministry warning of the possible dire consequences if Athens were to drop the euro.

    http://feedproxy.google.com/~r/NakedCapitalism/~3/aPMh3kJC9cE/euro-whacked-by-reports-that-greece-will-leave-the-eurozone.html

  1197. ALEX

    Mr M

    ok, that sounds like a reasonable bounce for silver…but that is still a 35% bounce ( and Gold would have to go to $1991 to have a 35% gain).

    So my question, or I guess point is that most here still see silver making bigger % gains this time around…but are hurt from Silver , so are in favor of a ‘seemingly’ safer gold trade – even if it means with less gain potential?

    I am wondering ( hey DG, Psychologically) if some have been damaged by Silver this week..and are done with it-EVEN IF they think its got more % gain ahead of it.

    I am still watching the dollar, but I will ride Silver again at first ( in AG and EXK currently)

  1198. Wes

    To those asking why the SLV 32’s hurt so much, the answer lies in failing to get the falling delta protection that the 41’s have.

    For example, at todays close, the delta on the 41’s is .136. The delta on the 32’s is .718.

    So, even today if silver went down Monday, I will lose .718 divided by .136 equals 5.3 times as much money in the 32’s as in the 41’s. And this has been going on all week.

    A major, major blunder on my part that accomplished nothing even if silver had gone up. Both deltas were essentially .95 or greater on last Monday morning.

  1199. John

    n1tro said a while ago:
    “.. I did notice on my forex platform that when silver was jumping up to $49.xx that Sunday night, there were pauses on the platform where I couldn’t press the button to buy/sell and then when it was falling on Osama’s death, same thing….”

    I just came across something which might relate to this, but I don’t know where the poster gets his information…

    “…Another rip off they do with the HFT [high frequency trading] computers is set them to talking to each other, and as they trade a zillion contracts back and forth, they can take the market where ever they want it go by selling six times the naked shorts in one day that there is silver mined in the world in a whole year. “
    https://www.kitcomm.com/showthread.php?t=64568&page=318

    I wonder if it’s true.

  1200. pimaCanyon

    Ugh! That IS a high number on the SoS page for GLD. However, as Poly once mentioned, that number is small compared to the total dollar amount of GLD traded today:

    SoS -113 million (-96 million in block trades)

    But the volume on GLD was 24 million shares! At a share price of $145, that’s 3 1/2 BILLION dollars that changed hands today trading GLD shares.

    So the SoS number of 113 million is 3 1/4 percent of the total dollars traded today.

    Still, that’s a big number for GLD. I believe I’ve seen bigger days, but not very often.

  1201. David

    Alex,

    There is gigantic overhead resistance on silver. Lots of trapped longs looking to get out. The psychological damage in that one is going to be profound. There is also lots of room to fall to the 200dma if this is the D-wave.

    I think it will be dragged along for the ride if we still have a c-wave top coming, but it’s not going to $50.

    Gold is the safer ride, even if you’re leveraged.

  1202. Ollie

    This is really interesting to me (from zerohedge)

    “yesterday, yet another day in which the SLV saw far more notional volume than the SPY, the ETF traded 87.5% of its total shares outstanding. In other words, virtually the entire holder base changed hands.”

    It says to me saw almost total capitulation and SLV is in strong hands now

    Which can also mean there may not be so much resistence on the way up as everyone sold out near the bottom

    We may spend some time building a bottom but with so many people shaken out as they will scale back in their buying will help drive prices higher again

    This is old school price volume analysis but I thought I put it out there…

  1203. Brian

    Jay, I think that there were a lot of people looking for any strength at all to sell GLD into. The big answer will come quickly for the dollar, since any strength at all next week will form a weekly swing. Seems to me that would mean a rally up to the broken 3 year trend line at the least. I’m favoring one more intermediate cycle in the dollar to finish this C-Wave off.

  1204. David

    Something else I just realized:

    As an industrial commodity, silver may have topped early because it’s sniffing out a coming recession.

  1205. Gary

    Folks get it in your head that gold is going to test the lows and it would be easier to form the swing if it makes a slightly lower low.

    Again it will be in the weekend report.

  1207. Ollie

    Is GDX/J subject to the same erosion over time as UGL or AGQ?

    Or is it different?

    In other words is it better to get into individual miners at the bottom of the D (and be exposed to some company specific risk) or buy GDX/J

    Appreciate the answers, thanks

  1209. fg100

    Ollie,

    I agree with your analysis. SLV holders capitulated. We had a successful retest of the lows this afternoon, and slv bounced hard off the lows. If everything works out with the dollar turning over and heading down to the 3 yr cycle low, we should at least get a double top on silver…..

  1210. David

    GDXJ is an ETF of junior miners — not leveraged. So you can hold it without the erosion of AGQ, DGP, or NUGT.

  1213. Jin

    With Dollar firming, I feel better effort should spend on shorting energy and may be long UUP.PM is too risky right now, and is does not worth it from risk and reward perspective.

  1214. William

    One other thought, we rode 2 daily cycles up, we were showing remarkable profits in such a short amount of time. My entire portfolio was up just over 100% early Friday. At that point with a 3rd daily cycle a posibility not a certainty I should have set some stops. I should have mentally decided where my maximum pain threshold was for my gains. It probably should have been some where in the 50-65% range. If I had walked away with 50% gains I would feel much better about this. In the future I will definitely try and do a better job of picking me exit before hand as we get deep into a move.

  1215. ALEX

    DAVID

    I tend to agree actually. I was thinking that even if Gold were to move , it still may just hit near that $1650 target , and Silver just does a 50% bounce from this last leg down ( $16 ish down, $8 up).

    Like maybe $42. Both the 10 and 20 sma are converging there and will be strong resistance (especially as you said…trapped longs looking for a chance to bail)

    Thanks for your input.

    Have a good wkend! ( I also am eagerly awaiting this wkend report)

  1216. Gary

    Hot rod,
    If gold can marginally break yesterdays low it will ease the parameters for forming the swing and if buyers step in there again then we will have something we can base from.

    I am starting to lean towards a higher high in gold (probably not for silver) based on what I see at the last two three year cycle lows.

    I’m starting to think we may yet finish out the third $200 point leg.

    In the weekend report.

  1217. Hot Rod

    Cot reports are out. Those commercial bastards covered another huge chunk of their shorts on the fall mon and tues.

    It’s unbelievable how they can accomplish this time after time.

  1218. Rick 4779

    Little help here please…I am reading some of Doc’s case studies and he refers to a trader “pocketing handles”. What is a handle?

  1219. Wes

    Alex, you are right about AGQ being the better play if silver is going to $49.5.

    But the even better play would be to put the exact same amount of money in the June SLV $33 options.

    Even better than that would be to put it in in the May $33’s and switch the resulting money in 2 weeks to the DIM June options with a delta of .8 or better.

  1220. Dan CA

    SLW earnings report is coming Before Market Open on Monday. So some of the support could be from runup to the earnings report.

  1221. mostlyThumbs

    Ollie (zerohedge) said:
    SLV traded 87.5% of total shares outstanding…total capitulation.

    How would one know whether the volume was capitulation or HFT algorithms just generating high volume?

  1222. OptionsOnly

    I’m waiting for a swing low in Gold before entering any new positions. To me, 1450 looks like a magnet for Gold, and 32 for Silver. Who knows what they eventually will be – but I just want the meat of the fish, someone else can have the tail and the head (I think that analogy is from “Remininces of a stock market operator”. Also, I’m in this for the long run, very glad to have Gary’s analysis on my side. However, I do plan my own trades – and trade my own plan, and do not overtrade. Have a great weekend!

  1223. blammo

    The 90 day SMA is holding like a champ. I plan to use that as my stop with HZU/AGQ as I scale in over the next week.

    I agree that the silver beast likely has the most upside (as long as you don’t cherish your sleep).

  1224. Ollie

    Thumbs, good point, HFT really inflates volumes to the point where old style volume analysis becomes useless…

  1226. Ben

    I think that even if gold rallies, it’s much less likely now for a runaway move, unless all those burned this week in commodities and silver are on some serious drugs. But that’s a good thing. It would be amazing if this shakeout actually helped those who stupidly or blindly held on, like me, as Jim Sinclair believes. But I can already feel the pull of the dark side — why a correction could buck so many off — as some of those burned in the last four days capitulated today relieved to have a single green day. But I think that’s what Jim is talking about. Clear as mud, though, ain’t it?

  1227. D. Saul Weiner

    Seeing gold drift up at end of day while dollar makes new highs makes me believe that the low is in. Gold fell a lot before dollar moved up, so the cycles are a bit out of sync.

  1228. Tudor

    Wes – very nice! Some questions:

    1. How do you determine your initial number of contracts when you do the DITM buy? Do you simply equate number of shares with number of options? (If you had 1,600 shares of SLV you buy 16 contracts.) Or do you use delta to determine the number of shares to buy? (If you had 1,600 shares of SLV and the delta of your chosen option is .80, you’d buy 20 contracts.)

    2. Do you try to keep delta in a target range? I.E. – As the share price rises and the delta approaches, say, .90, you roll up to a strike with a lower delta?

  1229. aviat72

    Gary:

    I used options to hedge. What I did was to buy an OTM put ending the next week and finance it be selling a slightly OTM call.

    So last Friday I bought a GLD $151 Put and sold a $GLD $155 Call, all expiring today. No pain during the daily cycle correction for my core holding. Did get some pain due to the gun-jumping I did yesterday; today’s bounce helped me get close to even. On the previous Options Expiration Friday, I had cut down on my GLD position which I rebuilt post Fed.

    I think the big challenge you have is that your subscriber base includes absolute novices to hedge fund traders. So you can not get too sophisticated.

    As I wrote earlier, the irony of the situation is that you were focused on getting people out before the parabola collapses. Unfortunately we were too focussed on gold as the market, when all the action was in silver. There were several other markers. Oil made a marginal new high but was struggling; OIH was diverging as were the miners. Silver made a double top on Monday and Friday RTH. Further the volume last Thursday and Friday was very low. If the momo was alive, we should have seen a bigger push. We had seen similar action during the early April lows but it made a new high by Friday.


    April 7 to April 17

    April 24 to May 1

    I think one aspect which should also keep in mind is the action on May 1, both in the SI Futures and with OBL. For the next few days I was completely distracted; did not see the obvious signs. Then came the Fed. So there was a triple slam of Euphoria. I am sure it affected a whole bunch of other traders also. Also many portfolio managers reallocate every month, so May 1st was an ideal candidate for major OTF (larger time frame) action.

    Luckily for me my downside was limited because I was using ratio spreads.Was paying a buck or two per contract and would have enjoyed gains similar to holding SLV if we had headed to 60. I did not have a core AQG position.

  1230. aklaunch

    While we are rehashing last week. On Thursday SLV had one of the highest volumes of trades on the exchange. The price did nothing. There was even an exhaustion candle on the chart. There was some major selling going on and major buying by retail traders that day. Next time i see that I am out. I was fully invested not much below that high point and figured i would just hold through a few buck correction. We sure as hell needed one at the time. Then this week happened.

  1231. Ben

    The trouble with “next time” etc. if finding the correct indicator in real time. SLV seems like a good place too look, which probably means it won’t come in in that way for three years, or maybe in six or seven years with the final blowout at $199.98 per ounce, with all of us predicting a shoot through $200 to perhaps $300, and AGQ perhaps reaching $45000 before topping.

  1233. Wes

    For anyone interested in the true outcome of the options strategy I outlined above, I had one account where I actually traded it in the pure manner.

    This account last Friday at the close was hedged at 140% of total value, with the hedge consisting of May SLV $41 options.

    For the week, Friday close to Friday close, SLV lost 26%.

    Now, had silver continued to climb as we had speculated, I would have made about 1.40 times that increase.

    At 140% fully invested I would have lost 1.4X 26% equals 36.4% of the account.

    I actually lost 19.6% of the account because as the options became worth less, the delta decreased from over .95 to about .13 today.

    This is the best strategy I can think up for having your cake and eating it too.

    If anyone has a better late in the cycle strategy allowing for increased profits after an expected brief and shallow cycle low, while simultaneously guarding against disaster, please post it.

  1235. MG

    MrMiyagi said…
    US$ Index chart is starting to look (pardon the word) parabolic…
    =====

    LOL – It is a cursor to say that word now (parabolic) after the hell Silver experience of this week?

  1237. Done

    GARY,

    Can you outline an exit strategy for us if you believe this is the D wave in the weekend report? Thanks a lot

  1238. Rosabarba

    I would guard against the urge to read the washout volume in SLV as a sign a tradable bottom is near or in. If yesterday’s volume of 300M shares represents most of the float for SLV, the volume on the week came in at more than 1B.

    The new holders (and each share had, on average, three different owners this week) didn’t stop the selling pressure, and no doubt a significant number of the current holders will look to cut their losses on any decent sized bounce. For the past week (and the past four weeks if we’re talking about miners), more money has been trying to get out of the PMs than in.

    While GDXJ held up alright today, GDX faded relative to gold, and the negative divergence seen on the GDX:GLD chart continues to widen. The major mining stocks and ETFs are all trading below their 10, 20 and 50-day averages, and it is unlikely they will just punch through those levels without looking back, assuming they even get there this month. Any near-term strength should be viewed with suspicion, IMO, and folks should also bear in mind that the summer tends to be a weak season for both PMs and equities.

    Speaking from some experience, those who’ve experienced losses (or seen unrealized gains evaporate, which tends to feel the same) should be very careful about trying to “make it all back” in the coming days or weeks with oversized trades.

  1239. Rick 4779

    Its pretty quiet around here. Is this the equivalent of a happy hour? 3:30 on a Friday afternoon…California time. A bottle of Pacifico please

  1240. Jayhawk

    I agree Rosa. I’m looking for a partial retrace of the miners sell off (perhaps 50% or so from the top) to scale back my remaining miners. I’ll then look for them to prove to me they are healthy again.

  1242. Jin

    I agree with Rosa too. With QE2 coming to an end in June, may should be time to step on break, not step on gas pedal. Same as in high $40s, we should has stepped aside, instead of go all in. There may be some more upside in PM, but the risk is too high.

  1244. David

    1) Everybody is predicting a bounce back to $40-46.

    2) Everybody is predicting that after that, silver is done.

    When everybody agrees on something, it’s usually wrong.

  1246. Jayhawk

    A lot of people are predicting silver will go to the 200 MA from here too. Other blogs are wildly bullish on ZSL.

    What do you think David?

    I think the miners could give a decent bounce in the next week or so…I intend to dump them.

    IMO, this next cycle will fail and the intermediate cycle will be done.

    However, I don’t believe we will get a major sell off. I think 1400 will hold this summer.

  1247. Daniel

    David-
    I concur! :))
    Either C wave is still on and we blow through (not what I expect)
    or
    D wave is upon us and feeble recovery rally rolls over pretty hard.
    Nice that Gary will tee us up for either one IMO.

  1248. fat boy

    I like the advice to not to try to make up your unrealized gains to quickly by throwing caution to the wind.

    my account is down 45% from the very top but I don’t feel I have lost anything – its in the market and so up and down is a reality – its only lost if you bail out now and you chuck it in a CD. Gary’s work will help a lot and Gary himself is learning all the time as his posts over the last couple of years show

    thanks for the inteligent comments on the blog all

    This next IT low is going to be a tough buy as lots of punters will be scarred to jump back in to silver.

