TRANSITION TO D-WAVE

Don’t let the title fool you, for reasons I’ve outlined in this weekend’s report I think gold likely has one more move to new highs before the D-wave begins. 

However the action in the dollar and silver this week have probably taken the parabolic phase of this C-wave off the table. Rather than the normal sharp spike up it appears that this C-wave is going to end with a more modest move than prior C-waves. That being said it did last much longer and gain just as much above the prior C-wave top as any other C-wave. So in terms of duration and magnitude this C-wave has fulfilled every expectation.

I’ve noted in the past that a D-wave is a regression to the mean, profit taking event. That regression tends to be most severe when the C-wave ends with a parabolic move. Action and reaction.

However this time it appears there will likely be no parabolic rally to top the C-wave. In that case the D-wave will probably be milder than prior D-waves. As a point of reference every D-wave so far has retraced at least 62% of the prior C-wave advance.

Without the parabolic stretch I think it’s likely that the impending D-wave will only retrace roughly 50% of this C-wave. If gold pushes up to a marginal new high slightly above $1600 (in the weekend report), then it will probably only drop to around $1250 which just happens to mark the upper boundary of last summers consolidation zone.



What should follow after that is a fairly strong A-wave surge. A-waves usually test the but don’t break to new highs. At that point gold will enter a long sideways period to consolidate the massive gains made during the this last C-wave. During this period it will get very tough to make money in the precious metals market. 

However there is still some upside potential once gold puts in the daily cycle low that is trying to form now. Great potential during the D-wave if you know how to use puts and excellent upside potential during the A-wave next fall, before the metals sink into the consolidation doldrums.



This year still has great opportunities left and of course we still have the next C-wave to look forward to in 2013. That one should make this C-wave look puny in comparison.

1,463 thoughts on “TRANSITION TO D-WAVE

  1. Bob loves Hawaii

    Gary, I totally agree with this analysis, especially in the short term. Open interest for May silver and June gold are still very high. This is deep pocket investors holding.

    My suspicion is prices will move up until gold stand for delivery day (end of May).

    Pressure will start to subside for the summer.

  2. Sibek

    Thanks for the guidance Gary.

    There are 2 interesting long term charts I wanted to put up on silver. The first is a 10 year linear chart on silver and shows that we are at or near a major support trendline: http://screencast.com/t/C6DKkqs4

    This 2nd chart shows silver on a log scale and showed that silver hit its head on the top of its 10 year channel and was a good indicator of a pullback coming. Wish I paid a little closer attention:
    http://screencast.com/t/mCiisgFA

  3. Intern

    Gary, BLH,

    You recommend mostly, only buying DITM options. Is it to help protect oneself from market drawdowns like last week?

  4. Gary

    S,
    I don’t think I would put a lot of faith in lines on a chart. In order for them to work enough people have to trade off them.

    Silver is a thin market and as such very volatile. Volatile markets aren’t good markets to trade off technicals.

    Especially in your first chart. I really doubt a line on a chart is going to halt a parabolic collapse. Those almost always have to return to the point at with the parabolic move began before the selling abates.

  5. Hot Rod

    Sibek,

    Awesome trend lines there. I was messing around with similar lines but just could not get them drawn straight. I do see that this spike low in silver does look like it is in the support range. I do hope that this action is simply a “reset” button being pushed.

    My biggest issue is that I am overly optimistic so I am looking for analysis to tell a story I want (bullish).

    I think a bigger surprise to the market would be a silver launch higher and into the $60’s.

    I hope JPM sees this as a short covering opportunity to get out and then go long – so we can get back to supply and demand fundamentals.

  6. Hot Rod

    Gary,

    On your point about the trend line I agree that it won’t “halt” the decline dead in it’s tracks.

    But, it may indicate a range that we’ll trade around.

  7. Gary

    I,
    There are times when in the money or even out of the money options are appropriate but for the vast majority of the time I’m just substituting options for shares.

    As in, if I wanted to buy 100 shares of XYZ company I could accomplish the same thing with 1 call option.

    In that case buying DITM means the option will move almost in lock step with the stock. (If XYZ gains $1 so will my call option) The upside is that the price of 1 call option is a fraction of the price of 100 shares so my return on invested capital is greatly magnified.

  8. RA

    Gary,
    You marked the beginning of this current c-wave as 2009 apr. Should it not be nov 08 that was the start of this wave?

  9. Gary

    HR,
    I can tell you exactly what will halt the decline. Gold putting in it’s cycle low and rallying 🙂

    Silver will follow although I think this time silver will show relative weakness compared to gold instead of strength.

  10. Gary

    RA,
    The A-wave began in `08. The B-wave bottomed in April `09. The C-wave began when the B-wave bottomed.

  11. Sibek

    Gary, I know your analysis has a lot more experience behind it than my own but I do think there is something to be said for long term trend lines. I know a few investors that were paying attention to the upper boundary of the silver chart. I’m not saying it was going to stop a parabolic phase, but I do believe many technical guys may have jumped in once that trendline was broken… you can see how it goes parabolic at that point. Again not saying it was going to stop anything but more of a confirmation. Thats why It think on the way down it will serve as some pause and may bounce there initially.

  12. Gary

    S,
    If gold decides to bottom here then yes silver will rally and it will look like the trend line halted the decline. But if gold continues lower silver is going to ignore that line and follow gold.

    You might be better off drawing trendlines for gold.

    BTW gold just tested the 38% retracement of this intermediate rally.

  13. Gary

    S,
    Post away. I would never stop anyone from expressing their ideas, thoughts and questions especially ones that are contrary to my analysis. It’s always good to see the other side’s view.

  14. jabalong

    Gary,

    Just read the weekend report. When did you get out of AGQ? Didn’t see any note to that effect in your premium updates.

    You laid this out as an alternate strategy in a 5 May update, but don’t see anything to say that you were acting on this strategy.

    Was it intraday Friday that you exited your positions? Even so, wouldn’t that prompt a “portfolio change” update to the premium section?

    Too many posts in the blog to catch these kinds of things and just want to be sure I’m not missing them in the future as they happen.

    Thanks

  15. niven

    Gary,

    Where do you usually invest your money after the A-wave is over? Do you put your money elsewhere or do you ride out the consolidation period until it reaches the next C-Wave?

  16. Patrick

    Gary,
    Once we have more solid confirmation that the 3 year dollar low is in, will not there be money to be made shorting equities (certain sectors)?

  17. New York

    Gary,

    With QE2 stretching cycles and altering so much is it possible the consolidation phase won’t be what’s expected too? Either shorter or longer then you would expect?

    Also, how does this never before seen monetary policy affect you cycle analysis?

  18. New York

    Gary,

    Another thought I had. Huge hedge funds got caught in the margin hikes and started to unwind margin and run for the doors because they needed liquidity. You mentioned in report how big money often likes to push prices above or below key support and then take the other side of the trade.

    Do you think the possibility exists that this huge shakeout could be the perfect storm scenario for something like this? Having smashed silver sentiment and leaving the retail investor scarred from the sharp silver decline being the perfect set up?

  19. Bob loves Hawaii

    I am watching silver for a bounce, and my trigger is a cross of the 10EMA over the 30 EMA on a 15 minute chart.

    My long term daily 10/30 did not cross, but is squeezing, a price bounce off of that is very bullish, a break and well down we will go IMO, or at least I am not long.

    The momentum indicators are way overstretched, so risk reward is on my side.

  20. Gary

    I,
    The downside is your risk is unlimited with inverse ETF’s.

    With a put option I know exactly what my risk is if the trade goes against me.

  21. Gary

    J,
    I posted the alternate strategy right before I got on the plane then decided I didn’t like the idea of being unable to watch what was happening as I was in the air so decided to opt for it myself.

    I was frantically trying to get the trades off before they closed the doors and I missed my flight.

  22. Gary

    Niven,
    If I can find something where I think I have an edge then I will buy or short it during that period. If not I will just go to cash in my portfolio and wait till I think the next C-wave is ready to move.

  23. Gary

    Patrick,
    If I’m certain stocks are back in another cyclical bear then yes we can try shorting. I have to be completely convinced though before I go that route.

  24. Silverhound

    Props to Gary for his calls so far. He’s been bang on the money as far as I’m concerned.

    Riding this PM bull with silver and leveraged ETF’s is a high risk strategy and all about position sizing and accepting that while there are high rewards for those that know how to trade them there is also the potential for huge loss if you don’t understand them. For those that have lost paper profit, that is unfortunate but you haven’t really lost anything. For those that came in late and are down on their capital, I feel for you as I’ve been there myself but you have have to understand that once you press the buy button on a trade you take ownership of that trade. If you enter near the top of a rally you should use a reduced position size so a loss won’t wipe you out. By all means take advisement from your mentors but do some research so you understand what you are doing and know what can go wrong.

    I’ve posted before that it only took 3 minutes of reading one of the free SMT gold cycle reports before I was looking for the subscription link. The cycle tool is enough to give a trader a valuable edge to ride this PM Bull over the coming years. One of the things I look for when I buy shares in Junior Miners is that management has skin in the game (a decent number of shares in the company) so they have to take ownership of how they run the company. With SMT, Gary has skin in the game. I’ll be following his cycle work as long as he is generous enough to share it.

    Looking forward to the action over the coming weeks.

    Thanks Gary

  25. Steven

    Gary,

    Continuing from the posts last night about not getting out of silver in time. I have a few thoughts.

    First, you have always been thoughtful and even often answering my personal emails. You have also by and large been very correct about events.

    I take full responsibility for not selling, however, the responsibility I take was in listening to you. It is wrong to say most of the experienced traders did not get out in time. Many did in real time and I saw it in real time. So it is not true what you say that who could have seen it in real time. I saw Doc sell Sunday night (another rule I don’t understand is that you do not consider after-hours trading even though this is a 23.25 hour market and global in nature).

    However, I cannot understand some of your rules. You say you always sell early. Yet you did NOT expect more than a “tag” of $50. why wasn’t the high 40s good enough? You always say not to get the last few percent yet you tried to get the last cent here as it appears.

    Further, your reasoning to make the switch was to avoid a huge fall. Why play it so risky in that situation?

    I simply cannot understand what was so magical about the $50 number. I personall gave up months of profits. And that means alot in terms of money and time as I was at this full-time.

    I spoke to more than a few friends who follow your service and ALL of us were completely baffled the week BEFORE the massacre why you were not selling or at least scaling out. We assumed you knew something we didn’t. We were wrong and some of those people are in big losses as they bought AGQ much later in the game.

    I don’t know. I looked for your advice that first day and I think you were traveling (either Mon or Tues).

    Really most (if not all) of the experienced traders on Mon/Tue/Wed saw what was going on. And then the sell comes on Thurs, almost $200 points down.

    I have so much more to say but I do think you tried to do the best for your subscribers. It’s just this time I think you were really playing a game of chicken with $50 when nobody would have cared about even $45, especially if you were going to switch to a gold-related vehicle.

    My self-examination is that I have to understand why I didn’t listen to my gut instincts, logical review of the situation, other experienced traders, etc.

    Rules are a good thing. But here it simply seems you adhered to some and ignored others (selling early when you didn’t expect much past $50 anyway). Perhaps you could consider the possibility of looking at why this happened. Nobody would believe me if I said how much I lost this week but that is not the real issue. The real issue is that everyone was counting on you getting us out in time and you were playing a very risky game imo.

    But again I take responsibility for not hitting the sell button. But I think you are simply overlooking many facts (and there are more but these are enough for now) in your error.

    I do have tremendous respect for you and your analysis had done very well up until now and thank you for your service. You are one of the best ones out there (maybe the best) but for the life of me I cannot understand why you played it so risky with the biggest trade of almost all of our lives?!

  26. Gary

    New York,
    QE is stretching virtually all cycles. That’s how it’s affecting them.

    I don’t think QE is going to alter the consolidation phase. That is more a product of human emotion similar to regression to the mean.

    These really large C-wave advances require a long consolidation period before they can take the next step up.

    It’s like running up a really steep mountain. The higher and faster you run the longer you have to rest and catch your breath before the next sprint.

