After what should be a brief pause this week commodity markets will move into the greatest rally of the last decade. As usual I will stay focused on the precious metal markets. They have been the leaders during this entire move out of the `08 bottom and they will see the largest parabolic move of all commodities during the final leg up.
I’ve noted in the past that consolidation size is usually a good leading indicator of how large the following rally will be. Gold just consolidated for 5 months. That is going to produce a massive rally. It’s already produced a large move and it’s just started.
Gold and especially silver have already come much further than I originally expected at this stage of the game. I was looking for gold around $1650 and silver at $50 by the top of this C-wave. Silver has already reached that level and gold tagged $1575 yesterday. This has unfolded in only the first two daily cycles. The third daily cycle is where the real parabolic gains are going to occur.
The third and last daily cycle higher during the semi parabolic move in `09 added 200 points in a little over a month.
The coming parabolic move will be significantly more powerful than what happened in `09 as this will be a final C-wave move. We should easily see a 300- 350 point move in gold and it’s anyone’s guess as to how far silver rallies during the final parabolic finish. $65 or even $70 isn’t out of the question.
Now for the downside. The final dollar collapse is also going to drive the rest of the commodity markets wildly higher. That will include the energy markets. Oil is due for a brief move down into its cycle low this week too. Once that has run it’s course we will see oil soar higher, possibly even reaching the `07 high of $150.
$150 oil collapsed the global economy in `07 and the economy was in much better shape with much lower unemployment than it is now. In an environment of already high unemployment $150 oil and soaring food prices are going to drive the global economy into a recession even worse than what we suffered in `08.
Social conflict in the middle east and many emerging economies is going to intensify. People in depressed countries already can’t buy food to feed their families, what do you think will be the response if food prices double again?
The world is about to pay the price for Bernanke’s attempt to print prosperity and it is going to be a very steep price and cost many lives.
beep
test
What? The dollar is getting a sustained bounce? Did I get abducted by aliens and transported to another planet? This can’t be earth.
Gary,
Good piece. Bad for the economy but good for us if it plays out as you expect.
Would you recommend adding to positions on the way down over the next week in the event that it turns suddenly or doesn’t play out as you expect? Or would you suggest waiting until at least Thursday or Friday around the jobs report or for a swing low to form? I know I won’t time this perfectly, but feeling as though I should wait for more downside first. Thanks.
This is a smart man like Gary:
http://seekingalpha.com/article/267074-the-silver-correction-is-over-next-stop-62?source=email_the_daily_dispatch
Just wait for a swing or if you want to take a shot at picking the bottom wait for the 5 day RSI to close in oversold territory.
If my model is correct we have bottomed in gold and silver (the lows earlier today/tonight) and now proceed up progressively.
(I’m not as confident saying that about silver as gold, but I’ll say it anyway. Silver remains a razor blade whipping around the room.)
Clearly I could be wrong so don’t blame me if you go broke. But you guys already know that, right?
I don’t think there has ever been a one day daily cycle correction.
Instead of multiple attempts to call a bottom and whittling away at your cash with these tight stops you could just wait for a swing or at some point take a position and hold on to it.
Gary
Not going to hold you to it, what is your guess as to how long this final C wave could last?
One long extended daily cycle?
End of June?
Also If we have dry powder and got in this morning we are still getting things on sale in our view right?
what I know is that call prices are higher than yesterday. At Gold 6 dollars lower, call 1500 Jun11 are unch…People are buying ….
TZ you’re overtrading man..
been there and done that. 🙂
I have forecasted 2 weeks of downside on this pause but not acting on it until I see the signal to go in.
H,
You know how long a typical daily cycle lasts in gold so you can easily figure that one out without me.
I have not used any of my margin but am considering doing so when we get our daily cycle low. If this were you, what would you put the money in, gold or silver? And what fund or stock would you choose and why?
Right now I am in AGQ, SIL & SLW
Thanks Veronica. No problem. My questions/comment still stand though I think. 1. How accurate has this been the past few years 2. how much further would we need to drop to fulfill the signal 3. I believe you said you would no longer say “got a sell” as this sometimes means “sell” and sometimes mean “buy.” So you previous post should have read, “My system says gold is going down now” right? How much further at a minimum? How accurate has this call been?
Great post Gary
funmike,
I know your question was directed to Gary, but I’ll throw in my two cents: Since you’re all silver at this point, if you buy more, I’d buy deep in the money GLD calls. That will give you some exposure to gold (gold might outperform silver in this last leg, who knows?) AND by buying calls you can get the leverage you want without spending as much of your margin. (In other words, you can spend a lot less on GLD calls to get the equivalent exposure to buying DGP shares.)
Gary,
If you are so smart what is your explanation for the extreme lagging of the miners?
hey Veronica,
I’ve missed your posts, glad you’re back!
Rick: Gary has answered that twelve times already. Also, starting a redundant request with “If you’re so smart” is possibly not the best way to get someone to answer you. Just a thought. I could answer but will pass (because I, after all, am not at all smart).
Thanks Pima,
Although I would like to have Gary’s opinion I also appreciate viewpoints such as yours as well. Thanks for the reply. I have been giving some serious consideration to going to gold since I am all silver now. Don’t know yet what I will do. I may opt to do nothing.
less liquidity in silver now that margins are hiked. IT’s going to get even wilder….
Gary
It just amazes me we can get that type of a move in such a short period of time.
I find it hard to believe silver will crash like Ben Davies:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/2_Ben_Davies_-_Silver_Criticality,_Why_Silver_Might_Crash.html
I expected a little more volatility this morning with the Brits back from the party…must still have Pippa on the mind
Following on from the Sprott/PSLV question in the previous post…
SB/Flaunt, yes the reason Sprott sold PSLV shares last month, though Eric Sprott won’t admit it, is that PSLV was trading at a ridiculously high premium to NAV of 25%!
I bailed on my PSLV for the same reason, as that premium is just crazy. Took profits, moved into other silver & gold vehicles, and will probably get back into PSLV at the next A wave if the premium is low enough.
The trick with closed-end funds like PSLV, CEF, etc, is to get in right after a new share issuance, which almost inevitably dramatically lowers the premium, at least for a short while.
Had a big laugh reading an interview with Eric Sprott about why they sold and he was asked about future issuances. He said they’d do them only in such a way as to not take a hit to the premium. That’s absolute nonsense.
SB
That Davies guy uses some big words that I just don’t understand.
Just watched an episode of the Amazing Race from 24 April (S18E09) and thought of Gary’s trip this summer.
The teams are racing around Zermatt trying to deliver luggage to various hotels. The one where Gary suggested folks stay, Hotel Christiana, is one of them. It appears at the 35-minute mark and probably elsewhere in the episode.
Just thought I’d mention it in case anyone’s curious to go back and watch it to get an idea of Zermatt and the hotel.
Found one link where you can stream it:
http://www.watch-the-amazing-race-online.com/Watch_The_Amazing_Race_Online_Season_18_Episode_9_Were_Good_American_People_Leg_9_Vienna_Austria___TBA.html
wmp,
I don’t believe it myself.
jabalong,
Sprott has managed to make himself into a brand within the precious metals market. The PSLV premium is like buying anything name brand – You’re paying for the name. I never took a position in it but I would have sold and bought something else as well.
Lock N Load.
DG,
I will give you 1 warning. Answer the question or I will shoot you where you stand.
a. Rise in PM’s is fake due to leverage; miners reflect true prices.
b. Price of oil is hurting the miners
finally market correction starts –
starting to accumulate SPY now
Yup Flaunt, Sprott’s certainly done a great job at branding and building big interest in his PHYS and PSLV funds in a relatively short time.
It’s funny talking about branding, as Central Fund of Canada’s been at this since the early 1960s and is equally solid, yet hasn’t quite caught the imagination of investors to the same extent (the names a bit odd and clunky I think).
Personally, I like both companies funds and usually will go where the premium is lowest. But as CEF has yet to do a US AMEX listing for its Silver Bullion Trust fund (and really illiquid on pinksheets), PSLV really leads the way there.
But when you start getting into mid-to-high double-digit premiums, let alone into the 20%-plus range, that’s crazy. With that kind of interest, Sprott needs to do more frequent follow-up premiums to let some air out of the tires.
I like these funds for part of my money as they offer a more solid vehicle for physical metals, but I’m not in them to play a game of premium speculation, which to me PSLV had become at 25% and fortunately I was able to get out at just the right time!
Has anyone seen the movie “127 Hours”? After watching it over the past weekend, I think Gary should change sport… perhaps Golf, less dangerous.
Gary,
I am going to be on my honeymoon 5/5-5/17. I’m going to try to add positions this week with this daily cycle low. Do you recommend putting in a trailing stop while I am away to ride the final daily cycle advance?
Put another 2% of total capital at risk. Bought NUGT.
Brings total portfolio risk to 4%. Still have lots of dry powder and looking forward to putting it to work.
I will add a stop to the stops and trade trigger link once it becomes appropriate.
Ouch, holding AGQ really hurts. Hope we hurry up and get on with this.
I am not standing. Does that mean I am safe?
On the daily chart for SLV we have nearly reached the levels of the last daily cycle low on the fast stochastics and we have already fallen lower on the RSI. I’m not adding yet but I am looking at these indicators for timing tools as we reach levels that we reached at the bottom of the mid-March daily cycle low.
ah ah, you are very funny DG! you should nap the whole day to avoid Rick and AGQs….
Fair enough, I am subscribed to the premium site I just don’t know if I’ll be able to check anything on the honeymoon. A bit concerned of being away for that long without a safety net.
Bought some silver futures. 40 cent stop.
Rick: I’ll answer , but just because you are so warm and fuzzy: I believe the 3rd option is correct. The miners are just consolidating huge runs and any sector is entitled to underperform for a while. I bet they now outperform once the daily cycle low is in.
If this daily cycle in gold is running extremely long shouldn’t the next cycle run short?
Silver approaching over sold territory. Only 11% over the 50dma. RSI at levels only beaten by the IT cycle low.
Gold still has some room and is stretched high above. One quick drop in gold should be more than enough to reset this puppy.
This might be a short lived event.
I see a possible down wedge pattern in silver showing selling exhaustion. The double bottom in the last 2hrs looked reasonable so I’m trying a buy here with a small stop.
Rick,
I hope you were just kidding around with DG, like he and Alex kid around. If not, what the hell is your problem?
Assuming you were kidding and to answer your question: yes, mining is a fuel intensive business but I’d encourage you to compare the price of oil in June 2008 with the price of CNX, BTU, ACI, and PCX. Parabolic moves in spite of record fuel prices. All rose and the same time and all came tumbling down at the same time.
@William, yes seeing the same thing on Silver, you beat me to the punch.
I’ve always thought that April 11th high was where the cycle could have topped, that’s where I got out. If we can drop to the $42-$42.50, that will be enough for me to add a position.
OK, here it comes now!
What did bernank just say on cnbc? was that today or old?
aljiowa,
If I were in your shoes, I would first of all figure out a way to check the markets daily or at least every other day. We’re at a critical time, I would not want to miss this opportunity.
You could instead put in limit sell orders at potential price targets so you could take profits piecemeal. The risk there is that your targets get met, you position gets sold, but the market keeps going higher, so you end up leaving money on the table. But if your limit orders have too high a price, they might not get filled, the market could peak while you’re away and you’d miss out on getting out near the top.
Tough position your are in. But congratulations on your marriage!
We’re certainly going to print a cycle low, possibly today.
Gary, what number on Gold would provide confirmation for you?
Closed silver. Wow…WAY too volatile. No way I’m doing that.
There we go! point it towards the basement and step on the gas!! With Poly as engineer.
HEY ALEX,
AG = 17 coming up!
It’s a gift! Maybe if it gets there by my birthday (5/5), Ill buy some.
Best,
Le Fou
Jabalong,
I’ve been reading your comments about PSLV. Could you explain what NAV is? Also, does each share represent a certain amount of silver or something like that. I’m pretty new to this
so any thoughts would be helpful. I’m under the impression PSLV may be safer than other ETF’s meaning they really have physical silver backing them.
Thanks
Greg
TZ(8155),
Are you also TZ(4404)?
Thanks Pima, I appreciate your feedback. I’ll figure out a strategy here. It’s going to be a pretty low tech excursion so I’ll be unplugged.
Poly,
I also exited positions back on April 11th and have been patiently waiting for this cycle low. I guess my question to you would be why jump back in today and not let this thing play out over the next few days? As Gary has stated before, this typically takes 3-5 days to play out, which would put us at the back half of this week. Also, we have yet to see any real bounce in the dollar yet which, if it happens, should initiate another leg down in the metals. Why the urgency to move?
PIMA,
Thanks for your response to aljiowa. I have a similar dilemma, since I’ll be in France on vacation from 5/8 to 5/24. Judging from Gary’s post today, it looks like the C-wave will still be working then. As painful as this correction is, if we get a swing low Friday(I hope)/Monday(a little more nerve wracking), I’ll add and check back as often as I can.
I hate having to take my laptop, though.
Best,
Le Fou
ROB,
Google keeps locking my account thinking I’m spam so I open a new account. The digits are just the last 4 of the profile ID to distinguish. I can’t get into any of the old ones.
No idea how their ‘spam’ detectors work or why.
TZ,
Why don’t you change it to TZed or something that’s not so much trouble?
You know the definition of insanity? Doing the same thing over and over expecting different results.
Best,
Le Fou
Some silver miners are starting to fight the down trend.
GPL and FVITF have gone green, up ~1% each.
TZ,
Don`t sweat it Bro. We know your the real thing! 🙂
Gary,
If the dollar doesn’t begin to roll in the next few days or by Friday does that change the outlook for where this whole parabolic wave is going? If that is the case do you have any recommendations to protect our positions in case of any possible event?
PST,
I’m not jumping to buy, just on guard in case we drop suddenly. We’ve waited long enough, our patience will hopefully be rewarding.
But I like being ahead of the move, as long as i feel I’m close to the bottom I will start taking small positions, more of the very DITM positions, these wont hurt too much if we keep dropping.
If a parabolic move lies ahead of us, I would have something to profit with, even if I miss a couple of points on the cycle low.
There is also the other “runaway” scenario still potentially on the table, so I want some exposure to that scenario.
Lastly, I want to buy some OTM’s here soon, I like to get these as close to the bottom, but as it’s dipping, not rising. The premiums on these get crazy fast once a rally is sniffed.
Unless one hits a wide, predetermined stop-out I can’t believe people are selling miners into this move. Some of the old favorites are getting cheap enough I’m tempted to load up then turn off the computer for 3-4 years.
I am all in bought SLW calls at 40 June. Going to light a candle now!!!
I just popped in for a nosy to my local bullion dealer, chards In Blackpool, and the premium for a kilo of silver is 30% over the spot rate. £26 versus £34.!!!!!!!!!
My basic interpretation is that that is the real price of silver
£34 an ounce uk, $56
Thanks Poly.
Just to clarify, the reason that I was asking is that I’m also contemplating when and how to jump back in, so just wanted to understand your thought process.
Your comments are helpful as usual. Good luck and hopefully this patience is rewarded.
Come to daddy. 20 pt flush on AGQ from here (fingers crossed).
I just popped in for a nosy to my local bullion dealer, chards In Blackpool, and the premium for a kilo of silver is 30% over the spot rate. £26 versus £34.!!!!!!!!!
My basic interpretation is that that is the real price of silver
£34 an ounce uk, $56
I nibbled some more on this dip. Half as much as my earlier purchase.
Don’t mind being a little early with this size. Total risk at 5% of capital now.
SB,
What do you mean by total risk.
Sandy101,
That’s the amount of capital I’m willing to lose. For example, on a $1 million account I’ll stop out at down 50K.
Most here talk of % of capital invested, but that is not as important to me as the total loss potential, which takes into account the volatility of the instrument traded.
Shalom
What % of your portfolio is in cash?
There is no way I’ll be able to stop myself from getting very heavily long if we get a puke out tomorrow morning.
I’d like to be more patient, but this is getting ridiculous with the miners in particular.
SB, I hear you. I’m trying to be patient, but can’t stop myself from taking little bites here and there.
Haggerty,
I just checked, and after today’s purchases I have roughly 2/3 of total left in cash.
Remember that I was mostly silver miners and sold all a couple weeks ago when they acted like crap vs. silver busting new highs every day with 2-3% gains. I was pissed not to be in metal (AGQ), but am pleased I sidestepped the miner debacle.
Wow
Shalom for you that’s a lot of paper. Do you unload a certain % after a daily cycle low is in place?
aljiowa,
Gold won’t top before late May and the middle of June is a more realistic timing band.
Go enjoy your honeymoon and leave the smart phone at home.
The HUI has the trendline off the Jan move to catch it now. 547 or so. That would still keep a pattern of higher lows in place. Sigh…
Still, the miners blow. I hate them with the white hot intensity of a 1000 suns.
Maybe they will just go to zero now. We should have got leveraged UUP three weeks ago. We’d be better off.
the only reservation I have about adding to miners (heavily) is that I’m getting close to stop on the first batch of NUGT.
I very rarely (if ever, these days) get heavy into a trade that has already stopped me out unless a week or two passes. Let’s see if I get stopped out. If so, I suspect we might be broken for awhile.
I’ll share the results here.
damn..miners still not diverging
guess more downside to come
We may be near the bottom if so many of you are tempted to buy back in right now. I’m sure other investors are thinking the same thing.
I’m already 100% invested, so all I can do is sit and watch.
“Do you unload a certain % after a daily cycle low is in place?”- Haggerty
I think you’re referring to using the cash to buy? Absolutely, I just hope I can stay patient for now! 🙂
The bottom line is that miners will be a great hold for years to come.