    I guess we keep watching the dollar – and now DG’s signal , ummm

  1249. aklaunch

    My guess after reading and reading is that silver will get beaten down to 27-30$ as the repercussions of hang over continue and also because a lot of PM people will be switching to gold?

  1250. David

    I have no idea what’s going to happen.

    It just makes me uneasy that there’s a universal consensus out there.

    Based on this I might infer that the chances of

    1) silver crapping out completely before it gets to $40, or

    2) silver blowing through $50

    are higher than anyone is currently anticipating.

  1252. David

    The path of maxiumum frustration would be for silver to blow right through $46, confounding everyone’s expectations.

    Then, it makes a run to $49, and everyone thinks it’s going to blow through $50 this time…

    …and it dies at $49.75 again. At this point everybody thinks they’re going to get let out one more time, but it goes straight to $25 and consolidates for years thereafter.

    The market is a bitch.

  1253. Wes

    Tudor,

    Say you want to hedge $100,000.

    Each option will hedge 100 times the price of SLV times the delta of the option.

    Last Friday, SLV closed at $46.55, so each option hedged $4655 times .95, the delta of the $41 option. So, each option hedged $4655 times .95 equals $4422.

    Now, $100,000 divided by 4422 equals, in round numbers, 23.
    So, 23 of the $41 SLV May options would have hedged $100,000.

    Now, that’s one for one. Of course if you want a 140% exposure, you would buy 23 times 1.4 equals 32 options.

    At this point you will make 3200 dollars for each dollar SLV goes up from now on. You will lose $3200 for each dollar SLV goes down initially, but this will constantly decrease as SLV falls in price.

    This coming Monday morning, you will lose $435 for each dollar SLV goes down, because the delta of the option is .136.

    Notice that you paid $655 for each option if you bought them when I did, so your total outlay was $655 times 32 equals $20,960. This is all you can lose if silver goes to zero (perish the thought).

    You are guaranteed to keep 79% of your original $100,000, while having a 140% initial upside exposure.

  1254. Rosabarba

    David,

    It sounds like you have a pretty specific, multi-part scenario in mind for how silver will trade from here. Speaking again from some experience, carrying those sorts of roadmaps in our head can lead us to stick to losers longer than if we just gleaned what we could from the price action.

    Silver may (should) bounce soon, and perhaps make it past the 50dsma to 40 or higher. Personally, I’m not sure I would bet on it, but since we have nothing to read by way of price action from the initial and massive thrust down of the selloff, there isn’t much yet on the chart to give an indication of how strong that bounce will be. It might not be very strong at all.

  1255. Jayhawk

    If it made it to 49 again, I bet every single person here who held AGQ through this crap storm will gladly dump it in a heart beat.

  1257. David

    Rosa,

    If you read my earlier post, you’ll see that in no way am I predicting that silver is going to $49.

    As I said, I have no idea what’s going to happen. If silver goes to $49, it’s going to be without me.

    I think it’s every bit as likely that silver drops on Monday and keeps falling without pause until it hits the 200dma.

    What I am saying is that there is an overwhelming consensus around a bounce to $40-46, which by definition makes it suspect.

    I got rid of most of my AGQ and swapped it for gold and gold miners before this week went down. I will swap out the remainder (at a profit) before we get to $40.

    Because the XAU is already at the 200dma — the place where most D-waves usually stop — I am comfortable owning gold miners here for the long haul.

  1258. Bob loves Hawaii

    Hey Rosa, you also should consider the volume a capture by the HFT’s, as well. Notice the crawl along the 10EMA on the 15.

    I read where the day traders captured SLV.

  1259. Rosabarba

    Jay,

    I agree. I think everybody who’s currently (and regretting) holding longs would love nothing more than a test of the previous silver high into which they could sell. Considering the parabolic move to get there and enormous liquidation in price and volume that followed, I think it is a stretch to expect that outcome in a matter of weeks.

  1261. Rosabarba

    Bob,

    The math would suggest that day traders would have had to be big SLV players last week if it turned over its float three times.

    I’m not sure I understand how that or HFTs sheds light on the silver trade going forward.

  1262. Jayhawk

    David-

    Technically, the 200 or so has caught most intermediate sell off, but we have not had one of Gary’s dreaded D waves since 2008.

    I think the global currency mess will keep a bid under gold from getting too hammered as Gary thinks…But he’s been at this MUCH longer than me. DOC is in the camp of milder intermediate sell offs if I’m not mistaken.

    Rosa-

    How are you positioned?

    For the other readers, Rosa is not a troll but a a very savvy PM trader who is a moderator at BlueChip Bulldog, a good trading site. He’s been in the metals for many years and has a great feel for SLW, SLV, GDX, etc.

    He also came here last week and mentioned the SLW strangle play. (I thought at the time…”yea, I’ve been wanting to strangle SLW for a few weeks now! 🙂

    Would love to hear your game plan Rosa.

  1263. Rosabarba

    David,

    Gotcha, and excuse my mistaken assumption. I’m not sure if the consensus of a bounce to 40-46 is overwhelming, but the point in any event is to guard against becoming too wedded to expectations if the price action fails to materialize.

  1264. fat boy

    iis there a whole mess of resistance for dollar index around 76 ? anyone
    or is that just a hopefull clutching at straws question ?
    New image now I am lighter

  1265. Bob loves Hawaii

    Rosa, simple, the same way they generate obscene volume on Citicorp.

    I watch the level two on SLV, and pop, pop, pop all day long.

    The tight bands intraday are also a tell.

    You may be right, but I think most everyone is flushed out and SLV is left for dead, until people realize that there is too much open interest against the inventory.

  1266. David

    Jay,

    If you look at 2006, the XAU bottomed out a little under the 200dma.

    The only time the 200dma has not provided support was during the 2008 meltdown, which was a unique scenario.

    Not to say it can’t happen again, but I would bet on a more typical D-wave scenario.

  1267. Jayhawk

    I know…I look at the HUI and think it’s setting up like an intermediate bottom! (Silver too hitting the 90 where the last intermediate landed looks strange too). Gold is not even that stretched at this point…

    Maybe it’s mild corrections this summer SLV to 200, Gold to 144, HUI around the 200…chop around those levels?

  1269. Wes

    Tudor,

    The second part of your question is quite important. When your DIM options get even deeper in the money because of increased worth of the underlying security, you should sell those and replace them with options of no more than a .95 delta.

    This is my major screw-up. I should have sold my 32’s and replaced them with an equal number of 41’s. That would have required me to take money off the table.

    There is really no excuse for not doing that. I was just lazy. It cost me dearly.

    I’d think replacing them every 3 points up would be sufficient.

  1270. Rosabarba

    Jay,

    “Savvy” is putting it too strong, since I spent weeks watching the yawning divergence between miners and metals without significantly reducing my exposure at the time. The SLW:SLV was a clarion warning to at least hedge, and I didn’t listen to it. I never put on the strangle play this time around, and at this point I’m not sure the risk-reward is there.

    Right now, I’m out of all mining shares. I have some June calls on SLW and SVM that, barring a strong, multi-day reversal with volume, I don’t expect to hold beyond next week.

    SPX printing a doji after the jobs pop, with a Friday surge in the $VIX, is another clear warning sign, imo.

  1271. David

    Jay,

    One of two scenarios on the miners:

    1) Gary is right and we have one more leg on this thing that takes the HUI 30% above the 200dma, or

    2) This C-wave had everybody crammed into the silver market at the expense of gold. In this scenario, silver crashes down to the 200dma while gold and the miners slowly drift into a mild low and grind around for awhile.

    3) We are about to enter Meltdown part II — another deflationary vortex where all assets get thrown out indiscriminately. This is the only scenario I can envision in which gold miners drop sharply from here.

    I think 1) or 2) are more likely. As soon as 3) shows up the Fed will rev up the presses again.

    The 200dma has always been a good buying spot during this bull market, and I expect that to remain true until the bull is dead.

  1272. Dan

    Wow! Been away from the markets all day but the first thing I noticed is how the PM stocks couldnt put in any sort of bounce after these massive declines. PM stocks warned us for weeks in advance that we were near the end of the run and they will again let us know in advance when its safe to get back in.

    My guess is the dollar has bottomed here and with that, all commodities across the board. A few points higher on the dollar and we will have confirmation that we have broken the months long downtrend channel. We should have our confirmation by next week. Also, watch how we will now conveniently start getting blasted with news of the Euro zone’s imminent collapse.

  1273. Gary

    Every D-wave so far has retraced 62% of the preceding C-wave.

    From current levels that would take gold back to 1150.

    However I’m not convinced gold is done going up and if it can finish out the last $200 leg I think it’s reasonable to expect a milder D-wave that only retraces 50%, since the top would have come at much less extreme levels than other times.

    A 50% retrace from $1650 would be roughly $1250.

    More in the weekend report.

  1274. pimaCanyon

    aviat72,

    You hedge sounds good. But what if the correction had been shallow (or none at all, as in a runaway move)? Your short call would got deep in the red very quickly and your long put would go to zero very quickly. Seems risky in a bull market, riskier than outright shorting. Why not just buy the OOM put and do nothing with calls?

  1276. Gary

    First off forget about the 200 DMA on silver. The bottom will come when gold bottoms.

    But for what it’s worth a parabolic move of that magnitude probably isn’t going to correct just back to the mean and stop. It will probably dive considerably below the mean.

    I expect we will see silver tag the previous C-wave top at $21 before this is all over. It will be a multi month process though.

    The big fast declines are probably over.

  1279. Dan

    David,

    Your second scenario is exactly how this will play out.

    I see a lot of people on this board also arguing that the “fundamentals” and “its different this time” because of the…”fundamentals.” Believe me when I say thats the exact same argument you see at every parabolic peak.

    Silver’s short-term move the past month was not based on “fundamentals”, it was strictly a speculative frenzy. The emotional roller coaster has now gone from greed to fear.

  1280. Tudor

    Wes, most excellent write up on positioning with options. I’m curious how you choose your initial strikes for various scenarios (intermediate low, daily low, etc…) And, if you don’t mind, could you connect the dots and explain what actions, if any, you take as the price of the underlying moves (either up or down). You’ve already said you got caught flat-footed with the 32 strike when SLV was well into the 40’s. I understand the rational for why that’s undesirable – you’re at too high a delta as the underlying declines, and gamma isn’t high enough to kick the delta down. How do you determine what the new strike should be? Do you target delta, gamma, a combination, or something else?

    Thanks a ton, Wes. I really appreciate it.

  1281. conheart

    I am also a new sub and I agree with T. The analysis has been all over the place this last month. One day we’re waiting for a tag of $50, then we’re anticipating a scary correction, then a runaway move is called and then we’re in the middle of a waterfall decline due to lack of recognition that we are already in a mini parabola. So, my question echoes T’s as to what kind of expertise we are paying for here.

    I haven’t commented yet because I still feel pretty irked. Let me explain why.

    I had the good fortune of making 108% in the first month I joined SMT because I bought in on the lowest market day of the Japan tragedy. It was one of the most frightening steps I’ve ever taken. I made returns beyond anything I’ve ever experienced and literally sat in front of my computer saying,”Oh my God, oh my God!” I was so overwhelmed with the profits that I got out just before April options expired and consequently missed much of the big move. I didn’t get greedy. I didn’t chase it. I sat in cash and waited for the tag of $50 which never came. I waited for the scary pullback which would mark the cycle bottom so I could get back in with double my cash position in preparation for the C-Wave. It took discipline not to beat myself up for missing the juiciest part of the move up.
    Then, last Thursday, April 27 Gary declared that we were in a runaway move. “The last $25 correction confirms the runaway move and should also mark the cycle low. My advice, if you didn’t get in at the close, is to get whatever positions you want to add at the open,” he said, and he’s the expert.
    So I got back in.
    As of today all profits are lost. So, the guts it took to get in after Japan’s disaster, the patience it took not to chase the daily run-up….all of it for naught because a “runaway move” was called. And it was called “in real time.”

    So, Gary, when you chastise the suggestion of buying defensive puts as “a waste of money” and when you dismiss the practice of using stops at the top of a stretched market as being poor trading form, and when you abandon your own trading tools to make a hasty “runaway move” call, then frankly, I have to question your stewardship.

    This however, takes the cake, and I can feel my anger rise again as I type. You said this morning, “No need to get greedy. We already got a spanking because we got too greedy last week.”

    Do not include me in that “we.”

    I got back in solely on your call that we were now in a runaway move.

    In all fairness the metals came undone so quickly that you had no opportunity to “un-call” the runaway move, but nevertheless the damage was done. I was in. On your call. So please don’t ever make a blanket statement that sweeps us all into the category of being “greedy.” Had you not declared a runaway move I would still be sitting here, post correction, entirely in cash as I’d planned. So, yes, I’m a bit miffed at the expert advise I received.

    I now hold July options in GLD, SLV and SIL. My small but expensive AGQ position is toast. Hopefully you and the excellent traders on the blog can lead us out of this morass, but must say my faith has been shaken.
    I’ll put it behind me now and start all over as most here are doing. Thanks for hearing me.

  1282. David

    Dan,

    I don’t think anybody on this board is arguing that this was driven by “fundamentals”, other than the decline of the dollar.

    There are people out there who believe that the aboveground silver is all used up, that JPMorgan is trapped in a short position, blah blah blah. Not many people here are buying that stuff.

    The only debate here is the direction of the dollar over the next month — specifically, whether the dollar bounce is right now, or a month from now.

    If the bounce is right now, then silver is going straight down. If it’s a month from now, it’s going to burn a lot of shorts first.

    For that reason, I think silver is too risky to hold, but it’s also a risky short right now. If the dollar goes to 65, silver short positions will be less enjoyable than they are now.

  1283. Dan

    Gary,

    Of course the bottom in silver will happen when the bottom in gold happens but that kind of information gives you no predictions as to the price. Its like someone asking you what time the sun will rise and you responding that it will rise once the moon sets. The most reliable prediction (guess-timate) you can make is the the 200dmva as that is(roughly) where all previous parabolic crashes have ended.

    Below is a great recent article studying how past silver crashes have ended:

    http://financialsense.com/contributors/chris-puplava/silvers-destiny-with-200

  1284. Tudor

    Wes, just saw your post. It must have gone up while I was typing. Thanks.

    I really like that and will be taking a good, hard look at it. There’s much to recommend your method – maintain exposure while keeping cash on the side, ability to scale a position as the market moves, flexibility in levering, and taking money off the table while keeping a skin in the game when things get dodgy.

    I’m floored. It’s flippin’ brilliant.

  1287. Gary

    Con,
    yes guilty as charged. But in all fairness I was sitting Monday morning with my finger on the trigger to sell and told everyone that I intended to sell.

    Unfortunately silver gapped down $3.00 and took that plan off the table.

    In hindsight we should have gone ahead and sold into the gap but in real time I couldn’t do it and I don’t think anyone else could either. Obviously not you.

    So again it’s over and done with now and nothing we can do about it other than next time expect turns to come premarket and bite the bullet if we have to enter or exit into a large gap.