  27. Duuuuuude

    No kidding……this was the scripture lesson at church this morning:

    1 Peter 1:17-19 (New International Version)

    17 Since you call on a Father who judges each person’s work impartially, live out your time as foreigners here in reverent fear. 18 For you know that it was not with perishable things such as silver or gold that you were redeemed from the empty way of life handed down to you from your ancestors, 19 but with the precious blood of Christ, a lamb without blemish or defect.

  28. Gary

    Steven,
    Ok let me try this again. Monday morning I was ready to sell. I told everyone in the weekend report that we would sell Monday. At that point I thought silver had gotten close enough. So I didn’t miss that call, I got it right on the money.

    But the market gapped down $3 Monday morning. My mistake was in not being able to see that silver was getting ready to crash 30% in 5 days. If there was some way to know that in real time don’t you think I would have gone ahead and sold into the big gap?

    Did anyone anywhere predict a 30% drop in 5 days? No of course not. That is something like a 4 or 5 standard deviation event and not predictable.

    Historical precedent from every other C-wave for the last 11 years said that this wasn’t the top and that the correction in silver should be mild. If that was the case then getting caught in the daily cycle correction should be no big deal. We would just ride it out like we rode out every other daily cycle correction and then be ready for the next leg up.

    Only this time historical precedent failed and something completely different happened that had never happened before.

    Again you are trying to rationalize something with the benefit of hindsight that couldn’t be done in real time.

    I guarantee if we had gotten out and silver had rallied to $60 or $70 dollars you would be just as upset, probably more so.

    So enough with this Monday morning quarterbacking it’s starting to get ridiculous.

  29. NolanRyan

    The ball is all over the place…the hitter doesn’t know where it’s going.

    Also, another reason why knuckleballers are of limited effectiveness: it’s difficult to throw a strike on command, which can be a problem when you’re behind in the count and you have to throw your 80 mph fastball for a strike.

  30. rapper

    Steven,
    If you were seeing other traders get out why didn’t you follow their lead? If you were talking to people a week before about getting out why not then? On Friday, I wanted to get out as I was seeing a lot of things that I didn’t like but Gary was still in so I was still following the plan. Well, the lesson I learned here is that I can make my own decisions (duh) and follow my own calls. I absolutely have to do this if I want any longevity in this game. If I had sold on Friday and then silver had a short, scary pullback Monday I would have thought I was a genius but then when silver goes ballistic Tuesday and runs to 60 I would have been very disappointed. Sure I would have made fine money but then I would have questioned why I didn’t just stick to the plan. Either way you have to own up and you know that but you also have to let it go and move on because you are doing longer term damage. Move on and get back to making money.

  31. NolanRyan

    Hindsight is 20/20 is what the new boss told us when we heard him admit that the guys working on the equipment had a lot of problems. Get over it is his point. There are always a lot of problems.

    The hindsight bias is defined as a tendency to change an opinion from an original thought to something different because of newly provided information.

  32. jhnewman

    Silverhound: very well put about Gary and this site. I too was OVERJOYED to stumble across his cycle work for gold/silver. That knowledge gives a trader an INCREDIBLE edge, and it was the missing link to my crafting a devastatingly-effective swing trading strategy for gold/silver/miners.

    *****I too want to thank Gary for sharing his insights.*****

  33. Bob loves Hawaii

    One OTM idea that offers nearly 3 to 1 return is to buy the June 40 and sell twice as many June 45’s.

    Close the position between $40-$41, set a stop on the trade at break even once it gets there.

  34. Silverhound

    jh

    There aren’t many guarantee’s in life but sometimes you have those aHAH moments when you stumble across something good 😉

  35. jhnewman

    Silverhound: agreed. I almost did backflips when I ran across Gary’s gold/silver cycle analysis — and I would’ve done ’em — if only I knew how to do backflips!!! ;^)

    Are you an Aussie?

  36. Adam

    Gary,

    I’ve been thinking that maybe all of the dollar cycles since QE2 started in November have been extended and lasting closer to 30-35 day range. If this is the case, then every time we broke a cycle low (indicated by black arrows), we have rallied to test that breakdown and fallen. In this case, that means testing the 75.5 level on the $USD. This counter-trend rally in the dollar can last up to ten days-ish as evidenced in February. My reversal swing projections give me a cluster of reversal dates that give me an area to expect a trend reversal. We will probably expect to see the ROC in the dollar rally slow as we get closer to these swing reversal dates, where we will watch for a swing high.

    As you see in the metals & miners charts, the damage doesn’t look quite as severe given the extended count.

    On the bottom chart, I have 10 year yields. It looks like its consolidation will be ending next Monday, May 16th if my reversal swing date is correct. The Andrew’s Pitchfork tool coupled with the reaction line gives us a price projection of 3.031% which is almost the exact same size as the first lurch lower in yields. I would expect yields to begin putting in a failed lower low and we will likely see them to begin their next move higher. That makes perfect sense given the lack of QE2 to keep rates artificially low. Plus, the big boys like Bill Miller and Dan Fuss expect rates to be moving higher and have allocated their portfolios as such. That’s big money that will not be buying Treasury bonds. I think this decline in interest rates is merely due to Treasuries putting in their annual cycle low which comes in the first quarter or early 2nd quarter. I think that this will be a left translated cycle and indicative of a big shift in the bond market. (Yields will have to move thru the February high to get a left translated cycle in Treasury prices) With yields moving higher, that will weigh on stocks – which will most likely be attributed to summer doldrums by the financial media.

    They can try to fool us into believing that inflation pressures “transitory” by collapsing commodity prices by raising margin limits & spooking investors, but the story has not changed. Commodity markets will recover from this because the longer term story is still in tact as the markets continue humming along. Gold may not be the “best” investment in this scenario, but it will probably keep pace with a rising commodity index.

    If I’m incorrect and the global economy cannot sustain its growth, we will have another deflationary scenario on our hands. In this case, precious metals will outperform other commodities.

    http://2.bp.blogspot.com/-Nk0WTwHVrjE/TcbAPbFIUBI/AAAAAAAAAVk/2-wyc03TIwg/s1600/2011-05-08%2BDollar%2BGold%2BYields.png

  37. SF Giants Fan

    Gary
    You have used the term “close enough” many times in your reports. On April 25th with AGQ up +20 at the open and DG making a comment he sold some of his AGQ position, for me that was “close enough” and I sold it all. That big red candle (17% drop) you had on your and Doc’s report scared me to death.
    On the flip side, I got some miners I have to unwind. But hopefully I can do that on the bounce. I will be watching Gary and DG for clues. Oh forgot Poly..

    All `

    Don’t get down on Gary. He is human. I imagine he has lost sleep over this like many others. I’ve been following him since the summer and he is great. So as Gary says “Clear your head dust yourself off and let’s make some money”.

  38. Steven

    Gary,

    I have not been posting much on this subject so it’s not fair to say enough of this Monday morning quarterbacking. The point is that you did NOT expect silver to go to $60 ot $70 and even if it did we would have sold everything at $50.

    You always said you thought this C wave would “TAG” $50, not go beyond it. So you in essence were trying to grab every last cent in a way especially if you said you were selling everything at $50 so the argument that $60 or $70 would make eveyrone happy is not correct as we would have been out.

    You know the size of my account and the losses were beyond belief enough for my grandchildren to be taken care of…again, my mistake but rationalizing it from your vantage point is not helpful for any of us to learn from.

    Yes, it is spilled milk. And my dismay is of course losing the money but really it’s the way it happened. If $50 was the ULTIMATE target (as you always said this C wave would tag $50, not go beyond it) what were we waiting for??

    In any event I still do thank you for everything else you have done for us.

  39. Steven

    One thing I misunderstood is that you said if silver had gone to $60 or $70 I would have been upset. I truly know I would not have been and we would have captured much of those gains through the gold plays. I’m over and out on the subject but extremely burned.

  40. New York

    Steven,

    You are obviously still in the denial phase. I think your best bet is to transition to acceptance at this time so your emotions don’t interfere with your ability to make money moving forward.

    If Doc made the call, and all the experienced traders you saw realized what was happening in real time why didn’t you sell?

    You think Gary wanted to take the hit on AGQ by selling Thursday as opposed to Monday for sh!ts and giggles?

  41. Steven

    New York,

    You are correct. I very clearly said it was my responsibility for not hitting the sell button. I just didn’t understand in real time what the difference was between $48 and $50. But Gary had not let me down before so I just waited for the call. Again, enough but I needed to say this much.

  42. jhnewman

    Silverhound: I’ve never been there, but I know it’s a beautiful country.

    Watch out for those salt-water crocodiles!!!! :^)

  43. David

    Steven,

    I think Gary is a great trader but he’s human.

    In the past he had often been early in his trades, and that had cost money. I think this time that was in the back of his head. I also think there was a false sense of security about silver passing $50. Success breeds overconfidence and that’s what happened here. Gary has icewater in his veins but even he is susceptible to human emotions, particularly when “coaching” a “team” of 2500 subscribers.

    What I have observed is that cycle theory is a great tool for seeing the big picture, but that there’s a lot of “play” in terms of short-term timing. Things like daily cycle corrections can be off by a few days and be apparent only in retrospect.

    Gary has a lot of faith in his cycle tools, and that may also be a cognitive bias. He was “expecting” a daily cycle correction, so that led him to underestimate the magnitude of the drop when it came.

    More than anything, we (you and me, Steven) have misunderstood the nature of the service Gary provides. Gary is a point of view, he is not a prophet. He is wrong sometimes just like all the other great traders.

  44. Gary

    What Steven is failing to mention is that he took, if I remember right, a modest 2-4 million dollar account to apparently 63 million and then lost it back to 14 million.

    So all in all he’s still up at least a couple hundred percent. I find it really hard to feel sorry for someone that’s up a couple hundred percent.

    Steven the problem isn’t that we missed a call. The problem is that you were massively leveraged. That leverage felt wonderful on the way up but hurt like hell on the way down.

  45. SF Giants Fan

    Steven

    If we hit $50 on silver and you sold, and say silver hit $70, believe me you would be upset. AGQ would be > $570. You would be boo hooing about all the money you left on the table.

  46. Steven

    OK, Gary. Now you have crossed the line from when you were alway a gentlemen and someone I could count on for privacy. I sent you a private email that you chose to publicly put out there. And you did it before you got my next email. Very wrong what you just did and very misleading if/when you get my next email. I never in a million years thought you would take a private email and post it for the public, let alone in a completely misleading way.

    I agree I had leverage but I just think some of your own rules were violated BUT AGAIN I TAKE RESPONSIBILTY FOR MY ACTIONS SO PEOPLE PLEASE STOP TELLING ME IT WASN’T GARY’S FAULT I LOST THE MONEY.

    Enough of the topic…Happy Mothers Day to all mothers.

  47. Silverhound

    and we still have the A wave coming up shortly……and the next C wave, then the next A wave, then the next C wave……..lots of opportunity there

  48. New York

    Steven,

    I hear you. I got burned too. My account was up 100% in two short months – killing it. All of which I NEVER would have been able to achieve without Gary. The mistake many of us made was thinking he was bullet proof and so many overlooked their own instincts and comfort levels opting to follow blindly. Gary has said many times his risk tolerance is such that he could lose 50% of his account and not skip a beat.

    I actually got nervous with all the Euphoria about $50 silver and sold 75% of my AGQ in 1/4 lots at 290, 300 and 340. Then I let greed take over and bought back higher. Yea it burns but I’ve lived to see another day and the best thing I can do for my account balance now is to accept, learn and move forward.

    Best of luck.

  49. David

    Steven,

    To be fair, I also remember that you had a lot of inside information about the silver market from a big buyer, and that led you to be extremely confident as well. Perhaps overconfident.

    This is a classic example of confirmation bias — you selected “sources” that confirmed your own position.

    All in all, $14 mil is not bad. You got out in pretty good shape compared to a lot of other players.

    Don’t make the mistake of mentally “booking” that $63 million, or I guarantee you will lose everything. That money never existed. I am down big $$$ as well (nowhere near as much on a percentage or absolute basis), but I’m not thinking about where I was a week ago. I’m thinking about where I am now.

