535 thoughts on “MAY 1 REPORT”

  7. RA

    I noticed that on the leg up silver normally 25 dma acts as support. I think it will not go lower than the 25 dma.

    As it is the current intraday low is 15% off the recent high.

    So I added spot silver at 43.5. Will add more if it gets back down to 43.

  9. hkc

    Hot Rod:

    In one of Gary’s earlier comment, he said he would never sell into a cycle low, and his new post more or less confirms that this is under way, so I don’t think he will sell tomorrow. Also, he will post in real time any trade he makes, so hopefully we’ll know then.

    Gary, please enlighten us explicitly! Thanks!

  10. Hot Rod

    HKC,

    I agree, but we’re not at a cycle low. We are just staring the dip into the cycle low (maybe).

    Also, he is not doing just a straight sell as we all know. It is a switch.

    I do see some things in the report that contradict what he posted on the blog earlier, to the effect that I believe he is still carrying it out early am.

  11. pimaCanyon

    Looking at the daily chart of silver, IMO this correction will likely drop to the 39 – 40 range. It may stop at 41, but I’d give 40 and even 39 higher odds.

    Gold’s not as obvious to me, but 1490 – 1520 looks likely.

    We don’t sell into daily cycle lows, instead, use them as buying opps. Good luck all!

  12. NJ

    Gary / DG / Others:

    When the D wave hits, how about going long ZSL with 2-5% of portfolio instead of OTM SLV puts?

    As a side note, is this Black Swan event of Osama being dead the good news on which this cyclic bull tops? News on terror cannot possibly get better than this!

  13. Jennifer

    Hot Rod_

    Gary said in his blog post earlier

    “I won’t be making any decisions before the market even opens. However now the potential reward has again swung in favor of silver as the move back to $50 is much larger percentage wise than a move from here to $1650 for gold.
    If you have cash you are now better off putting it in silver.”

    He’s not doing anything until he sees how things shape up in the morning.

  14. jhnewman

    In this rally in silver since last August, the pattern has been for the daily cycle to put in a low at the 20 MA on the daily chart and then move up slowly, hugging that 20 MA for 2 – 5 days.

    The 20 MA for silver right now is roughly 42.86 on the futures contract. Eyeballing spot silver on Kitco, it looks like the low for tonight in spot was roughly 42.30 — so silver has already gone below the 20 Ma by about 50 cents.

    I wouldn’t be surprised if tonight’s low marks the daily cycle low for silver, and then it hugs the 20 MA for 2 or 3 days and then starts to move up away from it in the new daily cycle.

  15. TheBookGuy

    I guess we know why gold and silver were going down. Obviously some folks knew that this was going to be announced. 🙂 Martin Armstrong often says that cycles tend to be able to predict major events.

  16. Tudor

    TOS upped the margin requirement on their mini-silver futures contract to $6,007, twice the exchange requirement. I chatted with a CSR and was assured that I would get a surprise liquidation, but I could get a margin call tomorrow with two days to meet it.

    My oh my. These are interesting times!

  20. Gary

    I will never sell into a cycle low. Not to avoid a draw down, and not to convert silver to gold.

    If you don’t see a portfolio change then I didn’t do anything. People you know this, why do you continue to ask this same question over and over.

    Daily cycle lows almost never last one day so don’t get it into your heads that this will be over in one day.

    Also you can throw away your charts your trend lines and your moving averages. They are worthless right now and will just cause you to make a stupid mistake based on something with no predictive value.

    Just let the correction play out and buy once a swing low is formed.

  22. Haggerty

    Gary

    Thanks for posting. It def settled my emotions.

    Benjamin your pitchfork drawing makes me want to use the rest of my dry powder to buy AGQ.

  23. notGreedIsGood

    Gary

    what makes you so confident that it is the “latter” that we will see?

    so if the next daily cycle is left translated, what is the timeframe for which you expect the D wave to begin?

  24. n1tro

    I’m confused. Gold leads the way and silver follows. Gold closed at $1565 on Friday and given tonight’s events only slipped to $1540 and is now trading about $1551. So the move a $25 drop is still within the runaway scenario isn’t it? Why are we talking all about silver and what its going to do?!

  25. niven

    Hey Gary,

    I purchased gld options earlier when gold was at 1535. Should I sell them with a profit and buy call options on slv or slw while it still has a lot of potential?

  26. Gary

    Not,
    Because there’s no way the greatest C-wave of the entire bull market tops with a whimper. This is going to top with the largest parabolic move of any C-wave to date. Silver has already shown what is possible.

    Now it’s gold’s turn to follow the silver parabola.

  27. Gary

    Niv,
    I can’t answer that one for you. You know what I’m doing with my portfolio and you will know the minute I make any changes. If you want to do something different then make a plan and take your best shot. Then have the discipline to follow your plan.

  28. Gary

    Off to bed so I can get a workout in the morning. Hopefully this will continue and give us a recognizable cycle low.

  29. basil

    Gary,

    if I understood correctly, yesterday you mentioned in your report that the PMs might top out earlier than what you had expected. In today’s report however you sound convinced that the C wave will likely last for quite a bit longer. You are also raising your targets on gold somewhat, while I think that yesterday you mentioned that gold might end its run prematurely.

    Is there a discrepancy between your outlook from Saturday to Sunday, or did I misread anything?

    To me today’s spot price action almost seems like confirmation of the caution you expressed in yesterday’s report, where you were concerned that the run could end early; the only surprise now is that PMs seem to be tanking on the news that Osama bin Laden is dead rather than on the unemployment report.

    My question is, what has changed that is causing you to alter your view from yesterday’s caution to today’s optimism?

    Would be great if you could answer that. Thank you!

  32. v

    Hi Gary,

    Last week I went ahead and converted 30% of my Silver position to Gold.

    Should I exit Gold and move back to Silver now or let it remain same.

    V

  33. Jay Lin

    Basil,

    I will try to answer it for you since I read his update this evening. Simply put, the difference is that this decline has offered up a discernablee cycle bottom. Gold is no longer in ‘run away move’ which disregard cycle length. Now that cycle bottom is forming this week, he can make a better forecast as to what the top would look like. And his conclusion is that we have another parabolic up move over the next cycle.

    Does it make sense to you? I am not a cycle expert but since Gary probably went to bed, I’d like to help out.

  34. Beksachi

    Gary,

    Reminds me of the japan earthq week: I was nervous as hell but you were rightly confident in cycles and your experience.

    Great report- I will try to remember that week as we go thru this week

  35. Bill

    Hi Gary – nice report.

    Hopefully you’re feeling better now – and maybe you lost enough weight now to do a 5.12d in Oregon, eh? 😉

    Re: the dollar cycle in your report, is it still within the statistical mean of how cycles work for the dollar? I would have thought that’s it’s too late now to have a cycle dollar change.

    Also (general q) why (someday) consider DGP, instead of UGL? DGP is DB’s ETN, not PowerShares ETF which is UGL (sister to AGQ). Is it because DGP has more liquidity?

    Thanks.

  36. Haggerty

    Basil

    I think the difference is that the dollar still has yet to make a new 3 year cycle low.

    I think if Gold would have extended its gains this week and Dollar made a new 3 year low then we would have been looking for the exits, because there would be nothing left driving this C wave advance in PM’s.

  37. Silverhound

    Evening all,

    Well looks like Gold hit it’s cup n handle target on the chart and had it’s correction, painful as it is to watch, it was expected. This chart doesn’t have the correction day on it yet.

    Hope you’re all enjoying the draw down, I’m not 🙂

    Sometime I wish I could just draw a chart and press fast forward to get past the ugly bits…..

    Gold Cup

    Regards
    Darren

  38. diana

    From Market Watch:
    May 2, 2011, 3:05 a.m. EDT

    “U.S. stock futures rally after bin Laden’s death
    Dollar jumps; crude-oil, silver futures slump”

  41. kmisak

    Good morning. As much as I hate to see my portfolio go down, I am glad we may have a cycle bottom, for it means a potentially spectacular finale. Since I am all in, I will ride the wave… at least I have no decisions to make!

  42. Gary

    Geez still the dollar can’t get any kind of bounce. If the dollar continues to collapse the expected (and hoped for) daily cycle correction could come right back off the table.

  44. Gary

    V,
    If you already have gold then just leave it as is. It’s probably a tossup at this point. Both gold and silver have come back strongly from the lows and the dollar can’t find a bid at all.

    If the dollar continues to collapse this week then I wouldn’t expect this corrective action to last very long. Heck it might not even last into the open.

  48. discreet shopping

    What do you all make of the fact that commercial traders’ short positions in silver have dropped to their lowest levels in many months…this is the ‘smart money’ after all!

  50. T.J. Rand

    discreet-

    IMO, a decreased short position will likely mean that there is a belief that silver has a greater chance of rising in the future, and that any short covering will be more muted.

    It’s all relative, since I believe, that the short book is still good sized.

  51. Gary

    Discreet,
    Someone commented on this earlier. The COT’s are only predictive at bottoms when the Blees rating is above 90. Other than that trying to read something into every little wiggle is a fruitless endeavor.

    Sometimes a top will come once open interest hits all time highs. But then it can stay at that level for a month or more so it isn’t an actionable timing tool.

  52. Poly

    Nice post Gary.