  1288. Gary

    Dan,
    You seem to think that parabolas go back to the mean and stop. That’s not the case. The further the parabola stretches the further it tends to fall below the mean before the momentum can be halted.

  1291. Dan

    Gary,

    This silver move was a record relative to the 200dmva but only by a few % to the one in 2006 and only a dozen or so % points more than other silver parabolas so based on that I expect it to behave maybe slightly more extended on the downside compared to 2006 and other crashes but not much.

  1292. Jayhawk

    Gary-

    the ABCD thing is your theory or is it shared by others?

    How many of these A-D cycles have there been (does it just go back to 1999-2000?)

    Would it not make sense that the currency crisis would deepen and become more severe over the duration of the bull, building in severity (globally) and causing sells off the become shorter and less severe?

    Just some thoughts.

  1293. Ryan

    Conheart,

    I feel you pain but at least you were able to momentarily enjoy your realized gains. I never got the chance. I remember when the Japan crash was happening and I was freaking out but I held strong and everything came back with a vengeance. It was Gary and the board member here that kept me in it. So I got more confident and I added along the way up and even added AGQ, DGP and GDX when the runaway move was called. I was so happy to see my account grow beyond imagine just like Gary said it would. So then this Sunday night I almost had a heart attack. I really wanted to sell but everyone and Gary’s report said to stay calm and just ride it out. I rode it out when the Japan crisis came and I made it out alive so I thought the exact same thing would happen. When we dropped hard Monday and Tues, I remember on the tues night report Gary said not everyday will be drops like that and then when wed was hit hard again I should of sold but was scared of selling at the bottom. I sold on thurs in the morning before Gary made his alternate plan because I couldn’t take it anymore. I loss a very significant amount of unrealized gains and every time I think about it I get pretty upset. I’m out of all my positions now and going to play pretty defensive. I might start going back in when Gary calls the swing low. I still believe in Gary because he did call to switch to gold. If we didn’t have that overnight drop on Sunday, we would of got out of silver and been riding in gold and most of our profits would still be intact even after this week. Thanks for listening just putting my thoughts out on this wild ride.

  1294. mdsn

    Con,
    You seem to be a lazy fool. lazy because you want someone else to do all the work for you, you want Gary to think for you, call all your trades and hold your hand start to finish.
    A fool because you expect for a small subscription fee you will be free from taking responsibility for your own trades.
    You got lucky to find SMT and make 108%.
    But with your attitude, you would have lost it at some point no matter what. There is no free lunch.
    yes, it been a long hard week for most of us here, some got hurt worse than others…but the second guessing, monday morning quarterbacking is irritating and you blaming someone else is a sad and wrong. There are others here showing some class by disagreeing, reviewing and analyzing but offering constructive thoughts on learning and doing better next time. Blaming someone else for your trade is really unbecoming.

  1295. EricH

    “First off forget about the 200 DMA on silver. The bottom will come when gold bottoms.”

    Gary, recent action have indicated that Silver has lead this move for the past 3 months. Why would the characteristic of this move all of a sudden change?

  1297. EricH

    Silver has topped in the April/June time frame in 2004,2006,2008 and now 2011. Amazing how timely this bull market is.

  1298. Gary

    Eric,
    Silver led in regards to relative strength but gold is still the cyclical driver of the sector. Silver won’t act independent of gold. AKA silver isn’t going to bottom and head back up until gold does.

  1299. EricH

    TrendFriend,

    “Chris Puplava
    Portfolio Manager, Fundamental Analyst at PFS Group
    Primary Tel: 858.487.3939″

    I would love to see Chris’s portfolio performance in the past 2-3 weeks.

  1300. Gary

    Jay,
    This is the 6 the ABCD cycle. I first came across the ABCD label reading the Aden sisters report years ago.

  1301. Glenn

    Hi Folks,
    I am new to Gary …only been on board a few months . Was up on paper a lot…but haven’t sold…still up tens of thousands…

    No gain OR LOSS till you sell…
    If you have ever worked with an investment advisor you find Gary refreshing and upfront. In my opinion, Crystal balls and charting are more art then science…have found him to be surprisingly accurate…timing a bit off occasionally. Be cool…the money is going to be made in the long run…not several months…My view…thanks to all the seasoned blog contributors…info is …well…outstanding…glad to be a part

  1303. TrendFriend

    Eric, last Friday Pulplava writes suggesting parapolics. This Friday he points out that silver was overbought on this magic numberizer.

    Seems like everyone called the top in one way or the other. Once you sort through it all you figure out why their system will not do you any good.

    Happiness would be finding just one that works better.
    Big chance to learn from mistakes as the supposed experts ‘splain what’s happenin. May I get lucky and find 2 or 3 good one’s and even more that are all right.

  1305. Mike

    Rough week. I’m gonna put it behind me with the drink of the week called the “Osama”: two shots followed by a splash of water 🙂

  1306. fat boy

    conheart

    tough times and i feel the pain

    I only started investing in feb 2007 – yep feb 2007 nearly top of the market – lost 50% of capital through to feb 2009

    since then I luckily found and followed Gary and if I include 2007 have returned even after this debacle annualized 20% per year recouping losses and then some

    i have also been underwater whilst following Gary however it has come good with the bull correcting my mistakes with gary’s assistance – own your trades- a 75c ish a day news letter informs you to make your own choices there is no easy trade here or anywhere.

  1307. EricH

    “Silver won’t act independent of gold.”

    Gary, i don’t want to be harsh and i have tremendous respect for you but that statement is simply wrong? Your portfolio was comprised of all silver investment vehicles that leveraged to 140%. If you would had focused on Silver, I’m sure your train of thoughts would had been different and probably saved yourself and a lot of your peers a ton of money.
    Silver topped on April 25th (Sunday night open) at 49.80. In the subsequent 2 days it traded sideways with a low at 44.6. From Wednesday on in that week, i believe this is where you dropped the ball by believing silver won’t act ‘independent’ of gold. On April 28th (Thursday) Silver made another attempt at 50 (a historical number) printing a high of 49.50 during regular trading hours while gold continues it’s surge (10+). On Friday, April 29th Silver tagged 49 and closed down for the day. Gold on the other hand surged over $40+ (a rarity).
    The facts are there for you to analyze. Silver wasn’t the only one that acted independently, the outcast miners also sniffed what was coming when it closed red for the week in one of the most specular gold surge in recent memory.

  1308. Keys

    I am no expert, but since the power of a D-Wave is the C-wave move, can we also put on the table another consolidation pattern for gold. Simply put I don’t think we can use an ABCD pattern, without a proper C-wave, which causes a D, which causes a bounce in the A-wave, which drops down into the B…which starts again with the C.
    Without a noticeable and proper C, how can any of the waves work…

    Further let’s pretend nobody owned silver and treated it like Palladium…Palladium dropped about 20% in a month from Feb to March or so…Nobody cared, Nobody thought about it. Platinum fell 10% or so…But again nobody cared…

    Perhaps our mistake is that we thought silver was somehow important to this c-wave, which is based upon gold.

    Gold is barely down on a percentage basis…I understand the entire commodity complex is in drop, so this is concerning…and that the USD is rising(somewhat), but in many currencies gold is doing nothing…and even rising in some.

    I am not sure what to think about it…but I think our entire story might be different had we never touched silver, having had treated it like any of the other metals…and only focused on gold.

    Then I know some here argued that perhaps any PM run goes into the most undervalued asset, which silver was…and that the parabolic move would come in this metal…that makes sense too….thinking out loud.

    Have a sunny week-end all.

  1311. Gary

    Keys,
    We have actually had the most massive C-wave of the entire bull market. It has lasted over two years and gained 83% ($860 to $1575).
    What it hasn’t done so far is end with the usual parabolic move.

    It is the parabolic move that drives the D-wave regression to the mean profit taking event.

    If gold doesn’t manage a true parabolic finish then I would expect the D-wave to be milder than all others in that it might only retrace 50% of the C-wave instead of 62%.

  1312. jhnewman

    Gary: I also found out about the ABCD waves from the Aden sisters. Eric de Groot, a protege of Jim Sinclair, has also referred to these 4 waves.

    Actually, I believe these 4 waves are embedded in a larger superstructure for this whole bull market in gold.

    Athough Sinclair is arguably the top gold analyst in the world, this time around, he points to Alf Field, an Australian, as the best gold analyst in the world. And Alf uses Elliott Wave to analyze the gold bull.

    Up through 2008 or 2009, Alf was “calling” the bull with amazing accuracy, as I understand it, with regular posts on 321Gold or some such gold site. He stopped posting because he was worried that too many people were using his calls to trade physical gold, and he was worried that a number of them might lose their “wealth insurance” this way during these perilous times.

    Anyway, Alf says the whole bull market, from start to the future finish, will be one giant 5 wave Elliott Wave advance:

    Wave 1 up was from 2000 to the C-wave top in 2008;

    Wave 2 down was the massive D-wave down that followed and bottomed in October;

    We are now in the famous and biggest wave up — Wave 3;

    I’m guessing that Wave 4 down will be similar in magnitude to Wave 2 down, and I’ll bet this will start at the top of this “eight-year cycle” that we’re currently in;

    Then Wave 5 up will finish up the bull.

    Breaking down this Wave 3 that we’re in right now: it also will be 5 waves:

    Wave 1 is from the October, 2008 low to the C-wave top (which I think is still dead ahead of us);

    Then Wave 2 down will be the D-wave;

    Then Wave 3 up starts with the A-Wave.

    So after this D-wave (which I personally don’t think we’re in yet), we will be entering the most famous and anticipated part of any 5-wave Elliott Wave advance: the fabled “3 of 3”: the third or biggest wave inside the third or biggest wave — the very heart of this MASSIVE bull market.

    By the way, at this point, as I understand it, Alf is predicting that this entire gold bull will top out somewhere around $10,000/oz. (I know James Turk is also talking about something north of $8000, and Sinclair always seems to be pointing admiringly to “Alf’s numbers”.) I know many would find this hard to believe, but if what we’re witnessing is the collapse of the global currency system that’s been in place since 1944, and if the revalued price of gold has to “rebalance” the whole GARGANTUAN mountain of world debt — I can believe that high figure.

    [“Rebalancing” world debt = take the entire amount of debt in the world and divide it by the entire number of ounces of gold in the world, and that should be the price of an ounce of gold. I don’t completely understand the concept, but, as I understand it, that’s sort of what “the system” is doing here, and what needs to be done to finally get the world economy up and running again — at some future point.]

    I saw some discussion here recently about what silver might do overall. I know, after this past week, people probably don’t want to hear about Demon Silver. But Eric de Groot, that protege of Sinclair’s, has lots of great Big Picture data that he provides on his blog site. He is saying that, by the end of this bull run, the gold/silver ratio should be somewhere in the range of 16-18 (which is where it ended in 1980). So if you assume gold hits $10,000, that would put silver in the range of: $555-$625/oz.

    I know probably many wouldn’t believe such a thing. And it’s probably not wise to dwell on these matters — better just to play things “one leg at a time” as best we can, and then see where we end up. But that’s the info. I’ve collected by following (intermittently) a few of the top independent gold/silver analysts in the world.

  1313. Gary

    I’m in the $7000 to $10,000 camp myself.

    In the 30’s debt destruction took the form of a severe deflationary event.

    This time I’m about 99% sure it will take the form of global currency destruction.

  1315. Keys

    Here’s another question…following up with my previous comment…pretend we never touched silver…and we never got burned…anything in the gold charts to suggest that the C-Wave is over?
    I mean we were all heavy in silver, but what of the people only in gold, what would they be thinking? Basically this week has been about emotions, and carnage…but taking a step back I am wondering if the mistake is not in the ABCD pattern, or us getting caught in a D-wave, but rather our poor assumed confidence in the predictability of silver relative to this pattern.

  1316. Jayhawk

    Hello Newman.

    Good stuff there. What does their wave theory think a correction will do as far as damage this coming wave down (wave 2) before the larger wave 3?

    Gary’s A wave will test the gold highs in short order made on this wave….and with the longer term gains you all are discussing, I can’t imagine parting with physical for a fairly short blip on the radar.

  1318. pimaCanyon

    jhnewman,

    Great post. Thanks for writing it all out for us!

    I have studied EW and even though I found it difficult to use in a practical way (read “using it to make money in the markets”), I still sometimes find myself looking at charts from an EW perspective. So it’s interesting to hear this very large EW interpretation of gold.

    One thing that I have read with respect to commodities, though, is that they often differ from stocks in terms of which of the impulse waves is the strongest. Stocks it’s usually the 3rd. Hence, the 3rd of the 3rd being the strongest subwave. However, with commodities the 5th wave is often the strongest. A parabolic blowoff is usually a 5th wave. Other than that minor point, I would go along with everything Alf is saying. Do you have a link to a site where he posts?

    I would also LOVE to believe that the D wave hasn’t started. The caveat there is the strength of the dollar. Today after moving above the downtrend line drawn off the January high, it closed below that line, but then traded back above it in the after hours trading.

    We’ll see what happens on Monday.

    Have a great weekend!

  1319. flaunt

    I don’t post here much but everyone here seems pretty intelligent. It’s a little funny to me the pundits who were calling for a crash in silver are taking credit for their amazing forecasting abilities. It’s BS. The crash was set off by rash of margin hikes by the exchanges and brokerages. If that external event hadn’t occurred it’s likely silver would have gone up a lot more before coming down and these people would have missed out on a huge chunk of the move. So unless they had inside information and warned about the massive upcoming margin hikes then they’re full of it. They simply got lucky.

  1321. ...at ease

    Good point on that chart Gary. Looking forward to your report.
    Rest up from your trip and crazy week.
    We all need a rest. 🙂

  1322. jhnewman

    Jayhawk: To tell you the truth, I don’t know. Alf isn’t publishing his stuff on a regular basis the way he used to. The last thing I saw from him was a note he sent Sinclair that Sinclair posted on his site, basically saying: ” Jim, we’re going to hit your $1650 target soon.” That “Alf note” was posted sometime back in February or March, I think. You can use the “search function” on Sinclair’s site if you want to find it.

  1327. Hot Rod

    Gary,

    Sorry to beat a dead horse here but I keep coming back to my question of whether there is more than 1 month left in this run up.

    The consolidation in gold from Oct to March was MASSIVE and stands out big time on a long term chart. This looks like a solid enough foundation to get a really big number top here and also be the bottom of the next step (D wave?).

    It is difficult for me to see, if C wave is still in tact, how by June 3rd we will get a parabolic top in gold unless it just goes f-ing crazy straight up.

    As you have noted in the past, the liquidity that has been pumped in and the moves by the FED have stretched cycles and caused other abnormal things to happen.

    Why not in the gold wave, too?

    You have also said that the events in 2008 were once in multi-generational. On the long term charts (especially in silver) this huge irrational dip, if ignored, keeps a long term trend line in place to where we are now.

    It would be greatly appreciated for folks like me if in your reports (or on the “charts” section) we have commentary on the options in play and the specific targets we are looking for for each. I agree that these are moving targets and commend you for changing as you get more data – something that would help a lot. Examples such as this would be good (illustration only):

    If gold goes below $1425, the C wave is toast and D wave is official.
    If gold gets above $1520, C wave in tact.
    Etc…

  1330. Gary

    HR,
    Without the dollar breaking down hard there isn’t much way to get the big parabolic move this time. Although I think gold will likely make marginal new highs before this is over.