  50. Gary

    Steven,
    You publicly told everyone on the blog several months ago that you had taken a 2-4 million account to, I think it was 16 million at the time.

    So I didn’t revel anything you hadn’t already said except that you had now made it to 63 instead of 16.

  51. Gary

    clark,
    I’ve said this before that I really don’t recommend playing the D-wave other than in put options.

    In your case you should probably just sit still for a couple of months.

  52. jlinks

    I think the real issue was everyone being over leveraged.

    AGQ is designed to burn you if it tanks, get that into your head, it’s a double leveraged ETF.

    The fact that Gary had it so close, by making the call that once at 50 he is out, shows that this was one massive whipsaw to remember!

    I think that everyone should think of these ETF’s that they’re like options, that will put it in perspective.

  53. Steven

    Yes, that is what I am talking about. Obviously if I wanted everyone to know my finances I would have posted that on the blog and not sent you a private email. But, again, spilled milk. I just didn’t think you would have done that but you have always been a gentlemen so I’ll assume this was a one time thing and let it go.

    signing off for now.

  54. Robert

    from John Hathaway who probably knows more about the gold/silver markets than everyone here combined
    “When asked about silver specifically Hathaway had this to say, “My instinct is that this was too quick for this to be final. It’s like a haymaker (in silver) and it knocked everyone for a loop. Could it go to $30, could it go to $28? Yeah I suppose so, it could, but it wouldn’t bother me.

    The long-term fundamentals for silver are no different at $35 than they were at $45 and what they were at $15. It’s a hard idea to get across, but I think people get too wrapped up in current price action.”

    When asked about gold Hathaway remarked, “Well gold has hardly corrected. I thought silver by comparison was very spikey and for it to go to $60, it couldn’t have done it from $45 without doing this first. This is just a correction for gold that may not be over, it may take more doubters. It’s a shakeout, we had this huge run and a lot of investors and traders probably got in too late if they were short-term in their thinking, but that is not the big picture.

    The precious metals markets may just chop around for a bit. After that, gold and silver should set new highs. I think people will be amazed at what gold does. Once it (gold) had the last breakout, it did tack on close to $200 in no time flat, I think it will do the same thing again on the next breakout.

    You’ll see an advance that nobody gets, nobody anticipates, and it all comes down to the fact that there is a lot of money to go into a very small space. Somebody likened it to trying to put the Hoover Dam through a garden hose. If money wants to move into gold just stand back because who knows how high the price will go

  55. David

    Steven,

    It’s an anonymous blog. The only thing anybody “knows” is that somewhere in the world there’s a guy named Steven with x dollars.

    I don’t get the sensitivity about money here. Many people got offended when Cory revealed he had $20 million. Who cares?

  56. Peter

    I think we all realize we F*** up. My F*** up was in going SLW for the RUN instead of AGQ … others sold too early and bought back in, others sold too late.

    Lessons learned .. lets just make sure now we capitalize on the bounce and miss this upcoming D Wave. I would personally like to get my account up into the 7 digits by 2013.

  57. Rob L.

    We should all be a little more sensitive to Steven. Can anyone comprehend losing $50 million dollars? Even if it was paper profit, it wasn’t Monopoly money.

    Steven, if its any consolation, you can still buy and sell me. 🙂

  58. Eamonn

    Gary,
    I don’t like your new portfolio post. I want to participate in the d-wave with out of the money call options. I don’t want to sit around. I’m sure most people don’t too. This new portfolio will hobble the service. Please reconsider

  59. Silverhound

    Nobody is giving Steven a hard time.

    Trading is a tough game. You have to learn to roll with the punches and move on or you’ll miss the next opportunity. And not count your chickens before they hatch. Thats rule 1 in every trading book.

    A lot of people only dream about being able to realise 7 x gain, whatever the $$$$ amount.

  60. David

    Eamonn,

    You can probably just play the dollar using UUP, or whatever equivalent they have in the UK.

    It won’t double your money, but it’s not a bad idea to play it relatively safe right now.

  61. Umberto

    Gary, I think you are doing a fantastic work for us.I follow you since August and I’m up 50%. Never did before.

    Can you please keep posting option trades on the premium site? I wouldn never be able to ride a D wave without options.

    And please, can you keep the old “single portfolio” with the new “family man” portfolio? I’m single.

    Thank you and sorry for my English.

  62. Peter

    gary, I agree with Eamonn … we depend on you, especially now, to at least guide us into suitable stocks/options to maximize our returns, but, in the end we are responsible for ourselves. I for instance, was concerned about the ultra ETFs and mostly stayed away from AGQ … personal choice. I also stayed away from options, as I realize they are to be used sparingly. Having said that I would like to use them , especially when a DWave comes to gain back some of these recent losses, and I am hoping to have some guidance from you, from which I can then pick a time/entry level which better suits my needs.

  63. David

    I feel just as bad for someone losing $50,000 on a $63,000 account. Probably worse. $50,000 can help send a kid to college. $50 million is enough to screw your kids up for life.

    Besides, if he plays it safe and smart, he will make that money up in fairly short order.

  64. Eamonn

    Thanks David for your idea on UUP. I still don’t like the portfolio being hobbled. It seems lame now.
    Btw, I’m in the Republic of Ireland, not UK (touchy subject that, here). After Greece blows up, we will be next.
    I wonder if the US economy will be able to walk on its own legs when QE2 ends? I sense a massive debt day of reckoning coming for Europe and the USA.

  65. Peter

    Steven .. it sucks to lose that kind of cash. I am sure you will make it back shortly. On the other hand. if you do have some type of confirmation, we would appreciate you sharing some of that info with us …

  66. Nickname unavailable

    I agree with Eamonn that Gary should not change his posting of his personal proposed positions, even if it involves a lot of leverage or options.

    There may be some subscribers who don’t understand how options work, or understand how leverage is a double edged sword, but there are also plenty of us here who do in fact have extensive experience with both and are completely comfortable assuming the risks contained therein. We’re big boys, we can take it. And if someone can’t, or didn’t understand the risks going in, then they didn’t do their own due diligence and is their own fault.

    If anything Gary, you should post two portfolio choices–one for experienced investors and traders that includes any choices you are making personally, and a “model” portfolio for those who are inexperienced with options and leveraged funds.

  67. Gary

    Folks, If you know what you are doing then you will know what options to buy when and if I think the D-wave has begun. You don’t need me to tell you that. If you do need me to tell you that then you have no business buying options.

    From now on people are going to be forced to make realistic decisions about their true risk tolerance.

  68. Eamonn

    Yes, a “Family Man”, risk adverse portfolio, and a “Single Man With No Obligations” portfolio. What what I can see, its easy to get a “Family Man” type investment anywhere. There are loads of conservative funds out there. I want something well thought out, but with some cojones, to make some real money

  69. MD

    I think what has happened here is that everyone had gotten used to Gary always being write and dismissing the fact that even the best investors cannot predict the market’s next move.
    Instead of thanking Gary for all the hard work, a few have been complainers.
    It is such a shame that these complainers have the ability to change the format of this blog and potentially the way in which Gary discloses HIS transactions and HIS thoughts.
    I for one am grateful for all your hard work and thoughts Gary and am very saddened if you choose to change your structure and postings on the Pay Site.

  70. Eamonn

    MD, my sentiment exactly. This will just destroy the service. If theres money to be made in out of the money puts on gold/silver in the d-wave, I wanna know about it

  71. Silverhound

    MD

    Exactly. Even Jim Rogers was buying $USD a couple of months back. During the rally that the smart money was selling into.

    Not sure too many here can say Jim doesn’t know what he’s doing, he’s the master of Old Turkey.

  72. Steven

    I REALLY am not trying to restart this discussion. I just had a post that I realized never actually posted and I’m just posting it now but it was from over an hour ago.

    I guess maybe the bigger point was holding on after such big down days mon, tues, etc.…at least that was my mistake.

  73. Redwine

    I agree with MD, Eamonn, and others concerning change of format. It really is too bad that someone harvesting 200% is whining and maybe even causing Gary to alter a beautiful format (revealing his trades while suggesting alternatives).

    I feel sorry for you Steven with your paltry earnings. I’m ONLY up 33% this year.

    I was looking forward to option ideas, from you Gary, for the D wave. Oh well.

  74. Russell

    Gary,
    Please continue to post investing ideas as that is what attracted me to your sites. I am new to options, but used your opinions and others who comment here to make some good trades. I am learning options within my risk tolerance, and I love to hear discussions on what strike, expiration and why. Maybe you need a premium, premium service for those not adverse to risk. No risk….no gains.

  75. MrMiyagi

    Sure would be nice if gold continued to climb past 1550$ and over 1600$!
    In thin trading Saturday in India, gold closed at 1506$ and silver at 36.95$. Does this mean anything? I don’t know, we saw what happened the last time!

  76. Brian

    Well I will say it Steven. Gary probably tossed that tidbit to get you to STFU.

    To have those kind of gains and think you somehow deserved more is unfathomable. Then to come on here and blame Gary for you not cashing in your chips is beyond belief.

    My own father called me Thursday last and said he thought we had gone far enough. He cashed in that Friday and kept his gains. You had friends in high places telling you to get out also, and chose not to.

    In my book, everything happens for a reason. Usually it takes a good while to deduce that reason, but it always comes to pass that we find it out.

    You should ask for your 200 back and leave. Playing this blame Gary game has gone past any semblance of reason. Just my 2 cents worth.

  77. Harry

    Gary,

    I’d like to second the previous suggestion about a two-tiered model portfolio, with one being for most investors and the other being a riskier portfolio including options. I’ve been planning for some time now to ride the D-wave with some combination of put options (and I’m sure I’m not the only one). While I’m an experienced options trader I still respect your opinion and was looking forward to seeing how you were planning on using options for this next wave.

    I feel like some of us have been acting like – for lack of a better analogy – a bunch of drunken teenagers. Our cool Uncle Gary has been letting us try his beer and teaching us how to drink properly but some of us got completely hammered and wrapped their cars around a lamppost. Well, now Gary’s taking away the beer because you obviously can’t be trusted to act responsibly. So here’s some apple juice, instead. Feels kind of demeaning.

  78. David

    Eamonn,

    I sense some revenge trading going on here.

    One of the points I have heard many times froom the greats is that when things are not going your way or when the trend is unclear, you need to trade smaller.

    This is not a good time to learn options, particularly on silver, which could easily reverse and go to $70.

    UUP should net you about 20%. The a-wave should net you 100%. That’s 140% in six months with no leverage.

  79. Gary

    Here’s what I will do. I will publish several portfolios including extremely aggressive ones. The only portfolio I will post in the normal SMT newsletter is the model portfolio.

    In order to receive the other portfolio and aggressive strategies one will have to buy a separate subscription. That subscription will be emailed to those subscribers only and I can tell you right now it’s going to be expensive.

    If you can’t afford the subscription then you have no business even contemplating aggressive strategies that involve heavy risk.

    If you want the subscription you are going to have to email me and ask for it.

    I really hope that no one decides to go this route. As I’ve said many times in the past heavy leverage always ends in a blown out account.

  80. Keys

    As per some ideas on D-waves in puts.
    D-wave….what about a layered approach to buying puts, instead of them all at the same strike.
    One note I will say on options is that it really depends on the premium at that time. If the premium is too high you are forced to go deeper into the money to avoid it…and if you are so deep in the money you might as well go short at a certain point.
    My experience with options is rather mixed…I may buy some puts, but only if they are cheap…I will stay in cash if there isn’t an easy trade to gain from…SLV for example has puts that are way too expensive. No intentions at all to go short into this market..So either I get a good deal or no deal.

    This would be a token position as well…My real move, get back to full unhedged positions at the beginning of the C-wave, and hold my positions until the next parabolic move. Normally, just to show how we can adapt Gary’s work in our own, I would buy and hold after the D-wave…however since an A and B follows, I will most likely adapt a full Turkey position only after the B completes. Ie stop watching pops and drops…Hopefully at this point, since I hope people are out of silver, silver tanks back to 10(dreaming), but that would be an easy value trade.