    My only concern is the dollar IT. Is there enough time and juice in that to support a parabolic gold cycle? The IT is already stretched.

  53. Harry

    Gary has said – and correct me if I’m wrong – that the metals will not top until we see a panic low in the dollar. Period. I’m being cautious this week but until the dollar really gets creamed the metals will have upside.

  56. Shalom Bernanke

    Now that we know what the silver miners were discounting the last couple weeks, I might have to buy some back if they can show strength relative to the metal. No rush, but I don’t think we should overlook them when it’s time to buy.

  58. Paul

    Gary, I am trying to understand the end of this intermediate cycle as you portray it in your new post. You outline two scenarios with charts based on a current daily cycle correction. The first involves one more daily cycle but the second looks to involve two more daily cycles (one RTL and the other LTL). Am I interpreting this correct and if so, how does that affect the future timing bands for the end of this intermediate cycle?

    One other point, is the back end of the final daily cycle of this intermediate cycle the dreaded DWave hence the LTL requirement as you stated?

  61. Shalom Bernanke

    Everything is OK and the only decision for me is when and how much to buy. I’ll observe th open and plan to get heavily long into a daily cycle low if it presents.

    In case it does not materialize and we begin a slow march higher, I intend to put another 2% of portfolio at risk today (bringing me to 4% total risk). Bigger purchases to follow later in the week.

  64. Shalom Bernanke

    I hate trading off news events as they’re impossible to quantify, but if I’m not mistaken, this weakness could persist into the close as these margin hikes force sales by the end of the day.

  65. Shalom Bernanke

    Eamonn,

    Nahh, you haven’t lost control. Can’t control the market anyway, a trader can only control his reactions to it.

    Expect heightened volatility for the rest of the C-wave.

  66. pimaCanyon

    Driver,

    Believe me, I don’t believe any of the government BS about 9/11. I just didn’t know this about bin Laden that he may have been dead already for many years. Thanks for that link.

  67. Gary

    Paul,
    I was pointing out that all intermediate cycles end with a left translated daily cycle. That isn’t possible with the current cycle as it extremely right translated. Once this bottoms then we have to see either a cycle that fails to make a new high and rolls over in less than 10 days or we see a spike to marginal new highs that tops quickly and rolls over into a left translated cycle.

    I don’t believe for a second that the largest C-wave of this entire bull market will top with only two daily cycles up. I also don’t believe this will top before gold and miners make a big parabolic move. That leaves the second scenario (second chart in the report) as the most likely way this will unfold.

    Either way we need a recognizable daily cycle correction so we can take the runaway move off the table. I don’t want to deal with a runaway move because my cycle tool becomes ineffective and it becomes hard to spot the timing band for a top.

  68. Eamonn

    SB, can’t understand why silver looked sick last Friday while gold rocketed. That, and the breakdown of the cycle analysis/ theory with no cycle low. When I can’t explain something it bothers me.

  69. Gary

    Emmonn,
    When you get nervous and start questioning the big picture you end up making emotional mistakes that cost you money.

  70. Shalom Bernanke

    Eamonn,

    We didn’t know the reason for the move of Friday, but we do now.

    I can promise with absolute certainty that the best traders/investors (with the deepest pockets) are not doing anything but making buy lists. It doesn’t mean we turn around immediately, but only the inexperienced and emotional traders will sell into this.

    It really is not a viable option, even if we go lower first. The bull will let you out.

  71. Shalom Bernanke

    Miners were the tell over the last few weeks, so let’s keep an eye on them. When they begin to show relative strength vs. silver, it might foreshadow the end of the pullback as well.

  72. Eamonn

    Trust me Gary, I am your number 1 fan and I really look up to you for the way you lead this blog and do your work. You are a rare human being. All I’m saying is that I’m nervous, but I will always follow what you are doing. Lost far too much money trying to be cute and the Market making a moron of me.

  74. Shalom Bernanke

    I’d hate to take shares off others here that hand them over. Let me take somebody else’s shares off them, but not fellow SMT’ers!

    Alright, I’ll give the posts a break. I’m just getting excited at the prospects. 🙂

  75. Eamonn

    Thank you SB. I look up to you too 😉 You strike me as someone who has had years of grizzly experience in the market

  76. Hot Rod

    Bankers are not tipping their hand this morning. We have made it past the 8am and 9am potential “raid” spots and is looking more like a “back to business as usual” up trend.

  77. MG

    Gary
    You said you’d never sell into a daily cycle correction; therefore you won’t convert to DGP & GLD call this morning.

    The question I have is: Does this mean that the plan you had to convert silver to gold is not off the table for the remainder of this C-Wave finale?

    What I’m really asking you is: Was your original plan to convert to Gold based on the fact that it was a runaway move in gold, but now with the daily cycle correction on the way that plan is off the table for good til the C-Wave TOP and you’ll remain in Silver til the TOP?

    And by the way, thank you for the great report last night 🙂

  80. Gary

    MG,
    My original plan was to convert to avoid a possible extreme correction in silver close to or at the top of the C-wave.

    I think gold has one more complete daily cycle higher before this tops. I will wait and see how silver acts as the metals rally out of the next cycle low. If it pops back very strongly to $50 very quickly, then the odds are probably high that silver will easily cut through $50 and go much higher.

    In that scenario I will hold silver for a while before converting to gold as the percentage gain will be much larger.

  82. Jim

    Gary,

    I took a small portion of my SLV Call money off the table at the close on Friday. My intent was to move it into GLD calls today.

    Will you be giving a signal for those of us who are not all-in with some guidance as what to do with our cash (e.g. watching for lower lows)?

    Thanks!

  83. flaunt

    I must confess I don’t entirely understand cycle theory but I follow Gary’s recommendations with great interest. What I don’t understand is with so many events occurring how it’s possible to say with confidence that some sort of cycle event is taking place. This correction in silver is most likely being driven by massive margin increases. Are events like these considered “catalysts” of cycle events, or are cycle events supposed to happen on their own, independent of external events, or does it matter?

    Previous margin increases have proven to be buying opportunities but this one was relatively harsh so it may take a few days to play out.

  84. pimaCanyon

    Driver,

    From Bloomberg “Bin Laden’s body was buried at sea, the Associated Press reported, citing an unidentified U.S. official.”

    Yeah, sure. Okay, I believe they killed him yesterday. And buried him at sea? WTF??!! He was killed in the MOUNTAINS on the border between Pakistan and Afghanistan and then they flew his body hundreds of miles away to the ocean, so he could be buried at sea??

  85. Supermalc

    Pimacanyon,

    So his burial spot does not become a “holy place” and a rallying point for jihadists, would be the reasoning.

  86. TZ(8155)

    This comment may not hold long, but I believe the low in gold overnight was all we will get and resumption higher is imminent. I’m betting on it with a stop at the low (on a partial addition to my position.)

    It isn’t a huge risk. It’s just what I’m seeing and playing for now.

  87. Power Corrupts

    Noticed what looks like a fairly significant jump in the “gold lease rate” charted on the Kitco site over the last few days. Not sure what the gold lease rate is. What might an increase in this rate mean?

  90. jhnewman

    pima: Bin Laden was killed in a medium-sized city about an hour north of Islamabad. He was in a very secure compound there. He wasn’t killed in the mountains (the so-called “tribal areas”).

  96. pimaCanyon

    jhneuman,

    Okay, my bad. However, Islamabad is in NORTHERN Pakistan, very close to the mountains, and more than 1000 kilometers from the ocean. Why fly the body 700 miles to dump it there? The story just sounds fishy to me.

  99. P.K.

    So would this be the right time to buy those “out of the money puts” on silver”

    “The way to handle this? – simple – stay long and buy yourself cheap protection in the form of out-of-the-money Put options in silver itself, or Call options in something like the ProShares Ultrashort Silver, code ZSL. The cost of these options is peanuts compared to what you will save yourself if silver should suddenly tank.”

    http://www.safehaven.com/article/20820/silver-market-update

    So to protect my long positions in silver, should I buy “cheap protection in the form of out-of-the-money Put options in silver”

    Would it make sense to do this today?

  103. Edwin

    off the trigger, let the positions work.

    i go in with no leverage. because one may get killed when timing goes wrong. no one knows the future remember that.

    did anyone really think no one wasn’t going to collect on the top trend line last week… haha you got to kidding me. this is profit taking.

    let the games begin.

    key levels are – 1515 gold, 45 silver

  104. Gary

    PK,
    It’s way too early to buy puts on SLV now. We need to get the final daily cycle up. The time to buy puts is after we see gold rally in a massive parabolic move and put in a high volume exhaustion day.

    That’s probably still a month away at least.

    Silver could easily move to $60 or even $70 by that time.

  105. DG

    I have been saying I will not buy miners again having sold them weeks ago. This correction has changed that. If we go down 3-5 days as Gary predicts I may even get a buy on one or two (AG probably!). Even aside from the buy, these prices are getting too juicy to resist. I will buy SLW when this is over, at least. I think this drop is going to make us a lot more money than we’d have made had it not occurred. just sit tight for now. I don’t know cycles anywhere near how well he does, but I do know markets, and he’s right: A move like this is not going to end with a whimper.

  106. Gary

    What we want to see right now is some follow through to the downside over the next couple of days so we can get a recognizable daily cycle low.

    That will set up what I expect will be a truly amazing final cycle up.