    In the report tomorrow.

  1331. aviat72

    pimaCanyon:

    Since I am selling the call against my core holding, there is no way I am going to go into red. At the worst if GLD had closed above $155 today, I would have sold at $155 or just rolled the options up and over. So when I closed the books last weekend I knew that even if we collapsed, I have a out at $151.

    Gold went near parabolic last Friday so it was not that I was selling into a daily cycle low. I did my trade when GLD was in the high 152s. There were so many warnings, including the miners giving up their Wednesday gains and what not. The expectation that the miners would have a moon-shot was not being realized and to me that meant that it was time to be defensive.

    This is where you as a trader need to judge your risk tolerance. We were expecting a daily cycle correction, so why not hedge in a manner consistent with your “framework of expectations”? (Thank you Doc). I always had the freedom of taking the hedge off early this week if it looked like the correction was done. But the May 1 flash crash in silver sealed the deal for me.

    In hindsight I should have closed the position (i.e. sold Gold and the put) while the put had some premium left after the decline started gaining steam mid-week. But I, like most others, was focussed on catching the intra-day signs of the cycle low :).

    I feel sorry for the AGQ holders. These leveraged ETFs are a beast. If you hold them as a core holding you have to hedge it around key inflection points. There is no way around it.

  1332. jhnewman

    pima: that’s very interesting about commodities. I hadn’t heard that, but it makes sense.

    And as for Elliott Wave, I agree: it’s usually too “backward-looking” and slow to use in real time. By the time you get done arguing with all the Elliott Wavers as to “where you really are” in the EW scheme of things, the opportunity has passed you by, and a new argument starts as to “where are we now”?

    Here’s a link to Alf’s old posts (on Gold-Eagle, not 321 Gold):

    http://www.gold-eagle.com/research/fieldndx.html

    It’ll be very interesting to see what happens on Monday. And I know everyone is waiting breathlessly for Gary’s weekend report.

    By the way, I know I’ve seen you and your avatar on some other site in the last year and a half, I just don’t know which one. I’ve inhabited a number of them, and I bet you have too.

  1334. fat boy

    at ease

    new you’d catch the new me and I hope your account has not had a warp core breach..

    I’m sure I’ll grow fat n gold again in time

    I’m still not reading anything to far adrift from the core cycles and sentiment and bet you next time it will not happen the same way that’s for sure

    good luck with your trades

  1335. ALEX

    CONHEART

    Ouch! I feel badly , because I know you didnt get to actually ‘realize’ your 100% gains. And you seemed to do Many things correctly, especially your Patience after you first got out.

    Now We need to figure out what direction things are going and get back to adding gains to your portfolio. It will happen, and many good traders on here have great ideas…up or down mkts.

    My only advice going fwd…dont let that frustrating loss make you feel that it came in 1 month, evaporated in 1 week…you must go all in and get 100% in 1 month again again immediately.

    I feel that the game has changed a bit here..it may be back to chipping away for a while…Its not possible to go ‘all in’ when mkt(s) direction is in question.

    Best wishes going forward!

  1336. Hot Rod

    Gary,

    Thanks.

    I still think the dollar can break down.

    Another thing I have been meaning to ask you is regarding the target for the 3 year low. We have been focused on the 2008 bottom and breaching it only slightly.

    In looking at a long term chart, each 3 year low has been significantly lower. 2005 was 80, 2008 was 71. Again, with the shenanigans from the FED this time around, why are we only looking at 70 as a bottom? why not 60? Why not a convincing breach of 2008?

  1338. Hot Rod

    Gary,

    On the premium site, it says the 3 year cycle for USD can be between 3 and 3 1/2 years. Bottom was in March 2008 so we are right past 3 years.

    Can’t we go for another 4 months based on this – or does the IT and daily cycles negate it?

  1341. Silverhound

    Hi All,

    I’ve kept away from the forums this week so I didn’t have any distractions. Still catching up on all the posts on the blog.

    For what it’s worth I don’t think the dollar has put in it’s final low just yet. If you look at the UUP chart and the lows in Nov 2009 & Nov 2010 we can see price put in a low on increasing volume with a bounce which then fell into the final low. This final low coincided with positive divergence on the MACD. This says to me the smart money tested to see if there were any sellers left on the final low while accummulating.

    At the moment we are only at the initial low on increased volume. We haven’t seen the test or the divergence on MACD.

    Gold is also yet to complete it’s range up.

    Ok only another 1300 posts before I catch up heh heh

  1342. Beanie

    The bull market in precious metals is over. They’re gonna trade sideways for a few months to few years.

    Next up is the massive technology sector rally, starting Monday.

    Good luck.

  1343. Beanie

    What happened the last few days was exactly what happened to all the popping bubbles, whether it be 2000 tech wreck, or crash of solar a few years ago.

    Silver is on its way to 20.

  1344. samppa_nyman

    Hello, another burned out silver rider. Not just losing wins, but on the minus about 30%. I will definately not sell my coins for a loss damnit. This is supposed to be a bull market, so taking a 30% loss would be just ridiculous. I’m willing to wait.

    But at what price to sell when we get to around 50 dollars the next time is really the tricky part! What does the crystal ball say, how far do we go the next time when 50 dollars comes around? Crash again or way above 50?

  1347. Benjamin

    There’s many great traders on this board.. Some studied O’Neill…

    Now, hindsight is 20/20 but silver had a few distribution days on HUGE volume before the big gap down… in hindsight it would have been prudent to sell..

    Silver was sniffing the cycle top in gold, it was leading gold, distribution started days earlier and went berserk once gold topped… nobody could have anticipated the damage.. the move was incredibly vicious… and yes… manipulation or not, we had been taken…

    I wish I would have noticed it to sell my quite substantial leverage… This whole parabolic move was so incredible to me and nothing like I have ever ever seen… (“May you live in interesting times as the Chinese say”) Learned so much from it. Expensive but the earlier the better.

    Now, what I am wondering is why couldn’t the dollar’s explosive rally on huge volume be also some sort of “shake off” before the big reversal like in silver instead of an explosive rally from the bottom of the 3y cycle low?

    Everybody knew the trend was down… maybe sentiment and leveraged players had to be refreshed before the last leg down… The fundamentals still seem to be in place for a C wave, unless something transpires soon (and not the Greece BS)

    I guess we’ll see in a few days if the coil reverses.. Gold moved pretty convincly up on good volume and against a strong dollar… looked like a genuine bounce.. brought tears to my eyes…

    my $0.02

  1348. Benjamin

    Another thing that I want to add is thank you guys for your option strategies… i never studied options before SMT and learned quite a lot about them recently… my futures positions took much more of a hit than my option positions (more or less double) on comparable contract size.. which is another lesson in itself… and something that seems incredibly valuable! (although futures have their advantages too)

  1349. Silverhound

    All caught up, whew, you guy’s sure know how to pump out some posts when emotions are running high!

    jhnewman I noticed you posts have provided a bit of clarity in all the confusion over the past few days. Please keep posting, I am enjoying your thoughts, probably because they align with my own.

    I’ve come across a few tid bits from Alf as well and he seems to be on the money from what I’ve seen. It’s a shame he doesn’t post more often.

    Cheers

  1350. aries

    From the excellent Gary Dorchs’s Global Money Trend Magazine, may 6 2011:

    “Hindsight is the best sight!.
    But looking back over the past week, the secret warning signal of a major top in Silver was
    flashing late Friday afternoon, on April 29th, just hours before the CME began a series of 3 rapid
    fire increases in Silver margin requirements.

    How Big Traders dumped Silver – On April 29th, there was a most unusual divergence
    between the price of Gold and Silver. Gold has suddenly surged more than $30 /oz, to as high
    as $1,570 /oz, in the final hour of trading on a Friday afternoon, yet during the same time
    period, Silver couldn’t move higher, instead it fell nearly 75-cents /oz to $48.25 /oz.

    On May 2nd, Silver dropped $5 /oz on the opening in Asia, but rallied to $44.25 ahead of the
    NYSE and Comex opening. Suddenly Gold in New York jumped $25 /oz to a re-test its previous
    record high of $1,575 /oz, yet Silver couldn’t approach its record high at $49.15, instead,
    Silver’s mini rally fizzled out at $47.30 /oz. These were early warning signs that the Gold-to-
    Silver ratio had hit rock bottom and it was time to get out of Silver.

    And with Silver vulnerable to a nasty correction, following its parabolic rally, it would drag the
    Gold market lower, amid sales contagion. Traders holding massive long positions in Silver, and
    aiming to sell the white metal without disturbing the price too much, first moved to jig-up the
    Gold market to $1,575, to encourage buying in silver, or at least discourage selling. Once Gold
    reached $1,575 /oz, the smart money started dumping their Silver positions!!”

  1351. Danno

    You guys should not be screwing around with OPTIONS. I have seen options destroy the lives of at least 2 people I know personally. They were just as knowledgeable as anyone on this board. Options were only ever meant to act as a hedge. if you have 1,000 shares of GLD (or own physical gold) and you are getting nervous about a sharp pull back then you buy a few puts. That is how to use options. That is the only appropriate way to use options (apart from selling covered calls). What you people are doing here is straight up gambling and you are going to get burned. Might not be today. Might be 3 years from now, but you are going to lose big. Options always catch up with you in the end. Doesn’t matter if you are doing straddles or strangles either. You will ultimately lose. Beside, there is not reason to buy options apart from protecting a core position. If you can’t trade your way to a million dollars using straight stock then you can’t trade you way to a million dollars using any method, especially not with options.

  1352. Ivan

    Gary,
    You did a very good job during the C wave and I would like to thank you for your perfect strategy to exit Silver and switch to Gold when Silver was close to 50. My self- I sold my Gold at 1572,on the second attempt to move over 1575. later I bought Silver back at 38.05 and sold it at 36 with losses about 10 K ,but I listen your advise and it was good that I exit intime. Anyway the big gain that I ve made durring the C wave cannot be delete. That was an amazing 3 months,because of your smart advices! Thank you once again!!!

  1355. Poly

    Gary,

    You have made it very clear that this C-wave blowoff is ALL about the dollar’s move into a 3yr low. You say there is not enough time to extend this cycle, but this cycle has often run early and late before.

    I have heard you numerous times tie in the end of QE2 with the 3yr cycle low. Is it possible that if you ignore any correlation between QE2 and the 3yr low, that there is nothing stopping the 3yr from finding it’s low anytime between now and the fall? Clearly the dollar rally is putting in a new IT cycle, what is stopping it from quickly failing?

    There is a currency war out there and the US economy is clearly turning down again. I just don’t see for a second Bernanke sitting back and allowing the dollar to appreciate considerably out of a 3yr cycle low, at least not without a fight.

  1356. DD_Ing

    Poly –

    Do you plan to buy some OTM puts on GLD once the D-wave is upon us? I have done well in the past with “controlled” amount of OTM puts (not extreme OTM but a few $$s out) and wonder if others also plan to utilize this strategy. Thanks.

  1358. Gary

    Danno,
    Options can and often do destroy accounts if they are used improperly for leverage.

    Just substituting DITM options for shares is an excellent way to improve returns and control risk.

  1360. Gary

    Poly,
    Anything is possible but it would require QE3 to drive it. I’m not at all convinced that the Fed would be politically able to run another round of money printing, at least not until we got a very serious sell off in the market. They certainly wouldn’t announce it as such.

  1361. TZ(8155)

    COOLKEVS,

    May I make a request. For months now you have been posting “Depew” stuff. We have just passed through one of the most violent and testing periods seen so far in the precious metals market.

    I would like you to post SPECIFICALLY whatever buys and or sells that guys disclosed in real time (and not “we see the tendencey of a J type setup extending over the next 5 weeks depending on the extension of the turn point number 2”).

    If he has NO specific/actual buys or sells then I kindly ask that you stop posting his stuff cause it always seemed useless anyway. If he did have buys or sells then we can finally evalute them clearly.

    Is that fair?
    If someone else saw value in that stuff, then fine I guess keep it coming, but I’d like to see him put up or shut up.

  1362. TZ(8155)

    By the way, I’m not talking about something astrological-like which *maybe* can be “interpreted” as a buy or sell *depending* on the words he used – and is therefore covered in either direction. I’m talking about all that mumbo jumbo actually resulting in *any* statements whatsoever saying “SELL SILVER OR GOLD TODAY” in the last two weeks.

    Did that occur? When?

  1363. TZ(8155)

    Weekend listening. Good stuff:

    Ben Davies on this week’s events:

    http://www.kingworldnews{DOTHERE]com/kingworldnews/Broadcast/Entries/2011/5/5_Ben_Davies.html

    Bob Hoye say’s that is *IT*.
    Bull market in everything is over. Liquidity collapse down is back on and his “Peak Momentum” forecaster has completed:

    talkdigitalnetwork{DOTHERE]com/2011/05/silver-bull-takes-profits/

    (Hoye called the 2008 crash correctly so he seems good at determining when these liquidity crunches re-appear. Since 2008 he has had some trouble calling for declines similar, in my opinion, to the reasons Doc and Gary have had in that the large and unusual Fed printing have floated and extended everything beyond all past measures.)

  1364. ALEX

    GARY

    I have a question that is sincere and not being a jerk or insinuating anything in anyway.

    I have been confused in your past reports as to something that you have said repeatedly, and was wondering if you could explain.

    Sometimes someone points out that ‘2 yrs ago this happened, so I think this will happen next” on the blog…

    At times you will reply, ” Folks, you’ve got to stop projecting the past into the future” or “you need to stop extrapolating what happened in the and thinking its going to happen again”… something to that idea.

    Yet, many times you do go back and say also in your reports that ” The last 3 yr dollar low did this, so I think we can expect this.”

    I agree with the idea that history often repeats itself, if not exactly, at least it mimics it. So whats the difference?

    Are you familiar with or remember times that this has happened?? And can you clarify the differences. Thank you

  1365. Danno

    Gary,

    You can blow your account out (go to complete zero) playing with DITM options. I have seen it happen repeatedly. This rarely happens with plain stock.

  1366. Gary

    Sure, many times people point out a particular pattern that happened in 06 or 08 and then try to extrapolate the same pattern to today.

    I don’t really think that kind of pattern matching is going to do us much good.

    I do think gold will continue to move in an ABCD cycle, at least until we get to the bubble phase. I think that because the ABCD cycle is a reflection of human nature and the thin nature of the precious metal markets.

    I think tops and bottoms will get tested because trend followers always try to re-establish big trends.

    I think for the most part the bigger the consolidation the larger the rallies tend to be and this will continue to be the case.

    I think cycles will continue to work (although they are stretching more often because of QE) because cycles are just a way to quantify human emotions. As far as I can tell those have not changed in the last 5000 years.

    I think regression to the mean will continue to work and the further anything stretches from the mean the more violently it will regress once the pressure is released. (The Fed’s monetary policy is exacerbating this principle.)

    What I don’t think will work is to say that since gold moved x% above the 200 DMA in `06 and the move lasted x days with a dip two weeks into the rally that it will do the same thing in 2011.

    So in general there are some tendencies that are universal in the market because we are human and we can’t change our nature. But to expect those tendencies to play out in exactly the same way every time is an endeavor that gives our human minds a sense of comfort but really has no edge in making money in the markets.