And for shorter term traders like most here, the bull will let us out favorably.
I’m not buying it yet, but somebody pointed out GPL’s strength and I agree that it looks tired of going down.
Jayhawk,
Thanks for the humor! It helps cut the tension. One good blast on the dollar and we can get this damn thing over with!!
SB, how many years did it take you to learn be successful as a trader?
Last thought. Even if we have more pain ahead, which looks like a solid possibility, I’ll venture to say the worst of the move is done.
I doesn’t mean we rocket tomorrow or even in the next few days, just that we’ve seen the worst of it.
Look GDX, SLW, and other stocks.
LARGE volume; look on intraday charts and compare to previous days.
People are cracking and selling here.
More downside? I don’t know but certainly pain/panic selling.
HEY Y’ALL!
I just stopped by to say I’ll be droppin by wit a web page that gives you a chance to make the kind of money my wife and I have made trading the HUI miners!
We’ve just upgraded our single to a double wide by doing it. It’s GUARUUNTEED cash money!
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Eamonn,
I was able to consistently make money, though not a lot of it, after my first year.
Around the third year I found my own discipline and starting making a big difference.
Gary’s time horizon in trading is something I’ve worked on the last couple years and see the benefits of that as well.
Once this C-wave completes, we’ll be back to my favorite type of markets to trade…sideways to slightly trending vs. this parabola stuff. 🙂
HUI investor,
LMAO! That’s a handsome wife!
No panic or blood on the street yet, doubt this is anywhere near done, might have to wait until tomorrow. Only possible move higher is our still valid runaway option.
Miners are doing a great job of stinking, again, just as metals get their best legs for the day, the miners collapse.
SB,
I don’t do chop markets very well. Want to give a (suitably vague) description of your approach to trading them? Oscillators? Scaling in/out? ???
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SB, what do you mean when you say “I found my own discipline”?
And, if you don’t mind me asking, what is your strategy for making money in “sideways to slightly trending” markets?
Thanks :o)
What the hell dxy?
Greggy_M,
To answer your question about PSLV and other such funds…
NAV is Net Asset Value, so the value of all the assets a fund owns – in the case of PSLV and the like, that would the value of the bullion it holds plus probably a relatively small amount of cash.
Dividing that NAV by the total amount of shares of that fund gives us the NAV per share, which tells us how much of the fund’s assets each share is worth.
http://www.investopedia.com/terms/n/navpershare.asp
So then the question is whether the fund is trading at a price higher than its NAV per share (ie, at a premium) or lower (ie, at a discount).
Since closed-end funds like PSLV or CEF only issue shares maybe once or twice a year, when buying interest is high and more investors are vying for that relatively static number of shares, people are willing to pay more than the underlying value of the metals held by the funds and the premiums can run well into the single digits and even double digits.
Why are investors willing to pay a premium for these funds? Well because in the spectrum of paper silver/gold vehicles, some are perceived to be safer, like Sprott or Central Fund of Canada’s products. Why are they perceived to be safer? It comes down to details about what their underlying holdings are (actual physical metals vs paper contracts for example), how the physical metals are held, where, under what terms, etc.
This is it in a nutshell or at least my take on it. The way I look at it is you have a range of options from holding physical metal in your hand at one end to derivative products at the other end. In this spectrum, funds like PSLV and CEF are closest to the physical end of the spectrum as far as “paper” products go.
The way I look at it is I’ll go with funds like Sprott or CEF for money that I’m parking for the longer term, while I’ll use things like AGQ for trading money (though a larger share since I’ve found Gary’s blog). I’ll also base my decision based on the premium to NAV, refusing to pay too high like PSLV recently, or going for the lower if say looking at PHYS vs GTU for instance.
If you want to know more about different bullion investment vehicles, read some of the thread (particularly the ones titled Paper plays, CEF, PSLV, PHYS) here in this other board where I’m active:
http://marketwatching.freeforums.org/investment-vehicles-f13.html
Lots of opinions out there on different bullion vehicles, but that’s my two cents for what it’s worth.
look at the dollar lol not cooperating yet
Stochastics and MACD primarily. As far as scaling in/out, that is well suited to my personality and something I’ve always found easy when focusing NOT on percent of capital invested but rather percent of capital I’m willing to lose.
So the size of subsequent trades almost always varies as prices move, but the amount of capital I risk per trade rarely changes.
Why thank ya Mr Bernackie. Aint she a beaut! I was able to impress her with the 1980 Ford Pinto I got with my HUI winnings over the past year. Was she saw my toothless grin rolling in that stud machine, she was all mine.
Happy HUI trading boys and girls!
Hey Aviat,
About your OTM options post, really helpful. How do you figure out which strike to buy and how many months out to get?
Thnx,
Sideways markets will trade from overbought to oversold more often than a strong trend like we’re seeing in metals this C-wave.
Just look at the beating silver and miners have taken the last several days, and still the stochastics cannot yet push into oversold territory.
The best lesson I learned (after a couple years) was to avoid information/indicator overload. Keep it very simple because in the end, successful trading depends on discipline more than anything else, and it is difficult to stay disciplined and level headed with too many moving parts.
Doh! Greg, forgot to mention a key bit, which is that funds will list their premium/discount to NAV on their websites, once a day or even intraday.
Here are the links to the various NAV pages for Sprott and Central Fund of Canada’s funds:
http://www.centralfund.com/Nav%20Form.htm
http://www.gold-trust.com/asset_value.htm
http://www.silverbulliontrust.com/net_asset_value.htm
http://www.sprottphysicalgoldtrust.com/Net-Asset-Value/default.aspx
http://www.sprottphysicalsilvertrust.com/NetAssetValue.aspx
You can also input their stock codes in this site, which gives more info on each fund’s historical premium/discount to NAV.
In the end of the day, it still comes down to trying to buy low and sell high. But as an added wrinkle with these funds, if you can buy at a low premium and sell at a higher one, then so much the better.
The main concern though for me with these funds when they premiums get too high is when will there be another share issuance (never announced ahead of time) that suddenly deflates the premium. But even then it’s not such a big deal in a bull market and if holding these funds over the longer term I don’t think.
The premium on PHYS is coming in quite nicely. If gold can just get a quick drop out of the way I’ll begin to buy.
Doh again, Greg forgot that link with more information on closed-end funds’ historical premium/discounts to NAV:
http://www.cefconnect.com/
Sorry, I’m in Asia and it’s late in this part of the world – getting tired and time to hit the sack. Cheers.
The level of miner hate on this board is a definite tell.
SB,
How do you calculate your % risk per trade? Do you use stop loss orders?
David,
I think you might be correct.
Yup SB, PHYS is trading at a low for it under 2% premium and is also on my radar.
Greg, PHYS has often traded in double-digit, mid-teen premiums so this is pretty good for it. It just did a share issuance last month, which has taken some of the air out, which is good.
Not only is it lower than Central Fund of Canada’s all-gold GTU, which is at about 4% now, but historically GTU’s premium doesn’t go beyond single digits.
So PHYS is attractive now on both counts – in terms of its premium at the moment and where it’s liable to rise back to.
Kevin Depew at Minyanville pretty much sums the next few months up in DeMark:
MONTHLY SELL Setups (June-September) in SPX, NDX, INDU, RTY, DAX, UKX, CRB Index, Corn, Wheat, Soybeans, Sugar, WTI crude, Brent Crude, RBOB Gasoline, Gold, Silver, HYG, IEF, SHY
The one MONTHLY BUY Setup over the same time frame ???? US Dollar Index, although that pesky 72.50 still has not been breached…
David,
You’re right, but with good cause. Seriously, they suck. To be banking on them for the last cycle is a real risk of under-performance. I’m pulling up 6 month charts of SLW, SIL and GDXJ, they look sick to me, in relation to their underlying metal.
Thank you, SB. Very interesting.
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Gottahaveit,
First determine what amount of money you could lose and still be happy, say 5% of your portfolio.
If you have $1 million total, you can lose 50k and have no worries. Look at the average true range on what you’re trading, that is what is a typical amount of volatility you can expect. You can find the range in most charting software, often called ATR. I typically use this number (rounded off) for my stop as well.
Then you can calculate how many shares you should be taking in each trade. For example, I see SLV has an average range over the last 20 weeks of $2.30 per week. If I were looking to buy it, I’d give myself that much to risk, so on that $1 million account with 50k (5% at risk), I should buy roughly 22,000 shares of SLV per trade.
I try no to focus on amount of portfolio invested as it is misleading. The risk has to do with the volatility of the vehcile, and risk is my concern. In this case, however, the account would be almost fully invested. If something moves a lot less, once can buy a lot more.
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Yes, I use stop orders. Especially since I often step away from the ‘puter.
DG
This is a FUNNY conversation w/you and Rick. I’m not sure if anyone was ‘getting it’ at the time, but funny. I am only up to where he gave you 2 choices…and you replied
Blogger DG said…
“Rick: I’ll answer , but just because you are so warm and fuzzy: I believe the 3rd option is correct. The miners are just consolidating huge runs and any sector is entitled to underperform for a while. I bet they now outperform once the daily cycle low is in.
May 3, 2011 7:03 AM
3rd option..haha 🙂
I will be leaving when I catch up on this blog (only at 7:03 am) but just gonna say I bought Ag at $17.7799999 . i believe it could go lower, there are gaps below that I would LOVE to buy, but at this point, a good bounce now or later woulld be a good trade .
cya all! p.s. dollar bounce anyone?? Talk about WEAK!!
Traderlady! Is that you reaching out for a handshake? 🙂 Hello
P.S. I’m not reading this ‘live’ yet,I am catching up from 7 a.m., then I have to leave – just wanted to say hello before I forget
Poly,
I remember going on a rant against the miners in this board, talking about how they had gone nowhere for years. I hated them with a passion.
That was August of last year.
Gary said something once that was very apt. If you want to know the emotions of others, just check your own. If you hate the miners, chances are everyone else does too. Right now they are being shorted like crazy. When they break, they should break big.
yep…unfortunately no bottom today, but we’re very close…
but a good day to start accumulating though
until the miners diverge, we’re headed south
this dollar is so pathetic…
David,
You are right, of course.
ADP tomorrow should help put a push in the dollar (up) temporarily.
Could we still theoretically get a swing in the dollar today if we stay above a low of 72.72, even if we have a down day?
Gold/silver down even with dollar down hard….what will happen to the PMs when the dollar finally bottoms?!?
Here’s my take using my emotional radar. If I’m itchy on the trigger finger and wanting to buy, its likely everyone else is too, thus its too early. If I’m wanting to puke up shares, everyone else is too, thus the time is getting ripe to buy.
Right now, I’m eerily patient, thus neutral. With this reading, I wait for price to dictate with a swing low. Hopefully around Gary’s stated range of 1500-1510.
Just think, in appx one month people will be on here all giddy about the money to be made by buying AGQ, DGP, and high risk options. That’s going to be the time to unload, and pick up a few puts on the SLV.
Cheers!
f
Fubsy,
I am calm too, but that is only because of Gary’s guidance.
I would be totally freaking out on my own and would have probably sold my AGQ position yesterday.
We have guys here at SMT have a huge competitive advantage which most folks outside don’t have.
Hope this does not skew our perceptions:)
Gary,
I know that in the past cycle lows have all broken trend lines.
Are you going to call this cycle low if it does not break a trend line, and are trend line breaks a part of cycle analysis ?
Fubs,
Thanks for the reality check.
SLW outperforming SLV for the first time in sooooooooooooooooooooo long…
maybe I just jinxed it here – do we have any ray of hope?
LE FOU
Didnt you read my mind last time too?
I think I’ve talked to you 2 or 3 x on here , and every time it was because you mentioned something I was thinking of.
I will tell you why I bought AG here…
1) it looks quite oversold-
2)I was in it and I’m not ‘old turkey’ or ‘buy and hold’ when I expect a pullback, but if I was, I would still be in it here,just hoping for a retest of $26…so I buy some here hoping for a retest of $26, yet also hoping it fills the gaps $16 and this area too to buy more. Now I’m in a position to be happy either way 🙂
-by the way AVL looks really good to me here.
David,
Maybe this will bring the bottom:
I HATE THE FREAKING MINERS! WHAT A PIECE OF JUNK THEY ALL ARE! I WOULDN’T TOUCH ‘EM WITH A 10 FOOT GOLD POLE, IN FACT I’M GONNA SHORT THEM ALL, SEND THEM ALL TO ZERO WHERE THEY BELONG!
Good tactic, PC.
AGQ should tag 279 today…
Blogger Gary said…
aljiowa,
Gold won’t top before late May and the middle of June is a more realistic timing band.
Go enjoy your honeymoon and leave the smart phone at home.
May 3, 2011 7:56 AM
GREAT ADVICE-
I agree…you dont want your honeymoon to be so closely followed by a divorce. This is time for YOU and HER together…she will always remember it!! If you bring a laptop ,smart phone, etc..you will be tempted to check it whenever you want/anytime/everytime. She will ALWAYS remember that 🙁
IF you feel the need to…May I suggest you ask your future wife NOW-if she would mind you spending a SMALL amt of time in the ‘business’ room that most hotels have (10 minutes). sometimes free or small fee, you can check your KITCO and a few stocks on ‘stockcharts’ after close ( it’s like mini-market-rehab) you slowly cut the addiction 🙂 My wife and I read by the pool before lunch, and she doesnt mind me checking it while she’s reading.
Gotta go for the day!Cya
I used to use Jay as my primary sentiment indicator on miners and PM’s in general, but he is becoming a little unreliable!! Ryan is pretty good, but kind of an outlier.
Looks like Gold, Silver and Dollar are playing their own separate tunes without any conductor guiding them.
Just because there is a world outside of PM’s (there is?)… If the Dow closes up today I will get a sell on SPX. Remember the sells are not as good as the buys (the buys you can take to the bank). I am short some Q’s already and will just hold rather than add 1. to keep dry powder for PM’s and 2. I will be heavily short when $USD bottoms
Just thought to mention it if the sell is of interest to anyone.
I should add in Miners there as well.
DGP is flat and Gold is down 15 bucks
Wes,
Any particular number on Silver fancy you? Or you playing it off the gold cycle?
Wow. AGQ close to 100 point drop from last Thursday’s intra-day high of 382.
Captain has turned on the fasten seat belt sign.
Please, lets just get this over with!
Dollar rise to 73.50 breaking the overhead resistance, silver drop dramatically to 40, gold drop steadily to 1510. Then all of us SMTers jump in at that time, gobble up etfs, calls, futures in metals and miners, thereby stop the decline and get others to chase it up wildly, get rich and retire.
But alas, wishes, horses….looks like more pain is ahead of us for the next day or two. At this point, I’d be happy just getting back to the old highs before destroying a significant percentage of my account.
Don’t panic sell!
Wow … there goes silver
wow, just left my seat for 2 minutes and wouf….
And there she goes. Weeee!
AG is now 33% off it’s highs.
Silver breaking 40 might be in the works for this week.
AAron,
I hope that 40 is the stop and picnic area before going back to 49.80
For once, SLW & SIL doing better than SLV.
Market testing that 42.50 level, that might have been it.
Does the airline have barf bags?
Haggerty: You are looking at different time frames and closes. On the NYSE GLD is down 37¢ and GDP is down 22¢
Sophia, Im seeing a double bottom on the USd here, if it holds and rallies to the mid 74s, that can pressure gold and silver lower. A great buying opportunity. The break of 40 would do the most damage, and I think thats what we will get before it reverses higher.
I dont trade silver, so Im not the best at predicting its moves 🙂
I doubt that’s it.
But we’re getting so close, just $0.50 more and I’m taking a bite.
Damn Gold does not want to confirm this move.
DG
I don’t think I follow what you are saying.
i feel like puking UP..
there goes my AGQ
i might have to squeeze into Gary’s basement by the foosball table
Dg
I think I got it now. But should’t GLD and DGP be down a lot more.
Forgot to mention my bias!
Im short Euro here (a short term trade).
Jabalong,
Thanks for the insight, it really helps. On my TD Ameritrade ticker quote it says PSLV has 835M in assets and it’s Premium/Discount is 13.52%. I assume the 13.52% is the premium over NAV. By the way PSLV is really getting hit hard today much harder than slv, is that normal?
Thanks again it’s really appreciated;-)
Greg
/SI may be headed for $39 if it can’t turn around overnight
http://i54.tinypic.com/f39yy0.png
if it does get down there, the last time it was at such a low sentiment level was january of this year before the whole rally even began. if that doesn’t shake out every last ‘speculator’ i don’t know what will. here’s hoping.
whitebear, are you buying agq today?
Haggerty: You wrote “DGP is flat and Gold is down 15 bucks. “Down” means vs. the previous close, but you are using one time for the gold close and a different time for the DGP close. There was price movement in between. On the NYSE (same open and closing for DGP and GLD) they are tracking exactly correctly.
Gary has spelled out pretty clearly what it will take for the bottom to be in: 1. GLD touching lower BB 2. RSI below 30 3. Breaking a trendline to induce shares being puked out. He can of course be wrong, but unless you are experienced and have a pretty good reason for disregarding these instructions, you are probably better off waiting for at least one of these.
Aaron,
Short Eur too…fast a furious in-and-out…Playing a nice ADP report…
Brian,
Thanks for the shout out so I’m going to add to the sentiment indicator. I don’t know if I can take much more of this. I already threw up in my mouth and if silver goes to $40 who knows if I’m going to do something irrational. I’m pretty worried about silver right now because it’s tanking so hard yet no real bounce on the USD and gold is holding up.