    What I don’t want to see is for gold and silver to recover today. That would keep the runaway move alive and I don’t want to have to deal with a runaway move because it’s almost impossible to spot the top in real time. And when they do top they tend to crash with no warning.

    So in order to avoid getting caught in the crash one has to get out early and sit and watch the market just continue to go up with out them.

  107. Driver

    PC,

    You can see how the gov’t creates a lack of trust in itself. It’s been going on for a long time if one just opens their eyes with an open mind.

  108. Driven!

    Gary, for people who just joined your crew and have cash on their hands, what are your suggestions?

    When do you think will be time to come in and into what?

  109. rapper

    I like the idea that someone proposed last week about having the London boys chasing come Tuesday. Now, I didn’t think it would happen this way but if that’s what transpires, I’ll take it.

  110. Gary

    Driven,
    Just wait for a swing low. I will post in the nightly report when I think the cycle has bottomed.

  111. DG

    I think the miners may have bottomed already. Then the next three days or so gold can drift lower with the miners not making new lows. That relative strength ought to occur before the bottom just like the weakness did before the top. Still best to wait for the cycle bottom though, IMO

  112. Edwin

    the 10.5% silver drop overnight sent some shockwaves.. the usd rally didn’t even last for half a day though..

    a little bit of profit taking, higher margin requirements, and perpetual fear happening as i read this

    stay the course

  113. Matthew

    Personally, I don’t think gary will agree with me. But, I think last night was a take down by the big boys. It was low volume euro session just like the other sunday. Before this wave it seemed like there were take downs in the euro session all the time…

  115. DG

    Matthew: Is there any practical use to determining whether it was a “take down by the big boys” or just normal trading? Should it affect our investment decisions somehow?

  117. Poly

    Now the big boys are taking it up 🙂

    I wonder if the hundreds of hedge funds who move amongst hot risk asset had anything to do with it. After bidding up Silver 100% in months, their leveraged futures accounts are up %100’s.

  118. Edwin

    i’m not a day trader. used to be. now with this bull market in metals, i work off intermediate moves.

    the only buy i got was back in january.

    imho just sit this out.

  119. Jayhawk

    Pima-

    Can you show me what channels you are watching on gold & silver.

    On 4 hour chart, I show silver now back above it’s intermediate channel again.

    /SI

  121. Matthew

    No practical use for me at this point no. Just an observation. However, I do know people that try to trade with institutional investors. All of the trading we are doing is observational at this point. Cyclical trading is just trading off of past observations. If it were off of solid fundamentals the most prudent thing to do would be to buy hold wait for fundamentals to kick in and sell…

  124. Edwin

    matthew – of course. no one knows the future.

    cycles, technicals, sentiment gets you pretty close to a pretty good trading system. if you know how to read them.

    many on this blog are talented traders. Gary, DG, TZ, Poly, SB, to name a few.

    no one knows the future.

    you are playing with sharks here.

  128. Felix

    So maybe we’ll end up just “hanging out” again with no definitive move all week till the Jobs Report Friday makes some kind of $bounce?

  131. Hot Rod

    Damn, TZ, I was just about to pull the trigger after your post earlier thinking we may drift.

    Good call again. Train has left the station.

  133. jhnewman

    Jayhawk: Agree on SLW. A high probability that this morning was the daily cycle low. As you said, final washout move.

  134. Hot Rod

    Gary,

    For those with cash, should we just contine to wait or is there a technical level we can key off of to buy in?

    You mention 5 minute oversold on the RSI, we have not hit that so far today.

  136. Hot Rod

    Quotes just now on CNBS:

    “Gold looks unstoppable”

    “S&P daytraders have switched over to silver daytrading”

    “Gold is acting now like it is the world currency”

    “Gold will continue to be the safe haven….and pull the other commodity markets with it”

  137. KAL

    I think the dollar needs to buy a vowel. Unbelieveable. Someday someone needs to write a book about the Invisible Hand vs. debasement of currency. Amazing the ability of the (somewhat) free market system to the see reality behind complex monetary moves.

  141. Gary

    I can tell you without reservation this was not a daily cycle low. Daily cycle lows are visible on the charts from across the room.

    This could be a one day correction in a continuing runaway move or it might be the start of a move down into a daily cycle low but it was not a daily cycle low.

  142. jabalong

    Interesting that gold’s pretty much back to where it finished off Friday, while silver has recovered the lion’s share of its smackdown.

    I wonder how much we should be reading into today’s “overnight” action as the raid on the PMs came on a day when most of the world was closed for May Day.

    Seems to me that it’s along the same lines of the action to start last week when silver when on a big sprint in thin trading amid another holiday in many markets to start the week.

    That said, the near tagging of $50 was this time last week was good enough for me to pull out of half my silver and move across to gold. So I don’t maybe today’s action does portend a downweek, or maybe it’s just some monkeying around amid holiday market closures?

  143. Gary

    Hot Rod,
    Without an obvious daily cycle low in place I can’t tell you with any certainty when a good time to buy is.

    I can tell you with a great deal of certainty that the C-wave isn’t done.
    So as long as you are emotionally capable of holding thru a draw down anytime is a good time to buy.

  144. TZ(8155)

    Steve,

    What about silver?

    My thoughts on silver are that it is a BLENDER here. And I’m not interested in jumping into a blender.

    I am 100% completely POSTIVELY MASSIVELY happy I sold all my silver futures within about $1.50 of the top last monday morning.

    That is the trade (holding too long after massive profits and a blowoff move) that, in the past, I would hold through and end up destroying much of my profits. Not this time.

    Clearly silver could continue up and make new highs but it will NOT be an easy thing to either play or hold through due to the volatility now. And maybe it does NOT make a new high. I don’t envy you guys holding AGQ.

    Since silver is now easily moving 50cents+ on the smallest of sneezes, it is very difficult to get a good position and hold it with minimal loss. I’m not saying I might not try if things turn more positive, but I’ve moved my position over to 5x gold futures and I’m happy.

  147. Poly

    Gary,

    Starting to feel like you were right about that runaway.

    With the dollar up against its IT timing band and stretching, maybe we just run away for another 15 days while the dollar finds its 3 yr low.

    You can get very parabolic from these gold/silver levels in 15 days.

  148. Gary

    Poly,
    Yes gold is certainly not doing what I wanted it to do. Now we are back to the runaway move scenario.

  150. Hot Rod

    The last 20 minutes, silver has run out of steam and gold pressed a lot higher.

    Anything to take from this as it is a repeat from Friday.

  151. flaunt

    Gary, even though it would hurt my position I’m pulling for your daily cycle low. I’d feel more confident if you were more confident.

  153. Gary

    Hot rod,
    You really need to turn off your computer. Now you are trying to read meaning into ever 5 minute move.

  156. Jennifer

    Remember when it used to take a week for silver to move $.50-$1… Good times. The changing scale on those Kitco charts messes with my head. When silver moves slowly over 3+ days its all zoomed in so that small moves look huge, then when they zoom it way out like this – these $1 moves look like nothing.

  157. aviat72

    Silver is on a roll. I think too many people shorted it expecting it to collapse at the open when the SLV/AQG orders hit. The price action last night was a low volume liquidation and the futures contract was trading above the VWAP for most of the night. At this rate we will see a swing high and a swing low in the same day 😉 J/K. The real challenge will the consolidation high volume areas between 48 and 49. If it can take out 48.80ish area I think 50 will go like a “hot knife through butter”

  158. aviat72

    Also Gary, keep in mind that the time-horizons in which moves happen, at least among the professionals have shortened a lot thanks to 24/7 market, computerized trading, HFT etc. Sentiment swings now should be measured in terms of hours and not days.

  159. TZ(8155)

    And the CME is probably going to have to raise silver margins again today. In 12 MINUTES last night we had a move which was TWICE the margin amount per contract.

    Thus, even if a person was trading at HALF max margin level they STILL got their account destroyed last night.

    Generally margins should be set so that a reasonably expected move does *not* take out a persons account. The exchange has to set levels so that holders of contracts have enough money in the margin to cover expected moves.

    The amount of an ‘expected’ move to consider in setting margins just skyrocketed last night. We’ll see what they do today.

  164. T.J. Rand

    I’m appalled (as a US citizen) and amazed at the weakness of the dollar. Dollar sentiment remains very bearish (bullish for the $)and, as Poly has mentioned, the Intermediate cycle is more than overdue to end. What will it take for the $ to bounce?

  165. Gary

    I think it’s pretty obvious the dollar intends to make new all time lows before the three year cycle low occurs.

  168. MrMiyagi

    Still holding and waiting.
    Slept in this morning well sort of because it’s 0825 and I am up..
    Strange strange 24 hours so far….

  170. T.J. Rand

    Agreed, Gary. It’s unfortunate that the only thing we can really do about the dollar’s demise is take advantage of it through PMs.

  171. Mike

    I’m in the same boat TZ – except I’m never 5X anything ;). I like the blender analogy. I still held a small stake of SLV calls but even let those go Friday after seeing the suspect decoupling of silver from gold.

    Although my account is in the green today since I’m gold only, I agree with Gary that a daily cycle correction is long overdue and would have preferred a good shakeout for more sustainable gains later.

  172. Haggerty

    Gary

    I think Big Bob who loves Hawaii said that some silver miners are reporting soon. Do you think that could be the jump start for miners to start acting right?