  1367. Gary

    Danno,
    Only if you are leveraged. If you only substitue options for shares then you are controling risk and improving return on invested cash.

    Ex. Lets say you wanted to buy share of SLW and you were willing to risk 10% of your capital on the purchase. Lets just say 10% of your capital would buy you 100 shares. Well you could pay $3500 for those 100 shares or you could buy 3 June 32 call options for just a little over $1500 and still control roughly the same amount of shares but only have at risk 4% of your total capital and presumably you would be able to spot if you were wrong and exit without losing all $1500.

    In reality you probably have at risk about 2-3% of your total capital.

  1368. jhnewman

    SILVERHOUND: Thanks for the kind remarks. It’s a real pleasure to be in “Gary’s Chat Room” with all these knowledgeable people. There’s a great deal of sharing going on here, and that’s a wonderful thing to see.

  1369. RacerX

    Frustrating week. I can’t believe I (we) gave back most of the profits.. and that was actually the “C” wave.

    Fwiw, I think the CME has broken SLV. Think we see a relief rally, then more downward thrust.

    Will be using Gary’s reports as a guide. Thanks Gary.. Unfortunately we missed this one.

    A lesson lurned might be not to over-concentrate on one market (ie: SLV). Whether or not one wants to believe it’s “manipulated” or not, in hindsight it was too much of a position risk.

    If there’s anything I’m most upset at is the CME–and co-conspirators such as one of my brokerages (Thinkorswim) who were complicit in the relentless margin hikes. Yes the argument can be made that ToS is just protecting itself and ultimately its’ customers.. but the multiple, repeated margin hikes I believe are what cracked the market.

  1370. ALEX

    OK Gary

    Thanks , that cleared it up a lot. I just didnt know why you made one statement , and then at other times pointed out the past occurrences.

    I tend to agree with just about EVERYTHING that you said –
    (except the ‘no edge’ part 🙂

    -because I also believe that it is human nature and emotions that tend to cause repeated actions in the market. Thus some re-occurring patterns. Panic selling 50 yrs ago is the same ’emotion’ as panic selling today. Euphoric buying 50yrs ago…same emotion today ( same final results today too), etc.

    (I also agree , so many % above 200sma doesnt mean same % above today – or this many days it went up, so now this many days too,etc )

    There are , as you mentioned due to other forces like Qe1 and Qe2 , times when things stretch, but back to the means…I agree.

    Thanks.

  1371. ALEX

    In Fact, your answer kind of explained to me, one after the other , what your ‘trading tool box” consists of.

    I know cycles are #1 with you, and I have gained a lot of confidence with your cycles too since last August…at the IT low, I am very confident with ‘TIME’.

    I am also glad to understand that you have all those other minor factors (tools) close by too–to smooth out the rough edges. A hammer and some nails alone does not a carpenter make 😉

  1372. jhnewman

    TZ(8155): THANKS very much for posting that stuff. I haven’t looked at it yet, but I know Hoye in particular is VERY good at this stuff (though I’ve seen him blow some big calls too).

    He did get pretty much everything right in the 2007-2008 crash: what would happen to stocks, bonds, the dollar and gold and the PM sector.

  1373. Dan

    Gary,

    Can you please let us all know how you calculate how “further anything stretches from the mean” because based on that, you figure out “the more violently it will regress once the pressure is released.”

    I am curious because most of the experienced writers in the PM community use the 200dmva as barometer but you have on many occasions deemed that an unacceptable method of calculating how far the move has stretched from the mean. So can you please advise what statistics you use to extrapolate your definition of “how far something is stretched from the mean.”

  1374. Silverhound

    If anybody wants to see some gaps in a chart take a look at the gold:silver ratio chart. Ran from below 32 all the way back up to test 44.

  1377. E

    DD_ing, great article. even martin armstrong mentioned in one of his paper that in june gold can go to 1250 and from there it will go parabolic to 5000/-

  1379. funmike

    By Sarah Turner, MarketWatch

    SYDNEY (MarketWatch) — Inflation data is due out next week from China and a strong figure will likely prompt expectations of further policy tightening measures.

    Wednesday sees the release of inflation figures for April, and economists broadly expect Chinese consumer inflation to show a rise of between 5.1% and 5.2% compared to a year ago, according to a Dow Jones

    Chinese inflation data will the focus in Asia next week, with figures due out Wednesday. Companies reporting earnings include Japanese automakers Toyota and Nissan. MarketWatch’s Sarah Turner reports.

    That would follow a 5.4% reading for consumer inflation in March, which was well above the official four-year target of 4%. Wholesale prices were up 7.4% in March compared to a year ago.

    China has been fighting inflation by raising interest rates and reserve requirement ratios for banks, and a strong figure on Wednesday may well spur more such moves.

    http://www.marketwatch.com/story/chinese-inflation-data-on-tap-for-asia-2011-05-07?link=MW_latest_news

  1380. funmike

    Kevin Kerr, editor of Kerr Commodities Watch, said the fund outflows shouldn’t shock anyone.

    “The funds were heavily into the metals and with these markets going parabolic once the exchange raised the margins on silver so dramatically, it was like opening a dam that needed to let off some pressure — and boy did it ever,” he said.

    “Funds will begin buying again at cheaper levels and the pattern will repeat,” Kerr said.

    http://www.marketwatch.com/story/investors-pull-money-from-commodity-sector-funds-2011-05-06

  1381. Gary

    Dan,
    There is no way to exactly calculate where a parabola will drop to. But if gold retraces 50% of it’s C-wave gains (every C-wave so far has retraced 62% or more) it would go back to about $1250. I doubt silver will hold the 200 DMA if gold is considerably below it’s 200.

  1382. DD_Ing

    E –

    Interesting….I can get my head around the 1250 part in June…however does he mention the timing on the 5000 projection. I feel this is still the bubble phase several years out as Gary mentions, approx 2017?

  1384. E

    DD_ing

    his papers are really good, he actually mentioned week of 04/25-05/02 to be very important, and boom we got the correction, he also mentions that we need to get gold low in the week of june 13th to get super rally.

  1385. Gary

    RacerX,
    You are probably kidding yourself if you think you will or would be able to diversify away from the next risk. In real time there is no way one could willing choose to underperform by exiting out of silver and then sit on the sidelines and watch everyone else get rich.

    We always want what the other guy has. It’s what drove the housing bubble. Everyone saw their neighbor getting rich and they wanted a piece of the pie.

    Well everyone saw silver investors getting rich and they wanted a piece of that pie too. If you had been able to diversify away risk you would have. So don’t beat yourself up because your nature is the same as every other human on the planet.

  1387. Silverhound

    TrendFriend

    For your benefit. Here is a 30 year chart of the Gold / Silver ratio and a more recent chart showing the last few months. It’s not my chart but it’s the best I can get up on here. You can see that the 44~45 area is significant. It’s taken over 25 years for the ratio to fall below this level. The ratio recently touched 32 which was the low back in 1983, before retreating last week. We are now backtesting the 44 support and resistance area. Judging by your previous post you appear to have “some” ability so I’ll let you work out the significance of all this.

    30 Year Chart

    2011 Chart

    Now as far as my “obscure TA” goes, I’ve posted probably 4 charts on this blog. I thought they were all pretty self explanatory. What part didn’t you understand?

  1388. pimaCanyon

    aviat72,

    Thanks! I see now–you were selling covered calls to finance the puts. I missed that point in your post. It’s selling naked calls that would make me nervous! Great plan, glad it worked well for you. Something for me to consider for future IT tops (and even daily cycle tops if we get late in the timing band). Some time ago I did consider selling covered calls against my GLD shares, but hadn’t considered buying put protection with the proceeds.

  1389. Gary

    A quick correction. In the above comment I said one could buy 3 option contracts for $1500 and control the same amount of shares.

    I should have said one could buy 1 call option for $533 and control the same amount of shares.

  1390. DD_Ing

    E –

    Interesting, I guess maybe we watch for a rise in Gold the next days/weeks coming out of the cycle low, then start building some short position with slightly OTM calls (controlled amount) going into late-May and June. If his prediction plays out that could be quite profitable. Of course as Gary mentions it all hinges on the dollar – if $ still falling at that point would not enter short position.

  1391. pimaCanyon

    jhnewman,

    I used to post very occasionally at futia’s site. For a while (end of 2008 and early 2009), I posted at Atilla’s site (until I got banned 🙂 I’ve also posted occasionally at Obama Girl’s site. There are probably a couple of others that I might have made just a few posts but can’t think of them now.

    But since signing up for Gary’s premium service last summer, I rarely look at those other sites, much less post there.

    This group is the best group I’ve come across. Not only do we have some excellent traders here and their posts are especially helpful, but we also have Gary!

  1392. jhnewman

    Silverhound: I was looking at that same exact thing (the gold/silver ratio) yesterday, and comparing it to the 2006 C-wave “end events”. I still have to do the same for the 2008 C-wave “end events”, and see if I can reap any JUSTIFIED insights.

  1393. jhnewman

    pima: it wasn’t any of those sites you mentioned — but no matter. And I agree with you very much about this site. Great place!

  1394. ALEX

    Gary

    just curious-I’m leaving tonight to be with friends Sunday . Will your wkend report be today or tomorrow /

    ( just asking so I wont keep checking all day, I’ll just plan on reading it Monday)

  1398. Silverhound

    jh

    We’d be interested to hear what you come up with 🙂

    I know some traders who shorted silver at the end of last year thinking it was the top because the ratio was approaching 45. They only got a couple of bucks scalp out of it.

  1402. Elaine

    For a little weekend entertainment while we are waiting for Monday, visit

    econstories.tv

    for a really awesome video about Keynes and Hayek done to rap music.

  1403. Hot Rod

    Gary,

    Great report as always.

    I know you may think it isn’t likely, but another scenario which would be great if you could outline a strategy for is if we don’t test the 1460 low again and from here make it back up past 1520 (not necessarilly in 1 day of course).

    Is the plan the same, but with just waiting until a trade or close above 1520?

    Lastly, what about a highly unlikely scenario that we gap down in the dollar sunday night and it’s off to the races in the metals Sunday night and into Monday at the open. In other words we immediately do a 180 and it’s back to the situation from a week ago.

    I know, I know. I am an optimist. But, I like to be prepared for every scenario.

  1404. Gary

    I really doubt that kind of powerful rally in the dollar is going to just reverse on Monday.

    If gold just continues to climb higher without a retest of the lows it will almost surely be a bear flag and we will exit at some point (hopefully before getting caught when the bear flag breaks down.)

  1405. Gary

    Alright I’m off to the gym. I’ll be back to answer questions later as I expect there will be many 🙂

  1406. DD_Ing

    Gary –
    Great report as always. Looking to recover from some of the damage last week but I think the key is keeping a clear head and your analysis always allows me to keep things in perspective. Also trying to get it back with a home run doesn’t work, so if I can hit a series of singles I will be in good shape. Thanks again.

  1408. KAL

    Hey guys. It was a tough week. I’d like to give myself a new set of trading rules for the future. Alex, DG, SB, Pima, and other guys, would you mind sharing your capital-protection strategies if you get a chance? What I’m looking for is a kind of 10-commandments type of brief overview, nothing exhaustive. Thanks! If you’d prefer email, I can share one if necessary.

  1409. ALEX

    That was one of my favorite reports. thorough and well thought out. Great job Gary.

    It is very similar to what I was thinking (someone on the blog mentioned yesterday about previous double bottom lows in the dollar (Thank you who ever you are) and so with that..I felt a false break of gold just below the 50sma will shake out the rest ( everyones a bit shaky) while the current dollar rally weakens.

    I agree with the idea that we have 1 more shot at making $$ on the long side before this D-Wave really rolls in.

    Great report, it was Much Clearer ‘seeing’ it all spelled out on one page, than in the 7 different windows (tabs) I had open 🙂 just

  1410. ALEX

    KAL

    I actually have my ’20 rules never to break’ written down in a notebook that I have written for myself from trading experiences over the past many yrs ( This and Docs was my 1st sub/blog to share things, prior to this I was a ‘lone trader’ after just getting bad advice and ‘tips’ for 2 yrs).

    I went to reading books on Livermore, O’Neil, etc and developed my own way.Learned a lot the hard way 🙂

    If you are still here for 10 more minutes and want to post your email, you can, and then delete that post if you want after I get it.

    I will email you my personal ‘rules’ ( I broke 1 this week!!!…but still went to 50% in time 🙂

    Live & Learn 🙂

  1411. emilone

    Gary,
    Thanks for your report!

    Were should be the silver target (45-47 $ maybe higher), if we see gold 1600+ and a slightly deeper usd index.

    I am full invested in AGQ.

    Best regards from Switzerland,
    Emilone

  1412. pimaCanyon

    Danno,

    Hey, don’t “should on” us, okay? 😉

    What you say about options probably does apply to most people reading this board. However, there are certainly other strategies than just buying puts for protection that a trader can use to make money and/or hedge. Some of these strategies are spreads and yes, those are somewhat sophisticated. But even those can be learned.

    My recommendation to anyone new to options (my turn to “should on” the newbies 🙂 would be first to heed Danno’s warning. You can get badly burned with options. You can lose every cent you put into an option position.

    But if you want to explore the option world, first read about them. And pay attention to posts on this board by Poly and Wes and aviat72 and others. Also, read what Gary has to say about options.

    After you have studied up on them, start SMALL. Continue investing most of your portfolio in ways we have been, like SLV, GLD, and the miners, and use only a small part of your capital for an options position.

    Danno’s right, you can blow up your account with options. So be careful out there, start small, stay small for a while, learn from experience. And remember what Gary has said over and over about leverage: Heavy leverage will eventually blow up your account. You CAN use options for leverage, so be sure you calculate how leveraged you really are when you take an options position.

  1413. ALEX

    EMILONE

    Gary can answer too, but I think he just left, so may I add…

    Put silver on a 1 yr chart with a 20sma. It held that for many bounces as support. I am thinking MAYBE a retest of that area (which could only be 42ish by then, and I am done with Silver.

  1414. DG

    Kal: I don’t have specific rules but have some things burned into my brain: (Note that some are trading rules for my approach, but they may be useful to you as well).

    1. Do not average down. If you are in the hole in a position the market may be telling you you are wrong. If you choose to violate this you do it once and small, with a tight stop on the add-on

    2. Look down instead of up, especially If you are doing well. What is your risk not how much can you make. People get more confident and reckless as they pile up gains. That’s the best way to give them back

    3. If you are losing play smaller and smaller until you get back in tune with the markets.

    4. The markets can do anything. We don’t “have to” hit 50. The top doesn’t “have to” come during NYSE hours. These kind of beliefs cause trouble because holding them increases the chance that other contradictory clues will be missed. The market can do any damn thing it pleases! It’s like skiing: mind on the goal and tremendous commitment to what you are doing, but moment-by-moment flexibility as well. Imagine the “impossible.”

    Note: Some of these assume you have gotten basic control of your emotions. If you haven’t, THAT is the place to start!

    Just a few ideas. My other highest recommendation is to read Market Wizards by Schwager.

    Good luck.

  1417. pimaCanyon

    DG,

    Thanks for your rules.