    Going forward I plan, but not certain yet, on taking off my put protection on gold…I don’t see the demise in gold happening yet…however, my gut may tell me otherwise…at which point I will just keep it on. If I see a gap down tomorrow, I will most likely take them off into the gap. Especially if the gap is fairly large. Double etfs, options, etc won’t be in play. Miners as well I won’t touch…again since Gary’s work is so valuable, I know a D-wave is on the rise, and I don’t want to get too risky. So a pure gold play for me. Until I get that eery feeling again, and then it goes back on for the duration of the D.

  81. Brian

    I mentioned in the previous thread that a move like this would probably come to pass. Gary has to look out for his own portfolio too. When he has to deal with the ration of BS he has taken this week, it can be very distracting.

    Personally I want my coach focused on the big picture. I can surely figure out how to allocate my money.

    For those wanting option exposure, there are many good posters here to learn from. Write the names down when you see them. Bob, Wing, Wes, Poly, to name a few. Educate yourselves, and enter the game as you choose.

    As the coach gets busier, the available time for hand holding will go down dramatically. We all have to stand tall.

  82. davedimes

    Wow. What a difference a week makes!

    This is the nature of the beast. Making money brings euphoria and good will to all men, losing money the opposite. Please control your short term emotions folks and grow up a bit. I’m not even a sophisticated trader, and I recall many times Gary giving excellent advise with his portfolio stating what trades to make depending on your risk/age/objective tolerance. If you can’t stand the heat..

    Gary – That being said..I am disappointed with the change in portfolio strategy. The strongest, and I believe most truthful, fact I can say is that these people will lose their money with or without your portfolio methodology change. Even if you were making large returns per month, they will always find a way to be greedy and lose. The world is filled with these people, and there is nothing you can do to prevent them imploding themselves.

    Keep giving your advice, caveats, and don’t lose sleep over those who do not read the warning label.

  83. Eamonn

    David, maybe you are right about revenge trading – I don’t know. I am too inexperienced yet to recognise that within myself.
    But, it seems to me, 5-10% on options is fair if the odds are stacked in your favour that a d-wave is coming and that prices will fall heavily. I don’t see any heavy risk or gamble in that compared to other trades.
    I want to step back from further trading until I see what is going on. By that I mean, is this dollar rally a massive head fake and a the predicted event occurring with the gold daily cycle low? Or is it in fact the 3 year cycle low?
    I don’t think I will step back in until I know what is going on in the dollar. If the dollar 3 year low is in, I will go long the dollar and short gold. If the dollar low is not in, I will go long gold

  84. bborden

    Gary, I am a recent subscriber and I hope you will not change the way you present your portfolio to us. I don’t know how many subscribers you have but I’ll bet 95% realize the risks in this game and just roll with the ups and downs as they come. If someone thinks they can do better running their own money then just cancel your subscription and move on. The squeaking wheels shouldn’t get the grease in this case to the others detriment.

    Like you, I am one of those who can lose 50% of my net worth and it wouldn’t make a bit of difference. In fact I have lost 50% of my net worth in this game in the past and it didn’t make one bit of difference.

  85. Steven

    Everyone giving me a hard time can seriously take a hike. I did nothing more than many other people did on this board over the past week. All I said was that I questioned some of Gary’s tactics and rules. I also incessantly said that I take full responsibility for my own actions and THANKED GARY A MILLION TIMES FOR HIS BOARD. So don’t blame me for anything. He is not making this change because of me. Maybe I’m just the last person who made a comment that finally broke the damn but you don’t change an entire business model just because one person has a difference of opinion. So are you saying I have no right to question Gary? And if Someone questions Gary then they are the bad guy. I know of many respected people on this board that have questioned him many times (TZ & DG come to mind but many others as well). Change the format or don’t that’s up to Gary. I have tremendous respect for him but I did and continue to question his actions and I’m entitled to my opinion.

    So quit the mob mentality. And like I said you have no idea what my financial situation really is as Gary did not give you the entire picture which makes it completely different. I ask that he does not do it and I’ve ended this subject.

    I never thought of Gary as someone who could not be questioned. Now he makes a change and the mob is after me with pitchforks!?!?!?!?!?!

    Here, I’ll make everyone very happy. I will do my best not to post here anymore unless it is to a specific member or absolutely necessary imo. But I’ll refrain from being an active participant since this is obviously not a free speech environment.

  86. CMT

    Here’s another sub that will be disappointed if Gary changes his approach to presenting his portfolio. I’d hate for the site to change because a handful of posters refuse to be responsible for their own money.

  87. David

    Gary,

    People are obviously not following the model portfolio already. From what I’ve seen nobody is. Some people are using massive leverage. Others are not not following your timing. So what’s the point of three more portfolios no one follows?

  88. CMT

    David, good point. I almost said in my above post that I didn’t follow Gary’s portfolio, but I liked seeing and thinking about his approach.

  89. Keys

    Gary,
    As per the model portfolio…I am in the indifferent category…Whatever is best. 🙂
    Aright really time for that beer.

  90. Silverhound

    Steven

    You said Doc and other traders on here exited silver near the top. You failed to mention that they had also exited earlier in the rally thinking the daily cycle top was in and got it wrong.

    If you only lost a paper profit it was just a number on a screen, you haven’t lost anything. Step over the dead horse and move on to the next trade.

  91. Steven

    akalaunch,

    What else can I do. The mob is after me because I questioned Gary. I clearly said he is the best I have come across and all I did was question him. And now everyone is doubly pissed becuase it looks like Gary changed his entire business model because of ME! Anyway, I’m a good person and I believe Gary is as well. And I wish well to all.

  92. Gary

    Steven,
    The portfolio change had nothing to do with you.

    It just became very apparent this week that a great many subs did not take me serious when I said everyone has to decide what level of risk they are willing to take. Many were just mimicking me even though my risk tolerance was much greater than theirs.

    Those people are now going to have to make real decisions about the amount of risk they are willing to accept.

  93. Peter

    Steven … I think you are overdoing the mob mentality. Many people here feel bad that you lost such a large sum of money. Trust me, if I went from $4M to $63M and back down to 14M$ I wouldnt be happy either. Nonetheless, sh*t happens, this is the stock market, and yea, in Gary’s defense this thing went down pretty quick. I expected a bounce at Silver 43$ and dipped my toes in AGQ for a tidy 33% loss in 2 days. I think as a board we need to get over this and move on.

    Gary … like someone else mentioned, you could post 15 model portfolio’s and some people will find ways to lose money in the bull. I will ask you to look at the big picture as well .. you got a lot of folks here who accept the risks and invest within their means and who have done very well over the past few years ( I am one of them ) Lets not lose focus of that.

    Cheers

  94. David

    Steven,

    I hope you don’t think my comments are “after you”.

    I certainly don’t think questioning Gary is off-limits. I have certainly questioned him (respectfully). But the simple fact is that he made a mistake. All traders do it, even the best ones. The important thing is to acknowlege it(which he’s done), learn from it, and move on.

  95. Steven

    David,

    Agreed 100%. It just seemed that this one was a bit glossed over and I had some thoughts to put out there. I wasn’t blaming Gary. I was just giving my personal thoughts.

    Steven

  96. thedocument

    Over a year ago, I postulated that the nature of the PM bull had changed after the 2008 liquidation event. Rather than seeing parabolic moves separated by huge consolidation periods, the market switched to a strong trending mode. This change in character explains why the ABCD methodology doesn’t fit anymore (and I suggested as much back then).

    What we should expect, therefore, are successive intermediate cycles… much like the last four… which unfold as trending moves followed by mild declines into intermediate lows. The exceptions will come when gold needs to take a breather in order to allow moving averages to catch up. In these cases, we are likely to see an intermediate cycle complete a triangle consolidation. The weekly action in 2009 provides an example.

    That said, I highly doubt price will retreat to $1250. Unless gold is ready to enter its 8-year cycle decline, intermediate lows should not be violated. Therefore, whether or not gold treats us to another rally during this cycle, the coming intermediate decline should be rather mild and hold above the $1310 pivot.

    Since commodities in general are due for a decline into a 2.5/3-year cycle low, I suspect the following intermediate cycle will then complete a triangle consolidation into early next year. Gold will then launch out of the consolidation as commodities come out of their own major low.

  97. Natanarchist

    My two cents…on future portfolio info. I don’t think gary should have to provide 2 or 3 different portfolio’s. Or he can charge for them. But a better suggestion might be to use the resources of this blog. There are enough experienced investors/traders to help “build” a portfolio for the conservative long term investor to the more experienced more risk taking trader. This way, if things go wrong, everyone owns up to their trade/investment and we don’t crap on one guy.

    Gary..noticed the blees on silver is back above 80. Not necessarily guarantee’s higher, but is a good sign that we are bottom or close to it. I also noticed Silver open interest was still significantly off its all time highs at this recent peak. I know you have commented that the COT is not good for tops but do you see anything relevant in terms of short term bottom?

  98. fubsy_cooter

    Stephen,
    I would say everyone is pissed. There may be a couple posters who are expressing irrational thoughts and blame. Ignore them. You have every right o question anyone on this board. Gary has set the groundrules and your behavior is well within them.
    f

  99. fubsy_cooter

    Why I’m choosing option 1 from the weekend report Gary laid out.

    I think this period in front of us is frought with more uncertainty than usual, thus I want the market to proove to me that we are not yet in a D-Wave. I am taking the most conservative of courses becuase it will offer me a clear stop, and the market will have to show some initial strength for me to reset for a postentila C-Wave finale.

    Anyway, this has been my decided course of action throughout this correction, and thus far the market hasn’t given me a signal to buy as no swing reversal has occurred.

    I’m assuming those who subsrcibe will be able to understand this post.

    f

  100. MrMiyagi

    Like the miners and metals, we are diverging from the task at hand.
    Quit bitching, quit bitching at eachother and let’s make some money.

  101. Gary

    Nat,
    I do think we are close to a bottom but more because the daily cycle low is due than because of the COT.

  102. Gary

    Doc,
    You may very well be right although I’m not convinced gold can continue to just keep chugging higher without a third round of QE. And I don’t think that’s politically feasible until we get at least another mini crisis.

    Either way a rally as massive as what we’ve seen over the last two years is going to need to either correct (D-wave) or enter a very extended sideways consolidation to digest those kind of gains.

  103. thedocument

    The gap down on Monday was, indeed, difficult to follow. I was contemplated buying puts on silver or even shorting to hedge my gold longs, but could not chase the move lower. As Gary said, no one could have predicted a 30% liquidation over 4 days.

    I think everyone should remember that Gary is posting his opinions, but no one should just take his thoughts and action for granted. We all had access to the same info, and anyone could have sold on his or her own.

  104. ...at ease

    Steven,
    You have a right to share feelings as so many others do here. I read everyone’s posts and some I agree and some I don’t. Same way with trading decisions.
    It’s not fun to express something and next thing you are being attacked. And I agree, it does become mob mentality at times even with just a few.
    Don’t let the blog Nazis determine what you feel you can and can’t do or say here. Keep on posting, we all learn from everyone here whether they admit it or not.

  105. Steven

    Thank you Fusby. Means alot. And thank you Gary for making it clear the change in the portfolio struture was not due to my posts.

  106. Beanie

    Are you ready for the last tech boom? Are you ready for the green energy revolution? This tech boom should last thru 2016-2018, taking the Dow to 36,000…after which, all hell breaks loose and the bears win.

  107. DG

    Steven: I am just catching up on the blog after a long break (I don’t check much on weekends). just for the record, I generally support what you have written and find little that is objectionable in it. There are two possible reasons for going over the past: To complain, vent, or Monday-morning quarterback, or to learn something. The first is useless, the latter MANDATORY if you want to get better, at trading, any other skill, or at life. I plan to post Monday as I want more people to see it, but Steven, while I felt disappointment in your posts and a touch of complaining, they did not seem at all grossly out of line to me. I have spent the entire weekend reviewing what went wrong for me. The claim that one can never do better in real-time that what one did in the recent past is simply and obviously absurd on its face. That would mean improvement is forever impossible. More Monday…

  108. eeelove8

    Gary,

    will I ever make back the money I lost in AGQ during this unreal drop in 5 days?