  173. Gary

    Miners don’t move on old news they move on expected forward price of silver or gold.

    It seems they have been expecting a daily cycle low for about three weeks but the metals haven’t cooperated.

  174. Will Puricz

    Gary,
    Are there any books you recommend on cycle analysis? I have seen some work on Walter Bressert on the web but not much as far as books to really break it down. I have learned a good amount of elliot wave, but I like cycle analysis since it seems like a less complicated view.

    Awesome job on covering the metals. My subscription has already paid for itself. Thanks again.

  175. Ben

    Gary, I have no idea why. I just asked if it did. If it was a trigger, it would make sense to me that it would not stick.

  177. Poly

    It’s ironic, but contrary to popular belief, profiting from parabolic tops are so difficult. We lick our chops in anticipation of a parabolic ending, but in reality, the money is made in the gentle accumulation months leading to a parabolic run.

    If you’re going to have any chance of making real money during the final run, it will require nerves of steal to avoid selling the dips and buying the pops, they will occur almost daily.

  178. wingman

    Gary,

    Now that you are convinced this is not the daily cycle correction and are re-confirming this a runaway move, will you sell your AGQ and SLV this morning and move into gold as originally planned? If not, when do you anticipate making the switch?

  179. pimaCanyon

    wingman,

    Gary did not say he is convinced this will not turn into a daily cycle low. What he said is that we do not have a daily cycle low right now.

    The market could head south again and gold could drop to 1515 or so. That would be a low enough low to qualify for a daily cycle low. And it could start that drop right now. If it does, it would likely be over in a day or three.

    But if the low that came in last night is all we get, then we do not have a daily cycle low and the runaway move is still in place.

    The point is that right now we don’t know whether we’re going to get the daily cycle low or not.

  180. Rob L.

    Poly,

    good point. This is my first intermediate cycle and the thing that I have learned is that the closer we get to the top the more I need to lighten my exposure not add to it.

  181. wingman

    Pima,

    Thanks for the feedback. However, what Gary said at 7:44a.m. was “I can tell you without reservation this was not a daily cycle low.”

    That’s a pretty decisive comment and I’d like to hear how it’s affecting his trades.

  182. pimaCanyon

    Yes, THIS was not a daily cycle low. This means “this”, as in what we have so far.

    At least that’s the way I read it.

    How can he or anyone else possibly say what’s going to happen for the rest of the day today, or tomorrow? Unless you can say for sure that you know what’s going to happen later today and tomorrow and the day after that, how can you be sure we won’t get the daily cycle low?

  185. pimaCanyon

    FWIW, we have a nice looking double top on the 30 min chart and gold futures are dropping hard. Maybe we get the daily cycle low after all.

    The TL break we would need to confirm it is down around 1519 on tomorrow’s date. That’s a pretty big drop, but not out of the question. On Wednesday that TL is around 1523.

  186. Gary

    It’s not possible to get a swing high today. But we might get one tomorrow. That would open up the possibility for a move down into a cycle low the rest of the week. But we need the dollar to bounce.

  187. David

    At one point weeks ago doc said he expected a very sharp, but very brief correction. This seems to qualify.

  189. Gary

    Yes a correction must be visible on stockcharts which means it must occur during market hours.

    I’m not buying for one minute this notion that a daily cycle low can occur during a thin after hours market.

    Daily cycle corrections are profit taking events that clear sentiment. That can’t happen over a couple of hours in the after market.

  190. Poly

    We still might get it, looks like she wants to drop again. The chart since 11am top has been all down hill.

  191. Ivan

    Gary,it looks like correction is already started.
    If you have to enter a new possition,what woyld you prefer to buy at the bottom of the corection Gold or Silver?

  192. Poly

    Miners are really sucking wind again. I have a decent amount in 401k accounts, but they just blow. SIL especially has been a dog the entire IT cycle.

    I’m dumping them all for UGL and some AGQ, if they go for a run in the final weeks, that would be a surprise to me, even if they have always done this during past c-wave endings (All 3 of them)

  194. aviat72

    Poly
    So far the down action has felt more corrective rather than impulsive. During the down move SI is finding support where it should (Fibs, VWAP) and the bounces are sharper than the declines (so far).

    It has auctioned very well. Top of the day was near that 47.26 low of last Thursday; and continues to honor technical price levels very well.

  197. niven

    According to Turd, he hypothesized that gold would test the levels of 1560-65 which it did today. If gold reaches that point it would begin to consolidate lower at supports of 1540 or even 1525. This week we still have the factory report, the ISM non-manufacturing, Jobless claims, nonfarm payroll and unemployment report out. If any of these signs show a positive improvement in our economy than perhaps the dollar will appreciate for a short time which will hopefully signify the next parabolic move in silver?

  198. james r

    Hook,

    I agree. In the past miners at least SIL would have a 5-7 day correction then a sharp reversal.

    What I am seeing is an intermediate type of correction that has lasted 14 days and counting.

    This is not what I would consider a normat cyle correction.

    James

  200. DD_Ing

    Silver miners such as AG showing oversold according to stochastics. This is the same level seen at last IT cycle. Therefore I think we should see a bounce later in the week or early next, especially if we enter parabolic phase as Gary mentions. Would be foolish to sell now IMO.

  213. makutaku

    So what’s your routine SB ?

    Long nap, then commute to work to push the print button and smell the sweet aroma of fresh paper with your coffee ?

    I will blame you if we don’t get our daily cycle bottom !

  216. Quy

    TZ,

    How about throwing us dogs some bones by letting us know your exit target on gold. I’m assuming you still think it’ll be over in few weeks. I’ll start calling you “Master TZ” cause “u da man”. Thanks in advance.

  217. oa92000

    ” Shalom Bernanke said…
    Not buying yet. In fact the only thing I’ve done today is take a long nap. :)”

    SB, are you still holding NUGT?

  218. Will Puricz

    Gary,
    What books would you recommend on cycle analysis. The only stuff I’ve seen is pdfs by Walter Bressert. I was wondering if there was a good book detailing cycle analysis. I do know elliott wave, but I feel like it is too complicated and the waves get too messy. Seems like there is a simplicity to cycle analysis if used right.

    Thanks for all the great work on your blog and subscription.

  220. Shalom Bernanke

    oa92000,

    Yes, I still have NUGT and am waiting to add to it and put more funds to work in the near future but not today.

    It’s my only holding besides physical at the moment.

  221. Shalom Bernanke

    If we close near here or lower, my best guess is more decline to come tomorrow. And the Sprott news, although basically a non-event to me, is bound to shake up a few more longs tonight.

    Maybe we get an exhaustive puke-out in the morning to take advantage?

  222. notGreedIsGood

    For Canadian gold and silver option traders,

    are you guys trading options in Canada, or are you guys trading with US options?

    i don’t think i can find a decent canadian listed option…

  223. Shalom Bernanke

    I don’t believe I’ll get taken out of NUGT as my stop is in the low $34’s but if it gets there I promise to be long gone.

    Until then my days will consist of looking at buys. (and an occasional nap)

  224. MrMiyagi

    Will P,
    There aren’t many books out there for cycle analysis, this question has been asked a few times and I believe Gary has referred to a couple of Trader Vic books on amazon.com.

  233. Shalom Bernanke

    Rod,

    I’m not looking at individual names to call this turn. Better to look at a miner etf like SIL or GDX as a guide when to buy an individual name like SLW.

    None of the names we’re looking at will turn higher until the group does.

  234. Patrick

    This has been ugly for anyone who has holding a good amount of mining shares. Over 50% of my account is in them. I’m not really sure what to do here…

  240. ddn3f

    This is setting up for the big washout before the parabolic move. Gary said that there will be talk that the D-wave has begun. This drop is really going to shake us up.

  242. Shalom Bernanke

    Patrick,

    Even if I were loaded up in miners, I would not sell shares into this decline.

    There looks like more pain ahead, but the bull will let you out at much better prices if you can hold through the discomfort.

  247. catbird

    I haven’t done a darn thing today…haven’t even logged into my account.

    Thankfully I didn’t nibble this morning like I was tempted to.

    Now even the buck is showing signs of life as gold sags. It looks like Gary’s daily low could be comin’ at us this week!

  248. ddn3f

    gold does look like it is joining the carnage. This is good news. This sets us up for a swing high tomorrow and hopefully a swing low later this week. Although it hurts this is good news. Just close your eyes and hang on this week if you believe in Gary’s work.

  250. DG

    I believe the chart patterns, volume patterns, etc. in the individual miners will be overwhelmed by the drop in the metals if it goes further. That is, a chart can look great but if the sector gets smashed the “looking great” chart will fail and soon look awful. Better off waiting for the bottom to form and then buying the miners a little late. The goal for me isn’t to catch the lowest price, but to be sure it will go up after I do buy it.

  253. The Hook

    OK, silver miners trading at 2010 levels. Thats almost six months of gains gone.

    You guys are layering into long positions right?

  256. ddn3f

    I just want to throw the obligatory comment just in jest, ” Gary, has the D-wave started? What should I do? Should I sell?”

    The above is a joke. Please everyone stay calm and not freak out.

  260. hkc

    Is there a decoupling of Silver price on Kitco/goldseek with SLV? SI on Kitco is still at 43.6 and slv is around 42.6, almost a dollar difference.