    Would you ever violate rule number 1? For example, we’re expecting an IT low in gold, we take a partial position, it goes lower and is now late in the timing band. Would you buy more? Seems like a lot of folks here do just that and actually plan to get into their position that way, 1/4 now, 1/4 if it goes lower, 1/2 on swing low, etc.

  1418. MrMiyagi

    It is my take that psychologically small buyers are toast.
    I don’t know what percentage of the market is driven by the small buyer, I’m guessing maybe 8-10%, but those are the ones that make a lot of noise.
    While silver went to 50 once, dropped, went again and dropped once more, gold’s climb has been steadier aside from practically the last day and a half before the downturn. I think that it will do what silver did, test the new high once more, and if it can breach it continue up to Gary’s numbers.
    If this happens, and only if this happens, then silver can possibly go up to 43$-45$ range.
    The other scenario is that come Monday-Tuesday, US$ continues up and gold/silver drop. The miners will probably mirror either of these moves.
    So, what can a person do? I still have July GLD and SLV calls and I think that a protective put is called for here, OTM, a long D drop protector.
    That’s my thinking, grain of salt applies.

  1419. DG

    Not my way. I like to add on the way up. I’d rather sacrifice the 1% or so, kind of like waiting for the swing low means you are getting in on strength. I sometimes do add on weakness but then it is definitely small. For my bottom-picking style, if I am in the hole it means my interpretation that it was the bottom was wrong…so why is it right now? If the item drops just a little no reason to add, and if it drops a bunch I was wrong in calling it the bottom.

    That all said, i do violate the rules, but it is done consciously, smaller, and with tight stops.

  1423. pimaCanyon

    Mr M,

    I believe you’re right, especially in the silver market. Most small specs are out of that market, on margin calls and on losses. If they were the drivers of the quick runup, then that runup is not likely to begin again any time soon.

  1424. ALEX

    EAMONN

    Those were DG’s great rules 🙂

    If you want to post your email in the next 5 minutes and then delete it , I can send mine later…(I only have 5 mins before my wife kills me, we are going out 🙂

  1426. Peter

    i’m thinking about Gs report … with the scare Silver put into the market, I can only see gold going up in a tight orderly fashion. I dont see a parabolic move with a blow off top in gold anymore. Having said that, if there is no parabolic move, at best an orderly one, can we really expect a 50% decline for the DWave …

  1428. ALEX

    DG said

    “My other highest recommendation is to read Market Wizards by Schwager.”

    I like that book a lot. Have you read “Legendary Traders” by John Boik?

    Thats a good read also. I LOVED it.

    OK, out for good now ( Dg, you were right…I never say goodbye and leave on that 1st good bye! Maybe that’ll be my “Rule # 21”

    “Say it and Mean it 🙂

  1429. Steven

    DG,

    What do you think the prospects are for silver right now? Do you see a bounce and is there a logical level for a potential bounce? I still have some AGQ and trying to decide what to do with it.

    Anyone else feel free to chime in!

  1431. KAL

    Thanks Alex and DG. I appreciate you weighing in. Sorry I missed your post, Alex. When we’re both back on at another time, I will post that email and remove when you get it. DG, I certainly broke some of your big rules. I focused on the up, not the down. Ususally, I focus only on the down. In short, I had too much faith in Gary and should have been more skeptical, only for risk purposes. I have my emotions in check I believe, maybe too much in this case. I tend to not listen to my emotions at all and get in trouble. Ask my wife about that one someday!

  1432. KAL

    By “too much faith in Gary” I mean I should have owned my strategy fully and did not. Nothing against Gary! I should have been more clear.

  1433. DG

    Kal: There’s a difference between “emotions” and “feeling.” Feeling is the seat of intuition and is invaluable in trading. For example, “I could just tell it was going up.” Emotion is when your desires get in the way resulting in a distorted picture of reality (We see what we want to see.) You can never have your emotions too much in check, but if your feelings are too much in check your are cutting off a part of the decision making process. It is difficult to tell the difference and mistakes will be made but one can practice and come to identify which is which, and quarantine the emotional part (panicking out, greed, etc.)

    Steven: I have not particular thoughts on AGQ. If it bounces I’d just lighten up some each 5 points it rallies and switch to DGP if you like. I have to say it felt great getting out entirely and clearing my head fresh.

  1434. Bosco

    Love the weekend report! Appreciate Gary lays out 3 options and discuss pros and cons of each. This way, I can apply my judgement and select the best-fit option to my situation.

    Encourage Gary to continue this format.

    Also appreciate Gary to say “Now we have to get back to the business of making money.” Yes, this is what matter to us.

  1438. funmike

    I still have all my agq and am wondering what to do. 1. Sell now and convert to gold 2. Try and ride it up some before switching to gold if the market moves that way 3. Place some kind of stop on it to prevent another major surprise. The trouble with a stop is that is could take me out at a loss here just before it reverses (assuming it does reverse). Because the thinking is that we are close to a cycle low.

  1439. catbird

    DG,

    You mentioned your rule of thumb is not to average down if you take a position and then it drops, but you also say you WILL however add if your initial position rises.

    My question: what is the smart way to add more capital as your initial purchase rises?

    A confession: When Gary trimmed his AGQ a few weeks back (seems like a lifetime ago) I over-trimmed. Little did I know that I should have STAYED over-trimmed in light of this past week’s bloodbath….ha ha.

    Anyway, when the PMs started coming back, and when Gary called the runaway move, I “added into strength” and added more AGQ than I should have. Cost me this week. (I’m fine, I just gave away WAY too much profit from August-April)

    So how do you go about adding into a winning position while being smart about it?

  1440. KAL

    DG, I have a “feeling” that my comment here is the kind of feeling you’re talking about:

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

    APRIL 29, 2011 11:05 AM

    At that point, I had a feeling things were going astray and was thinking about switching to DGP. However, I stuck to the game plan. AGQ was in the 350’s and 360’s that day. Lesson learned. Glad to have the feeling to be able to listen to it next time.

  1441. Eamonn

    KAL, I had that “feeling”/sense too, so you are not alone. I was too inexperienced to act on it though. Silver stopped following gold higher, and I was troubled by it. There were other signs too, but I was thinking about that a lot

  1442. DG

    Catbird: For me, I need to see something else bullish to add. For example, the items drops to support, pulls back on light volume for two days or so, there’s another catalyst (like gold drops but the miners are up), etc. Then I add. Patience helps. Then if we rally, the add-on usually had a break even stop (if I bought at support and the support gives way…?) Add less on the way up. That is, if you went in with 50% initially, and 20% or so as we go up so your average cost doesn’t rise too much. I bought AGQ several times but the highest was about 160 (except for some trading share I would fool with).

    Kal: Could be, but it is very hard to separate out what is emotion and what is feeling. I do this constantly in my non-trading life with decision making and so have come to be pretty good at telling which is which. It also relates to my lecturing work about how to quiet the emotions enough so you can get clear-minded. It is only when you are clear-minded that those feelings are trustworthy. Not easy to be clear-minded when the world is beating you senseless but that’s just when you need it!

  1443. Gallo

    Gary,

    Why is your cycle analysis not taking into consideration the possibility of the dollar holding off on a move below 70 until either in the 4th quarter of this or the first quarter of next year at which point gold should move well into new highs?

  1444. hkc

    Well, there was one thing I did not see anyone mentioned: on Mon morning (last week), there was one point in time that AGQ recovered to only loosing about 3%, I thought about getting out then, especially after a long night watching Silver plummeted in Asia. I did not see any actions from the experienced traders, so just shrugged it off to the Silver volatility.

    For many of us who are novice on the board, I would really appreciate if we can discuss all the market moves as they occurred, and maybe have different game plans proposed. I for one did not understand the implication of margin increase, or decay nature of double ETF, etc…

    I believe we have some of the best experienced mind on this blog! If we have a plan of action, I am sure we can find a way to avoid this in the future, even in real time!

    Thanks to all!

  1447. New York

    Hubert, I swap my silver for gold and play the ratio. Physical is a long term hold. I wouldn’t get cute with it if you got it at $27 thats not bad but typically the ratio will move up sharply.

    In fact, in hind sight I overlooked that in my trade strategy because I got greedy. I started to front run the $50 silver price and scaled out of my AGQ nicely. I had about 185 shares of AGQ and sold 50 at 290, another 50 at 300 and was going to move another 35 at 360 but froze because I was overconfident at the prospect of the upside. Luckily I had stop loss that got hit and I got out at 340.

    The plan was to play the gold:silver ratio and when it approached 32-33 the plan was to convert the remaining AGQ to DGP.

    when AGQ went higher I felt like I missed some upside and so when we got a draw down I let prospect of the upside take me off track. I ended up getting back in to AGQ a little over 300 with another 50 shares which brought my remaining 50 shares coat basis up from about 190 to 250 and rode that all the way down.

    I pretty much blew out 75% of my unrealized profits. Now I’m like a deer in headlights with my last 50 shares of AGQ. I missed my chance to stop the bleeding Friday when it hit 198. I learned a (more then one) valuable lesson.

    I had hit my goal and rather then stick to the plan I broke down in real time as I let greed take over. Lesson learned and my capital is preserved with a small profit to trade another day.

    I am holding physical gold through this though.

  1448. Gary

    Kal,
    I can virtually guarantee that the next time when you get that “feeling” the the bull will surprise you and you will be left sitting in the dust wondering how in the hell you could have made such a catastrophic mistake.

    Folks when something like this happens we all have a tendency to think there was some clue we missed or some strategy that would have saved us from making such a horrible mistake.

    But the simple fact is that if we could have foreseen it then we would have.

    The next time isn’t going to be the same as this time. The next black swan will come from a completely unseen direction and then we will go through this all over again trying to figure out a way to avoid the unavoidable.

    I’ve found it best just to accept that every once in a while the market is going to catch me. It doesn’t happen very often but when it does I just accept it, avoid getting caught in the whole shoulda, woulda, coulda, nonsense, clear my head and then get back to trying to make money.

    I suggest everyone do the same.

    The big risk now is that you become gun shy and can’t hold positions. That will be a catastrophic mistake especially when we get to the final bubble phase of this bull. During that phase gold can and probably will rise 2-300% in a year. Silver probably several times that.

    If you exit after gold has only rallied 20-30% you will miss the entire final rally.

  1449. aklaunch

    Thats what happened to me to HKC. I still down understand the whole margin thing but i am going to research it hard this evening as i have lots of time to learn about it. As far as the losses this week i can really say it has motivated me to learn more about the dynamics of the markets. I am going to be very ambitious in the long run here trying to learn as much as Gary knows about these things. Glad to have the help of the board here to.

    What eases my mind is that we are in a long term bull market here. My plan is to follow Gary and learn as much as i can and be a multi millionaire in the next 10 years.

    We all have a big bull market in front of us. I can only imagine how well we are going to do in the future. We all have learned a ton here this week and it is only going to make us much stronger in the long run.

    I am dealing with the try to make it all back quick syndrome. I think i am starting to get clear headed again. It always feels that there is this time restriction to make it rich but i think we still have the rest of the C wave and then a ton of money to be made on the decline of the C wave. Then the A wave up and down to. How lucky could we be to have a plan in action for the net 3-6 years!!!!

    That i am very thankful for. I have no doubt we will all be financially free by the next decade. That or we will be at world war and this whole years action would seem quite meaningless anyway.

    I am proud to have such a good group of people to converse with on this site.

  1450. Gary

    Gallo,
    One more intermediate cycle down is a possibility but I think it would require QE3. I’m not very confident the Fed can politically pull off another round of money printing unless the markets are tanking.

    So all in all the timing fits better in the spring, sentiment hit multi year lows and we have what looks like an intermediate low starting to form.

    Right or wrong I’m assuming this is the three year cycle low forming.

  1451. T

    What do yall suggest for someone who was not able to trade out of AGQ this week? I was non-computer accessible and you can only imagine how I felt when I checked friday’s closing price.

  1452. T

    Sorry, not sure if this posted. Any recommendations for someone who was unable to trade out of their AGQ this week? Wait for a bounce? Sell first thing Monday and run for the hills?

  1453. Brian

    In another year or 3, this event won’t make a blip on the silver chart.

    People here will be reminiscing about the pullback in 2011 at 50 that caught everybody off guard but them!

  1454. Alex in Montana

    JHNEWMAN – ALF FIELD

    On January 18,2011 Alf Field said after a lot of calculations on jsminset:

    “This concludes the end of Intermediate wave (1) of Major (3).
    The decline to follow the peak of Wave (1), (the peak being somewhere between $1558 and $1642), should be of a magnitude of between 16% to22%.”

    “I think we can conclude that your $1,650 forecast will clome close to achievement during the up-move which should start this week”.

    So, a) He nailed the January bottom, b)using Alf Field’s math and a current top of $1,575, then we decline to $1,228 to $1,323.

    Gary believes we may still make the low $1,600 level so Filed’s numbers for a bottom in gold price would only be slightly higher.

  1455. aklaunch

    T.

    The general consensus is that AGQ will go down a bit more and then be a a good producer after that as we finalize the C wave. Also the general consensus is we are all finished with AGQ for the time being. Gold seems cooler to the touch for burned paws:)

  1456. T

    Well I guess that leaves either sell at a loss and switch to gold or hang on and grit my teeth with AGQ. Tough call. Thanks for the response AK.

  1457. James

    Alex in Montana, you quoted Alf Field as saying “So, a) He nailed the January bottom, b)using Alf Field’s math and a current top of $1,575, then we decline to $1,228 to $1,323.”

    So to be clear, would Alf Field’s projection mean we have already topped and are now heading down?

  1458. Alex in Montana

    Ross Clark, the technical analyst at CIBC Wood Gundy has a low in gold of about the same level as Alf Field: $1,350 or so.

    Clark also believes silver’s low will be between $22.40 to $26.40, a level Gary has mentioned.

    More importantly, he sees both bottoming in a total of 6 to 8 weeks off the top: June 13 to 24th.

    Those levels if hit, will create quite a bottom in my estimtion and wash out a lot of newcomers to the precious metals arena, creating good opportunities for us all.

    Thoughts?

  1459. Alex in Montana

    James,

    I have not seen any recent info from Field, but keep his forecasts when I see them.

    Since he saw a top between 1558 and 1642 I am just assuming we got into his price range.

    Don’t know if he has proclaimed a top.

    I was just trying to figure out a logical price to buy back in. I’m 100% cash so trying to figure a bottom in both price and time.

    If I see something further from Alf Field, I’m sure I, jhnewman or someone else will post that info.

  1460. James

    A in M, thanks for the clarification. I envy your 100% cash position. I front-ran Gary and sold about 2/3 of my AGQ on the Thursday and Friday before the big drop started, moving part of the funds to DGP. However, I bought some AGQ back during the big drop – oops. I’ve still preserved the majority of the substantial gains achieved since following Gary’s lead some months ago, but am now wondering whether to sell my current holdings and wait til June for things to sort out.

    This is a great discussion forum. Thanks for your input.

  1461. Steven

    Did the last of the silver margin increases end of Friday or will there be another one that comes into play on Monday?

  1462. W

    Gary
    Read the response by the “concenses” to T about what to do for those who did not exit all AGQ, but could you address that in a post or a report? Sorry if you covered this somewhere, I’ve not been through all 1500 post in this thread. Guess the basic question is what is the guidance for those who are not on the “alternate strategy” yet?