    How long do you think it will take foor silver to go back up to 50?

  109. Eamonn

    fubsy_cooter, RE your post on selection Option 1 from the Premium site. I have the same feelings. I want to see clearly what is happening before I commit. The dollar could just as easily strengthen and gold rally quickly fizzle out. As Doc says “Its ok to miss a trade”, and I will be watching very carefully before I commit anything

  110. jhnewman

    Thanks for those thoughts, Doc.

    First, in 2008, we saw a more complex D-wave than we had seen before. And that has been followed by a more complex C-wave than we’ve seen before.

    And it makes sense to me that this more complex C-wave might alter the next D-wave in ways that we haven’t seen before. Specifically, that support zones may have been created by this complex C-wave that will stop this next D-wave higher than we’d “normally” expect. Which means higher than our “historical models” would indicate.

  111. Gary

    Not sure if this was directed at me or not.

    “The claim that one can never do better in real-time that what one did in the recent past is simply and obviously absurd on its face. That would mean improvement is forever impossible.”

    I never said one couldn’t get better. I said there will always be black swan events that will manage to catch us no matter how good we are.

    Trying to fix a perfectly good system so it doesn’t get caught by a 4 standard deviation event is just silly. All you will accomplish is to ruin a perfectly good system trying to prevent something that has already happened and is very unlikely to happen again in the same way.

    The next event will come from an entirely different direction so fixing the problem from this time isn’t going to catch the problem next time because next time it’s going to be a completely different scenario.

  112. Brian

    Steven,

    To have questions is reasonable. To step over the line to long post after long post of the same questions over and over crosses quickly to whining.

    Quite frankly if I pocketed 12m after starting with 2m, I think I would be off celebrating and not berating Gary. I guess to be as levered up as you had to have been, Gary is probably right, you will eventually give it all back.

  113. Beanie

    eeelove,

    It is likely you will never make it back if you owned AGQ in the 300’s. You never want to buy ultra etfs in the hundreds. Never. When an extended correction comes, you’ll be shattered. Daily compounding cuts both ways and is deadly if you’re on the wrong side. (Look no further than reverse-splitmeister ZSL.) Take any bounce this coming week and get rid of it.

  114. Veronica

    Doc, I’m a sub to your service also, and you and Gary are excellent. I think you are entirely correct about the ABCD formations. I also think they won’t occur just like they didn’t after the big correction in the mid 70’s. After that correction we got support at the 65 week MA and I think the same will happen for us moving forward. That average is currently at 1296 and moving up strongly.

  115. Silverhound

    Doc

    So basically you are suggesting that for the next 5 odd years we have a series of repeating ranges with consolidation in between similar to what we have seen since late 2008, with no major corections in between. Then we have the final blow off top at the end of the PM bull.

  116. Silverman

    David,

    Thank you for the class and the wisdom that you bring to this board. Your posts have really helped me to keep things in perspective.

  117. Bob loves Hawaii

    I lost money last week, but to complain about it is pointless. I have been trading a long time, and two things I was told early on is you can’t spend other peoples profits, and if you dwell on your last trade you can’t successfully prepare for your next trade.

    Regarding Gary and what he did or did not do or should have done has been addressed. He has a system that strategically positions him for outsized gains to the market, and will not change due to an outlier event.

    If people wish to modify his/her approach for their own portfolio, then just do it, Gary addressed that, as well, before this blow up. He was prepared to ride this down further than most here can or should.

    It seems like everyone wants Gary to apologize or admit he was wrong, and he has addressed it.

    I wish we now can just focus on our next set ups. Everyday is Groundhog day in trading.

  118. wmp

    Steven,

    I recall your posts from a few weeks ago regarding your success up to the levels you posted here today. If your are comfortable sharing how you got from that level to the higher level in such a short period, would you? I’m not trying to pry… or emulate, but am very curious!

    Thanks in advance and if you don’t care to, I certainly understand.

  119. Gary

    FWIW gold has formed a large and small T1 pattern out of the 09 B-wave bottom. The summer 10 consolidation marked the mid point consolidation that targets roughly $1650ish.

    The smaller T1 pattern started out of the July bottom with the recent 5 month consolidation marking the midpoint consolidation. This smaller T1 pattern also targets gold in the $1650 to $1700 range.

    As the second leg up is usually just a bit short gold should trade up to about $1640-50 then if the T1 pattern is valid it should drop back down to the large correction zone at $1250.

    The only problem with that is that during the entire bull other than the 8 year cycle low the 75 week moving average has halted all corrections. That average is going to move up to $1300 soon.

    I would be a buyer at the 75 week moving average regardless of where a T1 target is especially if the Blees rating is over 90.

  120. Shalom Bernanke

    Well, Steven has proven to be a whiner before, even dumping SMT because of my opinions.

    I see everybody that took leave has decided to come back! 🙂

  121. Silverhound

    jh

    EW isn’t the most popular subject on this blog, however.

    Further on the dicussion about Alf Field earlier. The last EW chart I saw of his was in January of this year when everybody was saying the top was in for gold. Alf was suggesting we were in an extended 5th wave and the correction into the January low was a wave (iv) of the extended 5th. He pretty much nailed the low with his call. He then expected the 5 waves up of wave (v) to his target of 1540~1650 odd. I haven’t seen him post anything since so I’ve taken the liberty of continuing the wave count myself. Please excuse the dogs breakfast as this is my working chart and hopefully I’ve labelled it correctly.

    As you can see we’ve completed waves 1, 2 & 3 up from the January low and look to be in the wave 4 correction. If the count is correct it suggests a final wave 5 of (v) to come.

    Gold EW chart

    Have you seen anything more recent on Alf’s count?

  122. Bob loves Hawaii

    Hong Kong is opening a gold and silver futures market. This is a game changer, as now traders can arbritrage between exchanges, and Hong Kong does not have embedded naked short positions, and also this exchange will need physical gold and silver, in Hong Kong.

    This is good news.

    http://www.zerohedge.com/article/hong-kong-mercantile-exchanges-1-kilo-gold-contract-end-comex-gold-futures-trading-and-bang-?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

  123. Shalom Bernanke

    As far as the D-wave goes, very few will make money even if they are correct. It’s a poor bet, even though I agree metals will get hit.

    I like the “easy” money.

  124. Shalom Bernanke

    Time to shorten expected hold times,and use tighter stops in each trade (with more size, keeping total risk constant).

    The steady trend is busted, but metals will find buyers into every upcoming dip.

  125. Bosco

    There is no reason for Gary to start another subscription.

    If people are ready for higher risk, they should be well educated enough to alter Gary’s normal portfolio and build their own high risk portfolios. If they can’t and have to rely on Gary, the new subscription will only open a door for them to blame Gary when they fail. They will because they are not well educated to do it at the beginning.

    The least thing we want to see is to have Gary diverges his focus on the normal portfolio that helps most of us.

    We need Gary to stay focus!!!

    This weekend’s report is good enough and should continue. It has given us options and mention about the opposite outcome (D-wave confirmation). Good to see it covers both sides.

    If anyone is still not satisfied, they should go find another blog. I lose money this week too but I want to be reasonable. There is only so much you should ask for.

  126. aklaunch

    Now might be a good time to create a big list of your favorite minors and watch which ones get hit the worst (weak ones) through the ensuing D and A waves. The ones that do descent should be posed to make the most gains out of the B wave into another C wave. I think when the B wave comes i will take a bit of my portfolio and buy some nice looking miners and hold onto them for the long haul. My phantasy is to hold something for more than a year or two and make a sweet profit with out having to pay the man so much.

  127. jhnewman

    Silverhound: That’s certainly no dog’s breakfast. Very interesting chart. I don’t know enough about EW to add much to what you’ve done, but it seems like a very plausible count and scenario to me.

    I haven’t seen anything recently from Alf. I wish he’d post more. You’re a compatriot of his, go down to Sydney, buy him a few pints, and persuade him to put more of his stuff out there!

    About EW: if it’s something you’d like to master, you might think about learning the DeMark indicators. As I understand it, Tom DeMark invented an indicator called “TD D-Wave” that supposedly helps take the subjectivity out of Elliott Wave, it makes Elliott Wave more “mechanical” and therefore probably more accurate. There’s a chapter about this indicator in Jason Perl’s book “DeMark Indicators”. These indicators are supposed to be absolutely devastating in their “forward-looking predictive power”. But I just haven’t had the time to learn them yet (which is the case with a lot of more advanced technical analysis tools which I know about). And you need something like TradeStation, CGQ or, ideally, Bloomberg to learn them and apply them. Again, I just haven’t had the time (this isn’t my real job).

    Again, I haven’t seen anything recently from Alf, but, if I see ANYTHING from him in the future, I’ll bring it to this forum, and I’d ask you to please do the same.

    Cheers! And once again, I’m outta here.

  128. Brian

    SB, It is your animal spirits that keep them coming back. They try to stay away, but the magnetism is too strong.

  129. Bosco

    Veronica,

    You mentioned you are a sub to Doc’s service and he is also excellent.

    Do you have the website address?

  130. jhnewman

    Gary: thanks for the very informative post. It reminds me that I should be spending more time doing my own research and planning. So I’m outta here. Catch you on the flip-flop!

  131. Silverhound

    jh

    Cheers mate. I’ll look into the DeMark stuff you have suggested but the EW stuff is only a secondary indicator for me also.

    If I can get a postage stamp on Alf’s forehead…..where should I send him 🙂

  132. jhnewman

    Silverhound: send him to my hometown: Minneapolis, Minnesota, U.S.A.! We have such big mosquitos here (Land of 10,000 Lakes!), that they’re the “official state bird”!!!

  133. Jammer

    Here is what I take away from this disaster, because I think it is important to learn from this. Gary is not a guru, he is an advisor. All trades are the responsibility of the trader. Never violate your gut instincts, particularly when the risk-reward ratio has shifted against you. And never fail to close out your positions at least in phases as you start to show large profits. I would have been happy to close at 49 and my gut told me to when we made a double top. I cant blame Gary for that as he is the first to confess he may not be always right. I got greedy. I looked up a few bucks from 49 instead of down from the cliff I was hanging on to, and it was easy to say: well Gary hasnt closed yet and dump off the responsibility on him. It reminds me of the last time I left a ton of dough on the table, and a friend I knew playing the stock (which had gone from 5cents to 22 bucks) was talking to his broker and his broker said SELL and he said, no its going to hit big, and the reply? It already has hit big. SELL. So these are the lessons I will take from this. And never again will I fail to lock in some profits once I have doubles and triples in the portfolio, just because I am greedy and want the quad out of it. These straight up moves are highly dangerous, and call for emergency maneuvers to avoid getting caught in the downdraft.

  134. Hot Rod

    Steven,

    WMP beat me to the punch. I, too, would very much like to understand structurally how you have been able to build capital. If you could also outline some sample very profitable trades (without dollars of course) it would be greatly appreciated.

    I for one am always interested in understanding genius.

    Thanks

    Rodney

  135. Steven

    HotRod & WMP,

    I just stepped in for a minute, so I’ll give the short answer and can elaborate more if you want.

    It was a combination of a number of things. Leverage was definitely involved. I also got involved in silver at an early point. I also had some successful day trading. There were a few other items I did as well but one of the most profitable items was to time high leverage for a few days or weeks when I thought AGQ was about to make a move (based on a number of T/A items I look at) and those worked out really well.

    So I wasn’t leveraged to the max the entire time but I was leveraged to the max “at times”, usually no more than a few days.

    Unfortunately one of those days was the Monday we began to crash!

    I even put in a number of HUGE sell orders on Friday (too many shares for a single order) right around the market price and then cancelled. Perhaps this is what I am most upset about but I think mostly I am upset that I didn’t sell late Monday or even Tuesday when it became apparent to me that some was going awry imho. But yes, I feel no pride and much shame even though I took a few million and turned it 20x at one point. I had an even crazier ride during the tech boom (I was VERY early in that one and picked the right ponies) but that didn’t end very well either.

    I can give more specifics later but I hope this helps for now.

    Question for anyone. DO you know where the futures ended at 5:15 on Friday? 35.XX?