Whitebear: What did you base your “AGQ at 279 today” call on? And why “today”?
wow i was away for an hour and i missed this last drop…..my trigger finger is getting itchy
Nice Sophia!
In that case, may Lady Fortuna smile upon our portfolios!
If silver gets down to $39, AGQ should be around $243 or so. Still higher than where it was a month ago.
Thanks DG now I understand
Just a friendly reminder to base trades off of the silver price itself and NOT the price of AGQ, no matter how “cheap” it may seem.
Must be getting close to a bottom. Sell silver / miners and buy bank of america ??
http://seekingalpha.com/article/267253-why-it-s-time-to-sell-silver-stocks-and-buy-bank-of-america?source=yahoo
I can assure you Brian, I’m still very much a head case.
Saw it in the tea leaves. And, no I won’t buy till tomorrow morning unless they hit my number today.
Love,
WB
DG, BTW, do you know if Gary uses common/standard inputs for MA/Deviation for BB? Close,0,20,-2,2 and RSI_EMA of 14 MA?
Shalom, I see you nibbled on NUGT this morning. What is your game plan for taking a bite out of silver?
I did my nibbling there last week–glad I could push it down for you. : )
BTW, I haven’t done anything this week despite the tasty prices in silver.
As usual, I’m following Gary, and that means I want to see a bigger drop in gold.
I think the Big Boyz want to push silver down to $40 to turn up the pain dial to max.
Think about it guys: the thought of silver printing $39.99 is going to make weak hands cry for mommy.
just a reminder, gold and silver dont have to bottom at the same time. We have seen this before!
Ryan,
Don’t do it.
I don’t think the bulls will let it drop that far, that’s just me. This is a bull market after all.
i think this is bottoming today..i am going in at around 41
Garys silver chart on this post shows a draw line slightly below 40. Looks like we might get to that point.
T: I believe Gary uses a 5 period RSI and BB of (10,1,9) Someone else can chime in if I am wrong. If your eyes are good enough, look at a chart of his and it should be on there.
I have EXCLUSIVE video footage of the HUI’s intermediate cycle!
HUI!
Careful Razvan–silver is a very manic-depressive market. It could hit $40 in a flash.
Keep your eye on gold and the dollar like Gary does.
catbird,
It depends on how we work lower, but I’d prefer a lower open tomorrow and will have to start buying some of these silver names into any additional weakness.
The fact the dollar can’t rally or gold decline is messing with our perfect entry setups, not to mention I might get stopped out of NUGT if this keeps up. I originally gave the trade a $4 stop…that didn’t take long. 🙂
So much for my theory
Picked up a small chunk of SLV DITM right here at a dip on $41.80.
First target from last weeks high easily met.
Don’t look at your accounts now.
right now golds BB is at 1460…not going to happen! i think garys was talking about the mid bolinger band at 1510
why, is silver down or something? i haven’t really checked in a few days, might as well do so noWHOAAGOODMOTHEROFGODWHATISHAPPENING
Ryan,
Don’t do it. Now of course we could be wrong but at least wait for Friday or Monday. I am down 30k right now after being up 58k as of last week. I really want to throw up all over the place and sitting here at work I can think of nothing else, productive? Not really. So, what am I going to do? I am going to recognize that felt the same way at the last IT decline and the last daily decline and so on and so on and then I am going to buy more in a couple of days when this thing has bottomed. I know we are getting close because REALLY feel like I am the dumbest guy in the room for not trading the cycle. My plan was to not trade it and I am sticking to the plan come hell, right now, or high water. Both seem to be happening at the same time.
Gary uses on his charts a BB of 10, 1.9
That’s a 10 simple moving average and 1.9 Std. Dev.
To compare apples to apples, look at GLD versus DGP. GLD down .39 percent; DGP down .83 percent.
Note that UGL is down on .79 percent.
(There is usually a slight diff between UGL and DGP, and UGL comes out ahead every day I have looked at it.)
at this rate, when gold tanks to 1500, silver will be at 35
should I sell all and buy in then?
Please advice
oh it hurts
I would love to see us close at the lows.
What’s this? A feeble, barely noticeable uptick in the dollar?!
Naw….couldn’t be.
Razvan,
Gary uses 10, 1.9 for BBs. Its at 1479 right now and rising at about 7/day. So in 2 days, it would be well above 1490.
I’m not going to let myself buy anything until gold gets to $1525.
David and Rapper,
Thanks for your comments but this is really hurting. I think it would make me feel better if gold was falling harder and USD rallying. It’s scaring the CRAP out of me because I’m thinking silver can go down a lot further.
I just bought back my positions i sold at 42.79 couple weeks back for 41.91…selling should stop at 2 PM…hope this is it..
Great C wave here. This is fun.
Gold just needs to drop $10 more and we can print it!
Silver and the miners have more than enough daily cycle low type of damage inflicted.
http://silvergoldsilver.blogspot.com/
check out the new video about silver manipulation.. What are your thoughts on holding slv?
Jay, it sure WILL be.
St Deluise
You got me laughing out loud here at work. You and the guy who puked in his mouth.
By the way, there are two Ricks on this blog, I am not the Rick who wanted to shoot somebody standing who was actually sitting.
I have 41.60, 40.94 and 39.74 as levels of interst for SI. 41.70 is also the 50% retracement from the move from the 33area. 39.775 is the 62% retracement. I think a break below 40 might create flush to mark the intermediate low.
I am ready at 40.10 and 1513….will see if I get filled when I sleep like last night… 🙂
would be surprised if /GC didn’t test that mini flashcrash low at 1516. personally my chart jazz is pointing at 1493, but i will buy the next swing low on the 4 hourly.
Now I’m seeing blood starting to flow!
Also we seem to get another wave around 2:30 3:00 PM as the ETFs start becoming active. Unless people feel that we have a swing low in place, be ready for another flush into the 4:00PM. It works reverse on the up days. Part of it might be the ETFs themselves working. These inverse ETFs have positive gamma for the holders which exacerbates the moves into the close.
Ryan,
You gotta commit to your decision.
Shut off the computer and come back in two days.
Even if we are all wrong, we are in a bull market. You will recover all this and much more.
In 2008 these stocks went down 10% a day, day in, day out. A day like today would have been considered a rally. But if you held on, you made a fortune.
Getting rich isn’t easy. You pay for it at times like these.
“at this rate, when gold tanks to 1500, silver will be at 35
should I sell all and buy in then?
Please advice”
You don’t sell weakness with the daily cycle low approaching.
Jay LOL! I love me some C waves too. My wife checked our account last night against my wishes and she loves C waves too.
Can anyone find an example of silver dropping almost 20% during a “c-wave” because reviewing past parabolic runs anytime it has already fallen this much it doesn’t stop till the 200dmva.
Thoughts?
Gold needs to test that spike down last evening at 1516. That will make the low legit and Doc can call it a trendline break.
Thanks all for the specs on the BB from Gary – it just hit the lower BB then on the Silver daily chart yesterday AND today, As for gold, that’ about 1482.70 which as someone said “ain’t gonna happen” and I agree.
razvan,
set your BB to 10,1,9
then you will have it.
Flash Crash in Commodities?
Poly,
How DITM are your SLV calls you purchased if you don’t mind?
Gold is following suit now.
Gary has made this event VERY clear.
Stay focused guys.
If you have cash to deploy, your time is coming VERY SOON!
Otherwise DO NOT SELL.
Gold’s downward pace is now increasing. I will add some at 1520.
This seems more like an IT low than a daily cycle low.
When does this pain stop! Holding on tight to my AGQ position.
gold almost at 1525
David,
I really want to shut off the computer and not look but I still have some dry powder to put in. I’m thinking of putting it in silver since I’m so disgusted with it right now or dare I say it SLW.
Congratulations to those who have lots of dry powder, like SB and Poly. You are going to make a mint.
This is a massacre
OK, I really hope talking about it won’t jinx it, but we have a nascent bounce in the dollar forming.
My gut tells me the buck will move generally higher until the jobs report Friday.
I think a “max pain” strategy by Da Big Boyz would mean keeping the PMs bleeding until end of day Friday…heck, perhaps as late as Monday morning. Keeping them weak through end of day Fri would probably get a lot of weak hands to capitulate so they don’t go into the weekend stressing out.
Then perhaps after Monday a.m. passes and 99% of the weak hands have puked up their shares, they resume their rise.
This scenario pretty much jives with Gary’s guesses.
Sandy, gold down some 3% or so, hardly an IT low!
Looks like a good spot to leg in. Need SLV to hold 40.30.
Poly,
My main position from February is AGQ. That feels worse than last IT low!
Gary,
this feels worse than ever before…
My account is down like 30% in 2 days
i’m out of words…all my profits gone
I think that someone knows that the NFP is going to be good….
This is sick, seeing silver flirt with $41. Sub-40 looks very likely.
The good news is that 39 – 40 should offer support (according to the way I read the wave pattern).
39 will also be very close to a 50 percent retrace of the entire move up from the January low.
If silver goes below $37, I would start to get worried (okay, more worried) because that would completely change the wave pattern, essentially invalidating the pattern that I’m expecting silver to play out after this drop is complete. But let’s not worry about that till it happens, hopefully 39 will be all she wrote.
Wish I was in gold. That has hardly corrected and may have been very easy to hold.
Having said that, holding on tight to AGQ. Hopefully, we go back to happy days soon.
I think that the PM are getting close to bounce back… If Oil continues to puck, it has to be good for the miners…
sophia,
What is NFP?
Yes–I agree.
For some reason this feels more painful than the IT low! FWIW I have my seatbelts buckled and am fully strapped in! HANGING ON :))
I’ve got alerts popping off all over my screen for silver miners. Can’t be long now!
I was stopped out of my first chunk of NUGT, btw. Still have the other piece bought earlier today (with it’s own stop), and am ONLY looking to BUY.
It’s funny because Silver American Eagles are still going for more than $50 an ounce on eBay. They must not pay attention to market price very well.
Those of us looking to buy will have to act quickly when we decide…gotta buy ’em while you can, not after they turn hard (although that works sometimes, too)
PC, Non Farm Payrolls…
It seems that the little people like us are the last ones to know the number at 8.30AM on Friday….
Looks like the low will have to come on another day…maybe tomorrow or Thursday.
non farm payroll
I encourage everyone here to review previous parabolic tops such as 2008, 2006, 2003 etc.. Once silver made a parabolic run (as it just did) and then dropped almost 20%, it never came back until it hit the 200dmva. Plus add to the fact that the dollar is near all time lows with extreme record low bull sentiment readings.
Don’t mean to scare or offend anyone nor is this sn attack on Gary, just encouraging people to review past runs in detail. It’s worth the 10$ membership on stockcharts.
This is what we need to get our parabolic rally.
Lots of institutional shorts piling in right now. They think silver is a safe short. They are fuel for the fire.
When this reverses, you will see hedge funds blowing up left and right.
Yeah, I feel for those who stuck with silver and AGQ. What a drop. Gary saw this as a possibility and had a plan to get out, but postponed because it
I dumped my SLV and calls a week ago Monday when silver had come within pennies of 50. I bought some GLD calls with the proceeds, but a smaller position. Those are down obviously. Then, like an idiot a couple days ago I repurchased about 1/4 of my SLV position. Even so, I am in better shape than I would be had I not sold the position when silver came close to tagging 50.
My biggest concern at this point is the freaking dollar. It’s not bouncing, and yet silver is tanking and gold is dropping as well. What will PM’s do if the dollar gets into rally mode, how much further will they drop? And if the dollar does not rally, how much lower can it go with the extreme negative sentiment that currently exists for the buck?
looking like bounce tomorrow to suck in some people
and then low on thursday/friday
Dg are you still holding the TBt options? I’m getting sick of how many times I tried to buy it and was stopped…
I’m not buying gold yet, but for those that are, the premium on PHYS is now just a hair over 1% and the smallest I’ve seen it.
“postponed because… it hadn’t hit 50 yet”
I got a buy signal on the 15 for a short term trade on SLV, sold 39/34 May 6th puts and bought 20 June 45 calls.
David, VEvery few hedge funds even bother with silver. Its a tiny market that only small funds can afford to play in.
I’ll say it because everyone is thinking it……”Is this the D wave?”
Now I believe we only need 10 more people to ask this before it goes back up.
Aaron,
My understanding is the opposite. Silver has been a favorite of the hedge funds for awhile now. Keep in mind that there are thousands of them out there, of all sizes. A high-beta move like this does not go unnoticed.
For better or worse, I’ve bought May AGQ $280 options.
We may have a better level later, but I didn’t want to risk losing the entire pullback without making a bold trade.
153 million shares of SLV traded today!
OMG this totally BLOWS!!!!
I’m in with all four pawz…
Dan,
Who thinks silver has dropped 20%? Yes, it’s dropped but not 20% yet. Also, Look at the 2006 top.
Silver dropped from a high
of $14.74 to $11.62(a 26% drop)in only 2 days, then made new highs just 3 weeks later. Remember your ABC’s
A- Always
B- Be
C- Calm
David, we obviously have different sources. I am in the field, and no one I know even touches it. Maybe its just the selection that I deal with.
Seems to me the cycle theory is in fact cycle principle.
Waiting for US$ index to go higher and then that’s that.
Dollar is the key. Once it makes its 3 year low, PM’s are toast.
DG, how are you holding up here? This big a drop in AGQ–I know it’s not your usual trading style to hold thru something like this.
Alex, how are you doing with your miners? Did you bail on some of them before the big drop?
This comment has been removed by the author.
HUI making a BB trade for tomorrow if it holds here, so a bounce tomorrow should be a viable play.
I took off some AGQ on April 10th (I think) expecting a correction that never came… we are now back at that level. I am toying with the idea of pulling out the rest now and just pretending I just pulled it all out on the 10th and waiting for a swing to get back in. If I had pulled it all out back then, I would have been mad these past weeks looking for a way back in but I would be super happy today…
I probably won’t, but still….
Aaron and David,
There’s silver futures, which is a thin market. But there are all the derivatives out there–SLV, AGQ, etc. Couldn’t the hedge funds be in those? Huge volumes lately on SLV.
I wonder how much the CME will raise margins tonight? 🙂
i am beginning to think PMs may ignore the initial stages of a dollar rally for a good chunk of time just because it would be funny.
also assuming we need a new low in the dollar first before that even happens.
/SI still bee-linin’ for $39, hopefully prints it this afternoon or first thing in the morning.
…can’t…hang…on…much…longer…
Top off or no top off…
That is the question.
For ’tis dropped low,
Yet might droppeth lower…
PC, I just deal with futures, and so thats my field. Perhaps David’s sources deal with equities which would make sense.
Futures dictate equities though, not the other way around.
I mean, aren’t we essentially guaranteed to go lower once the dollar bounces? So why don’t we just get out…
Blood in the streets people.
THIS IS IN GARY’S NIGHTLY REPORT, SCENARIO IS WELL WITHIN SCOPE.
there are no guarantees… according to that theory we shouldn’t be down today.
Aaron,
You are correct in that that it’s much too small for the SACs and Fortresses, but there are plenty of PM-specific hedge funds out there, as well as commodity funds.
Who knows, we may even see a body float to the surface at the end of this selloff.
Jennifer,
I have had the same thought every day for the past 3 days. (I don’t have AGQ, but do have a small SLV position.) Of course, in hindsight I would have been better off to have dumped it a couple days ago. But now, we are so close to my expected target for a low (39 – 40) that my concern is that as soon as I dump it, it will take off to the upside.
But this is very ugly to say the least–down over 18 percent in only 3 days! And as I’m typing this, it just broke below 41 and still falling fast. bleh….
I looked at my acct. balance a couple of minutes ago and almost soiled myself………..
Jennifer,
Don’t do it.
but… but… bloodbath
The silver capitulation here is amazing…May see a breach of $40 by the bell.
Remember though, this is a healthy flush to reset sentiment, otherwise PM’s slow and steady rise would have been much more tenuous…
crap.. im not even going to login to my account. nothing but red!
Poly- Thanks for the calm words.
This beat down is starting to make me question my steady as she goes strategy. In this case, being quicker with a trading trigger finger would have saved me a ton of $. Lesson learned.
Cramer just said that this felt like margin call selling. I don’t know about that, but it does feel like I’ve been violated. Makes me want to question the 3 COMEX margin increases in 5 days…even though there’s no percentage in worrying about things like that.
Good news is that I’ve only given back half of my profits this year.
Adding to my AGQ here…. gulp!
Can anybody suggests a OTM call here ?
St. Del,
You have $39 silver as a target for this drop? What analysis gave you that number? (I ask because I see that same price as a potential stopping point)
Keep in mind this the plan that Gary had outlined in the his previous two reports. A bloodbath to reset sentiment which can allow gold and silver to finally go parabolic!
SLW BB crash.
i see alot of buy and hold turkeys are getting some anxiety.
i am buying silver here
HUI
Thanks for the laugh.
I dont see a bloodbath in Gold yet. But thats just me.
Blake,
Yes, but in Gary’s scenario the bloodbath corresponds to a rising dollar. I would have no problem with that. This is a pre-rising dollar bloodbath, meaning a rising dollar is going to make this … whatever is worse than a bloodbath.
Gary has anticipated everything that is happening.
And gold STILL has not cracked $1525. I’m not even considering buying anything until it does. (and I’d really prefer it to get to the $1510s)
Trading quotes – http://www.apeakunderthehood.blogspot.com/
True we needed a bloodbath to reset sentiment, but regardless of silver, Gold has not moved to the lows necessary for a daily cycle low. Silver, yes, but Gold is still $10 or so away. And the dollar hasn’t budged. Based upon the recent action, if Gold falls by $10, Silver will go to $35.