  1463. Manian

    Gary,
    If the dollar is in the process of bottoming, will you be considering any shorts, e.g., oil, tech, S&P, when you think the bottom is in?

  1464. kmisak

    I am also still in HZU/AGQ, to the tune of 25% of my portfolio. I would advise to wait it out; although it may go down from here, it will be nothing like last week. All the desperados jumped. Only guys and gals like us (the stubborn ones? the stupid ones?)are still ahnging on; all the other shares are in newer, stronger hands.

    I will wait for the bounce. If the c-wave is still on the table, I am going to ride siver – both HZU and my miners – the bounce will be greater than gold’s, but scarier, too! Imagine yourself on the tilt-a-whirl…

  1467. TZ(8155)

    May you live in interesting times.

    online.wsj{DOTHERE]com/article/SB10001424052748703859304576307380172271272.html

    Silver now and 1980

  1468. Steven

    Do people think the margin hike on Monday is already priced in? This one has been expected for a number of days apparently and silver did go up on Friday. Thoughts are appreciated very much.

  1469. Steven

    Do people think the margin hike on Monday is already priced in? This one has been expected for a number of days apparently and silver did go up on Friday. Thoughts are appreciated very much.

  1471. Layne

    All,
    I started following SMT at the end of February of this year and invested fully at that time. It was so easy to do exactly what Gary suggested…the plan was a real winner…positive feedback form everyone here and from my account balance. I became lazy, Gary could do no wrong.
    I am another that did not take the alternate strategy, still have my
    AGQ. It did not click for me last Monday that I should engage my brain and not leave it all up to Gary, so I rode it down all week. It was so easy to tell myself “it can not go lower than this”. On Thursday, I added cash to my account to pay down most of the margin balance.
    I have been monitoring this blog and the premium site pretty closely all week hoping for some guidance from Gary and feel a bit like a step-child. Am I the only one that fell in this trap? Just for the record, I am angry only at myself.

  1472. TZ(8155)

    STEVEN,

    Read the link, you have to put a period in the URL.

    If I post a working URL this piece o crab blogger system will lock my account as spam.

    PS: everybody should read that link. Not a bad piece for mainstream media.

  1473. Steven

    Layne,

    You are not alone. I did the same thing. I kept saying why not sell as we are so close to $50?! I only blame myself for not listening to my strong gut instinct. I cannot imagine how much money I lost this week alone. More than I have made in my entire life.

    The odd thing is that silver went up towards the end of the day and the after market on Friday. Why would this be so if people knew a margin hike was coming on Monday. It doesn’t make sense if you are short if you think the hike will hurt unless you think it was already priced in.

    Any thoughts on Monday’s action given the rate hike are appreciated.

    Steven

  1474. Keys

    Nice report…good to see you take things in stride and back to business. Anyways, I am an “ass” at times, but I have always appreciated your style, honesty and approach…so we got caught once…there is so much to look forward to and plan for…
    As a note though, since we have time, the biggest mistake would be screwing up the final C-wave…I actually think everyone here is better off for getting burnt on this, not because I think losing money is fun, but when the final surge takes place, we as a collective will be a little bit more cautious…all positions can be saved by this bull, unless we get caught in the last one…
    I agree that things will be difficult, but I intend, hopefully in line with some others here, to at least a develop a strategy in the future to make sure we don’t get caught as severely…Doesn’t mean we won’t get caught….but not with our pants down so to speak…
    Anyways for another day….off to burn the crap out of some meat on the BBQ….

  1475. aklaunch

    I think Gary said in the report he expects gold prices to go down a bit more. We have our fingers crossed that it does or we have a bear flag. Silver probably will do the same if gold continues down. If not…. I think he said it will go up a bit and then that “could” signal the end of our precious C wave.

  1476. Poly

    Hi Gary,

    I like your weekend report.

    Two questions if you don’t mind.

    1. If the coming gold cycle fails and makes a lower low, why does it have to be a D-Wave? Why could it not just be another IT cycle low in the working? Is it because you believe the D-Wave MUST occur with a new 3yr dollar cycle?

    2. In your report you talk about possibly making a higher high and then failing in a left translated manner. Wouldn’t that require gold to rally some 80 points in less than 12 days?

    Thanks as always for your time on the blog.

  1478. jhnewman

    ALEX IN MONTANA: THANK YOU VERY MUCH! It’s good to have a dedicated “Alfite” on here. I don’t follow him as closely as I’d like to. (I’d like to go back into his archives to learn more about how he analyzes gold, but I just don’t have the time right now.)

    *****If you could please bring to this forum any info. you find from Alf, I’d appreciate it very much (I will do the same). And the same goes for Ross Clark. He is also a pretty incredible technical analyst of gold and silver. I know he used to work with Bob Hoye. But from your remark, I take it he’s moved on. (Or maybe he works with this company you mentioned and Hoye at the same time.)*****

    But again, if you could bring anything you hear from any of those two guys to this forum, it would be much appreciated. And I’ll do the same.

    All the best to you!

  1479. KAL

    Thanks Gary for the feedback. I want to get back in the saddle. I believe your analysis is right on the money, as does everyone else (except maybe trolls and the beanies of the world). Unfortunately, I’m a new guy and didn’t make much before the AGQ slapdown. But, I will be back in the saddle again when we get the swing low and you make the call. I took a big hit to capital and will be avoiding any 2x silver leverage for awhile so I can sleep at night. Maybe during the A wave or the next C I’ll be ready. Gold seems to be a much safer 2x leverage call. Hey, if you don’t wanna touch AGQ, I don’t either! Thanks again. I own my mistakes, just want to learn from them. No blame game here. Have a great weekend Gary.

  1483. aviat72

    coolkev:

    This is regarding TZ’s comment about the DeMark setups. Please continue to post them. They are useful guide in understanding where the market is. DeMark’s are like Fibs. They may or may not work but they do provide a context to structure your trades.

  1485. Gary

    Poly,
    As always anything is possible. The dollar could go through another complete intermediate cycle before the three year cycle low is formed and gold could go through a fourth leg up.

    But I doubt it.

    I think the action in silver is pretty clearly saying this C-wave is about over. Maybe gold makes one more marginal new high (like I outlined in the weekend report).

    But I think that will be the end of this C-wave. We will then get a shot at the downside during the D-wave (if you are willing to buy puts. I would never short) and we should get some pretty good upside during the A-wave. After that it’s going to get pretty hard to make money for probably a year or so.

  1486. Gary

    BTW as much as everyone hates them miners are probably going to be the sector to ride during the A-wave.

  1488. Rob L.

    GAry,

    Since you are talking about the A-wave, will you be buying back into silver when it starts or will gold be your metal of choice?

  1490. jeff

    gary
    is going long on the dollar still a ” safe play ” . i was thinking of buying a put at 72 for september for about 550 dollars and then buy a futurse contract against it hopefully at 71.40 or better.

  1491. GottaHaveIt

    Alex,

    I was not online earlier today so I missed your offer of your trading rules. Would you please click on my profile link and email me a copy? Thank you!

  1492. Arun

    Gary,

    There is a significant change in how to deal with D-Wave. Prior to last week, you took the stand “Never short a D-wave other than with puts”. Makes sense. As of last couple days, you are of the opinion that a lot of money can be made in the D-wave. What changed in the stand or is it revenge trading?

    BTW, I am not finger-pointing. Just want to know the thinking why D-wave is easily shortable now.

  1493. trond56

    Those who turned off the computer last week in order not to make an emotional mistake are probably still happy, sometimes ignorance is bliss 🙂

  1495. Hot Rod

    Eamonn,

    Optionsexpress.com is free. I use the GCM11 (gold contract) in the live data charts. It’s not the best I’m sure, but it has a lot of functionality.

    You can do RSI 5.

  1498. Hot Rod

    Would any options trader gurus here suggest taking a long term straddle with heavy capital?

    It seems logical, with us being at a crossroads that we’re going significantly higher or lower. In addition, if we went higher you could sell the call and keep the put for the D wave.

    This seems too easy.

    Example. Dec 2011 GLD 145 call is $9.70 and the put is $9.40.

    This means GLD has to go up farther than 155 or drop farther than 135 to make money, correct?

    Basically only a 7% move either way.

  1501. aklaunch

    Does anybody know why the dollar started its massive decline around the year 2002? I am guessing Sept 11th but…. It rallied like crazy till the end of the year in 2001.

    Thanks

  1502. Hot Rod

    It would be super if the current action is a replay of this turn of events from last Oct:

    http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&st=2010-06-01&en=2011-01-01&id=p54814697394&a=233592825

    The USD did a cycle fake out bounce which hit gold rather hard.

    The end result was gold went up about $100 points within 15 trading days.

    Of course if this is the C wave top, maybe we could have those returns juiced more than $100 and also get a similar result of a higher high.

    Once (and if) gold breaks up above $1575, it is going to be a dangerous game to hang around even if there is still upside potential.

    Another “light” observation I am seeing is there are periods of time that Gold completely ignores the USD. It’s rare and we can’t bank on it but they don’t 100% go in lockstep.

    The action on Friday is very ominous and I am digging for a historical similarity which I have not found yet (although the above Oct 2008 scenario is close). The USD was up very strong and so was gold. Also, the stepchild silver was also up.

    One of them has to be lying. If gold is lying, we’re in a dead cat bounce and I would disagree with Gary that testing a new low in gold is not a good thing. If we reverse from here and don’t get above 1500 pronto we are f-ed. If the USD is lying than C wave fully in tact – last week might have just been a “reset button” pushed in gold and silver to shake off the speculators and chart signals.

  1503. Gary

    In late 2001 Greenspan embarked on a path to debase the currency in the vain attempt to halt the severe recession we should have suffered when the tech bubble collapsed.

    Eventually it halted the 2000-2002 bear market and moderated the recession. It also caused a real estate and credit bubble. Now we are faced with a much much bigger problem than if Greenspan had just let the bear market and recession at the beginning of the decade play out and cleanse the system.

    Bernanke exacerbated this catastrophic monetary mistake in 06 when the economy started to slip back into recession as the housing bubble started to deflate.

    Bernanke went on a printing binge that made Greenspan look like an amateur. The end result the real estate bubble popped anyway and the price of oil spiked driving the global economy into the worst recession since the Great Depression.

    In 09 in order to halt the mess that he himself created Bernanke went on another printing binge many multiples bigger than in 06 and 07.

    The end result will be a much more devastating collapse than the last one.

    All because the Fed can’t learn it’s lesson.

    All I want to know is how did a complete idiot get elected to run the the largest central bank in the world?

  1504. aklaunch

    I am just learning about options. As far as your Q regarding when you start making money. I think they start making good money immediately if the trade is going your way.

  1505. kmisak

    Gary, glad to see you all fired up! You have handled yourself admirably during this recent setback. I remember reading a post from Clarkatroid that this day (Thursday) was the worst of his life, and for once there was not the usual lighthearted tone. I too felt like crap: nightsweats and headaches… but to see the turnaround in attitude on this board has been truly remarkable. It has pulled me from the darkside. 😀

  1506. Hot Rod

    Gary/All,

    Is there a tool, data website or a way in stockcharts to find out and rank the trading days where gold had the highest dollar (or %) increase where the USD on the same day also had the highest increase?

    Going day by day eyeballing is not so fun.

  1507. Gary

    Hot Rod,
    Not that I know of.

    K,
    This is only one C-wave of probably several more plus a bubble phase to come. Just because we made one mistake don’t think we’ve ruined the opportunity. The bull still has the biggest and best yet to come.

    I expect the next C-wave will be even larger and the bubble phase will be like nothing we’ve ever seen before.

  1509. Eamonn

    How do we make money in the B-wave? It seems to be a very volatile slight uptrend in gold that lasts for one year…

  1511. Gary

    SDJ,
    Did you ask a question that I missed or maybe it was a question I couldn’t answer?

    Questions about where I think the correction is going to stop at and such are unanswerable. I would think people would realize that by now and those I just ignore.

    I thought silver wouldn’t go below $42 to $40. Shows you how much I know.

    If you had a question that I can answer, then sorry if I missed it. Ask again.

    During the week if I’m out climbing I don’t even bother to go through the blog when I get back. There are just way too many posts for me to go through them.

    I wouldn’t have time to write the reports.

  1512. Gary

    E,
    The B-wave is a down wave that corrects the A-wave. They can be pretty mild and probably too dangerous to try and short or buy puts on.

  1515. jlinks

    Gary,

    Have you considered setting up a regular forum instead of using the blog comments? That way you can restrict it to members and filter out the noise. (And decrease trolls!)

  1516. San Diego Jack

    Gary,
    I know better than to ask you “hypotheticals” about the future, especially since your crystal ball is in “shop.”

    My crystal ball has developed a cloud, and was snowing the last time I shook it up!

  1517. Gary

    The tutorial is for those that didn’t know how to create a link.

    TZ mentioned that when he posted Url’s he was being flagged as a spammer. So I put the tutorial up on how to create a link. I don’t think those get flagged.

    Plus it’s much easier for everyone to just click on the link than to copy and paste a long URL.

  1519. Jayhawk

    SD Jack-

    Here’s what I do.

    Bookmark this website that shows how to make a link.

    http://www.echoecho.com/htmllinks01.htm

    Then, when I want to post a link, I highlight the section like so and copy & past it into the the comments section.

    Step 1

    Then, highlight the section with the sample web site in between the 2 ” on like so

    Step 2

    Next, take the copied link you want to post and go over the highlighted area and hit right click, paste. You can switch the word “here” in the sample to anything you want.

    Step 3

    Hit preview to see if the links work, then publish.

  1520. San Diego Jack

    Thank God!

    Jayhawk, I thought I was gonna have to take html classes to get it down.
    Hell, I’m still trying to figure out what the work QWERTY means 🙂

  1522. Gary

    Jay,
    I do basically the same thing. I just copy the link creator from the tutorial and paste in the comment section. Then paste in the URL. Change the text part of the link creator to what ever and publish.

  1523. San Diego Jack

    Thanks Gary & Jayhawk,
    I get it now.

    Gary, I sure hope we get the movement you are looking for next week. My fault, I took the risk & I know it, but my option positions were absolutely hammered last week. I kept a cool head, let it do it’s thing, and await either of the movements you state in the weekend report.
    Sure would like to see them move back up, parabolically if possible.

  1524. Veronica

    I personally think that we need an immediate rise in gold starting Monday/Tuesday or this gold bull is over for now.A flat to up day Monday would do the trick and we should get several weeks of rising prices then.I think Gary’s hopes for a new marginal low would be devestating for gold bulls.I still have some hope left but IMO we need to have the miners and gold flat to up Monday and I think that would tend to freeze all the traders who sold the lows.I sure wish I would have followed my mechanical system this round:(

  1525. Jayhawk

    We are all suffering from PTSD.

    Post Traumatic Silver Disorder.

    I still think back and how that April 2006 chart Trond kept posting a few weeks was giving me nightmares and caused me to bail very early on AGQ. (265 range only to watch it run away). The thought of a 17% one day drop was too much for my risk tolerance.

    As my buddy Gottahaveit said, “remember the good old days when we would only worry about a 17% drop!?”