  265. Poly

    It is setting up nicely, I know its hard to believe.

    Silver getting close to that April 12th top where i thought this cycle would have topped. Around $42.50 Silver if we could get it tomorrow would be a real sweat entry, IMO.

  268. pimaCanyon

    It’s looking more and more like we will see $40 silver before this drop is over. Maybe $39.

    Gold is not as obvious to me, but low 1530’s looks likely, and maybe 1520

  272. pimaCanyon

    we would need 1520 or low IMO to give us the right “look” for a daily cycle low. If it stops here, the drop is still within the range for a drop within a runaway move (so far aoubt $33). Another $10 or so seems like it would be outside of that range. So 1530 would do that. But 1520 would be more obvious and would likely break the TL which would be another confirmation.

  273. Greggy_M

    Gary,
    I’ve been studying trader Vic’s book and I’m looking for 2B reversals in real time. I understand that gold is the driver here but would I be correct in saying that AGQ confirmed a 2B reversal today? Just simply for educational purposes?
    Thanks

  274. Poly

    SLV finally breaks it’s 8dma!

    Only did this once this entire IT cycle, that was the last and only daily cycle of this IT.

  275. ddn3f

    Poly,

    Interesting fact. Thank you. I feel like Poly and Wes are going to make a killing on this cycle because they have so much cash.

  279. Nike Boy2008

    here is my prediction:

    1)nice bounce tomorrow/wednesday (i bet a lot of people will go short based on the chart at close)

    2)lower low (gold 1520 and silver 43) on wednesday or thursday

    3)swing low on Friday

  280. Poly

    ddn3f,

    Still hurts even with just 30% invested here. Took a small hit buying at the high today, but quickly dumped it after it didn’t follow through.

    Key for all here is to not sell, that opportunity has passed. Walk away if you have to, but this pain should be for the greater good 🙂

  282. MrMiyagi

    The hardest part for me is the waiting.
    We’re looking to move to another province (or a province I should say..) and planning a trip past the C is getting harder! I so NOT want to be sitting at the computer, in fact, I don’t want to bring a computer at all!

  287. flaunt

    What’s it called when you have a failure to bounce back from a big sell off? Whatever it is that’s what we got. Feels extremely bearish in the near term.

  288. Poly

    I think we have plenty of pain to go too…….only seen one real “is this the d-wave” question so far 😉

    I think it’s 15 to mark a cycle bottom.

  289. Sandy101

    Jayhawk,

    Lucky you! Imagine the situation if you were into AGQ.

    It may have doubled the losses.

    I can’t belive that I held through all this with AGQ loaded portfolio. Would have definitely panicked had it not been for Gary’s morning post.

  290. Rod

    Jayhawk,

    You’re not alone. I too have a bunch of miners as well. But I’m going to hold the faith that Gary’s correct here and we’ll see a nice come back.

  291. Shalom Bernanke

    As much as I enjoyed riding the C-wave with a buy and hold approach, we’re headed back to my favorite type of market. Buying dips, but SELLING the rips instead of hanging on in overbought territory.

    One way markets are fun on the right side, but much harder to trade, IMO.

    As I said 2 weeks ago, my holding times for long ideas will be much shorter going forward. I’ll stay that way until Gary informs us another C-wave is on the horizon.

  292. Le Fou

    EXK looks relatively strong here.
    It tagged the 50 dma early on and bounced back above support at 10.50. Earnings report on Thurs, May 5.

    Best,
    Le Fou

  293. David

    Jayhawk,

    The miners should recover before the metals.

    A lot of pain has already been priced into them.

    Keep in mind that the slingshot effect will come into play when they get moving.

  294. Poly

    Guys,

    It always feels horrible into cycle lows, it makes you doubt everything! That’s how you know a real cycle low is coming, IMO. That’s how sentiment gets cleared to enable new cycles, especially parabolic runs. You can’t ride them just buying and holding!

  295. San Diego Jack

    My tummy hurts from seeing the decling balances in my accounts…

    Anyone have an idea how to pull up the Dollar Currency Index on Yahoo Finance?

  296. Poly

    “You can’t ride them just buying and holding!”

    I wrote this to mean, that it’s not going to make it easy to just buy and hold. Of course the only thing to do now, is to hold. No time for coughing up shares.

  297. DD_Ing

    Rod,
    I am with you, holding the line with the miners but would have probably sold today if not for Gary’s advice. Now alot of faith in Gary that this these come back during the C-wave parabolic move ahead……

  300. ddn3f

    At least we haven’t seen the pain we saw during the Japanese earthquake. I guess we will see that pain by Wed or Thu as silver drops below $42.

    I told my wife I am not going to look at my accounts today. I lied and peeked at them once during a bought of weakness.

  301. grimweasel

    Look at previous market tops. If you like Price Action then read ‘Trading Price Charts Bar by Bar’ by Al Brooks. Invaluable. The one rule that has kept the shirt on my back in my trading is ‘never trade counter trend unless there has been a prior significant trend line break’ – this one rule can save people loads as it prevents you picking tops and bottoms.

    Another great observation is that the rally back into the old trend line after that trendline break is one of the surest trades a trader can ever make – it will either test the TL and form a lower high or break it and form a higher high to trap most short sellers stops!

    I’m looking to get back long gold this week or next post NFP – the fiat currencies are too shot to bother going long. But then again to be a true contrarian is USD the trade of the moment?

    The best trades are made swimming against the tide – but I will wait for the significant TL break and rule of 4 (ie There must be a low, high, higher low and higher high for a new long trend; vice versa for a short)

  303. MG

    GDX/GLD now at fresh, new, 52-week lows. No much higher than the last low which was in February 2010, when gold was trading at $1,050 – amazing

  307. Ryan

    My portfolio still consists of a whole lot of AGQ, some DGP and a bit of GDX. It definitely hurts pretty badly right now. I still have some dry powder so thankfully I didn’t add more AGQ this morning. I really hope I can handle the additional beat down this week. For those that have a lot of cash on hand, will you be going back to AGQ or DGP or?

  309. Rosabarba

    MG is referring to the ratio chart, usually rendered GDX:GLD and showing the negative divergence between gold miners and gold.

    A much more stark version of this is SLW:SLV.

  311. David

    Rosa/MG,

    OK, now it’s clear.

    Right now the Xau/gold ratio is 7.16.

    This means the miners are insanely cheap relative to gold — indeed the ratio is higher than it’s been in a year.

    To a trader this may be a bad sign. To a buy-and-hold investor, it’s a sign of absolute value.

  312. GottaHaveIt

    Poly,

    You said: “Took a small hit buying at the high today, but quickly dumped it after it didn’t follow through.”

    Just curious, what did you buy and when (what price) did you decide to sell it?

    I like to follow your trades so I can learn from the master.

  313. St. Deluise

    bought SIL $32 lotto calls at the close for 30 cents, let’s see if this thing C waves or not.

    holding my same stash of PSLV which just dipped into the red today (thanks sprott!). won’t be adding until we see a sub-$40 print, if at all.

  317. St. Deluise

    also: since when do people follow UUP? i doubt the “big boys” even glance at that POS. volume on /DX in the last few weeks is below average, if anything.

  319. Slumdog

    Beanie, what did you do with the gold position you took at higher prices, I believe?

    Do you still see it going up?

  321. Daniel

    To me — that alone will help reset sentiment!! Now we can hope for a two-to-three day churn/grind/whatever to get this cycle low behind us!! Man– D wave will be a serious stomach churner for those who ride through it– (Anybody not listening to Gary — of course) :))

  323. E

    so as i posted couple of days ago, beanie did buy at all time high.

    beanie is joker and should be banned from here.

  324. Rosabarba

    David,

    I would say that the ratio is an indication of divergence, positive and negative, to both an investor and a trader. IMO, the ratio value itself is less important then the direction. Up is bullish, down is bearish.

  327. Jennifer

    Yay Beanie! I know you try to troll us, but when you show up it makes me happy. You are like one of the chickenburrito/moldyhamsandwich puppets come to life. Your doom and gloom posts are always harbingers of good things on the horizon!

  328. pimaCanyon

    SLV disappeared from the BoW page. AGQ numbers dropped way down on the total money flow and went negative on the block trades. Seems that big money is not buying this dip yet.

  329. Poly

    Don’t let Beanie fool you all, he is a closet goldaphile!

    His site is essentially ALL gold and silver related. From the Kitco live charts, links to buy silver, video of Turk, Fleckenstein, Paul and Rodgers.

  330. pimaCanyon

    Poly,

    Will this do it?

    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?
    Is this the D wave?

  331. Shalom Bernanke

    Poly has Beano pegged. Nothing more than a salesman, and not a very good one at that!

    Rest well traders, tomorrow could see the lows of this move. Get your buy lists ready.

  332. SLW TRADER

    Great action today on SLW!!

    At this rate, I’ll be able to buy that cardboard box down by the river I’ve been dreaming about.

  336. pimaCanyon

    Well, Poly said we need at least 15 “Is this the D wave”. One had already been asked, so I supplied the other 14, and whaddaya know, silver up a quarter!

  341. SLW TRADER

    I call dibs on Gary’s pull out couch in his basement. The one by the air hockey table and just under the dog’s playing poker framed picture.

    😉

  344. SLW TRADER

    I thought the daily cycle was so far over due that a correction would be quick but painful and over within possibly a day.