Jennifer,
The heavy bleeding in PMs started around 11:45. So did a rally in the dollar.
http://www.marketwatch.com/investing/index/dxy
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Checking in for the close.
ALEX, Hello to you! I am just trying to show I am NOT an “old coot ” from Sarasota. lol
EVERYONE, I am starting to see much pain from many of you. This is a good sign the end is near. Let’s go up, up and away! 🙂
Thank you Catbird (or SB the younger as I think of you in my head.) That has made me feel alittle better. I’m going to start drinking now.
pima (hi!), i use aggregates of fibonacci number MAs on 4 hour bars. the 610 (which contains fib-weighted averages from 13 all the way up and was where silver launched from in jan) is $39 on the money right now. the 1597 is around $33.
$39 is also where the 89 MA keltner is stretched 6.854 to the downside. the 11.09 is at $35.
a lot of hocus pocus, but in my experience they’re usually good levels to start and end positions.
http://i53.tinypic.com/11v6xpy.png
Man, you all are f’n funny!! Gold is down appx 3 percent from its high. This is possibly the most voLatile of all sectors folks. If a 3 percent drop in Gold is making you puke, perhaps its time to read your greed quotient and check your risk controls and tolerance. Swinging for the fences is a pretty common way to strike out. Not speaking to everyone here, but losing 30 percent in 2 days means you’re leveraged appx 10 times the volatility of gold. Good luck with that!
The comments are entertaining, though
F
Gold looks ready to fall through the $1,328 barrier now. This could setup a run to $1,325 and below.
Man, if silver drops under $40 I’m going to add some more to my physical stack.
slv has a gap at around 37 that prbly gets filled….I think that corresponds to around 38 for silver…
Poly,
1528$?
Gary…knock, knock…
Benjamin: I never had TBT options. I own some TBT (small position) And am 3% in the hole on the position. No plan to sell because it is small.
Pima: I am 1/2 AGQ and 1/2 DGP. I am still up quite a lot on the year and am willing to go with Gary’s plan. From my own analysis there is no way gold has topped out, so a rally is coming. Silver is a different story and I am more uncomfortable there, but we ought to, at least, get back to 50, so I am content to hold there as well. My cost is about 160 on my AGQ position, but do sympathize with those who bought late. My only comment would be to burn into one’s brain for the future: “Do not do fresh buying into market going nuts on the upside!”
LOL,
Yeah, $1,528. Sorry 🙂
Is this the D-wave? 😉
fubs,
The folks who are puking are not in gold, they are in AGQ which is down nearly 40 percent from its recent high. Even if you’re in SLV or SLV calls, you’d be down nearly 20 percent. That’s a lot different than 3 percent.
Who’s to say that we aren’t seeing some decoupling here. The metals don’t have to move in exact concert and they don’t have to move exactly opposite the dollar at every turn. Silver moved up much faster than gold and there were times when gold dropped and slowed down and silver just kept on going higher. Look at the time period around Mar 28 and Apr 11. Also the metals don’t have to be equally impacted by the dollar. We are putting in a cycle low, so far gold and silver are doing that no matter what the dollar does. At this point I don’t think a move up in the dollar causes a huge decline in gold and silver, I think the metals have already priced that in. Sure might continue to drift lower and bounce around in a range while the dollar tops off but I don’t think we see another $5 slam-down of silver just b/c the dollar decides to finally bounce up 1 or 2 points.
Fubsy – For me its not the 3% in gold thats killing me, its the 35% in AGQ. Thats a huge hit.
Thanks, DG.
William,
Good point.
Interesting … Nobody talking about trips and parties anymore.
🙂
AGQ: I am getting pummeled here.
Feels like Muhammed Ali is having his way with me for a full 15 rounds.
Now, I am waiting for the fingernails scraping the chalkboard to add insult to injury!
sophia,
Gary is out climbing rocks, having a good time, completely oblivious to the carnage we are witnessing. And if he were here, he’d just say, folks, you need to get a grip, get control of your emotions!
This is some sell off! I am in 70 percent cash right now and am feeling the calm and chill of Fubsy…Cooter you da man! I will say that I want to take my wife to Fiji for my 10th anniversary next August…OT I know, but anyone have any thoughts about the South Pacific? Stay strong!
A way to live through these things if you want to watch every day: Look at your account balance. Where will it be if silver hits 38? (A guess on my part) Get used to that number and assume we are going there. Your current balance is irrelevant. If you cannot stomach that number lighten up until you are comfortable with your balance when silver hits 38 (a little late now—this is for trading the rest of your life). I have made peace with AGQ at about 210 and assume we are on the way there. If that’s the bottom I will start my “year” with what profits I have left and look forward to the rally to come.
i’ve never taken such a beating in a 2 day period – maybe I should just call it a game
Gary is probably enjoying his day off from babysitting 😉
Picked up AGQ, AG, GORO, GDXJ and EGO for 401k accounts.
They’re either bargains of the century or dogs with fleas, lets find out.
Somebody needs to wake up Gold and remind it that it has to fall too. Can’t let little brother Silver do all the dropping.
Pass the sick bucket ladies
Nicely played, Poly.
Just nibbled up some June $42 SLV calls that I let go Friday before the close for $6.05 then for $2.20 now. These can go to zero with minimal affect on my account (less than 2% of my account).
If we assume that the dollar will spike up on Friday, wouldn’t that be a better time to buy PMs since PMs should correspond inversely to the dollar rise?
Thanks David.
Got to say though, I don’t get a warm and fuzzy seeing the HUI @ 549!
Reassuring piece by Dave Banister (hes been right on as long as I’ve been reading his stuff!):
http://www.kitco.com/ind/Banister/may022011.html
Everyone wants a pull back to buy,, scary as heck to do it in real time.
Poly,
Me too. If HUI has to go to 750-800at top of C wave, this is too much of a fall.
When & if it gets going, it has a hell of a lot of distance to cover over a very short period of time.
anyone ever do any research as to whether or not dip buying works better at the end of the day or the morning?
just glancing at SLV and it would seem (roughly!) mornings offer a better opportunity to deploy capital, in case anyone’s finger is getting too itchy. i know i am tempted now.
I managing a small account for my brother in law…Just emailed him trying to explain what was going down. Gotta love his response-
“I’m cool with where things are at. When you think the time is right, I’d like to add the other $1000 that hit a few days ago. Yeah, I can go to $2500 and still not have lost any of my own personal money. I picture a sling shot … keep pulling back tighter, tighter then …. Release!”
“My main objective is to be in as much as possible when the take off occurs.”
Jay,
You have a great client! 🙂
Silver is now ridiculously oversold here, at least in the short term.
I’m not going to discount the possibility that we just witnessed the daily cycle low at $1,527. It might not be a clear technical breach, but this late in the cycle with a supposed parabolic cycle to come, that might be “all she wrote”!
Some more GLD calls added. You would be crazy to sell now.
I know they’re in AGQ. They’re still leveraged 10 times the volatility of gold’s price. So, if you are in AGQ, and feel sick, its a good oppty to look at your greed quotient, risk exposure and tolerance, and honestly gauge whether you got too much AGQ.
It feels great when its going up, but can you afford your level of exposure whn it goes against you?
You don’t have to play futures to be leveraged. Gold commonly corrects by 8 percent. Are you able to hold AGQ on a 60 to 80 percent drop? If it’s 20 percent of your porfolio you probably can, but if its 100 percent of your account that would be gnarly.
I just think a lot of people with limited experience are trying to get rich quick. You’re much more likely to be successful if you make risk control your top priority, and select position sizes based on what you’re willing to lose.
f
PIMA
I am(again) back and trying to catch up on the blog…just got your question at 11.30 post.
I sold half my EXK and half my GPL a quite a while ago.I kept half and trade /half.
I sold all of my AG once at $26..got back in near $20.5ish and sold all again ON A LIGHT VOLUME RISE (KEY)2 days later,but did dip back in today.
Sold all of my AGQ on the LIGHT VOLUME (KEY)pass of $370 retest of the high (sold outthe following day).
I never ‘Buy and Hold” anything anymore ( I think most have heard me scolded for that 🙂 – I still let the charts tell me when to sell at least 1/2 near overbought areas…and Garys cycles have helped my timing too. I will be buying 100% again soon.
Its funny, it looks like ALL of my miners will do bollinger band trades today 🙂
SD , I also use MACD and Stochastics a lot.
I do hate HUI with the while hot intensity of 10000000 suns, but stepping back…If it stops at this trendline, it will have retraced just a bit under the 61.8 level. Exactly what the first daily cycle did.
The Pukey Index
I haven’t seen anyone mention this, but the lows of the day are around the 38.2 retracement from the January low; Silver at $38 would be a 50% retracement. As I mentioned previously $38 would also fill the gap on SLV…
Jay,
I admire your ability to draw new trend lines every time HUI drops 10 points 🙂
That would be “white hot” intensity. I hate it with the white hot intensity of 10000000000 suns.
Regarding silver and hedge funds. Of course they do, at least now when it is in the bubble high vol mode. SI is trading very well technically with Fib levels etc that the signs of computers are all over it.
I think we got the swing low in DX today.
Looks like it’s stabilizing around 41.
Greggy,
Lol I am more than calm as I am holding some puts and sold out what little I had left after the weekend fiasco so no need for ABCs. We are currently down 18% from peak and in 2006 we went down 21% (not sure about your math) but the dollar was in the mid 80s, not pennies from all time lows. Sure hope gary’s right as I’d live to jump back in but it will be extremely difficult to distinguish a dead cat bounce from a new uptrend after this slaughter and beyond the 2006 parabola all other post-parabola rebounds ended up being dead cat bounces.
Please dont take this as an act, just conclusions from studying previous parabolic tops….and just trying make a buck like everyone else.
You like that eh Poly? My delusional thinking knows no bounds.
what was the low on silver today?
The asian session is going to be fun
What a difference a day made.
Gary’s plan was to swap silver for Gold on Monday morning.
If silver had held on over the weekend, most would have switched to Gold and the anxiety level on this would would have been very minimal at this point in time!
Fubsy,
I do have too much AGQ, I realize now. But I’ve had most of it since $120. I’m not trying to get rich quick, just break into the elusive lower middle class quick.
If (when, please when) we bounce out of this I will trade it for something much less volatile.
At least you can laugh about it. We WILL be fine! When HUI hits 750 in 5 weeks, this will all be forgotten.
It’s like pregnancy, at least what my wife says, all the pain is soon forgotten.
Poly, More like a pregnancy scare..
I remember specifically when Gary said this correction was going to make people sick, wonder if the d wave was here, have people pulling out there hair, screaming, jumping from buildings, etc. I think it`s real simple; Do you believe the C top is coming or not? Gary got us this far and he is seldom wrong. Think; in a few days or a week your going to be on the other side of this and it`s going to be blue sky, all mai tais and yahtzee. Or you can pull out what`s left and put it in the bank @ 1%. Real simple.
Folks,
Even if this is the D-wave (it’s not) there will be an A-wave in six weeks that will let you out of your position at higher prices.
So selling now would really be stupid. Go eat a sandwich.
GST, min 40,58
86d4lif,
Exactly my thoughts. Gary has had a tremndous track record. Frankly, that is the only reason I was able to hold on.
The only thing that worries me is the dollar. Had it gone up and reset its sentiment, I would feel good. I am having difficulity in seeing dollar ride down for another few weeks on a fast pace with current sentiment level.
A break much below 38 would imply that margin is getting unwound.
Dan,
Your right my math was off but the point was even though price fell over 20% the next stop wasn’t the 200 dma as you claimed. Hope you make lots of money. Do you subscribe to Gary?
Silver bounced at 3:00 when the margin clerks finished for the day. Tomorrow is another day…..
amilena,
thank you
Gold won’t start correcting until the dollar catches a bid. It’s held up amazingly well with the panic selling in silver and miners
Hi everyone, after I’ve thrown up my dinner I’m planning of jumping off Blackpool tower if anyone cares to join me
looks like silver has been hit so hard that it can’t even recover
Poly-
What are you eye balling for the move up? What SLV and GLD strike & month?
I sold my 50% DGP position this am to free up cash to buy the FREAKING DIP! 🙂
Look at that /SI nail the lower green channel.
Intermediate sitting right under it.
http://screencast.com/t/UrrVkeUhrESI
Clarkatroid,
I’m right there with you buddy but unfortunately I can’t afford a plane ticket to get there anymore 🙁
SB, What miners interest you?
GDX hit Gary’s target today
Guys: Just my opinion, but I have been at this for many decades. One thing I have high confidence in regardless of Gary. Gold has NOT topped out. Topping pattern is wrong, sentiment is wrong, and fundamentals are wrong. I have no idea on silver but am trusting Gary. If there is anything to his analysis, the C wave is not over. If THAT is true we have one hell of a rally coming.
For me, I don’t do options in any size, I don’t do leverage, and I don’t buy/add after hysterical rallies. If you invest for many years exactly what is happening here is going to happen again. I have had my rear end handed to me enough that the lessons even got through my thick head (and that’s sayin’ something). Damage now will be likely reversed soon, so you may get a non-damaging lesson. That’s great luck!
Actually-
The green was the intermediate channel, the red was from last summer/
nice chart jayhawk…thank you
DG,
I sure would like to have a beer with you and just listen for a few hours. 🙂
Not buying today, I’m going to wait for a bit more of a US$ bounce.
I cant catch up with you guys, and I’m not skipping posts 🙂
A lot of good stuff today, DAVID and POLY holding steady -good posts by SB ,Poly,St Deluise,new ones, old friends…Good times!! 🙂
I just want to remind everyone that last wk , almost EVERYONE on here wanted lessons to go long with high leverage and options plays ( and I believe most were calls).
I also remember everyone saying they ‘d LOVE to buy AG at the $17 gap . Ta daaa! Here we are…even $17, down to $16 , and then up to $20, would be a great trade.
This is the toilet flush –
“sellers”- I’m afraid if one were to sell today and EVEN IF it crashes BIG tomorrow but then flashes back..one may not dare to buy again—until it is above where one has sold it. ( I did that a couple of times in the 2006 area). They crash & then turn up FAST and go up 13%-18%. It looks like an oversold bounce, so one doesnt get in, then next day -boom-its way above your sell price. you wait for a small pullback and the caboose never comes back for a month. Dont sell here. ( Someone said something like…’when the dollar goes up, these will crash worse?’the dollar IS a joke..it may just go down down -down-down, and then we should get a rally or bounce, go from there…just dont sell here. Prices will be higher then here I.M.O.)
Sandy,
I understand completely. Just backing out a little, I have a hard time seeing the dollar go up before it drops through the 08 low. I look at the in between as wiggles. The dollar really sucks! It seems the way things are going fewer of the rules apply. I think this pm market has taken on a life of it`s own, like a freight train getting ready to smoke anything in it`s path! For me, backing out and looking at the bigger picture is key. Hold on! The other side will be a thing of beauty!
Now a nice sideways move for a few days to consolidate this action would be very helpful. Allow strong handed institutions to absorb this supply.
BB Crash & VTO for the HUI & GDX… anyone trading on these?
Agreed. The dollar is worrisome.
Jennifer, you’ve been in with strong hand status. Drops like this always produce counter rallies, whether or not its the C-wave finale or a lower high, you will have a chance to shifyt your risk exposure into strength.
If you choose to do that be moderrate.
I use AGQ to juice my returns a bit. Its always my smallest position, but I’m more conservative than most here. Its really up to each investor to know their risk tolerance and act accordingly.
You don’t need excessive leverage to rock this bull. Without it you can still return 50 percent or morer annually by buying A-wave bottoms and C-wave intermediate cycle lows.
F
Probably will be a a dead cat bounce tomorrow to sucker people back in thinking it’s over with.
traderlady,
I like several, but I’ll bet just about anything metal related will work out once we turn.
The usuals like SVM EXK, while SLW is getting quite attractive.
For gold miners ANV, maybe NGD
The specific names won’t be as important as long as they behaved (went lower) with the group, IMO.
I also will add more NUGT at some point as it has both gold and silver miners. My hold times for trades the rest of this C-wave will be much shorter though.
I will probably only have 3, maybe 4 positions.
Seems like everything not purely gold-tied (GLD, ABX etc..) is having BB crashes.
Well, looks like I’m doing nothing today. Gold isn’t going to drop through $1525.
Maybe I’m “getting cute” by hoping for still lower prices tomorrow, but I’ll do it, because I’d even be fine with not buying more until Gary calls the swing low.
Today was a pretty decent pukeout, complete with the pain.
I might be wrong but we still probably have some weakness in the morning to buy into. If not, I’ll only buy small amounts into a rally and load up into the next dip (maybe later in the week).
If I’m right and we head lower tomorrow, I’ll step in comfortably.
MrMiyagi said…
Not buying today, I’m going to wait for a bit more of a US$ bounce.
===========
I concur with MrMiyagi. Wait..
This downdraft has been brutal for me.. hanging on though.
I added to AG today and will do so again. A rocket launch coming up!
the price levels are attractive across the board, so I either want to buy into further pukeouts or let miners show some strength, THEN buy into the next dip regardless of prices (meaning even if I’m paying higher prices, at least the direction has turned up).
catbird,
We have a plan either way. better prices tomorrow, OR worse prices but the wind at our backs heading higher. 🙂
SB, Just saw you post and thanks. I have those and shall add. I did not get out in time last Friday. I waited for Gary. Oh well 🙂
read somewhere $USD goes to $64. anybody sees this?
Rob L. Kind comment. If I remember you’re a young guy. Just think…keep at this, don’t get greedy and blow your bankroll (whatever size it is now), and take every single damn thing that happens as a learning experience, and 30 years from now someone will be wanting to have a beer and talk trading with YOU.