    I’m watching it live on my platform but that doesn’t show where it closed but where it is up from Friday’s pit session close. Unfortunately all Kitco shows is a 20 cent range 35.62-35.82 but does anyone remember where it actually closed?

    Second question, what is the exact differential between SLV and the futures right now? It used to be 80 cents or so but I thought it had changed somewhat?

    Thanks in advance for any answers.

    SB,

    We buried our conversation. There is no need to incite. And I NEVER threatened to leave SMT over our issues. Let’s please leave them be.

  136. Blake

    I have to say that creating additional portfolios for an additional premium in the advent of a few members complaining about losing their shirt is a little irksome. This is essentially a tax on the membership because a few people here cannot own their own trades.

    Having access to Gary’s own portfolio helps to inform me of how I want to allocate my own capital.

    This isn’t about the additional premium, but the notion that the membership will have to pay additionally for information we previously had bargained for is bothersome.

    Gary’s disclaimer wholly indemnifies him from any responsibility for third party trades. People must trade at their own risk but I’d ask Gary to reconsider based on what’s fair to the membership.

  137. Shalom Bernanke

    “Here, I’ll make everyone very happy. I will do my best not to post here anymore unless it is to a specific member or absolutely necessary imo. But I’ll refrain from being an active participant since this is obviously not a free speech environment.”

    -Steven

    You must forget how many times you leave.

  138. Beanie

    Be careful, last week’s massive selloff indicates a trend change. Silver could eventually see $20-25. I’m thinking that is a likely target. That’s usually the case with most stocks. Maybe silver has superpowers and does something entirely different, who knows.

  139. fubsy_cooter

    Gary
    This may be a 4 SD move in random markets, but given the size of the move in Silver and it parabolic nature, I suspect the 30 percent downdraft was mich more common than that.

    I haven’t looked at any charts lately to verify what I’m about to say, but most parabolas I recall end in a very steep and deep correction.
    F

  140. wmp

    Gary,

    The weekend report only advised those who took the alternative strategy. As you know, some of us didn’t get that message until after close Thursday and still hold AGQ/DGP.

    It’s obvious silver is a pariah by the weekend report recommendations and you’ve left those who didn’t or couldn’t execute the alternative strategy out in the cold. Someone asked before if you would make an exit recommendation. If I missed it would you please repeat it?

  141. Steven

    SB,

    You are really a master at twisting people’s words. I never said I was leaving just limiting my postings. And I NEVER EVER said before I was leaving. In fact I previously said people should not leave based upon our prior discussions other people may have said that but I didn’t and encouraged people to stay. You just can’t leave it alone can you or get in a pot shot whenever possible.

    Post whatever else you want I’m not responding.

  142. Gary

    FC,
    I think we all knew silver was going to crash. We just all expected it not to happen until gold topped and I’m not at all convinced gold has topped.

  143. Beanie

    The equities market is actually holding up quite well in spite of the plunge in commodities:
    http://stockcharts.com/freecharts/gallery.html?s=spx

    Semis and tech appear to be the ones on verge of breakout to take the general market higher.

    http://stockcharts.com/freecharts/gallery.html?qqq

    http://stockcharts.com/freecharts/gallery.html?s=smh

    I’ve said many times now (except the last few weeks when precious metals were getting a boner) that we get the last mega bull market in tech into 2016-2018 before precious metals re-emerges and the entire financial system collapses. The recent crash in pm’s and commodities is what the next bull market in tech has been waiting for. It happened last week. You should see a big rally in tech this coming week.

    Pm’s are weaker than I thought. I thought they would gap higher tonite and run to $40 Monday-Wednesday. But futures are down at the getgo.

  144. ...at ease

    Perhaps the C wave burst at top that we all expected ends up in longer width of time rather than height of it’s reach. Gary said the bull would do whatever it needed too to knock as many off as possible, or Bernanke and Tim’s plan is working. I prefer Bob from HI thoughts.

    Gary, I saw your post for strategy going forward. Not happy to see that. Not sure how that helps any of us.
    I was quite happy to know I was not gunning it to the floor as much as you, so felt safe knowing you were going full speed ahead and confident and I could gauge my speed to yours. Now, I don’t know where I stand, looking at what you posted, has me scratching my head thinking…huh? Now, it looks like my portfolio to yours, has you coming to to a screeching halt as I flash right by you with my hair on fire!
    Please continue posting as Gary is, not as Gary wants us to do. I am sure all of us were told, if your friend jumped off a bridge, would you follow? We pay for Gary does and thinks, not for what Gary thinks we ought to do. Let us make our mistakes and learn along the way, only way to learn what’s right for each of us. Plus with a position like you posted, that would make for one hell of a boring ride any way it goes.
    My 2 cents and hope you will reconsider to continue what you have been doing and telling it like Gary does so well.

  145. Gary

    WMC,
    At this point its anybodies guess. I think gold has to at least test the low before it can go back up. That probably means silver will go back down too. Will it go down a couple of percent or another 10%?

    I have no idea.

    We’re kind of in the same situation as last Monday. We aren’t privy to the future so it’s really tough to make a decision.

  146. fubsy_cooter

    Hey Gary,
    I gotta say, if the new portfolio you’re posting is the version of what you think people should have rather than what you’re doing, I’m feeling cheated. You clearly stated in the past that people should not take on your level of leverage unless it fit their risk tolerance.

    I’ve been a subscriber for appx two years now, and I want to see your portfolio, and make my decisions from there.

    You can’t expect to control what people do. you know as wel as any greed and fear run markets. you can’t possibly expect to control those driving forces by suggesting a conservative portfolio, and if you do, why should your more responsible subscribers lose out on knowing what your allocation is?

    Just feeling a little irked at the change.

    May I suggest that you give your allocation and next to it a more conservative one that is appx 50% invested in PMs during C-Waves.

    F

  147. Gary

    at ease,
    You know what my position is. so you know where I stand at this juncture.

    In the future you will just have to decide for yourself if you want to go heavier than the model portfolio. The analysis will remain the same. I will still call entries and exits as I see them but it will be up to you as to how aggressively you want to get with them.

  148. Wes

    Gary,

    I’ve never paid any attention to your positions, but now you call attention to them.

    Does the abbreviated exposure indicate you’re not very confident in your current predictions ?

  149. Salty

    steven,

    looks like you are correct. Kitco shows 37 seventy ish at 515 last fri.

    my fx chart stopped recording data at 4 pm… dont know why.

  150. Gary

    Wes,
    Not at all. I’ve been trusting my system for several years now. Other then a Monday gap catching me it has served me very well. If it helps any you can always assume that I am going to be invested at least 30 to 70% heavier than the model portfolio.

  151. fubsy_cooter

    With that said, I can easily create my own allocation based on where we are in the cycle counts.

    After all, that’s what I’ve been doing anyway.

    i’m willing to bet that you continue to see the same percentage of subscribers misallocating based on their innate greed to make easy money fast. They will still get creamed and lose most if not all their gains when the exciting tops form and fail.

    f

  152. ...at ease

    Gary, your the boss, but what drew me to your site, was your approach to the market and sector. Change is hard, but feel like the smackdown last week and the smackdown you got on the blog from some is giving the rest of us a smackdown again also.
    I like Gary and his insight, would like to see it continue. I am amazed that you can take so much guff and keep on giving. It is hard, I can see that, I couldn’t do what you do. Thanks for all you do and continue to do. Happy with Gary and all he does!
    thanks! 🙂

  153. Blake

    Gary-
    Will you write up a D Wave put strategy for the SMT subs when appropriate?

    Seems like the premium content will not even cover options now?

  154. Gary

    There will absolutely not be a put strategy in the normal report. My recommendation will be to just go on vacation for a couple of months and wait till the A-wave starts.

    FC,
    If you email a request I will send you the information.

  155. MrMiyagi

    I want to publicly say that I have no grudge against Gary or anyone else’s analysis on this blog.
    I am a big boy and whether I make a million dollars or go broke, it is my doing.

  156. Blake

    Feels like the whole membership is incurring punishment for a few outlier subs who fail to take responsibility for their trades.

    Paying a lot more premium to get content we have already bargained for and have grown accustomed to seeing is unfair.

    Creating an additional premium newsletter far and above the regular sub price is not going to deter subs from wanting to indulge in overly leveraged trades in an attempt to make money quickly. I imagine that most if not all subs will pay additional money to follow your trades in lockstep with the hopes of making huge sums quickly. Charging more money for information that you know people will invariably pay for seems exploitative.

    All it seems to do is create an additional revenue stream for you and alienate subs that have been loyal for some time… Just my two cents

  157. Silverman

    Gary,

    I lost a significant amount of money last week. At no time did I give the first thought to holding you accountable in any way nor did I feel the least bit annoyed with you. It was my trade on the way up and mine on the way down. That said, I find your decision to create and charge for a second portfolio a very big disappointment, especially in light of the losses of the last week.

    Pat

  158. Jammer

    In other words, Gary will show you his allocation and market calls, but wont let anyone follow him again to 14o% or let people buy too many options on his recommendation, and how could he? He cant possibly decide if 140% suits you or your portfolio or your reasonable disposition of saving and invested funds. Same thing with buying 50 call options. I am fine with it. If I know he is buying GLD, I will decide if I want or need options and how many. No investment advisor wants blind following. If my advisor will let me know his market thoughts and buy/sell levels, thats all I want quite frankly. You simply must make your own personal risk decisions.

  159. Tajir

    I agree. People with large account may be able to afford “expensive” SMT, but I feel I am left behind after last week mess. I understand that black swan events are unavoidable and accepted that fact, but, I was hoping to recover some profits during D wave, as Gary suggested in his weekend report. Now all of a sudden, I am left in the dark. Gary, I would request to reconsider this decision because many here will need your help (via your portfolio) to come out of last week’s mess as it gives comfort that you are in it with us. Leaving us behind would mean more damage as many won’t be able to make right decisions because of emotional damage they went through last week.

    One idea could be to include people with existing subscription to this new expensive SMT until their subscription runs out, at that point, you can give them the option to pick premium content or basic content. In this case, at least we won’t be left behind for the time that we have this subscription with “old” terms. I hope it will be fair for you and all of us. I know you had to go through a lot of tense questions/comments, please consider this as part of business.. thanks

  160. Wes

    Jammer,

    That’s fine with me, but I do want to know how strongly Gary feels about his current expectations. That’s all I ever used his exposure to determine.

    Gary,

    Maybe you can indicate your confidence in your expectations in some other way.

  161. Gary

    It has become painfully obvious to me that many people take their cue off my portfolio. Since I’m heavily invested they see that as a sign that it’s all clear to swing away because Gary is swinging.

    Folks the only reason Gary is swinging is because Gary can afford to strike out, not because I’m certain I won’t be wrong.

    I’m removing that false signal. Now you will have to make up your own mind about how hard you want to swing without the distraction of seeing mine.

  162. SF Giants Fan

    I can’t blame Gary for his actions. There have been >3750 comments posted since Monday’s meltdown and I can’t imagine how many negative e-mails he got. He isn’t a full service broker but many expected it.

  163. Wes

    Gary,

    For example when you sold AGQ and didn’t replace it with any gold exposure, I regarded this as a caution on your part about adding any exposure at that time.

    Later you verified that thought.

    This type of information will be missing going forward, and it diminishes the overall information level, particularly in real time.

    That’s disappointing, but I can live with it.

  164. Jammer

    Well…I am anticipating and hoping and would recommend that when Gary puts out a conservative portfolio he will just post his allocations: say 25% silver miners, 30% Silver, 25% gold, 20% cash, I can take it from there. If he will say I am buying Gold at 1460 I can take it from there. And I am hoping he will during the D Wave post where he thinks very high risk aggressive traders might have a tradable downdraft, but not give me instruments or strike prices etc.. I will take it from there. I am hoping what he plans to do is a bit of a work in progress. So…to summarize, Gary I hope what we get is:
    – % allocations to silver, gold (not interested in the instruments which I will choose) and silver miners and gold miners, again without telling me which miners;
    -buy and sell spot levels for gold and silver and miners/HUI (again in general,not specific miners); and
    perhaps an occasional statement that the expected sell off might be tradable for high risk aggressive traders with buy support at X, Y, Z levels. That kind of thing. That way I make my own decisions on instruments, price levels, amount of risk to put on etc. I find I am much happier that way.