    Right now, I feel like my nuts have been kicked so far up my behind that they are coming out of my ears.

  345. flaunt

    Just watched the Fast Money guys talk about silver. They are getting cautious but aren’t convinced it’s “over,” which means we probably need some more downside. However, when they were talking about silver they referenced it as a “bubble,” which means they clearly don’t get it.

  348. Poly

    Good night all, signing off. Going to watch a couple of Silver shooting the moon You Tube video’s from Beanie’s site.

  349. Dan

    So how exactly can be sure that this isnt the D-wave correction already?

    The miners are still falling faster than gold so that indicates we have further to fall from here.

    Seasonally, we are pretty late as are already in May.

    The dollar has fallen for two days in a row and PMs have also been down for two days in a row, anybody care to guess what happens to PMs if the dollar actually has an up day?

    Silver went parabolic and had a double top at 49.50 with huge volume.

    PM stocks have been lagging for several, typical of a top.

    Dollar sentiment is at record lows, lower than in previous peaks.

    The only argument for PMs not topping here is the fact that gold and PM stocks were not stretched enough above the 200dmva.

    Thoughts?

  351. Jayhawk

    Well, looks like the C wave has topped! See you all in three years! It was fun, but the (D)EATH wave is upon us. SLW back to 2.50.

    I’m selling all my stuff at the open, dumping all my bullion (just head Dave Ramsey saying what FREAKING IDIOTS people who buy gold are). Going long Beanie’s portfolio.

    There…is that bearish enough to kick off a move up?

  352. coolkevs

    I know you guys don’t buy and hold, but if you had from the Dec 7 GDX high to today :
    GDX: 64.22 (high adjusted for div)-> 59.85 = -6.7%
    SLW: 42.31 (high adjusted for div) -> 37.77 = -10.7%
    SIL: 27.54 (high adjusted for div) -> 26.45 = -3.95%

    And what lowly-loved investment has now outperformed all of these since that day with a natural disaster, nuclear disaster, and money-printing disaster in the making??? Yep, Japanese stocks:

    EWJ: 10.63 (high adjusted for div) -> 10.56 = -0.6%

    It’s a wacky world we live in, indeed…

  353. Haggerty

    I have a lot riding on this like us all. Just started to handle my father in laws account and am at 80% in his account.

    As far as I’m concerned the miners are holding up well. Look at the HUI. We just need to hold our positions. I will be adding AGQ if we dip to the 42 dollar level on Silver. My guess is that’s as low as we go.

  356. Jayhawk

    Got this one from Hilson last night. He was itching to buy AGQ, so that’s a bearish sign for silver.

    When he starts emailing about selling his physical, the bottom is in.

    Here’s the email-

    total BS!!

    Banbksters push it down 20% pre market
    and in an hour were almost at 45!!!
    AGQ tomorrow…pray were down 20%!!!!!!

  360. Clarkatroid

    Ok chaps

    We must be approaching the cycle low because….

    1) i feel physically sick to the pit of my stomach

    2) I want to sell everything

    3) I feel convinced this is the d-wave

    4) I’m not sure I can hold out this week through more downside

    So it’s time to keep our nerves, bite the stick and swig the moonshine 🙂

  362. pimaCanyon

    Dan,

    All of those things you mentioned concern me as well. The big ones are the dollar sentiment and the fact that the dollar’s IT cycle is stretched already. Seems to me that if the dollar puts in a low (call it a daily cycle low), there won’t be enough time left in the IT cycle for a whole ‘nother daily cycle. So the low (if the dollar does put in one) will have to be the IT low and that will also make it the 3 year low. If that were to happen in the next couple of days, PM’s will be toast.

    So I’m thinking that the only way the dollar tanks further and goes down to at least tag the 2008 low is for it to continue down without much of a bounce along the way, like continue down the rest of the week. The only fly in that ointment is that dollar sentiment is scraping bottom already–lower that at the 2008 bottom–so who’s left to sell and push prices lower?

    As I’m typing this I just realized that the dollar is thinly traded, so what we need to be looking at is Euro sentiment and sentiment of the other currencies that make up the dollar index. Anyone have a read on those?

  363. pimaCanyon

    Dan and Clark, thanks. Poly had counted one D wave question and said that for us to reach a bottom, we need 15. Yours bring the count up to 3 and my reply to Dan brings it up to 4. 11 more should do it.

  365. D

    Osama why’d u die! You’re killing my account =(

    jpjp, but lets get this week over with so we can go parabolic

  366. Jayhawk

    T-

    I can see it. The part about the banksters pushing it down, let’s buy AGQ?

    Trying to be somewhat open minded that the miners may be ok. Now the silvers are another story. I can’t find may good charts that are screaming “buy me!”

    On the HUI-

    For one thing, the 200 MA is only a little under 8% from here!

    The TRIANGLE pattern is still holding up.

    The 50 MA is holding it for now. Look at how the HUI crawled along the 50 MA for 8 painful days back in October before launching higher.

    HUI

    That being said, I’ve had just about enough of these miners. Complete letdown.

  369. Dan

    pima,

    Yes the EU dollar sentiment is at near highs also.

    I know I am going to get killed for this comment but the honest truth is silver has ALWAYS retracted back to the 200DMVA after parabolic runs, if one was to buy an inverse silver ETF here and not check prices until late summer they are pretty much guaranteed to be up a nice amount. Like it or not thats just the truth.

  373. GottaHaveIt

    Poly,

    Thanks for posting the details of your options trade today!

    I’m surprised you cut your losses so fast, have you given up on gold for the short-term? I would have thought you’d let it run for at least a few days to see if gold bounced back up.

    I’m still holding a couple of the same GLD options that you bought last Thursday and Friday.

    You weren’t kidding when you said there would be days when they would be down double-digits! LOL

  375. Gary

    PC,
    The last intermediate dollar cycle was very short. This cycle could easily stretch to 30 weeks to even out that short cycle. Actually that is exactly what I expect it to do.

  376. pimaCanyon

    wmp,

    Who supplies your charting package and data? I’m wondering whether it’s a bad tick or for real. I run TOS, so that’s where I’m getting my data.

    Because TOS provides both TOS charts and Prophet charts, I just tried getting the June Gold on Prophet but it won’t come up for me.

  379. pimaCanyon

    EricH,

    It does look legit because of the large volume spike, like a bunch of traders puked their contracts all at the same time. Forced liquidation due to margin blowouts, maybe?

  380. eric

    My agenda for the week. Computer off, Phone stock quotes off, bury myself in work and family and will turn the computer back on Saturday. Lot’s of road biking for me this week. maybe 200 mile week.

  382. Poly

    “Gottahaveit”

    I still hold those June $140 positions you got in on.

    This was a new position at 11am based on the idea the market shrugged off the overnight drop and the run-away was indeed moving ahead. Within 30 minutes or so, it was clear the market turned and the run away, for the time being was not on the cards. So being they were near strike May calls, I had no choice but to dump them before they cost me big bucks.

  383. Le Fou

    So Gary,

    I’m leaving for France on Sunday, and I won’t be back until Tuesday, May 24. I’m already fully invested in Gold mostly. Given the scenario you outlined in tonight’s report, would it be stupid of me or smart to turn off my computer until I return? (In other words, leave my computer at home and just enjoy myself?)

    Best,
    Le Fou

  384. Slumdog

    I know I’m just my own caller, but in my world, 1X, 1547, was reached. The stretch up 18 pts or so, would make it 1.15 approx, which is the 1X.

    On a monthly chart, we’re early for the next stretch to 3X, 1770+, if indeed there will be one. If there’s another rally, and do note that I want one as I’ve a small fortune in PMs that I want to see a mid-sized fortune, 1770 range is the 1st target and 2100 is the 2nd and last target.

    1X was the highest probability. But repudiation, at 1434.10, was real and has had the first consequence. I never figured out what would drive it on, but most of the time this repudiation reaches 3X range, 1770 area.

    That can arrive next month or at any time over the next 3-6 months.

    IMO, the time frame in which this move is running is the monthly, not the minutes or days.

    The pullback, undesired for longs as it is, will be a fib percentage of either 113 or 226. I haven’t backtested what fib % that has been.

  386. Aaron

    That spike down was so damn fast! I would have added if I could have blinked and reacted! Hopefully that’s a level we can revisit soon.

  387. aviat72

    That was some liquidation at the 6:00PM open. It definitely had the look and feel of a sell at market open kind of broker/margin liquidation. They made out like bandits I presume. In that one minute it traded all the way down to 1516.2and back to 1541. Very much like Silver’s flash crash last night but just faster!

  388. pimaCanyon

    Gottahaveit,

    My guess re Poly’s dumping of his calls is it has to do with the May expiration. When you’re playing with options that close to expiration, if they don’t do what you’re expecting in a few days, you can lose a bunch. If the daily cycle low takes a few days to bottom and then another two or three days to get the gold price back to where it was when he sold, the options would be worth a lot less than his buy price because of the time that had passed.

  391. pimaCanyon

    Jayhawk,

    I’m looking at the 1 min chart on TOS and it happened right at 18:00. Is that when the futures days rolls over? I’m thinking it had to do with margin calls. OTOH gold wasn’t down a huge amount, so why would there be a lot of margin calls today? Whatever it was, somebody dumped a bunch of contracts all at once.