Jennifer,
By saying be moderate I wqant to clarify that I meant not to sell all your AGQ as you would end up feeling the opposite of this, which is sickness at missing the final rally, which I believe is coming. Gold has been to pwerful and steady for too long to go down without a mini mania. Silver had one over the last few weeks and may again in the next few, but gold and Hui are still due.
Its coming, and should be a blast!
Learn as much as you can from this cycle. And remember the time to be aggressive is exactly when you were, at the beginning and middle of moves.
F
Nibbled on SLV, GLD, and GDX here.
Will add more after the swing.
traderlady is thinking the right way, if you ask me.
It feels as though some contrived “news” is due to break which will explain the behavior lately. the “news” will be insignificant in the longer term picture, and is an excellent time to load up if we get the catalyst. It’s not absolutely necessary, but is my favorite trading setup.
Prices always move before the news, and sometimes a little after too, but getting the news outta the way have always been my best setups.
Let’s see what happens.
BTW, I am doubling up my AGQ and DGP positions once it looks like the daily cycle low is in.
St. D. – just caught your earlier post, hilarious ROFL –
“why, is silver down or something? i haven’t really checked in a few days, might as well do so noWHOAAGOODMOTHEROFGODWHATISHAPPENI”
And don’t forget gold, too.
I love how it’s held up, and it looks to be a strong buy candidate.
I’m curious to hear Gary’s interp of the dollars actiomn. A bear flag would have m]de me much more confident.
Ok emotion quotient is shifting to uncertaintyWe’re getting closer folks
: ).
DG,
Thanks.
Greggy,
Of course I am and and he’s been very accurate but I have also been playing this PM market since early/mid 2000 and ive been through countless newsletter writers. The one thing ive learned is none of them are right 100% of the time. At the end of the day everyone is responsible for their own account.
Wow DG, from no more than 50% AGQ earlier to 100% AGQ and 100% DGP. You’re riding this C-wave finale with your guns a blazing!
DG,
My tactic too.
I’ll be adding to both at the daily cycle low and on a breakout to new highs in Gold.
Currently all DGP and GDXJ. Appx 30 percent invested.
F
gold rising and silver on life support…
Gary says in the post above that 65-70 for silver isn’t out of the question, some quick calculations translates them into 550-620 for AGQ.
Can anyone confirm this target for AGQ, I want to get some OTM 450-500 JUN calls
Sorry we can not say the same for $GOLD but $SILVER is now (VERY) close to oversold on that RSI-5 and has touched the bottom of the BB-10
http://gyazo.com/9f266af1a974d8718d4dd820b3c48c0b.png
Here is $GOLD
http://gyazo.com/1f14b95b7eaeca530b9163503cdaeac2.png
Shalom,
Exactly. And wouldn’t it be convenient for that contrived “news” to be the jobs report Friday?
What could be more contrived than a feddle gummint jobs report in a crap economy?
The dollar could drift generally higher until then and then the jobs report is a “sell the news” event.
OR…perhaps more likely, the dollar explodes up on the jobs number, terrifying whatever weak PM longs remain. They puke, but the PMs promptly reverse late Friday or maybe Monday a.m.
But you’re the older Bernanke with the “connections,” you tell me how it shakes out.
Added the last of my dry on dgp @ 48.50. It may get a little cheaper, but that`s my comfort level and I really hate to chase. Plus it seems in our world today there are about half a million reasons gold can go into outerspace at any moment. I`d really hate to miss that ride!
Fubsy,
Thank you for the advice. I hear you, but I think I want to start scaling out of AGQ after we get back closer to 50. I will still keep some for sure until Gary says bail, but I want to lower my risk. I also want to add some more gold.
Traderlady,
Not a bad idea. If silver gets back above $49, I will sell most of my AGQ and put it in gold.
The point is, once silver is north of $50 (and I think it will get there) I will sleep better with 90% of my capital in DGP and NUGT.
Wow this baby is bucking! Riders having trouble holding on to their lunches trying to ride this raging bull.
I’m a buyer here just not sure if I should pull the trigger yet.
Sorry Mike—a miscommunication. I have half of what I previously had in AGQ (that is, I sold 1/2 my holdings). I don’t have 1/2 my account in it. And I have a chunk of DGP. I will double up in each but will not be leveraged. I don’t do “% of my account” calculations because my whole net worth is liquid and is in several accounts, all available for trading. I will probably have 70% of my NW in AGQ and DGP once I think the bottom is in. As they are already leveraged in and of themselves, that’s plenty for me. If gold hits $1700 after that I’ll be very happy.
I’m not a cycles expert, but I do not see why there is all the fuss around the dollar. We want it to keep dropping, I don’t see the need to “refresh sentiment” so close to a 3yr low.
It’s on Day 11 of a daily cycle, we only need it to keep collapsing and stretch into a 3yr cycle low. Surely you do not expect any strength from a dollar that is about to fall to a 6 handle in a matter of week?
Added some SLV calls there at the close in the IRA.
I agree with Poly. The dollar can do anything it please at this point. We are day(s) away from the low, and at this point it’s coming whether the dollar rallies, fades, or goes sideways. Rather than the dollar jumping and reversing on the NFP report, it may simply cave then.
Jayhawk,
which IRA broker are your using. Mine doesn’t allow options within my ROTH
I believe TOS and optionsXpress both allow options in IRA accounts.
I’ve been a Gary subscriber for years but I’ve never commented on the blog before. I think all AGQ holders should pull up a chart of SKF from 2008 to see what happens when a leveraged etf collapses. Yes, there will be rallies, but since the starting point resets each day holding them for very long leads to the AGQ problem. If Silver went up 10% tomorrow, where would AGQ be? The compounding effects make it very hard to regain prior peaks after big losses. I’m a huge fan of Gary, and this comment has nothing to do with him, but rather with risk, portfolio allocation, and knowing what you own and how derivative products perform. I wish us all the best of luck, and I bought some SLV calls at the close.
anyone look at the SLW chart?
its sooo ugly…i hope it can rally from here
does all these people buying mean that we get more pain…maybe another 10% to 36
I agree Jennifer and that’s why I was so skittish holding AGQ for so long. Same deal with DGP.
Charles-I use ThinkorSwim.
Poly,
I thought the USD was on day 29 or 30 of this cycle with the last low coming in March. With today’s print, yesterday very well could be the daily low, no?
I thought this dead cat bounce (hopefully) would be the set for a left translated final cycle into the 3 year bottom.
Sorry, I am really new to the cycles.
Troll-
Mine was a nibble, fyi.
DG, Poly,
For me, dollar bouncing is just another confirmation but if silver/gold go parabolic without and US$ goes umm… negabolic… then it is fine too.
DG,
This is the FINAL cycle of the 2008 dollar move into the 3yr low, with my comments added:
http://stockcharts.com/h-sc/ui?s=$USD&p=D&st=2008-01-16&en=2008-03-24&id=p59986948124&a=233200049
thanks Jayhawk
looks like a lot of us nibbled today including me
by sentiment logic, it means that we have more pain ahead
or we’re all getting smarter and buying the dip 🙂
swing low is here?
P.S.
I should have mentioned that I still own Goro and EGO that I bought a week ago ( earlier my Post was to PIMA ,and I was discussing Silver miners that I had ownwd since Jan 25th).
EGO got smoked on big volume today, but I do still own it 🙂
Mr. M—Sorry. I didn’t even see your initial post. I was just agreeing with Poly in a vacuum based on what he said.
HotRod, Doc has it on Day 11.
In any event, it doesn’t really matter, the dollar chart is spaghetti, you can make what you want of it. Only thing I notice, it’s dropping fast into a 3yr low.
http://stockcharts.com/h-sc/ui?s=$USD&p=D&st=2008-01-16&en=2008-03-24&id=p59986948124&a=233200049
Poly,
Thanks for the USD chart so I guess it’s technically possible to get our 3 year low without a good bounce. I didn’t add my dry powder today but if we get another round of morning weakness I’ll probably go in. The question is AGQ or DGP?
Jennifer,
Good point.
My earlier comments about holding through a D-wave don’t apply to a leveraged ETF, because even if silver returns to the current price in the A-wave that follows, AGQ will be far lower.
I do think that holders of AGQ will be OK if this is simply a correction, though.
@ Poly/DG
My concern for the dollar is that sentiment is extremely negative already. I would be more confident in a continued plunge if sentiment were reset a bit prior to the jobs report or while the PMs are correcting.
But, sure it can go as low as it needs to to run out of sellers.
Wouldn’t you think that those who are going to sell the dollar have already done so?
F
Ryan,
That’s a good question.
Although today was painful, it would be nice to finish the job tomorrow and have a nice sharp drop to $1,515-20, recover during then day, so we can get on with the fun 🙂
Although hearing Clarkatoid’s pomme humor is worth a little pain.
Looking at a longterm chart of AGQ for today is gut wrenching.
http://stockcharts.com/h-sc/ui?s=AGQ&p=D&st=2009-05-05&en=(today)&id=p44969380103
wow…that’s some AGQ chart
looks like the bubble popped
maybe this is the d-wave
Jennifer,
Just when my stomach had settled down, you show us this chart.
Wow, only $25.00 from the 50 dma.
Poly, great chart. Fusby, most market crashes happen from oversold, negative sentiment conditions. While I don’t know if that’s true of the 3-yr cycle low of the dollar, I have a hunch that it always happens that way as the multi-year bullishness finally flushes away even the strongest of hands in a colossal washout. Then, *boing* and it’s a big rally. And our D-wave.
Fubsy: I agree with you about sentiment, but since gold has not topped, we can reason backwards and say the dollar’s low cannot be in yet. Can’t get the whole thing to make sense if the dollar is going to explode upwards soon. And I am confident that gold has not topped.
Fubsy,
You can make a case either way I guess.
But I do know, markets at the extremes can run for far longer than anybody would ever expect. The savvy stick with the trend and trade it until it no longer works. No reason why it just couldn’t keep going into that low, IMO. It did in 2008. 3yr low in late 2004 was a bloodbath too.
Jennifer,
The 2006 chart of silver looks very similar.
Of course, there are no guarantees that this is 2006 redux.
I am glad I swapped out most of my AGQ for UGL.
What’s the d-wave count at?
I’d say add mine but I would be faking it….
Alex,
I listened to you, picked up AG today at $17.50. Let see 🙂
Poly/DG
Agreed. As I was typing my thoughts were, “Well, things can stay irrational far longer than you can stay solvent”, and “sentiment can remain oversold longer than one thinks is reasonable”.
Yes, a major collapse phase would likely draw sentiment out longer than one would expect.
TK long GLD from 149.43
Jennifer – regarding the chart you posted: http://stockcharts.com/h-sc/ui?s=AGQ&p=D&st=2009-05-05&en=(today)&id=p44969380103
turn on the log scale and it’s not so scary…
In 2006 silver dropped roughly 22%, from about $14.60 to $11.60.
In AGQ terms, that would be about 45%.
It traded sideways for a couple of days, then slowly ground its way to a new high before the D-wave set in.
The bad news for those who are all-in on AGQ is that it will might not make new highs, given the compounding effects Jennifer talks about earlier.
But you will be let out at prices close to the old highs.
Maybe we are getting close to the bottom. In 2006, there was that 17% washout in silver before resuming the c-wave. If we use today’s spot low and the high of last week, it also roughly went down around 17%.
ZH speculating about a transition from inflationary to deflationary mood due to coming end of QE. If this is what’s happening would it throw a monkey wrench into the cycle? If it were happening, I think we’d see a strong and lasting up move in the dxy.
http://www.zerohedge.com/article/crude-plunges
I honestly feel like a chump for sitting here for 2 days and watching AGQ dump over 100 points and never getting out. Its my biggest holding. I feel like an absolute chump. I should have had stops set at my maximum loss threshold, but I didn’t. I pulled them all because Gary said to. I believe in Gary, long term – but I still feel like a chump.
Can anyone tell I’ve been drinking?
Jennifer,
make no mistake…same here..the pain just wont go away
i’ve given up almost all my profit in AGQ
i just need to figure out how to play this better
“TK long GLD from 149.43”
Crap, this could mean more downside to come. The only trades TK makes that are worse than shorting the strongest bull markets, is when he gets long. “Fish out of water” comes to mind. 🙂
Jennifer: there is no way to do this “right.” If you had sold at your stop and silver had gapped up the next day what would you have done then. Seriously, what would you have done? Chased it? then it drops again and does this. Let it go? Then you watch the whole nut finale and are in cash. There’s no right answer except to have a plan, no what your risk levels are, and roll the dice. If you have bet intelligently over time it will work (though not every throw will work).
And yes, I can smell your breath from here. Maybe lay off while trading at least?
It’s okay Jennifer,
It’s always after 5 pm somewhere in the world.
Jennifer – sorry to say this, but I have to since it’s on my top-ten list of trading rules…
“Never take a trade home with you”
You will have the opportunity to make back your portfolio losses.
Learn from the experience, don’t over-react to the portfolio change, and keep your head about you with as much optimism as you can muster while keeping your realism.
Gary and the markets will give you plenty of good opportunities to get gains back.
BTW, Whiskey helps me gain optimism 🙂
Jennifer,
If 2006 is any guide, we’ve already seen the worst of it.
We should trade sideways the next few days, then grind higher.
If you’ve been in since $160, you’re up huge no matter what. You will probably be let out at even higher prices.
Hi Gary,
The miners keep getting uglier – will you sell into the bounce? What’s our exit strategy now if the c-wave is over?
Can you please go over it in the nightly report
Jennifer,
I’m in the same boat. I went from the biggest gain beyond what I could imagine simply disappear in the span of 2 days. It’s definitely disheartening to say the least but Gary’s the one that allowed me to be so ecstatic just last week so I’m REALLY hoping he’ll get us out of this rut this week. Stay strong!
Jennifer, AGQ is a tough one because of the mechanics as David explains.
The double etfs cannot be held forever and must be sold into up movement. That said, you’ll get a much better exit point in the future so I’d sit tight (or sock the proceeds into some of the smaller miners once we find a bottom). They are not as exciting as AGQ but you can hold them for years if necessary and they still have plenty of leverage to the metal. Plus, they own the stuff in the ground which is the next closest thing to physical as far as paper trading is concerned.
Gary is a trader’s best friend.
Gary will never stand you up and will never let you down.
Gary will reassure you when you feelsinsecure and comfort you after a losing day.
Gary will inspire you to do things you never thought you could do; to
live without fear and forget regret.
Gary will enable you to express your deepest emotions and give in to
your most intimate desires.
Gary will make sure you always feel as though you’re the best precious metals trader in the chat room and will enable you to be the most confident, sexy, seductive and invincible…
No wait…Sorry.
I’m thinking of whiskey. It’s whiskey that does all that shit!!! Never mind.
Hi DG,
DOW closed UP 0.15
Is the sell signal is ON?
Might buy something in the AHs now.
I’m sensing a wave of Gary-hate coming on, which is always a very reliable sign of a bottom.
Anyone else changing their underpants 3 times a day
Thanks guys, You are right, I should switch to whisky – it does make me more optimistic, but also makes me want to fight 🙂
Yes, I’m still up big, you are right – but two more days like the last two and that all changes. I am usually a very even keel person and it takes alot to fluster me, but this has done it.
I will just keep chanting “this is not the D wave, this is not the D wave…”
I also keep thinking about everyone’s stories about riding the dot com bubble down into the earth – I just don’t want to have to experience something like that.
Anyway, I’m sure you are all sick of my day long freakout so I will take a break.
Although gold did not print a nice neat cycle low, there is a good chance Silver did!
Silver lead this entire IT cycle. Silver lead us into this drop. Silver is way oversold and it has dropped 22% from the peak to low, intra-day. No reason not to expect it lead us back out!
daily cycles last 3-5 days at least..maybe LONGER
and we’re ONLY on day 2 and there is already so much pain
Squeaky bumhole time
Jennifer:
I’ve stopped using leveraged ETFs when I expect a drawdown due to the negative effect of daily compounding losses. Instead I use Mini-Long futures/warrants (which I would guess you can trade in the US as well).
They don’t have any compounding side-effect at all and no expiry date. Also, you can choose which leverage you prefer and each comes with a corresponding stop-loss level at which they are automatically sold. For silver I’m using leverage of ca 2.7 and 3.9 and corresponding stop loss levels of 29.5 and 35.9.
This means that I don’t have to sweat through the volatility and also I’m not overly worried about being stopped out. (I should also mention that I have twice as much in gold as silver and also a fair amout of dry powder left as well).
Gold-Silver Troll,
I think you need to re-read cycle definition.
You might be thinking about the move INTO a low, which of course can last weeks in a LT cycle. Being so far stretched, the move into a low could be a one day affair, easily.
“TK long GLD from 149.43”
http://www.youtube.com/watch?v=WWaLxFIVX1s
Poly,
yes…thank you…my bad
I meant move into a daily cycle low is normally 3-5 days
Ok you guys, in the markets experience is the greatest teacher. Most of us who have been at it a while have stories of experiences that cost us some coin, but were worth the lessons learned as they made us much more profitable over time.
The lesson learned here is that parabolas are to be sold into. Silver went parabolic. It gave a sell oppty with a 7% rise on large volume. These are the sell triggers.
The higher a parabola goes, the quicker and farther it drops. So, next time you are in a parabola…probably in a few short weeks in Gold, sell into the strength and enjoy your profits without fretting about missing the top. Watch for a spike in price and volume and unload. Be prepared to miss a bit of the rally, but also to be free of worry, and even elated during the drop. Imagine if you had no position right now..would you be thinking it was getting closer to a time to sell or buy? My guess is you would be licking your chops waiting for a cycle bottom to form.