  165. Elaine

    Gary,

    I’m with Jammer. I never followed your portfolio exactly, and I won’t probably ever do options because I just don’t have any clue about them, but I will say that I do look at how you spread you investment money to give me a guideline.

    I understand if you no longer are comfortable sharing that information. I thought it was pretty remarkable in the first place.

    Thank you.

    Elaine

  166. Felix

    I’m in with Jammer and Elaine. I adapted the portfolio to suit my own account as if it was a set of relative strength recommendations. I can’t “do what Gary does” to the letter.

    However I would sure like some way to play the D-wave besides a vacation. My responsibility. I know what I can lose here.

  167. Blake

    This just is additionally jarring after a very jarring week. Feels like we are getting left out in the cold, Gary. I understand that you don’t want SMT subs trading on your allocations (which may ameliorate your conscience) but that is what the service was, as initially conceived.

    We ran into a black swan event last week unfortunately, an event which seems to have affected how you see your obligations to your subscription base. I am a fairly experienced trader that can make it on my own but it doubtless helps me to see how you and other more seasoned traders are positioned.

    As for options content, options can be complex financial instruments but I find it at least instructive to help your less experienced traders to understand how you play them at particular times (like DITM calls on parabolic moves and out of the money puts on d-wave volatility). Only last week did you iterate how much you believed out of the money put options on SLV would be very profitable, and now you are inclined to deprived your entire premium subs of a way to participate in the D Wave.

    Again, I think this is a bit paternalistic with a view to protect people from themselves but I will stress that we are all adults that are obligated to account for our own trades.

    Judging from the response on this board, this change has and will not be taken easily and I can understand your trepidation going forward after receiving a categorically unfair response to last weeks’ silver sell off, but this change does seem wholly reactionary to a few subs aggressive and misplaced animosity after losing considerable paper profits.

    Its seems as though your mind has settled on this issue but a healthy discussion amongst the blog can only be constructive.

    Good luck trading, all 🙂

  168. Elaine

    Some subs may be upset at this comment, but I sure hope the few, don’t ruin it for the many.

    This has been a very, very valuable experience for me and I would hate to see Gary get so upset that he discontinues writing the newsletter.

  169. Felix

    I’m in with Blake, Jammer and Elaine. I adapted the portfolio to suit my own account as if it was a set of relative strength recommendations. I can’t “do what Gary does” to the letter.

    However I would sure like some way to play the D-wave besides a vacation. My responsibility. I know what I can lose here.

  170. DizzyDean

    Felix, is it really that difficult to buy OTM puts when indexes are at new highs? How much money is involved? I was under the impression they could be had on the cheap. You could have picked up an OTM put a couple of days from expiration two Fridays ago and made money. 7 days would have done the trick. Of course, most will expire worthless, but it’s insurance. You never really hope to collect on insurance. Does anyone have a link to some OTM puts that I can look at?

  171. pimaCanyon

    Steven,

    The mob is not after you. Only a couple of people have posted something negative about your posts. Out of hundreds of SMT subs (or thousands?).

    I also believe that your posts had nothing to do with Gary’s decision to no longer post his own portfolio.

    Anyone reading the comments section of the blog over the past two months could easily see that there were a lot of folks using heavy leverage, EVEN THOUGH GARY HAS CONTINUED TO WARN US TO NOT USE HEAVY LEVERAGE, AND THAT IF YOU CONTINUE TO USE HEAVY LEVERAGE YOU WILL EVENTUALLY BLOW UP YOUR ACCOUNT AND THERE ARE NO EXCEPTIONS TO THIS RULE!

    It was obvious that these warnings were being ignored, that there were lots of folks using heavy leverage, and many of those were new subs and even newbie traders. It made me nervous! And I wondered whether the market would throw us a curve ball that would make it very difficult for those using leverage.

    So I think Gary’s plan to post a model portfolio that is good for most investors is a good plan. And I believe it had nothing to do with your posts.

    I’m sorry to read about how much this recent downmove has cost you. I hope you’ll continue posting here. Everyone who posts here will eventually get a negative response to one of their posts. You can’t please everyone.

  172. Felix

    DD – Sure it’s not difficult, but recommendations from a seasoned trader who is deeply immersed in the application of a particular trading model – a successful one which I am also following – are worth more than gold (or parabolic silver) to me

  173. pimaCanyon

    I’m surprised that this change to the sub service is such a big deal. Gary has not said that he will NOT be posting a portfolio. What he has said is that he will be posting a recommended portfolio that should work well for most subs.

    It’s not like Gary will not be in the market along with us. In fact, based on his prior portfolio allocations, he will be more heavily invested than the model portfolio.

    If you want more leverage, you know what to do. Just use one of the double long etf’s. Or use deep in the money calls. It’s not that hard to figure out.

    But remember Gary’s repeated warnings about leverage: Repeated use of heavy leverage will always blog up an account, and there are no exceptions to this rule.

  174. aklaunch

    It is time to start focusing on trading. Dollar down PM’s up. Anything is possible here with QE2. If the dollar did a large coil or fake out we will all be singing songs and whistling soon. I could totally see how smart money could stage this whole thing for an absolute killing.

  175. AgAuPbBrass

    Gary,
    I am also a survivor of the dot com tech crash. One of the lessons I learned is that margin, options and leverage is great when it is going in the right direction, but rapidly fatal when not. Since that experience, I have sworn off the use of all those instruments. You do lose everything eventually.

    What I value about your service is your analysis of the markets in relation to your methodology. You have good insight into the markets and am impressed with your calls. That alone is the most valuable thing I see on a nightly basis. You made me a ton of gains and I thank you.

    Two points. First, I think you should refrain from picking specific stocks / ETFs. If you are saying, for example that silver is in an A wave advance, I should be responsible to pick what is right for me. Comments about miners vs. metal would be helpful, but the actual instruments should be left up to the individual. Maybe you want to create a list of your preferred ETFs, but is the metal is going up, it should be my responsibility to choose AGQ or SLV. Second, options are experts. If your sub does not have enough understanding to use them, they should not be. Guiding someone via e-mail to use options is like guiding a blind man driving down a highway via a cell phone, shocking if it ends well.

    For me, I am pleased. I never used margin, leverage or options. I never went below 25% cash in my account. I am up 20% since the beginning of the year. The dot com bubble was a searing experience, but the parabola we just had in silver, not so. Some folks you can tell not to pee on the electric fence, some have to watch their friend, and others just have to experience for themselves. At least I didn’t have to experience it twice before I learned.

  176. Felix

    Very happy to be aboard is this gladiator. Looking for the long haul with y’all.

    “We who are about to die salute you!” Pick up, dust off. Bandage, splint.

    Ready.

  177. Patung

    I don’t feel influenced by Gary’s aggressive portfolio. I have zero interest in options, – got to start with the basics first, – and have never used leverage and don’t plan on starting.

  178. aklaunch

    All eyes on the gold price. If silver was the whipping boy and got creamed due to the margins and dollar rally duo then it will make its way back in no time. I just don’t see the dollar finishing higher than last year with this kind of circulation?

  179. Steven

    Thank you Pima,

    It means alot. And the few that did attack me seemed to overlook the fact that I consistently said Gary was the best I have ever seen and appreciate what he has done for everyone.

    He even picked me up in an email exchange a number of months ago when he could have simply ignored me. I think Gary is extremely bright and, fwiw, has a good heart and the best intentions of his subs. Heck, I know he got slammed on this decision as well.

    I waited all week to post something but frankly I was so shell-shocked I couldn’t gather my thoughts. Then over the weekend I put my thoughts down.

    I never intended it to be a slam on Gary. I was just extremely perplexed by his actions. One example was why we weren’t selling the week before when we got so close to $50 when that was the ultimate goal (just an example).

    Gary, in turn, explained it to me. gary also clearly stated that I was not the reason for this change. Perhaps I was the straw that broke the camel’s back. I have lost considerable money following some of his trades in the past but at least I understood his thinking. I didn’t understand it this time and I’m still at odds with it but that it what a discussion boards is for, isn’t it?

    Nobody, not me, not Gary should be beyond questioning. And he has always encouraged questioning. And I do not believe anything I did was offensive or less than respectful or even vengeful.

    My questioning really also was not venting but truly trying to understand his actions as I was completely clueless why he acted the way he did. I now understand why he did and while I still disagree with parts of it the ultimate decision (and I say this in almost every post) was mine and I accept the responsibility.

    I will continue to be a sub as long as Gary continues this service. I have actually dropped most of my other services if that shows how much I respect him.

    And I do not want to put words into Gary’s mouth but perhaps after being barraged by emails this past week (I never sent one) and comments on the boards (I never posted one regarding his decisions and unfortunately I didn’t get the text message for some odd reason until hours after he sent it and AGQ was down another 25 or so points but that’s probably AT&T’s fault!) when I did finally post he had simply had it. Had my posts come in the middle of the week they would have simply been lost in shuffle.

    So to set the record straight, even though we have points of disagreement I never blamed him for my situation. I was just questioning the tactics (I think many did just that simply by doing something else or saying so on the board).

    And I’ll even go a step further and give him credit as I probably have made more money with him than without him. It’s hard to say but the answer is almost positively yes. I just can’t say for sure as I became a sub over the summer and my portfolio was not extremely different than his and while I don’t know how that one would have done I assume it would have underperformed Gary’s if only for the fact that it was less geared towards silver than Gary’s portfolio.

    So is it ok to thank Gary for what he has done for me and question why he did something? I don’t think Gary would say no but again I don’t want to put words into his mouth.

  180. Dan CA

    I’m here for educational purposes only. I am not relying on Gary to get me to retirement, I’m 26 and need to learn to do this on my own.

    There is plenty of knowledge and expertise on the blog, so I hope they can help answer my questions regarding puts during the D wave. Either way, I’ll be using a small amount as a learning tool.

  181. Brian

    Steven, There are a lot of names for what you were doing. Backhanded Thank You comes to mind. Call it what you like, but the message was clear. We all understand. You screwed up. It was Gary’s fault. Let’s move on.

  182. Brian

    Bob, Now we are on the same page! Shoot me your ACH info and I will capture a retainer and we can get started ASAP!

  183. donald

    Gary, you are fantastic! I am responsible for all the buy and sell decisions—- so is everyone else. No one is likely to be able to hit all the curves and knuckles, mathematically unlikely to impossible. I want you to be happy and sleep at night. Perhaps there are many investors who know next to nothing about options, myself included,who are part of SMT. If I were you I would charge them sommething like 40k a year to protect their portfolio from a high arrogance titer.

  184. Bob loves Hawaii

    Hey Gary, I know you are a bit emotional right now, but I hope you will be a bit more descriptive than just go on vacation on the D wave.

    You may simply point out overvalued areas, typically we can expect this or that, etc. and let us draw our own conclusions.

    Your greatest asset to me is your uncanny ability to call IT cycle turns. BTW, I agree that gold has not failed a C wave yet, and there will be some validation.

    Sleep on it, and rethink a better approach.

  185. DG

    Catbird: Yes, and the dollar is down nicely so far overnight. Remember it’s a short term thing, so a stiff down day would honor its call. Hopefully it’s the start of more, but the signal doesn’t demand more. I will post Monday if the dollar is just down a hair, as to whether the signal is still alive. So far so good.

  186. jhnewman

    Please don’t let last week’s events cloud your judgement THIS week, or you’ll be making two mistakes, not just one.

    Do you have a trading plan for this week?

    The game is afoot. Gold, silver and the dollar have all opened for the week. If you’ve still got skin in the game, it might be best to focus and figure out your trading plan for THIS week, or you could get clobbered again or lose a big opportunity that will help rectify last week.

    I know how painful it is to lose a lot of money. I’ve been through it, every trader on the planet has been through it. But, if you’ve still got money in this game, now’s the time to focus on at least this coming week.