    It took gold down to the accelerated TL, but did not break it.

  392. Slumdog

    If you were more generous and considered the Europeans as co-equals, you would recognize that for them, this entire rally and collapse will not even show on their charts.

    They will see a flat line from Thurs close to Tues open.

    Capish?

  394. Clarkatroid

    Everyone, let’s make a daisy chain holding hands and start chanting
    “
    I will not sell……. I will not sell…I will not sell……. I will not sell….I will not sell……. I will not sell “

  396. Aaron

    Someone got themselves some very cheap contracts!
    Margin dumps are done at the end of day, this couldn’t be margin call. Besides what idiot dumps at market? With a size that big you always do it in chunks.

  398. Poly

    I think Gary is spot on here, this has all the feel of a coming cycle low. Just requires some patience to unfold. It often helps to view ones account balance (if they must look frequently) from where it has come, not from the highest peak.

  399. Slumdog

    With the Yerps on board, 1535 is the starting point. They will have woken up after a refreshing 5 day holiday, and will see the Americans have paved the way to new highs. Expect the retracement, up, or for them, new found riches, up.

  400. GottaHaveIt

    Poly, Pima:

    Thanks for the replies!

    I’m learning the options market as I go. I wouldn’t buy May calls for the reasons you stated, too close to expiry.

    But I am holding some of the GLD June 140’s and 160’s that Poly bought last week.

    One of the options trading books I am reading recommends selling options with 30 days left to preserve the time value. Would that be a good strategy for those June calls, or will you hold them until the C Wave tops regardless of how close we are getting to the expiry date?

  403. YesLetsDiscuss

    If that is a real bar, I expect that bottom to be tested tonight.

    Did anyone see it being painted live? Did it fall incrementally or was it just instant spike down?

  404. pimaCanyon

    Gotta,

    If they are very deep in the money, you don’t have to worry about time decay because the option price will have very little time value or premium left.

    But if they are not deep in the money, then you have a choice and I would say it would depend on the strength of the PM rally (if indeed we do get one!) at that time. The C wave will likely top before June options expiration, so holding until the top might be fine. (You’re talking options on etf’s and stocks, right? Not options on futures because those have different–earlier–expir dates than the stock/etf options.)

  407. fubsy_cooter

    This is getting pretty exciting folks. My trade plan is locked and loaded, and waiting for two trigger points..
    1) A daily cycle low, and
    2) A breakout in Gold
    in that order.

    If these events unfold as Gary expects I will be 100% invested for the C-Wave finale with my funds allocated as follows..
    DGP: 55%
    GDXJ: 37%
    AGQ: 13%

    Feels like a juicy mix to me.

    Here’s to parabolas.

    f

  409. Ryan

    If we do get that daily cycle low, you guys going with gold or silver. From the report tonight, I’m leaning towards silver, that is if I don’t puke first.

  410. Dan

    Gary,

    Great post, what would you plan on doing if the dollar keeps dropping for the rest of the week though? I ask as you previously mentioned the dollar should bottom on friday but now it seems your view has reversed.

  412. Poly

    @Gotta, there is (very little) next to no time value in front month DITM’s.

    The strategy you outline works well for long dated options like leaps or options you plan to sell many months out. The rule of thumb is buy 3 months past expected sale, because at around three months the time component of the price decays quickly.
    As the time value significantly deteriorates in the final 3 months, you buy 3 months ahead and only end up losing a small part of the time premium you initially paid.

  413. GKC

    man i’m starting to believe the conspiracy theorists may be right about the war against the p. m.’s

  414. Slumdog

    Maybe the sharp drop in pricing is due to the liquidation of found money accounts? 😉

    “Switzerland said it had found 360 million Swiss francs ($415 million) of potentially illegal assets linked to Gaddafi and his circle. Some 410 million had been traced to former Egyptian President Hosni Mubarak and 60 million to former Tunisian President Zine al-Abidine Ben Ali. “

  415. wmp

    Pima,

    I’m using TOS as well..I checked Finviz and they show the same dip at the same time (6pm EST)

  416. Poly

    That bar looks like a panic market order at the first tick of the market open.

    But if that ends up being the low tomorrow, that should be plenty to mark the cycle.

  417. fubsy_cooter

    Oh, I may be tempted to add another 10% or so in GLD or GDX DITM calls if Gold breaks out as well. Maybe a mix of the two.
    Say July GLD 145s and GDX 55s or thereabouts.

    I would imagine by the DCL, I won;t be as giddy. : )

  418. YesLetsDiscuss

    Poly,

    You think that would qualify as the cycle low? It would break Doc’s trend line.

    There might be a retest, but it could now point to the location of the eventual bottom tomorrow.

  419. fubsy_cooter

    @ GKC

    Seriously? Man, any market that sees large advances has steep sell offs. No conspiracy needed. All you need is greed and fear, which is what markets run on.

    Besides, steep sell offs are trademarks of bulls. Keeps fear at hand, which allows more upside. until you see a parabola in Gold and all related assets, the liklihood of a top is slim, at best.

    f

  421. GottaHaveIt

    Poly, Pima:

    Thanks again for helping me and others on this blog learn the options market by sharing your trades and valuable experience.

    BTW, I have two books on options trading and they barely touch on DITM options which seems to be the prefered options trading vehicle used by the pros here.

    Just goes to show that real life experience is much more valuable than book learnin’

  425. EricH

    The gold market is very thin right now, but that was a 3K contract order that flushed close to -29 points in a few seconds.

  435. flaunt

    I think Sprott sold because of the premium. Selling silver at a premium and then buying at a discount sounds like a reasonable notion to me.

  436. Shalom Bernanke

    I suppose we’ll find out some day.

    On the issue of miners, I think that everything metal will bounce hard when they turn, but I’ll focus on buying the “undervalued” miners for the end of this C-wave vs. loading up on metal.

    My only concern is that the S&P is way overdue for it’s usual 5-10% decline, which could keep a lid on all stocks until completed.

  440. GottaHaveIt

    @Moneyman:

    There is a history of rules changes in the silver market during big rallies.

    That’s part of what did in the Hunt Brothers back in 1980. Here is an excerpt from a story about the Hunts:

    Late in 1979 the CBOT changed the rules and stated that no investor could hold over 3 million oz of silver contracts and the margin requirement were raised. All contracts over 3 million oz per trader must be liquidated by February of 1980. Bunker accused the COMEX and CBOT board members of having a financial interest in the silver market themselves. Investigations later found that many had substantial silver short positions. Bunker knew that a shortage now existed or they would not be screaming so loudly. He bought even more. The price on the last day of 1979 was $34.45/oz. At this point Bunker and Herbert held 40 million oz in Switzerland and 90 million oz of bullion they jointly owned through International Metals. In addition to all that, International Metals had contracts on another 90 million oz due for delivery that March from the COMEX. The younger brother, Lamar had even entered the arena and had taken a $300 million dollar silver position by the end of 1979.

    Finally on January 7th of 1980 the COMEX changed their rules to only allow 10 million/oz of contracts per trader and that all contracts over that amount must be liquidated before February 18th. . The CFTC promptly backed up the ruling. On January 17th silver hit $50/oz, Bunker had continued to buy. At that point in time the Hunt’s silver position was worth $4.5 billion dollars bringing their profits in silver to $3.5 billion dollars. On January 21st the COMEX announced that it was suspending trading in silver. They would only accept liquidation orders. Silver dropped $10/oz and stayed around $39/oz until the end of January.

    You can read the full article here:

    http://www.gold-eagle.com/editorials_04/laborde012704.html

  442. Poly

    We all agree if the C wave is alive, metals will blowoff!

    We know miners have greatly underperformed to date, relative to metal. We can go on the assumption that they finally give us that blowoff AND greatly out perform the leveraged metals.

    So the trade seems to come down to, assuming c-wave is alive, a) buy leveraged metal, it will blow off. Sit back B) Find the best miners and hope they blow off with the metals AND hope they beat a guaranteed leveraged metal blow off.

    I’m just saying, its food for thought, as you plan your final attack.

  444. DG

    Hi everyone. Been hanging out all day with my friends visiting from Italy. Beats watching my portfolio get creamed, eh? I have a lot of dry powder and have been looking forward to/hoping for this (sort of). I will buy AGQ, DGP, SLW and a few miners, so the whole nine yards, ASSUMING the miners outperform at the bottom and look sold out.

  447. mdsn

    Question: How does the silver mini future YI track with the big one, SI? I was considering moving from trading SI due to these ever changing margin requirements. Anyone have any experience with both? Thanks

  449. Peter

    Guys don’t forget miners are releasing earnings starting week of May 9th. Next Monday!

    This may be our catalyst to jump start these suckers!

  451. Poly

    If we get this damn cycle low, we have to be prepared to be fooled again an this skyrockets higher again tomorrow. That changes everything.

  453. jhnewman

    CLARKATROID: You’re too funny. I say go into the hospital and ask them to put you into an induced coma. Then ask them to monitor Gary’s site, and to wake you when Gary says we’re very close to the C-wave top!

    It’ll be like a great vacation. And when you come out of it, you’ll be a rich man. (So better than a great vacation!)

    ;^)

  454. jhnewman

    P.S. Of course, it’s true the hospital stay might cut into your profits a little. So ask them to do it at your home, and get a good nurse.