My guess is that this will be an inexpensive lesson as Gold and miners have not had their parabolas yet, and that is how long term rallies end. Why? Because big money will continue to buy dips until the public rushes in and gives them a hungry sucker to unload on. This hasn’t happened in gold yet. So when it does, and it likely carries silver with it, sell.
In the meantime, breathe, and start a trading journal to document everything you would do differently the next time.
f
Folks, Keep your faith! In people,in the bull market, in your decisions.
I have followed Jim Sinclair for the last 3 years. I procrastinated until gold went over 1,000, buying at almost the top then and some more in the $900’s. Then I watched it go to the $700’s – but kept calm because I had faith in Sinclair. It was a bull market.
While I didn’t use leverage (I can empathize with those who are), I did invest 8 TIMES what I had ever invested before.
Again, have faith in the guru (Gary), the bull market, and your decisions – and why you made them in the first place. Wise trading, all!
(This is not meant to imply that I am wise or smart, merely that I trusted.) ;^)
Fubsy,
You’re so right.
That’s something I learn’t the hard way too. I scale in hard and early, then start scalling out as it get’s crazy.
It was already crazy when Silver hit $42, then $45, but they all kept coming at it. So now all of those latecomers that got in at the top got smacked for 20%, happens all the time. They wont come back into the market until Silver hits $55, convinced its going to $70, just when the D-wave smacks them for a 30% hit.
Nice one, T 🙂
fubsy_cooter
Nice sermon about trading
fusby,
I completely agree with you, I personally start allocating a small percentage of my portfolio to cheap put options as we go higher and then try to time the top.
http://www.zerohedge.com/article/another-decline-registered-silver-brings-total-comex-physical-multi-year-lows
Its ok guys , ive figured it all out and theres no reason to poop ones pants
If this is day 2 of a 3-5 day correction, then silver should bottom somewhere in the range of $2-5 by Friday and it will be free by Monday
mmmmmm…. free silver…….
Poly,
It’s my sense that gold will lead or perform as well as silver going forward, but it’s just a guess.
I don’t have gold exposure yet, but I do have lots of cash. It just wont exhibit any weakness to buy into.
Do you have any insight into the gold/silver relative performance question ?
If we can’t get a meaningful correction in gold, I’ll just wait for the cycle low confirmation.
Even after the silver correction, it has still outperformed gold big time during this intermediate cycle.
ALEX,
It’s not my birthday yet, but I got filled at 17.20 when the gap at 17.18 filled.
Maybe my birthday present will be a fill @ 16.45 when it closes the gap at 16.41.
Best,
Le Fou
Wes,
I too will not be fully invested into a c-wave top unless we print a cycle low.
I was thinking of scenario’s and thought:
a) We still have 1-3 days to print our cycle low, where it will be ALL SYSTEMS GO from there. This is our most preferred outcome.
b) We just go higher from here, into a final runaway. This keeps us minimally invested and much more guarded.
c) Today WAS the cycle low, being it’s the last cycle and the 3yr low coming, that’s all we get. Of course we will never know in real time, so we can not fully invest. Keeps us minimally invested.
d) We got trapped and this is the start of the D-Wave. Very unlikely and does not fit any of the descriptions.
One thing I noticed, that after this drop, 3 out of the 4 scenario’s get you much higher from here. So on this basis, I topped up some to 50% invested. I will ride with this for scenario’s B & C and will add like crazy on scenario A.
Any one else notice how much /SI open interest has increased the last two days? This would indicate that most of the sellers in the last two days have been net short sellers and not long liquidations. This bodes well for a future massive short squeeze.
You guys that are dying with agq make it sound like the party is all over. Do any of you dying right now think that silver won`t go back to at least 50? 60? Maybe 70? What`s the problem? I have some too and I don`t like it but look just a little further down. Like next week. Remember when Gary said there would a violent reaction from silver? When this turns around your accounts are going to look like the reels on a slot machine! Enjoy the ride! (I also noticed it doesn`t hurt to pay attention to DGs trades. Just a hint)
Nike: NO SELL. My error. This is NOT a new high lately because the Dow was down 3.15 yesterday. I cannot get a new signal without having a high for the past 3-5 days or so. No sell is possible tomorrow now either, so the idea is off the table.
86d4life,
You’re right, in all these cases this bull should easily let everybody out at $50 and fat gains, if you ride it.
Got to say, and it’s very easy in hindsight, sitting on AGQ with the cycle in the 30’s and waiting for Silver to tick over $1 more dollar was asking for it. It’s an observation to learn from, that’s all. I think a sub, “DA” (?) don’t recall exactly posted the same thing when it was right up there.
What the heck is happening to AGQ and SLV after hours?
i think gary will see this move from the far side of the room
“86d4life said…
You guys that are dying with agq make it sound like the party is all over. Do any of you dying right now think that silver won`t go back to at least 50? 60? Maybe 70? What`s the problem?”
:thumbsup:
Jeff,
Good humor! Lol
Another thing, why does Gary and everyone else for that matter trade AGQ and not something like /YI? The tax implications alone are more than enough (60% Capital gains & 40% Short gains).When your trading accounts are as large as some here, the tax savings alone can be huge! Throw in 24 hour liquidity and the compounding gains problem and it seems silly to trade AGQ over /YI or /SI.
elaine- looks like slv is getting an after hours lashing as well.
I for one, do not want to be drawn into a 24 hour obsession, which I know I immediately will, which is why I do not trade them. There have been very few times where the 24 hour liquidity would have made a real difference, in the end.
Yes the tax savings would be great, little consolation is knowing paying tax means you made good money.
I went through a short squeeze with gdx one time, no stops. Honestly, it felt like I got kicked so hard in the balls, when they came down they were ear flaps on my hat. Not cool. The difference here is I am 99.9% sure this thing is going somewhere outrageously higher. No sweat.
I want to thank Gary for giving me the idea to swtich from silver to gold as we got near the top of the silver market.
I am a HUGE silver bug, as you can tell from my avatar. I own physical and I was 100% in silver until the end of last week. I never had any intention of owning any gold or gold stocks.
Then last Thursday I dipped my toe into gold when I picked up some GLD options following Poly’s lead. But that was only 10% of my total portolio.
At that point (Thursday night) I still had 76% in AGQ and 14% in SLV calls.
Then on Friday morning, I noticed that DGP was outperforming AGQ so I figured something was up and it seemed like a good time to switch some of my AGQ to DGP to be safe.
After the first trades I was down to 50% AGQ and I decided to dump my SLV calls too. As the day wore on and AGQ conintued to lag DGP I dumped more of AGQ just before the big afternoon dip in silver.
By the end of the day I was down to only 22% AGQ and the rest of my portfolio was in DGP and GLD calls.
Now, don’t get me wrong. I’m not saying this to brag. The point I’m trying to make is that if I had not been a subscriber here I am certain that I would have remained 100% in silver and ridden the market down in AGQ only.
I know some of you may be angry at Gary right now, but he had the right idea, he was just slightly off on his timing.
Some of us got lucky because we adopted Gary’s plan to move from silver to gold a little early rather than waiting for silver to hit $50.
I don’t claim to be a genius, I never saw this drop in silver coming, I just made the move because I was starting to get “chicken” and I didn’t want to give up all of my gains.
By moving a big chunk of my money from silver to gold (rather than going to cash) I still gave up SOME of my gains, but only a fraction of what I would have lost if I had remained 100% in silver.
BTW, I have been 100% invested since early February, so no dry powder here. I just decided to change horses midstream and I want to give Gary credit for pointing out which horses I should change to.
Thanks Gary, you saved me a TON of money over the past two days!
Can a correction like this still be considered a daily cycle correction? Seems more severe than that, doesn’t it? More importantly, how can we distinct between what might still be a daily cycle correction as per Gary’s report and an actual D wave? Have the technical readings at the recent top such that we can absolutely exclude the possibility of this being the still early stage of a D wave? $380 to $250 in AGQ doesn’t look like a sharp drop, it already looks like a crash.
ANyone?
Ploy said “Yes the tax savings would be great, little consolation is knowing paying tax means you made good money.”
Poly, you are right but I remember I always used to say …”I would love to pay XXXXXXXXX in taxes one day! That means I am making money!”
Then that day came and I was feeling a bit foolish for not planning better and hiring a better accounting team.
Its never enough 🙂
GottaHaveIt – I also switched 100% from AGQ to DGP. But aftermarket today I sold 15% of the DGP, and plan to buy DITM options on AGQ sometime before the close on Friday. Are you going back (partially) to silver?
Basil,
I was thinking the same thing
how can a 20% drop IN TWO DAYS in silver (48 to 40) be considered a normal correction?
and yes AGQ 380 to 250 in 3 days..
Gary,
what’s our exit strategy? how do we know this is not the d-wave?
I am confused. One day Gary says we are in the C wave and he is trading silver to gold to ride it out. Then the bottom falls out of silver losing 40% or more in 2 days in AGQ. Is this not the type of decline we would try to avoid in a D wave? What happens in a D wave, you lose 80% in 2 days?
The advice given yesterday is to hold and silver should sharply rebound.
Why has Gary not posted something on the board today? Am I the only one that thinks this nose dive for silver is strange?
Advise
I am truly amazed by the conviction on this board that this is going back to and passed the highs. It actually scares me how little doubt there is here. I personally do hope so as I would love to see new highs but if this doesnt play out I truly feel sorry for Gary as there is a fine line between love and hate and this forum will turn into an all out hate forum against Gary if people lose their shirts.
eeelove8,
Why has Gary not posted something on the board today?
This thread you are posting on is a new one that Gary wrote today.
Read it again, it will answer almost all your questions.
Nice one Basil.
I think soon that we will get back on track but when do we know that this is not a daily cycle low?
How far must we go? Silver 35? 37? 39?
Gary prepared me for this long time ago. Kind of brain washed.
I dont login to my account..When silver price fall i just smile and think that we are getting closer to the bottom. I feel confident!
Soon we all will be rewarded! 🙂
Still alive Clarkatroid. What are you doing? Drinking again? lol
Guys: A daily cycle correction has to hold above the previous daily cycle low. This requires identifying the previous low. $1440 gold was a clear low, and gary has mentioned $1491, which is more debatable. As long as we are making higher lows and higher highs we are still in an uptrend. 5%–20%–50% is irrelevant so long as the previous low is not taken out. This is sever—no doubt—but severity does not determine where you are in the cycle. What’s neat is that before this drop started Gary said “By the time this correction is complete people will be sure we have already started the D wave.” Well, here we are. The correction should last 3-5 days. We will not drop like this for five days.
If we have started the D wave (I think that’s about a .5% chance) we will stop out if that previous low is broken.
basil,
Not a D wave yet because the usdx didn’t crash through ’08 low. If the usdx does a hard rally and makes higher highs and higher lows, I’d start worrying.
My guess (since he’s said it before) is that Gary would never sell into a daily cycle decline like this. He would wait for the bounce out of it even if it failed to make higher highs. That would be the exit strategy.
Ultimately you are in this on your own. I remember Joe Granville who was so right for so long he moved markets. And then he wasn’t and his followers got killed. Gary is the best I have seen, but he will be completely wrong at some point. BUT there is a stop in place. If you are so heavy that hitting the stop will ruin you, that is your error not his. hate whomever you want if that happens but it is your loss not his. No one has more incentive to take care of you than you do. If you don;t take that seriously, and follow blindly,eventually you may damage your account. Please do at least the minimal work of analyzing what happens when the stop is hit. If you are in silver you don’t know where it will be when the stop is hit, so be especially careful. If you bought early you still have lots off room. If you bought silver, and late, you have a problem and a question of faith facing you. Hang tough but learn from this. What went wrong here?
n1tro: The crash through the low on the $usd does not define the D wave (though I agree what you say is most likely.) If we make a lower low the D is on regardless of what the $usd does.
Gold down 3% from the top, how is that severe?
The cycles run off Gold! You’re invested in the runaway Silver market.
The cycle analysis has been 100% spot on. The trade however I can not say the same. It needs to be reviewed to avoid in future.
Someone posted yesterday that Sprott was selling his silver,turns out to be true but sold to buy silver miners! they’re shockingly cheap,he says:
http://www.businessinsider.com/eric-sprott-explains-the-reasons-he-dumped-shares-of-his-silver-etf-2011-5
Basil,
Correct. smashing through ’08 low would probably mark the C top but I haven’t seen it so still waiting for C top before looking for the D wave. Lets see what happens tomorrow.
Keep in mind this is kind of a freak scenario.
Silver has gotten blasted, while the dollar has declined and gold has been relatively unscathed. In an actual D-wave, the dollar would be rallying and gold would be getting creamed too.
What we are witnessing is a sharp correction within a parabolic top, not a D-wave. That doesn’t make the losses any less real, but it helps to understand what’s happening.
Keep in mind also that this action was totally expected. It is not a surprise in any way. Gary was ready to sell all his AGQ at the open, but someone in Asia beat him to the punch.
I for one think it’s an expensive but worthwhile lesson. A lot of us had come to think of AGQ as some kind of widows and orphans stock that went up forever. Two days and a hundred points later, it clearly isn’t.
Even if we should see the D-wave now, metals are a long only, and the best long at that.
And if this were the end of the secular bull, longs would get a better opportunity to exit.
People who sell into this will kick themselves. If you want to sell now, then at least wait for the snap-back that is coming. Of course, most will then decide to stay in forever.
Either you need out or don’t. If you can’t take it anymore, sell into a rip higher and not before, but if you are still in control and looking at the big picture, ignore the noise or do some buying.
Traders often confuse their long term prognostications with their short term sentiments and reactions. I think position sizing plays a big factor.
The worst part of all this is that if we go down tomorrow, like today, we would be at the 50dmva just under 40. By then, this thing will all be overdo for a bounce and most here will declare that the end of the correction and start of the final phase of the C-Wave. And maybe it will be or maybe itll just be a dead cat bounce(your guess is as good as mine but of all the parabolic moves, only in 2006 did it double top so odds are higher its just a dead cat bounce) Then the twist is after the counter-move, we could suddenly have another 3-4 day correction, like weve had this past week, where it corrects 20% (low $40s into low $30s) and that would put us back at the 200 dmva and the correction is done!
So the sad irony here is a lot of people could potentially never realize this is the D-wave until its all over.
DG is also right about gurus. Gary has had a hot hand, and that has led all of us to be overconfident, as if he were some sort of god who could protect us from all harm.
140% leveraged?
65% AGQ?
SLV options?
At the tail end of a parabola?
And, as Alex observed, at the very end everybody was trying to “learn” futures to gain even more leverage?
I bet that’s a lot more risk than anyone here envisioned themselves taking back in August.
David: Good point about D wave. I had not thought of that (That is, if this were the start of the D wave gold itself would be getting killed, and it’s barely down.) So we can add that to the pile of evidence that this is a horrendous correction and not more.
I just suggest to everyone here, if you add the next couple weeks here just allocate a small % of your portfolio to put options because it will be EXTREMELY difficult to tell if its a dead cat bounce or a renewed move up.
This comment has been removed by the author.
theres a cycle low in my underpants right now
Dan,
Both gold and silver fell together in the other years if I remember correctly.
Only in 2006 did we have a situation that looked like today’s example.
Has there ever been an acceleration or continuation of the uptrend of the gold during May in the last 10 years?
I’m just thinking this wave will continue but not until mid to late summer something along the lines of last year.
Where’s Beanie?
Beanie capitulated and went all-in on OTM AGQ calls on Friday afternoon before the close.
Terribly sad.
Clark,
You are just outrageous man!
Calm down guys.
Gold own 3%, get a grip, seriously!
You’re freaking out because you rode Silver right to the top and kept the leverage on. When it corrected, you were caught holding the bag waiting for $50.
Full stop, that wa the trade. In hindsight, once the cycle stretched and the gains were massive, either a move to partial cash and/or convert to gold should have occurred right there and then. Proper risk Mgmt was not observed.
But don’t think, scare or fool yourself for a minute that this is over, just because you did yourself in. Yes, it’s not Gary’s fault, we make our trades for better or worse. But gold has not gone parabolic and the dollar is far from it’s 3 yr low.
the value of one silver futures contract went well over $200k last month, that had many oldtimers screaming that the margins were too low and the brokers were facing incredible losses… then sunday nite showed the brokers just how much money they could lose when silver moved $30K in an hour
http://twitter.com/#!/mooreresearch
gold seasonal is poor here truly:
The monthly chart of continous gold futures shows a clear seasonal tendency for gold to sell off or consolidate from May into late summer or early fall.
http://screencast.com/t/ur0AdxlCr2C4
Count over four bars from the first bar of each year.
Hey guys,
Silver and gold are not one in the same. Silver is a highly speculative, extemely volatile asset that went parabolic. Gold is the wealthy’s insurance against fiat devuation.
The market turns when big money is able to iunload massive volume, which is always manifested as a high volume spike in price. We will see gold jump 80 to 100 points in a day on quadruple average volume or more. When that happens stop counting unmade profits and take the gist that is given.
Silver gave us the first chance. Holding it through a parabola was risky. Even Gary isn’t perfect, be he sure got us in a t the righjt time, and I think those who stay the course will get out in fine shape, too.
DG made a great point..each of us is responsible for determining our own risk tolerance and acting accordingly. Greed is a killer in markets.
F
The silver blogs I read every day are expecting continued corrections, ranging from $23 to $40. Harvey, Turd, and Franklin Sanders. Even Jesse posted a traders view on a collapse to $27.