    That was truly a historic week. I hope some of the newer traders make it through ok. I jumped into the miners after the FED meeting only to see those positions get crushed last week. I was not around the mining shares in 2008 and I’m sure that was awful, but I’ve never seen such a nose dive before in the mining shares.

    Hopefully, a bounce up is coming.

  1527. Dan CA

    New trader here…
    I got hit pretty hard, down 20% since joining.

    I know Gary says to avoid selling on corrections but being young and new to investing I think I need to create some rules for myself to abide by going forward.

    Holding onto AGQ for as long as I did not only hit my account, but also stirred up some emotional trades. I was trying to tell the market what to do… I think had I gotten out on a rule I would have weathered the storm with at least my dignity.

    (Alex, I’d love to have a set of those rules :), check my profile if you’re willing to share)

  1528. Bob loves Hawaii

    Gary, notice how we had a nice sell off in GDX and GDXJ after the last silver stand for delivery date passed. Then the traders start lifting metal prices for the next delivery date. Open interest remains high for both May and July, even after this bloodbath.

    We are right now at a higher low from there, and miners reporting have been lifting those shares.

    This gives me some confidence that we have another run in front of us.

  1529. Driver

    If you’re running Firefox and someone posts a url, all you have to do is highlight it, right click and choose “open link in new window”.

  1530. Bob loves Hawaii

    Steven, I do not think there are any weak hands left. Small specs are obliterated. Harvey Organ speaks a bit on that implication in his weekend report.

    Short interest is massive, and there will be a short covering rally.

    Open interest is still way too high to signal any sort of D wave coming. Deep pockets are standing, and they want the metal, not the fiat payoff. The exchange has two weeks to find a lot of metal.

    Gary is the strongest small speculator I know of, and he is swearing off silver. This sounds like an end to a D wave, not a beginning.

  1531. Gary

    Folks I’ll say it again. Whenever one gets hit with a black swan event the first reaction is to look for a way to “fix” your system so it never happens again.

    Unfortunately the fix will ultimately just do more damage than if you just forget about it and get back to making money.

    We have a classic example of this playing out in the banking sector. We just had a real estate and credit bubble. The knee jerk reaction is to pile on regulation so it never happens again.

    We had more than enough regulation to prevent it in the first place. During a frenzy regulation goes out the door.

    Now all the new regulation is just putting a huge strain on the entire system to stay profitable. Without constant life support from the Fed the financial system will not be able to function under the strain of all this new regulation.

    So they haven’t actually fixed anything they’ve just insured the ultimate collapse of the entire system.

    If they had just let the natural forces work they would have cleansed the financial system in a couple of years and we all would be much better off by now and on our way back up. Instead they have guaranteed at least another decade of misery and probably two.

    Just accept that every so often something is going to come along and blind side you. Pick yourself up, dust yourself off and get back to work. Just because something as one failure doesn’t mean it’s broken. Hell if it wasn’t for a Monday morning gap down the system was making us a fortune.

    That’s not something that is broken, that’s just a stroke of bad luck. It happens to everyone.

  1532. Jayhawk

    Yes, right click someone’s link and hit open in new tab in Firefox or Chrome.

    I like to make links as some are on iPhones, Ipods (I read this a lot from my iPod) and it’s a pain in the rear to copy and open in a new page/

  1533. San Diego Jack

    DanCA,
    I am newer sub, I was too was beat up, as was just about everyone else that is truthful here.
    I am sticking to the game plan, as I just don’t see the Fed & it’s policies doing anything but hurt the American middle class and currency. We are going backwards here, and the only refuge will be to get away from fiat currencies, and into Gold and Silver. Short and Long Term, they will rise.
    And I am astounded that Gary’s cyclical charts just happen to coincide with World Events. Market moving events just so happen to coincide with the market cycles?
    I guess LBJ was right when he said “there are no coincidences” (I think he said that).

  1534. Dan CA

    I agree Gary, but at the same time my anxiety got the best of me.
    For my case, it doesn’t have to be a quantitative rule. This taught me to admit defeat. If I were on my own (without this blog) I would have been destroyed during a D wave based on my actions last week. So I learned to admit defeat… valuable lesson.

  1535. hkc

    Gary:

    With all due respect, and I do have a lot of respect for your cycle call, as I mentioned in one of the post before, on Monday morning, there was a time when the gap down recovered to a very small % loss, and if you stayed on course with your previous plan, instead of telling us not to sell into a cycle low, many of us would have gotten out with minimum damage, including you.

  1536. San Diego Jack

    Robert Doll, BlackRock said;

    “It’s not only that commodity prices are correcting. The dollar is correcting by going up. Movement in the other direction, in my mind, is way overdue. It doesn’t mean commodities made a peak and will keep coming down. The commodities are among the most volatile things out there and they can have vicious swings in either direction without much rhyme or reason.”

  1537. San Diego Jack

    Jim Rogers said:

    In 1987 stocks went down 30 to 40 percent, smart people went in a bought more. If it goes down I hope I’m smart enough to buy move silver. – in CNBC

    Nuff said…

  1538. Gary

    HKC,
    Yes in the morning it came back to where it was only two dollars down. But let me ask you this. Without the benefit of hindsight how does one know that that was going to be your last chance to get out before a 30% drop?

    You are trying to rationalize something in hindsight that just couldn’t be done in real time. If it could then you would have gotten out at the top. How many of us have ever been able to pick the exact top or bottom of an intraday move.

    I can truthfully say that I’ve probably never done it other than maybe once or twice and even then it was pure luck.

    Trust me when I say that I did the very same thing when I was a novice investor. I would look at the charts and say obviously I should have done this or that at this or that point. But in real time you don’t have the benefit of knowing what is going to happen next.

  1539. San Diego Jack

    Gary,
    Last year, after the oil spill, I bought RIG 3 cents and BPO 40 cents above the lows, and it was PURE LUCK!

    My ex father-in-law would say “Hindsight is 20/20” to me all the time, and had a company called “Foresight Financial” and he still didn’t make any more money any other broker.

    Sitting on your ass and talkin’ bout what coulda, woulda, shoulda after the fact is easy.

    Doing it in Real Time is the bitch!

  1540. hkc

    Gary:

    I think what was hard for me to understand was if you already had a course of action due to some potential future event, why would you not carry out that course of action when that future event happens a bit sooner than you expect, since you actually “knew” it would come.

    You were not the only one who missed this, several experienced traders also got caught in this as well. And these comments are not to criticize you, I am only trying to find a more consistent approach for the future.

    Thanks as always to your tireless steward of this blog.

  1541. Wav_ridah

    In case anyone missed it:
    Fannie Mae seeks $8.5 billion from taxpayers
    By Corbett B. Daly
    WASHINGTON | Fri May 6, 2011 5:50pm EDT

    (Reuters) – Mortgage finance giant Fannie Mae (FNMA.OB) on Friday said it would ask for an additional $8.5 billion from taxpayers as it continues to suffer losses on loans made prior to 2009.

    The largest U.S. residential mortgage funds provider reported a net loss attributable to common shareholders of $8.7 billion, or $1.52 per diluted share, in the first quarter.

    Including the latest request, the firm has taken about $100 billion from the U.S. government since it was seized in 2008, though it has also paid about $12.4 billion to taxpayers in interest.

    Loans made in the past two years have been more profitable than loans made during the housing boom in preceding years.

    “As we move forward, we are building a strong new book of business that now accounts for 45 percent of the company’s overall single-family guaranty book of business,” said Michael Williams, the firm’s president and chief executive officer.

  1542. David

    hkc,

    A number of people, including Gary, believed that silver would break $50 on this run. In part this is because big money likes to run prices up over a big round number to create volume to sell into.

    The $50 number gradually became ingrained in people’s minds. At $49.75 it seemed a given.

    What’s more, Gary anticipated a sharp correction on the way to $50, so when the pullback came, it was seen as silver “following the script”. It took until sub-$40 silver for people to realize that silver wasn’t following the script and that $50 wasn’t going to happen this time.

    All the elements came together to trick us into thinking that the drop was just a sharp correction. This is an example of how a narrative or thesis can blind you to the downside risk. This was the ultimate example of Lucy yanking the football just before Charlie Brown could kick it.

  1544. aries

    Gary,
    Early warning signs have been given days before (i.e. the huge increase in trading volume in SLV, as Silver approached $50) was a warning signal, that distribution selling was underway.
    With all respect, I judge that smartmoneytracker did not track this time smart money, from a higher strategic lever (observing the big picture), but from the tactical traders level. Trying to avoid your 2006 crash paradigm, we were caught to an even major trap, which would serve as a paradigm in books of the future.
    It semmed to me that focusing on a daily/weekly trading process (instead the old turkey approach), we lost the big aerial picture and neglected the “worst case scenario”. Like Icarus, our flight took us very near to the sun, days before a predicted low and I am not sure If this was a responsible act, at least for me.
    Subscribing also to other services I’ve seen that other analysts (Like Peter Grandich, James Dines, Chris Weber, Gary Dorsch), recommended “Sell” in real time, while others like martin Armstrong , Alf Field, Sinclair have repeatedly warned for a lonf time of a coming low this June (week of June 13 according to Armstrong).
    My faith in your capabilities, unfortunately persuaded me to stay in and lost a significant part from my hard earned capital.
    I take full responsibility for my blind faith to your judgement and the lack of balanced fusion from all the information I got from various sources, but I think this “silver crash” it is too big to just let it vanish just through various comments on your blog. I am one of them who spent daily a significant amount of time, which at this time, according to my disastrous results seems wasted for me, since the so many comments, regarding the real time information, resulted, in my case, to an “hyperanalysis-superparalysis” effect.
    Also I do not know if all this bullishness shown here and your overarching interaction had any effect upon your ill judjement (like the Aden syndrom back in 1980 where the subscribers persuaded them to keep a bullish stance, at a time when the gold market began to fall).
    I know your kindness and your respect for your subscribers and I think that you’ll agree that we all deserve a “Silver Crash: What went wrong-Lessons Learned special edition” in your subscriber’s post when you have the time and peace of mind to do it.

  1547. samppa_nyman

    I would like people to discuss the time after this last C-wave (or beginning D-wave).

    Gary said it will be difficult to make money for about a year. What are you expecting to happen?

    No QE3 and a deflationary period? What about inflation, euro crisis…
    Stocks tanking with commodities for an extended period? Then what? QE3 starts once things look bad enough?

  1549. daniele

    Sampa, gary said one year AFTER a-Wave.”we should get some pretty good upside during the A-wave. After that it’s going to get pretty hard to make money for probably a year or so.”

  1550. samppa_nyman

    daniele,

    yes thanks for specifying… That’s the period of time I’m talking about after coming A-wave. What kind of events will make PM’s not a good investment in that time period?

  1551. daniele

    i think it’s just a period of consolidation in order to get into the next c-wave.A long sideways period.I think that is nothing about on specific events on pm sector.It’s just things go.After a A-wave a long period of consolidation called B-wave.That’s all.

  1553. GGuy

    Option is NOT something that one can buy because somebody told him to do.

    Aption are for expert traders, and are intended to build complex strategies with them, using the fact that they are non-simmetrical.

    Option strategies that have high probability of success ALWAYS involve option writing (selling). You cannot sell an option you are not absolutely sure you are an ice cold blood son of a b..ch.

    Be aware, be aware, be aware!

    Using non leveraged etf one can obtain gains that are ten to twenty times what a bank normally pay for your money if you give it to them. Greed is good, but do not let it destroy you.

    G

    http://www.ellipsetrading.com

  1554. ALEX

    DAVID said…
    “This was the ultimate example of Lucy yanking the football just before Charlie Brown could kick it.”

    May 7, 2011 10:52 PM

    LOL-funny visual, since we were supposed to kick this run to the moon!

    One thing that I did ,which broke one of my own rules (emotions during Euphoric rises)is that ( I believe we all agree’d long ago) that our plan was to “lighten up AS $50 approached. Many just kept increasing position & leverage.

    I was 100% at $49+

    The Euphoria near tops is influential. I originally had a price target of $52 ..and ‘MY PLAN’ was to LIGHTEN UP as it approached…and wait and see from $52. Buy back in accordingly, but when I lighten up —it clears my head for PLAN2. . I would have been safe sticking to my own plan…if it rocketed to $70 or $30.

    Gotta go..out all SUNDAY…ahave a good one..

  1555. Gary

    Aries & Hkc,
    David already said it very eloquently but let me try again. At the beginning of the correction all of us, myself included just thought it would be a normal daily cycle correction. As long as that was the case there was no urgency to avoid it because it would be recovered quickly.

    In real time none of us thought this might possibly be the top of the C-wave. None of the signals were there that had been seen at all other C-wave tops.

    I was fully expecting a move back to $40-$42 so it wasn’t until day 5 that it back apparent something else was happening. By day 5 it was too late to go back and correct the mistake.

    Again you are trying to rationalize something in hindsight that couldn’t be done in real time.

  1556. Power Corrupts

    Found some more information about the ‘gold lease rate’ data on Kitco. The gold lease rate is the rate central banks charge for borrowing their gold. The one year rate nearly doubled at the end of the week of April 30, so apparently parties were borrowing heavily, presumably with the intention of selling product either to hedge or speculate on a price drop. The spike in the lease rate now appears to be receding.

  1557. Power Corrupts

    Embracing the pm bull market, I believe, finds sustenance in the potential outcome of thirty years of borrow/spend policies in most developed economies. The birds eventually come home to roost in sovereign finances (angry birds?). Last fall Meredith Whitney made waves with her predictions of the effect this will have on state and local government finances. It’s interesting to me that several sources (David Kotok, Barron’s this weekend) are now attempting to refute Meredith Whitney’s analysis.

  1559. Douglas

    Re putting some grumbling into perspective. I was up 50% YTD before the fall. I didn’t follow through on my own game plan converting silver to gold for the reasons set forth by Gary in today’s report; i.e. not having the courage of my convictions through gaps.

    The result is I’m only up 15% YTD. If I continue at the same pace, I’ll be up 45% for the year. I can live with that. LOL.

    Last year, thanks in large part to Gary, I was up 30%.

  1561. Gold Lion

    The next time I see half of the people on this blog talking about options I only hope I can see it as a sign that we’ve entered the gambling phase of the market. Most people on here have no business in options. I have been investing for some 30 years and decided long ago options weren’t for me. I am more of an “old turkey” kind of investor who is good at buying when there is blood in the street and holding long term. I bought gold, silver and platinum mining stocks in the fall of 08 and have not sold any yet. The metals are not through going up, not even close. Last week in silver there was panic selling by the weak new comers to the trade and is was another buying opportunity for long term investors. I bought AGQ, but I don’t think most people have any business being in it as it is leveraged 250%.

  1563. Alex in Montana

    jhnewman,

    Ross Clark can be found on http://www.howestreet.com every week being interviewed by Stirling Faux. Ross always brings charts you can view/print out to follow along.

    Good interviews on there with other folks as well. Similar to http://www.kingworldnews.com

    As far as Alf Fields, he has said he doesn’t want people to blindly follow him so his posts appear to be infrequent on http://www.jsmineset.com.

    If I see anyhthing from him I will link or post it. Please do the same if you see his stuff

    Alex

Comments are closed.