  455. Blake

    Open question to the blog:
    Considering how stretched the gold cycle had been, and fearing a vicious correction, similar to the 17% drop of silver in ’06, last Friday I moved my AGQ and July SLV calls into 66% into DGP with the remaining 33% in dry powder.

    Since we assume that silver will significantly outperform gold in this final C wave advance, wouldn’t make sense to sell my DGP at the open and move all my powder in AGQ, and other silver plays, if and once we see a cycle low?

    Any suggestions are greatly appreciated!

  456. yanivicious

    hey guys not in front of my charting software, can someone just let me know what was the all time low on the dollar index (the low we are looking to get taken out during this coming 3 year cycle low)? thanks in advance!

  457. flaunt

    How’s this for a top call, from Ben Davies:

    “We believe that the market has been exhibiting the precursory signatures of power law behaviour, and that the internet power law of participation phenomena has produced a point of criticality whereby we have seen the top in silver for this half of the year. We believe a real shake out is imminent, in the order of $15 dollars over 3 to 5 days.”

    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/2_Ben_Davies_-_Silver_Criticality,_Why_Silver_Might_Crash.html

  458. BlueHawaiiFan2025

    Ok. I give up. Since no one is willing to say this. I will do it.

    I am going to SHORT the SECULAR bull market.

    Now… I just sit and wait until Gary gives me the lecture on why I should NEVER short a secular bull market and then everyone else chimes in and tells me the same thing.

    Then in about week, the PM markets starts moving up and everyone tells me “I told you so!!!”
    = )

  459. Ryan

    Clarkatroid,

    I remember you saying that you sold half of your positions? Did you end up buying back in? I’m still pretty much in full positions (mostly AGQ/HZU.TO) with a bit of dry powder left. So needless to say I’m full on PUKE MODE.

  463. pimaCanyon

    Blake,

    I believe Gary has said it’s a toss up at this point as to which PM, gold or silver, will outperform the other. My guess is that gold will because silver is still very stretched above the 200 dma. If you’ve already made the switch, I would stick with the DGP you have, no point in switching back that I can see.

    Basically it comes down to no one knows which one will do better.

  464. Le Fou

    PIMA

    Or to put it another way, we’re choosing between superlatives. Either way will be a big winner.

    Best,
    Le Fou

  465. Blake

    Thanks, Pima,
    I think I’ll deploy the rest of my dry powder in AGQ with a smattering of DITM SLV Calls! That way I can play both 🙂

  468. Gary

    Blake,
    I think you are setting yourself up to overtrade. Just stay where you are and if you want to add your dry powder into SLV calls or AGQ at the cycle bottom do so but don’t go jumping back and forth trying to catch every little wiggle.

  472. Blake

    Thanks, Gary and everyone else for their considered remarks. This blog is such a great and positive platform for both new and experienced traders to exchange questions and ideas. I wish everyone here healthy profits as we all ride this final C wave to the top, together 🙂

  478. San Diego Jack

    Uhh, could someone do me a favor and tell me how many charts are in the last post?
    On IE & Chrome, I show 7, on Firefox 6.
    Maybe a phantom chart?

  479. Bill

    Love this site! Been a premium sub since new year. First post here though.

    It’s comical when I peak at Kitco site now with one eye open, like a snake is going to jump off the webpage at me! Weird.

    However, no pain, no gain. Let’s hope for that cycle low on friday.

  481. MG

    To add to Silver can I use the Gold tag of the bollinger band and/or the RSI oversold level on gold as a possible cycle low? Or different parameters should be used to add to Silver?
    Thanks

  483. DG

    MG: Silver is too thin, so Gary uses gold for timing purposes. Wait for the buy signal on gold and then buy whatever silver you want.

  487. muttonfish

    I imagine there will be much better liquidity on the /YI now that margins have increased and /SI is less affordable. Good news, I think, as I’ve always traded the mini-futures — my heart can’t handle the excitement of a $25.00 tick.

    First comment ever (after many moons of lurking…since January)

  488. TZ(8155)

    Bought back half of the gold futures position I got stopped out of on that spike down. I took a look at it and evaluated based on some history. I think that was attempt to push things as low as they can.

    I think it’s up from here. We will see as always. I have about 85% of the position I had before that spike.

  492. Jennifer

    I’m seeing one broken link in Firefox, Chrome and Safari. The chart labeled “4% correction in gold” or something like that. The image link is broken and won’t show up in any of my browsers.

  493. San Diego Jack

    Jennifer,
    Went thru that already. There are 6 charts in total, and that broken link seems to be a phantom.
    It was Newman, using Safari that clarified it for me.

  494. Dan

    To all those options traders:
    You may have answered already in a previous post, but are you guys rolling your options when they hit a certain delta or ask price or just buying and holding?

  496. Bob loves Hawaii

    Interesting action tonight, let’s see if it holds.

    Sprott took a slug of cash and bought silver equities/miners, saying they are grotesquely undervalued.

    That spread wants to converge.

  500. yanivicious

    as a subscriber i see that gary’s chart’s vary from using the 5 day RSI and 10 day RSI, does anybody know the rhyme or reason behind when he is using one as supposed to the other? (i know what the difference between 5 day and 10 day RSI is, just wondering when he applies one as supposed to the other to a chart)

  503. Ryan

    You know I’m kind of conflicted here. Today hurt so bad that I should be happy seeing PM’s catching a bid here but then in the back of my mind I want that daily cycle since that should be healthy. I’m guessing it’s not possible for today to have been it can it? But I know if we do start heading towards the daily low this week I’ll be puking. Man, I suck at controlling my emotions haha.

  510. Ryan

    Scotch is my poison. Glenmorangie all the way. I won’t turn down a vodka soda though. I’ll have a big bottle ready for me this week just in case.

  516. San Diego Jack

    SLW,
    I’d be in hospital getting flushed out if I took a shot for every percentage drop today.
    Tequila is my poison…
    God, How I Love it So…

  517. sophia

    Got lucky in my sleep…left an order at 1521 and got fileed…gold trading 1549.20 now!! I guess that’s help my Silver position 🙂

  520. james r

    TZ,

    I would agree, the dollar is still puking.

    I have a few thoughts.

    I think the runaway move for gold is still on the table about 1600 -1650.

    I think silver may continue to struggle. The gold/silver ratio seems to have form a double bottom.

    James

  521. aviat72

    I just wanted to post a quick note about options. Though Gary encourages only deep ITM options (Delta > 0.8), in a parabolic move deep OTM options can also do wonder AS LONG AS YOU keep the exposure the same.

    Options have a property called gamma because of which the delta increases as the options starts getting in the money. What this means is that when the position starts moving in your favor, the delta increases but when it moves against you, the delta decreases.

    So support you were planning to buy GLD 141 June calls. You can instead buy 2 July 155 calls. If you have TOS you can use the Analyze tab, and the following trades. Short ONE Jun 11 141 call, and long TWO July 155 calls. This COMPARES the two strategies (deep ITM vs OTM). Go to risk profile and select +4@dayStep and step of 7 and plot P/L open. This will plot four PnL curve for the next 4 weeks.

    Notice that for the next week the OTM strategy outperforms the ITM strategy. As time goes by, the extra theta premium of the OTM calls will reduce returns. What is really interesting is the performance if gold does not rally. The deep ITM call bleeds PnL while the OTM call loses much less. This is because of optin gamma which works in your favor when you buy OTM calls. You can also consider ratio spreads (you go short one OTM option and long two OTM with a further strike) which have even better gamma characteristics, with a lower upfront outlay.

  522. Bill

    Good morning Gary (evening to me) – question about metal vs. miners – is it correct to conclude that the miners are leading the correction in the metal now? – and if so, do you expect the miners will bottom out 1st? – and if so will you call that out in your report please? Like you and others, I’m trying to go long both, and so would appreciate signals for both, esp. if they are at different times or days. THANKS!

  524. Strellsy

    Damn that double public holiday in the UK sure killed my silver positions.

    I woke up this morning to an 18% gap down in my x2 Silver ETF.

    Buying opportunity ahead Captain!

  525. Gary

    Bill,
    At some point the miners should start to resist further declines in gold. But wait for a swing low on the gold chart before buying.

  526. Haggerty

    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?

  527. James

    There hasn’t been much discussion of the 3 CME margin increases in the past week. At some point do repeated increases in the margin requirements affect the analysis of what lies ahead for the price of silver?

  531. Veronica

    DG, sorry about answering your question so late, but I’ve been extremely busy and have had a hard time keeping up with all the posts on Blogger. My stop is now up to 1525 on gold( I’m discounting the tick down last night in GC because spot does not reflect it)Is this the final top? You really expect me to know that?:)All I can say is that my system will get me out close to the top and if it’s not THE top will get me back in on any new upmove. Looking at the charts last night (and Gary’s commentary)I do think we will have one more upmove to new highs and there is a chance it will be massive so I will try to hang in best as I can and if I do sell I will be mentally prepared to buy back quickly.

  533. wingwalker

    I expect quick downdraft to mark this daily cycle low based on stretched cycle. So my conditional orders are in starting @ 149 on GLD. That should get us a trend break and a recognizable daily cycle low.

    I’m also long some oil that I may add to based on it’s clear daily cycle low of mid April. Easy downside definition on that one.

  534. DG

    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?

Comments are closed.