Harvey posts a Youtube explaing why SLV and GLD will collapse, while physical accelerates.
I’d say sentiment has changed, and good thing the posters like Dan are showing up here.
Someone said you don’t top when everybody is selling.
silver miner stocks aren’t ‘cheap’ here…
for years HL, EXK, UXG just wouldn’t leave the $2 price area, and SLW stayed under $10… so that’s when they are ‘cheap’
silver gainers list fairly near real time:
http://biz.yahoo.com/ic/ll/135pip.html
also real timefrom like 15mins after mkt open to keep up with what is happening in canada (and sprott) here:
http://ca.finance.yahoo.com/gainers?e=TO
now sentiment has done a 180 degree turn.Everyone saying silver and gold are going much, much lower .hopefully this keeps up for another week or so , then out of the blue the metals will start to turn around.i remember back in Oct 2009 gold pulled back big time, everyone was saying gold is done for etc, then it turned around and went up big time. This is from John Williams interview today( shadow Stats )
Large holders of dollars] will sell their dollar-denominated assets. They will convert dollars to other currencies. They will buy gold. Generally, they will dump whatever they hold in dollars and sell the dollar-denominated assets they don’t want. There’s a market for them; it’s just a matter of pricing. As the pressure mounts to get out of the USD, the pricing of dollar-denominated assets will fall, which in turn would intensify that selling. The dollar selling will intensify domestic U.S. inflation, which is one factor that picks up and feeds off itself and will help to trigger the hyperinflation.
Bob,
“I’d say sentiment has changed, and good thing the posters like Dan are showing up here. “
LOL go past the past few months, I have always been here however I dont post unless I dont agree with Gary. I posted when I went 150% a couple months ago and I received several comments including from Gary that I shouldnt be taking such risks then a few weeks ago when Gary went all in with silver and I saw dozens of fresh faces here, I said I was going to start deleveraging as its getting very frothy and got slammed and told to stop showing off that I went in at 150% a month earlier. Now again im trying to convey to people that this is probably the top but it is what it is. Anways ive got copies my transactions of SLW from 2003 and 2004 curious, what were you trading back then?
The bull is not over…and even if this turns bad, the bull will rescue our positions at some point…this is more important than waves, or cycles. This is what allows us to go old turkey…really big money is thinking about buying more, but this is patient money that doesn’t look at things in terms of days or years even…patient money buys the severe corrections and when the final move is made they sell into it. Patient money makes you rich over decades, not minutes, and ignores price action…even price action of the severe drawdowns.
The bull market from the 80s to 2000….how many could have beaten a buy and hold? This gold bull will do the same…I don’t have the fortitude to always do what I know to be the right thing to do, but the strong position is on the side of PMs….the US is not getting better, Europe is not getting better…we forget sometimes during these moments why this bull is alive. Gold is the opportunity cost of buying world markets. We have not come close to the forced reset yet. Patience is a tough one, and severe drawdowns make us drunk. But I will stand by my quote that the richest guy in this bull will be the guy that buys gold and silver, buries it(figuratively), and one day notices a billboard that talks about gold and decides to sell. There may be a few able to beat this guy, but it won’t be many…IMO
Of course, as mentioned before, I don’t have the constitution to hold through parabolic moves, despite my own best advice.
I won’t buy on this dip, but I hope all of you recover and make a mint off the hopeful last surge.
Another week or so?
Wil another day or so fit the bill for the masses?
Dan, I was in oil and owned real estate.
Dan, here is my macro view, when the Federal government figures a way to sell Treasuries to someone other than the Fed, who uses Primary Dealers to leverage it up to buy risk assets, game is on until food and / or oil makes it politically unappealling.
We are not there yet. Maybe they figured out something clever with the BOJ, but then the Japanese will carry trade gold and silver.
I am glad you are doing well, and thanks for keeping Gary honest.
Damn!
Dollar finally bounced
Good job Gary!
With the dollar bouncing the runaway move is way off the table.
Gold should be dropping tonight and tomorrow.
James
I am in cash took a small hit last Monday on SIL. Sold off DGP
And ready to deploy
Gary’s posted.
Another great report, Gary. Thank you!
Gary, a question…
Read tonight’s update, which all sounds great. Without giving anything away, you talk about gold vs the miners and the huge opportunity in the latter in this last leg of the C-wave.
With that in mind I don’t understand why you aren’t planning any shift in your portfolio towards gold miners. I’d have thought a 2x gold miners ETF like NUGT would be right up your alley, or even a return to GDXJ, which you had in your portfolio a few months back.
Any reason why you’re only sticking with silver miners in your plan for the month ahead?
Yes, great post!
James
Guys/gals, these two charts tell you where silver is most likely headed in the short term:
SLV
http://finviz.com/quote.ashx?t=slv&ty=c&ta=1&p=d
ZSL
http://finviz.com/quote.ashx?t=zsl&ty=c&ta=1&p=d
Notice the VOLUME.
A correction to $30 on silver is a possibility. I sure hope it gets there, because I’m hedged with long ZSL.
Bob,
Sorry but I just say it as I see it and try to offer some alternative views to beginners as I truly feel for them. And judging by how many are naively holding the decaying derivative – “agq” – during this correction, there clearly are many new people here.
Holding PM funds in my 401K has been painful to watch since the Jan 25 PM low (INIVX and FKRCX are the only viable offerings). Dead flat. No gain, while gold+silver up ~20%. Problem is energy: oil shot up 30% over the same time.
If printing/inflation keeps pumping oil at the same time as metals, it isn’t going to be much of a show for the retirement fund at this rate. At least I’ll be happy selling what little bullion I’ve got. 🙂
now more comfortable with slv/gld as beanie has showed up with reference that he bought zsl.
thank you beanie, you should actually start “fade beanie” service. you might make more money out of it.
Dan,
I surely don’t’ remember ever telling anyone they shouldn’t take a position in metals, leveraged or not.
Doesn’t really sound like me 🙂
But hey if you have a crystal ball and can guarantee in real time that gold will or won’t correct then I’m absolutely prepared to throw away all my cycle and sentiment tools and just listen to you.
BTW It’s kind of meaningless to come on the board after the metals have already corrected and tell us you sold at the exact top. A much better trick would be to tell us exactly where and when it will bottom and then how far it will rally and when it will top. Now if you can do that consistently I will be truly impressed.
Gary,
Nice post.
The cycle is way stretched and already caused signifcant damage in all but the gold chart. It’s going to enter it 3rd day decline tomorrow, so I doubt we have time bounce around working of sentiment. I would think there is a better chance that gol drops nicely tomorrow which mark the low. We could spend the next two days sideways to jobs Friday. Just a thought.
I like the recommendation to deploy whatever dry powder one can spare into gold and silver miners. They have truly been beaten up, extremely undervalued with a view to a final C Wave blow-off, and are poised to rocket once we put in a cycle low.
I think I will deploy my remaining dry powder (33%)into NUGT and DITM June SLW Calls; should be a healthy exposure to each PM Miner!
Ah Beanie
if everyone would give me .04% of their account ill flatten my account now and that would send the market up to 1800 in a matter of hours =)
this is a hybrid option play lol
So for the post C wave bash, could the SMT crew rent part of a ship for like an Alaskan cruise? Or do we have to charter the whole thing?
86d4life, you’re kidding, right? Please tell me so I know whether to stay out of this market for the next 6 months.
Folks:
Use options to protect gains.
As your profits grow buy some puts especially around weekends and prior to major events. This ensures that you are covered regardless of what happens.
If you are concerned about premium sell some calls. Last Friday when GLD was making runs I bought a put $151 for this Friday and sold a call $155 for this Friday at a net cost of 5c. I knew the daily cycle correction was coming but I have had no need to look at the PnL of my position this week since I knew that my worst out would be GLD 151.
Buying an OTM put and financing it with an OTM call during the spikes allows you to limit the downside while still enjoying the upside.
When trading concentrated portfolios in a volatile market, options can help you sleep much better.
Gary, nice report.
Miners can rally 50%% from here but if agq makes it back to the previous high that will also be 50%.
Would you still consider the miners a better investment at this point?
Gary,
I didnt sell at the top nor did I say I did, I took a hit like most people here and have been selling for a couple weeks with my last position on monday. I did however buy put options over the past month but its currently up to just 5%(although growing quickly) of my portfolio and im 95% cash. So having said that, I sure hope what you said in your report tonight plays out as I have tons of dry powder but my concerns and unease are as I stated and its just from experience and studying the charts.
Anyways, please dont view my comments as attacks on you as they are just alternative views and your reports are valued.
New Post – Hangovers
http://www.apeakunderthehood.blogspot.com/
RA,
If silver gets back to $48, AGQ will only get to $350.
This is because of the compounding effect that these leveraged ETFs have. This was spoken about earlier in the comments.
$48 is a 17% rise from here. Double that and you get 34%, not 50%.
Dan,
I view your reports as self serving. Once was enough.
Dan,
What makes you believe this is the D wave or that the top is in?
My system will sell at 1527,June gold basis.If this is the top and the sell is hit today it will have happened in the regular 1-3 days from the top. However, I think that we will have one more move higher so I will try to hang onto my positions which are up nicely and possibly leverage a little bit more if the opportunity arises.This particular buy is on day 32 currently and the average length of a buy is 27 days so it’s due for a sell.The big question is did we just see the top?I hope not, LOL!
David, thanks. Just realized that.
So if silvergoes from 40 to 50, we have a 50% gain in agq. Still comparable to miners but not significantly better.
Why shouldn’t we consider April 28 as day 1? SLV peaked that day. In this case, tomorrow, Wednesday is day 5.
this is looking like a repeat of 2006…
silver double top while gold roars higher
or this is the d-wave
I wonder if the new margin requirements for silver will have an effect on AGQ future performance.
We’ve talked about this in the past, leverage works both ways. I think any one that is still 130+% leverage in silver and silver instruments just learned a valuable lesson the past 3 trading days.
RA,
not a necessarily a better investment, an additional one
Bosco,
you don’t count cycles from the tops you count them from the troughs.
Lesson on selling for a loss to meet margin calls, you mean?
DG, my system has marked every major high since 2001 (when GC became electronically traded 24hrs)within 1-3 days of the high.It caught the 1980 mania spike 2 days after the high:) Of course the safe thing to do is to sell on this signal and re-buy on the next buy signal which should happen before new highs are hit.I’m going with Gary here and assume a stretched daily cycle will usually produce new highs in the next cycle and I also think we could go much, much higher on a panic spike.
Jabalong,
I already have a fairly sizable position in SIL and SLW. That’s good enough for me.
Well well, it has come to this. AGQ down 26% in 2 days. What I’m still trying to figure out is, do cycles really work or not? While it’s quite obvious to me that Gary is a genious trader, I still have my doubts about cycles. They feel a bit like EW, divergence, etc. But like a joker in cards, a genious trumps cycles, and that’s why I’m here.
Do Margin requirements apply to the miners?
Folks I don’t believe for a minute that this is or was the end of the silver parqabola. This is just a much needed pause somewhere in the middle, maybe even on the low side.
The correction has just been intensified by multiple margin hikes this week. None of this will stop the bull and if gold is above $1700 or $1800 you can bet AGQ is going to be somewhere in the neighborhood of $500 to $600.
Veronica-Thanks
aviat72,
Great strategy. However, what would have happened if the market hadn’t corrected, if gold had just continued to grind higher and was now priced at say 1625?
PC,
The answer is one would have thrown away money on expensive wasting assets.
If you think the market is going down just sell. If you think it’s going up buy. There’s no need to buy options to hedge if one is a small retail trader.
All you accomplish is to turn one position into two or three positions that you have to trade.
Eric,
That all depends how good of a hand they had…
Gary,
Some beginner questions.
Is raising margins on silver indicative of a mid-C wave or a top?
And, after the C wave is over, why would PM’s fall far? All the money that Bernanke printed is still persistent/exists, plus interest rates have not gone up yet. I see further upside like you do, but I see it going on for like years. Maybe you do, too, just that the D is then followed by another ABCD?
Thanks.
Gary, 1 more q please. If you removed cycles from your brain, would your success rate still be as high as it is now? The same as removing EW did?
Bill,
A D-wave isn’t a change in the fundamentals. It’s just a severe regression to the mean profit taking event that follows the parabolic move that always ends a C-wave.
After the D-wave has run it’s course gold then needs to build an extended base to consolidate the massive gains of the preceding C-wave. That is done over many months during the A and B waves and during a long initial consolidation phase of the C-wave.
Silver reached the point where it needed to either consolidate sideways or correct before it could continue up. The extremely stretched nature of the rally has obviously led to the correction scenario instead of the consolidation.
But silver is quickly working off all of the stretched conditions and it won’t be long before it will be ready for another leg up. (my best guess is roughly $60 but $70 isn’t out of the question.)
the sentiment on silver is pretty bad now:
most sites are calling for silver top now and that it is headed much lower
Oh, Gary, just noticed that you repied to my miners vs. metal q earlier this morning (your time). Got it, and thanks for that.
hi all
, i have been a sub since aug 2010, and actively following the blog x 2-3 weeks. this is my first post.
gary, do u think that the london stock exchange being closed on monday had anything to do with the selling in silver again today. if so hopefully the selling should stop soon.
thanks
Does anyone here trade CEF?
FYI today’s NAV is the lowest I’ve ever seen, -6.5%. Very strange – this data bit alone tells me that silver/gold are about to explode upwards.
See http://www.centralfund.com/Nav%20Form.htm
In 2000, Stan Druckenmiller was looking for one more rally in Tech/Internet/Telecom when he was running Soros’ Quantum Fund, and one can vividly remember him going on cable financal TV to talk his book. It didn’t work. There wasn’t one more rally and he lost big, quit the fund…….these things stay with you. We know we’re playing a game of musical chairs with the Bernanke Put.
Actually sentiment on silver is back to neutral after the last two days.
Bill,
No I wouldn’t even be close without cycles.
Put protection is a great tool if you are in limbo. Not sure if you should sell, or should stay long….If you can buy cheap enough, it affords you the time to decide whether to buy or sell. Put protection is not a bad idea if you need a few days or a week to figure things out.
Silver is dropping because the metals are moving into a cycle low. There’s nothing more mysterious than that going on.
Hooder, fundamentally, if interest rates were rising, I’d agree. But for now I see nothing but more upside for PM’s. So while that lesson is good to know, it may not apply yet.
Forum, is “going old turkey” meaning “buy/hold”? Is this what folks are doing for their IRA’s etc.? If so, is CEF one of your holdings? Thanks.
Blogger Poly said…
Alex,
I listened to you, picked up AG today at $17.50. Let see 🙂
Poly, when thing simply bounces to $20+, (that could be in one day 🙂
you’ll pretty happy, but wait for $40 to sell 😉
Le Fou
Very nice…I bought AG too (higher about where it closed) and am very happy. I have seen this one go up $3+ in a day…look at April 12 to April $13 . $17 will look great when it retests $26 and blows by it 🙂
Hi Gary,
Does the massive volume in ZSL a cause on concern? Normally we only see this at bottoms.
Gary, curse them blasted cycles!
That NAV on CEF has me spooked, plus all the charts for GDX, GDXJ, SIL, SLV, SLW look way way oversold. Is it possible that the reversion to the mean thing is DONE now for these? Could we have a cycle low tomorrow sometime?
I may have to be up all night waiting for your reversal post …
Bill,
As I said in tonight’s report usually a cycle low will at least drive the 5 day RSI into oversold territory. I wouldn’t try to pick a bottom until that happens.
A check in with my emotional quotient. Today definitely shifted my sentiment to more fear. Closer to a bottom.
f
I do like the swing low on the dollar as it makes the possibility of a roll over after the jobs report more feasible. A 3-4 day bear flag in USD would make sense with Gary’s scenario.
f
Yup, read that. For GDX, GDXJ, SIL, SLV and SLW it’s already there, though. But not yet for GLD.
Just that NAV on CEF is extremely low – it’s been a great indicator in the past.
Will sit tight for your post. Time for me to shut up now and do something else.
I think a lot of people are using ZSL to hedge silver positions but I just don’t believe the greatest C-wave of the entire bull market is going to end with a whimper. The miners never got stretched and gold hasn’t even rallied 20% above the 200 DMA yet.
That doesn’t sound like any C-wave top I’ve seen, much less the largest C-wave in 11 years.
I also don’t believe Bernanke is going to “get away” with printing trillions and nothing bad happen.
To Old Turkey….umm want-a-bess..to say things nicely…since I don’t want people to lose really money in front of their own pride…
Old Turkey implies an incredible amount of work….you will win greatly if you do so, but will you have the strength to continue it.
Heard many on this blog say “go turkey”….to clarify things…
You can’t go “old turkey” with
A)Options, since they expire
B) AGQ, or any other x etf
You can go turkey with certain miners and metals.
But even I, as much as a turkey as I am, will not go pure turkey. I will not hold during parabolic events…EVER. in fact I sell really really early! I adopted “turkey” since it is a fun name, but truthfully any person that says they are going “Turkey”, have no clue! It is an investment choice in a bull market, not an emotional decision to justify losses.
Alright try to keep it real for some novice investors! Not trying to cause waves…..with my mouth you probably don’t want to hear it either….lol
Acouple good articles..
From Stewart Thompson at 321 Gold
http://www.321gold.com/editorials/thomson_s/thomson_s_050311.html
From Ben Davies at KWN
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/2_Ben_Davies_-_Silver_Criticality,_Why_Silver_Might_Crash.html
Regarding puts, sometimes I use them. For me it’s mostly a psychological tool. Sometimes I’m nervous about taking a position so I’ll buy a few cheap out of the money puts while I’m taking the long side and resign to the fact that they’re going to zero. I think if it quiets your mind and makes you less nervous then it’s worth the money spent, since you will probably stay in the trade longer and make more on the upside.
interesting…
WSJ Reports Soros, Burbank Selling Gold, Silver, While Paulson Sees Gold Hitting $4,000 In Three Years
Here is a ten for one lottery, I am in this as of today; 4.5K invest, AGQ June 400 (5) contracts.
TOS says if we hit SLV 60 by June 10, it is a ten bagger. I will double this on the swing low in gold, and shoot for 100K profit before I bail, unless I get stopped out first.
Gary,
Some history, if you please;
How did you know that PM was going to be the next bull market 11 years ago.
And wasn’t that just after the Dot.com boom/bust?
Bob, what is your stop in it?
Bob,
Why not go with something like an SLV June 55 Call at 40 cents?
If silver goes to $60, this is way more than a 10 bagger with less capital outlay and better spreads.
I didn’t recognize the new bull until 03.
be aware of how leverage etfs work
if you lose 10% 2 days in a row for instance.
it takes more than 20% to make up for the loss.
start amount $100.
-10% = $90
-10% = $81
to get back from $81 + 20% (16.2) = $97.2
you’ll need ~23.5% to get back even
JUST BE AWARE
AGQ, HZU, etc are useful for definite directional trades, volatility is doubled, as well as risk. Sideways action not good for these metal derivaties.
good we’re seeing a flush out, it was getting ridiculous by the giddyness and attention these metals were getting, people leveraging to the hilt with options and margin (money they don’t have).
play this out for a couple weeks, and continue the pain with margin calls. i want to see blood before this correction calls it quits.
right now it isn’t the time to buy.
Gary,
After the dollar spikes up do you expect silver to enter the parabolic phase or will there be more consolidation before PM prices begin to move up.
Jay, You have become much more of a TA person than you were last year! Even though you still show your emotions, they are not as good as they were before. I did see where you said you sold your DGP today, so I find that a good sign!
Ryan, Please do not take this wrong, but you should consider one of the very good metal mutual funds out there. Particularly the funds run by John Hathaway or Frank Holmes. You can turn your money over to these guys and walk away for a few years. You are over the top emotional to do what we are doing here.
There should be no doubt now that the silver market is a manipulated market, as the CME Group successive margin increases have shown. (They have put down their ax and wants the market down, even if just short term). As such, you folks can pretty much throw all swingtrading technical analysis of any form out the window for the foreseeable future. We’re all blind monkeys now. All one can do is analyze the market day to day.
Puhlleeeez Beanie, The margin increase is a quite normal process.
Edwin,
Seems to me the emaole you make with $100 is tru for any stock, no?
$100 of SLV
-10% = 90
-10% = 81
… How is that different?
Gary, if one is leveraged with AGQ at this point would you suggest to unwind into any bounce we get here and shuffle capital into miners or DGP to avoid margin call?
This comment has been removed by the author.
Brian,
Normal? You can’t be that naive, can you? A successive increase of at least 3 times in a week? Where else have you seen this happen?
All you really have to do is once and see what happens. This successive type of move is done for one and one reason only — the intention to kill the futures longs and drive the price down.
Brian,
I have to start somewhere right? I just have to learn to control my emotions better so I can trade more level headed. I think I’ve improved from the last daily cycle. As much as this one hurts I haven’t freaked and wanted to sell anything yet but hey the week is still young hah.
Beanie, where is your post that says you hedged with ZSL prior to the silver correction? Or are you jumping on the short wagon *after* the 20% move?
Here is your post from Friday, April 29th:
Gold and Silver Slated to Rise Next Week
New York – yes it is the same with any stock. thing is leverage etf you’re doubling the volatility and gains of the security.
gold from measurements is about 13% volatile and silver is about double that at around 26%
now if you mess with 2x leverage etfs you will be doubling gold volatility to 26% and silver to 52%
sometimes it best to play the game unlevered, no one knows the future.
even cycles get short or stretched.
my strategy is pure unleverged metal exposure. screw the miners imho they are levered plays but you need to take into account many other factors like main stock market timing and favorability..
miners are for stock pickers or gamblers. you can make money on them if you’re a good stock picker /gambler.
Beanie, The brokers and exchanges are trying to protect themselves in case of a cycle low they know is inevitable. There are many clients that do not have the funds to accept a draw down. The brokers and exchanges are protecting themselves. I would do the same thing if I were in their shoes. Would you loan your money otherwise? If so please explain.
Beanie, cotton had 14 margin increases, and it is still pressing new highs.
Ryan, You were throwing up in your mouth. It is not worth it. You would lead a much better life letting John or Frank take you to the destination. These guys are great and proven managers. Selling bottoms and buying tops will never get you there.
Quality of life is a big issue. If what is going on here causes any amount of heartburn, why bother? Small price to pay.
Ryan seriously, I can give you plenty of examples off this blog of people that will not garner out sized returns. Objectively, that is what we are all chasing. If you do not have the temperament to make that happen, a good fund is the best route.
Best of Luck
Brian
Brian,
I was actually just joking around and trying to lighten up the mode like Clarkatroid. I hope no takes me seriously when I crack a joke about that or drinking my pains away. But thanks I know what you’re trying to say, if my trading ever affects me that badly, I know when it’s time to get out.
Okay, I will leave you as a sentiment indicator, although as I said, I find you an outlier because you are way out there. Jay gets crazy, but you are off the charts.
BOL
And yes people do take you seriously because you are way out there.
This comment has been removed by the author.
Working all week has kept me off here, BUT
DG, I loved your door number 3 answer! WOW! What if the prize had been behind 2? Or you had to cap him to stop the threat?
TZ, Trading the tops is not at all like grabbing that int low. Should you stand aside if you can’t hold a position???
BILL,
Read the fine print on the CEF NAV page and think it over. There is a problem. Do you see it?
You guys who keep talking about “buying puts to protect yourself” are either clueless or haven’t done the math.
The only way a put “protects” a long position is if you buy it at a strike EXACTLY where you own the long. Then you are protected.
However doing that requires a LARGE BUY PRICE which (surprise!!) is almost exactly based on the chances of that put going in the money and actually ‘protecting’ losses on the long. It’s a wash.
Conversely, if you then go out of the money and buy puts that are cheaper, well then you aren’t “protected” in the zone between the current price of your long down to the strike price of the puts.
The puts are cheaper, but now you are on the hook for much of the loss you were trying to protect against. And the cheapness of the puts is due to the odds that they won’t go in the money to protect you from a large loss and that you will only end up paying for BOTH the puts and still part of the loss on the longs.
So please stop trying to act like you have some magic formula you are telling people as to how they can “protect their downside”.
Options are usually priced almost EXACTLY so whatever you are trying to do comes out 50/50 with you neither winning or losing MINUS THE LARGE SPREAD, TIME DECAY AND COMMISSIONS.
Oh, and if you buy MORE puts (out-of-the-money) than you have in size with the long position, then you aren’t ‘hedging’ anything.
You are making a SEPARATE directional bet in the market like any other directional bet. So you don’t win that way either.
You are simply long with ANOTHER bet short with different parameters and issues. Pretty much complicating things and making it even harder to do the right thing and avoid costs, spreads, and stuff like ‘option expiration weeks’ where you get played with.
And finally, the minute you buy options against some long or short postion you own you have now ENTANGLED the position during times of stress.
If I suddenly WANT OUT of something I can bail. But if you have OPTIONS against it, then you are also faced with trying to exit them usually at the EXACT WRONG TIME.
The reason here is that while an underlying security can peak and turn and start to go down, the options will “see” the turn and start pricing in a move in the other direction. So the market makers will swing the option price (and spread) against you quickly while you still might have time to exit the underlying.
Or, you can sell the underlying but still hold the options (cause you say “damn..the prices got really bad, I’ll just hold and see if i can clear it out at a better price.)
If you don’t know how that ends you haven’t been trading long.
So this whole “hedging thing” with options just twists things up even more.
Not that I have any opinions on the whole “options” issue.
🙂
Another calm and measured nightly report Gary, thank you for that.
Reading this blog yesterday was another great study in human psychology and why 95% of traders fail to make money in the long run.
this is the lowest ive felt since joining SMT.
Seeing a shit ton of profits evaporating on a hourly basis isnt a coke and hookers party. My confidence is shot to pieces, but i do believe this is crunch time.
if one chooses to bail out here, and things go the way gary anticipates, then thats an out an out disaster, a mistake that will be tough to live with for years
If one chooses to trust in garys judgement and go the distance then theres a chance it could get very very ugly with no stops in place and various “experts” calling for a crash in silver
i think its crunch time, and im sticking with the plan. i believe in garys skill set, i believe in the bull market. we do not sell cycle lows.
come on lets have it arrrrggggghhhhhh 😉
ps gary, how confident are you there wont be a stampde for the door here?
I’ve got a 1/2 gold futures position (about 2.5x) with stop at the spike low of yesterday near 1516.
I think that spike will hold, but I don’t have a clear read on the situation (took a few stop hits today engaging on what I thought were lows) so I’m not fully in yet.
(In fact, I actually give the gold low at 3pm a good chance of holding as well.)
I’m down about 11% from peak net worth levels last week. No problem.
I’ll be back up to full position with some clarity. Or out if my stop hit – re-evaluating from that point. I’ve done very well since January low and see no need to have a large bet right here just now. I’m pretty good at jumping in large quickly so I’ll just let things settle some.
As before I’m out of silver futures, unlikely to re-buy (but never say never.) I think there is a very good chance silver doesn’t break above $50 on this final move.
An interesting point is the large reduction of short position after last monday and tuesday’s blowoff moves:
snalaska{DOOT]net/cot/current/charts/SI.png
That was a legit short squeeze and that purple line reduction were the people blown out.
As for a final move up, I’m open to there not BEING a final move up. Put me in Gary’s ‘indicator’ camp if you want with that statement. I’m fine with it.
I’ve learned the hard way that ONLY believing “there is no top yet, we MUST MUST be going higher” is not healthly.
Yeah, I’m pretty sure we are going higher and I’m 2.5x, but I’m not betting my life on it. I’ve already said where I’m out of gold (at least temporarily) if we resume lower. I’ll evalute from that point as necessary.
Finally, I have no options and will not be playing miners if we go higher. I still think miners will underperform whatever metal does (which does NOT say they will not go up. It’s a *ratio* thing.)
Oh:
1) I think this week closes flat to up by friday in gold (It will be very positive for a continued surge higher if so).
2) I think there are approximately 3 weeks of gains left.
(Comments based on current appearances. Subject to change and revision as always with new data.)
If my comments didn’t clarify, I think there is, say, a 75% chance that the low for gold is already in and that it was that opening spike down to 1516.2 yesterday afternoon. This seems to contradict gary and doc to an extent. (I have no opinion on a silver low.)
I’m aware yesterday’s spike doesnt show up on stockcharts, but that means nothing. They don’t reveal how they get their data and the standard reference for gold worldwide is the COMEX trading which *did* spike and clearly traded about 4000 contracts when it occurred. Yes, we could trade down to retest it, but I’m still saying I think it holds.
is it possible that 1527 was bottom ?
Hi TZ, sorry was away w/the wife for dinner – took a 2 min peak at the CEF NAV web page and didn’t see anything offhand – I didn’t do the math but it looks right in my head so far – if you tell me what’s wrong I’d really appreciate it!
Jarek,
Doubt it.. the dollar will probably spike up on Friday sending gold to a lower price
Hi TZ – just did a 2nd more careful pass at CEF’s NAV, and w/Excel I didn’t find any math mistakes. Wholistically it still reads right to me – what am I missing?
I also just read your posts. I don’t know beans about options, but regarding your comments on gold’s price, what are you basing your forecasts on? I mean, Gary uses sentiment and cycles, and I myself use just chart (so I don’t predict anything, I just react by following trends) – am curious now what you have found effective.
Bill,
I appreciate you looking and trying. (I have a problem with people who don’t and just want an easy answer. That isn’t you.)
The NAV page on CEF is broken and a real disservice to their shareholders. That it has stayed this way as long as I can remember is amazing.
Read the page closely.
If you look you will see that they use the closing market price of the stock, which obviously is 4pm eastern.
But they calculate NAV using the LBMA second fix for gold (and the LBMA silver fix).
http://www.lbma.org{DOTHERE]uk/pages/index.cfm?page_id=52
The LBMA second gold fix is 3pm london time or 10am EASTERN TIME!!!
The Silver fix is noon london or 7am EASTERN TIME!!!
So you are calculating NAV based on THREE separate values – NONE of which is even within **5 hours** of the closing stock price.
Imagine how far off this blows the NAV. It is essentially unusable and they somehow hand this out to people like it means something.
I don’t know why. And I certainly don’t understand why they don’t hook in kitco pricing or some other service and calculate NAV appropriately.
Maybe a call to the company if you are a shareholder and care about it.
A site called “cefconnect” (google it; no relation to CEF the company) has accurate NAV for free.
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If you take CEF’s NAV page and update the gold and silver prices to represent the SAME values as when you pick your CEF stock price, then the calcuation will be correct.
For yesterday’s NAV, CEF’s page used:
1540 gold
43.61 silver
At 4pm the prices were about:
1538 gold
41.77 silver
The silver was clearly way off.
By the way, that page is using a NOON exchange rate to. So they have a 4th value that doesn’t match the others. Jeez.
Hi TZ – I knew that but I didn’t really think that through enough. It certainly would matter if CEF closed up (or down) significantly from the open (close to London’s PM fix). Just like today in fact, and yesterday.
I’m looking at CEF on cefconnect.com, and it shows NAV for Monday but not Tues – maybe one has to subscribe. They say Mon’s NAV is 3.65%, whereas I remember that CEF’s website said something like -2.1%. That’s a 5 difference! I’ll compare this again at market close.
This makes good sense to me – I mean the way that you and cefconnect.com calc NAV – CEF started in 1960 or so, so maybe it made sense then but it certainly does not now. Thanks for bringing it to my attention.
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Gary, in your report you say ‘this late in the dollar cycle…’
Im showing that the low came on day 12. What day are you showing?
Hi TZ – I deleted my last post as I was kinda out there. However, I would like to know what you use for trading, as you obviously think broadly and deeply. So as we know, Gary uses cycles to help him figure where gold is going. What are you using that leads you to say that gold has 3 weeks up and then ?
seems like capitulation on silver …40.56 as I type
Wow, so far it seems Gary is spot on for this call. Cycles don’t work for me yet, but they sure do for Gary!
Time for bed for me, so I can get up and see what happened before market close.
Gary, pls don’t go for any 5.12D’s or 5.13’s today, as we need you and your fingers.
WOW!
I took Gary’s advice over a month ago and set my limit order at $48 silver, went on vacation and avoided looking at the markets for almost 6 weeks. I obviously missed out on a couple of dollars more, but look where I can buy back in now! Gary actually thought $48 was going to be the c-wave top in silver, and I think he is right that this thing isn’t over.
Been out awhile, has Gary mentioned when he thinks this daily cycle will bottom? This week? Next week? Or is he just waiting for swing low as usual?
It’s in your last nights report!
Clarkatroid – we’re all in with TP and a flush draw against the shorters bottom set.
They’re in the lead at the moment, but we still have good odds to be in the hand.
Nothing goes up or down in a straight line my friend. There will be opportunities to get out of this at higher prices even if Silver doesn’t make new highs.
It’s very early obviously, but the quotes on miners after hours are flat to positive.
Sophia,
When one is suffering a draw down they tend to see every spike down as the final exhaustion move and every little rally as the beginning of the next move up. However I just don’t think this will bottom until gold gets short term over sold, so you are probably just torturing yourself trying to see a bottom in every wiggle.
Arron,
That one is tough. It is possible we could count the 18th as a one day rally in a new cycle. If so then the dollar is only on day 12 and after a weak rally should enter the final collapse over the next 2-3 weeks.
That would suggest the jobs report on Friday should send the dollar down to test and probably break the 08 low before the bottom.
Unfortunately there isn’t really anyway to tell if this is the case until we see what happens next week.
thought i’d post this chart of SLV/PSLV
http://i55.tinypic.com/35d0twy.png
looks like a pretty orderly starstep down from the high, plus so far looks like a simple back test of that break out. expect /SI to get down to $39 but physical to hold around $17.
THAT SAID there are a lot of great conspiracy theories about silver out there, but really all you can do is watch what the price is doing. and it is not doing good. don’t go crazy with all this COMEX bladdyblah.
Arron,
I added the alternate count to the website.
NEW POST
Gary,
Where could we expect the BB crash trade to take silver?
Also, do you have a guess as to where silver will bottom when you think gold will bottom?
THanks
The rules of the BB trade are in the terminology document.
Thanks Gary!
Gary,
I’ve been a long-term buy-and-hold guy on miners for years (based on fundamentals). I have about 20 mining stocks (such as SLW, EXK, AG, GORO, MFN, FVITF, RGLD, SVM, etc.) that I am currently holding.
How should we position ourselves for maximum benefit for the upcoming C-Wave rise in miners? Would you recommend that I consolidate; leave well enough alone; some other consideration?
Thank you for the guidance.
Hey Jim
Gary is blogging on the new post
Alex,
Thanks! I didn’t realize a new one was up.
Jim
200$ is a good turnaround number on AGQ. For a bounce that is. I don’t buy the $60 and $70 anymore, obviously. This falling knife has broken much support on the downside. I think seeing silver going from 36 to 60 or 70 in a few weeks is very much dreaming.
The silver bull is still alive, but this rally is over, not withstanding some strong bounces.