  187. catbird

    Shalom,

    I’ve been fiddling around with the Average True Range (ATR) on (free) Stockcharts this weekend.

    If I recall, your preferred stop price is the 20 week ATR?

    Do you have any other favorite ways of deciding on your stop?

  188. Bob loves Hawaii

    This stuff happens to people even in the know pros. Let’s dust off and get back to work. From Zero Hedge.

    “The FT reports the Clive Capital, the “world’s largest commodity hedge fund” as defined by the FT (although we are more than confident various other and much largest “energy-heavy” funds would be much more appropriate for this moniker) lost $400 million out of its (paltry) $5 billion in total AUM during last week’s coordinated energy take down, initiated by the forced margin intervention in precious metals. Clive “is the biggest of several big hedge funds believed to be reeling after the unexpected sell-off hit markets late last week.” Clive is not alone: “Others, including Astenbeck Capital, the Phibro-owned fund run by Andrew Hall, are thought to have taken double-digit percentage point losses to their portfolios, according to investors.” The FT’s take: “The scale of the losses demonstrates that even the savviest investors in commodities were wrongfooted by the correction, one of the sharpest one-day falls on record.” “

  189. Shalom Bernanke

    catbird,

    Yes, the 20 period ATR is what I use, but it depends on the expected hold time.

    If looking for a 7-10 day hold time or less, I used the 20 DAY ATR.

    If playing an intermediate cycle or any expected hold time 2 weeks out+, then I use the 20 WEEK ATR.

  190. Paul

    I think you are making the right move Gary. At the end of the day the main asset that we have as investors is our psychology and when you lose allot of money quickly psychology is damaged severely. I think anything that you can do to help us out while also encouraging us to think for ourselves would be great. The 2 most beautiful things in the world are a stock that is increasing and a beautiful man or woman and both are incredibly intoxicating when we are personally involved with them and so are set the seeds of potential disaster in both cases. I of course learned the leverage lesson the hard way during the first leg down of the bear and so after last week I had a minor grief reaction and sold out of some short term accounts at a loss and have to decide what to do with the stuff in longer term accounts (as you have noted in the past a bull market ultimately corrects timing mistakes). Because I wasn’t leveraged I didn’t have much loss of sleep, palpitations in the middle of the night or self berating thoughts. Gary so far my experience with your service has been that you have honestly shared with us you opinions and analysis and it doesn’t seem to be infected with any conflict of interest. Funny thing is that two other newsletters I subscribe to came to the email after the close last friday and announced that they thought there was a bubble in silver. H’mm? Anyway I think that people inevitably will come to think of you as some kind of oracle and you don;t need the grief being a “guru” inevitably brings. So the most important part of your service to me is the analysis and reasoning and also learning about cycle theory and the other tools you use. We all know about SIL, GDX, GDXJ etc and should know that AEM is a great company etc. We can all subscribe to other services for individual PM stock analysis (please don’t if the accept money to sponsor stocks-gag) and we should all be watching other analysts on bnn.ca etc. I don’t think there is really any reason for you to publish a specific portfolio. Thank you for your service Gary!

  191. 86d4life

    Bob,
    Thanks for posting and good to know it wasn`t just us `snuffies` that got whacked.

    I think first order of business is to try to recover as much as possible from last week if we get some bounce this week and get into some cash until we can figure out which way the wind is going to blow here.

    Thanks to everybody that posts here. This has been a big wake up to how much it really sucked doing this alone. Best to everybody.

  192. KAL

    Gary, I’ve learned alot from everyone on here and I appreciate this community. After Thursday’s sad sale of my AGQ, my toddler daughter had a fever that went up to 105+. She was very sick and we nearly went to the hospital again. She is epileptic and scares us sometimes. You’re always afraid that a seizure will have a really bad ending. Anyway, that event made me think about what is REALLY important in life and what I appreciate that I have around me. Maybe we all need to do that sometimes.

    So, I want to encourage you a bit in a genuine way if I may. I’ve been a pastor for more than a decade and I think your role here is much the same as that one; it just ends up that way when you are the expert surrounded by less-expert people.

    I think the thing that impresses me most about you to date is your kind heart. You’ve obviously given alot of time to figuring out how to keep us from tanking our accounts. That took effort on your part, and hey after all you’re retired and when you’re helping us, you’re not lifting or climbing. So, thanks. I overinvested this C-wave, on porpose, because I was using some unexpected $ and I wanted to learn fast because I feel like I need to. I did the math, and I figured the chances of a smackdown were small. Of course, they were, and even pitchers get hits sometimes too. But I have learned much and in my mind after getting neck deep in the stuff, I am miles ahead of where I was 3 months ago when I was trying to do this on my own and making dumb decisions. Anyway, thanks for being a tough guy who cares, thanks for sharing what you’ve learned, thanks for responding to me personally, and thanks for putting up with our stuff. Please know that we all appreciate you, we just have trouble with our emotions, as they are strongly connected to our cash.

  193. Driver

    Well, it appears the whiners have added an extra burden to Gary. All I can say is that I’ve been very happy with his service. It enabled me to move partially from AGQ to UGL on Friday before the plunge started, obviously saving me money. If I did it, others could have.

  194. david

    Gary,
    I support your decision 100%. After all, we still all have access to your thinking, your analysis, your brain. And that’s what we signed up for.
    Forjan

  195. catbird

    Shalom,

    Thanks. I was reading a little of “Market Wizards” this weekend.

    Your strategy of keeping risk constant and only adjusting for stop breadth and position size seems much more sensible than the way I’ve been investing.

    Then I read the Paul Tudor Jones interview and that of Larry Hite. Their advice about managing risk above all else resonated with me.

    It’s all about how much capital you could possibly lose. When that is sharply defined going in, and it’s a tiny % of your portfolio, you’re not stressing out. And upside is of course very high because you can slap a trailing stop on there if/when you have a satisfactory profit.

    I’m still new and figuring out my style. I’m going to try this and start by only risking 1/2% to 1% of portfolio value per trade.

  196. catbird

    DG,

    As long as I’m asking people about stops–what are your favorite ways of figuring your stop when you first put a trade on?

    SB was just saying for short term trades (7-10 days) he likes the 20 day Average True Range and for longer term he likes the 20 week.

    Just curious to know your rule of thumb.

  197. DG

    Catbird: I’m a bit of an odd duck that way. They vary tremendously based on the situation so I can’t really give rules of thumb. Could be charts, could be $ loss, could be “the item has just now done something bearish”, could be break-even after I have a gain, could be my corns start to ache (o.k., maybe not that one). I usually know it’s time to abandon ship when I see it, but there are no binding rules for me.

  198. David

    Has it occurred to anybody here that maybe Gary is coming up with a two-tier service because it makes sense for him from a business standpoint?

    After all, he has subs with five-figure accounts and subs with nine or even ten figure accounts. If someone here is making sixty-three million piggybacking on Gary’s ideas, it makes sense for Gary to charge them more than $200. He presumably also has some institutional subscribers. Why should they pay the same price or get the same information as retail investors who probably should not be using exotic strategies in the first place.

    It’s Gary’s decision. All I need to know is where he thinks we are in the cycle, whether we should be leaning toward gold, silver, miners, metal, or cash, and how aggressive he thinks I should be.

    As long as there is a comments section we will always be able to share our ideas and come up with portfolios of our own. So let’s not complain about it or blame people for Gary’s decision. If it bothers you that much, shell out for the high-end newsletter.

  199. Bob loves Hawaii

    I hope this move up tonight is not a tease. I was speaking with a few other traders that frequent this site and we agreed having a small futures account positioned opposite of our lean might be prudent.

    These big moves happen overnight to trap retail and cause a cascade. This way I can forgo hedging with options.

  200. Veronica

    My system will go long at 1549, with this number moving down in the coming days.We really need an up day for gold and miners tomorrow to get me wildly bullish again:)

  201. Bob loves Hawaii

    David, if I had $63 million dollars, I would not try to self manage it, at 140% leverage. That dude should be paying someone $600K a year to baby sit it while he is off following his passions.

  202. Hot Rod

    Holy smokes are we back to “normal” tonight?

    USD down, gold up, silver up more.

    Let’s keep it up.

    Chugga chugga choo choo.

  203. Bob loves Hawaii

    Remember that IHS on the SPY, it bounced off of its retest of the neckline. This could be a start of a 80 point move higher.

    Gold will follow that move.

  204. Veronica

    I think everyone here that was hit hard by silver’s decline should complain to the CEO of SLW. He stated that he would start hedging/shorting at 48.00 on an earnings conference call earlier this year.

  205. Peter

    veronica .. you sure about that ?

    The number $50 per ounce appeared in another discussion about silver. I first came across this target in James Turk’s theory about three stages for silver’s bull market with stage 2 beginning at $50. This time $50/ounce came up in an interview with Silver Wheaton’s CEO, Peter Barnes, as he discussed SLW’s earnings results on CNBC (video below).

    Barnes noted that some “reputable banks” have made predictions for silver to hit $50/ounce by the end of the year. He thinks silver will definitely go through $50 in the next 2-3 years, but it “could be quicker.” Barnes’s bullishness was confirmed when he stated that hedging the company’s silver is nowhere on the horizon; hedging might be considered once silver hits $50.

    Note the use of the word MIGHT.

  206. Gary

    Jm’s comment that he keeps deleting and that I just responded to.

    “So much guff…lol..Just one guy alone on here lost 90k of his portfolio based on the “this will no doubt shoot to at least 50, everyone use all dry powder on this one”… and it then continues to tank.. Just kidding everyone, that was the D wave…o ya the risk to reward ratio..hmmm 49 goes to 50, 52 tops… 3 dollar move up… Risk downward according to gary for the pull back was 41-42…for a $7-8 loss…hmmm can any guru on here tell me if that is a good call?”

  207. jhnewman

    KAL: let me join in with others to say that was a great post. You have a beautiful family. All the best to all of you.

    And to give everyone here some perspective: gold is now at about $1500. Over the next 7 – 9 years, it will probably be going up to somewhere in the $8000 – $10,000 range. THERE IS A HUGE PART OF THIS MASSIVE BULL MARKET LEFT TO MAKE BACK ALL OF YOUR LOSSES, AND A LOT, LOT, LOT MORE THAN THAT. You should thank your lucky stars that you are already involved in the Great Gold Bull Market, and that you have someone like Gary to teach you how to fish it. When it comes to surviving and even thriving in this horrific financial crisis, everyone here is so very far ahead of the rest of the population that it isn’t funny. At this point, you are part of a very small, blessed minority.

    Which brings me to one last point: I know it’s very hard to do, but PLEASE try to wake up people around you: your family, friends, acquaintances, strangers. Wake them up to the fact that we are only in about the third inning of the biggest financial crisis the world has ever seen, and that what’s to come (stocks crashing, Treasury bonds crashing, and especially the dollar crashing = a form of hyperinflation) is actually going to be worse than 2008. Please persuade people to buy as much physical gold and silver as they can to survive what’s coming. (And if you want to give them a healthy scare, give them the book “When Money Dies”, which is about the Weimar Hyperinflation. You can tell them: “I don’t think it’s going to get as bad as this, but this is the process we’re starting to go through with the dollar, and it’s going to get very bad.”) And it would be nice if they followed someone like Gary, who could help them invest any other money they might have in the best gold and silver stocks AT THE RIGHT TIME = the bottom of the D-wave, bottom of the B-wave, etc.

    I know it’s very tough to get people to do these things (God how I know), but I feel it’s almost a moral duty to get as many people as possible into by far the safest lifeboat in this ongoing financial hurricane — the precious metals.

    All the best.

  208. ...at ease

    JHN,
    I keep trying. So far, only my brother has joined in on the metals investing after spending a week with me. However, not sure if he is really in it for the long haul or just thinking it’s a curtain fad to make a little money.
    It sure didn’t help that this past week was the week, I spent with my family, so they weren’t impressed rather just more skeptical about what Mom’s got herself into since she was on the computer on Monday and Friday trying to salvage account balances and not joining in the family activities. Until Gold and silver becomes the more stable investment, I fear we won’t convince a lot of folks until it’s too late. All we can do is keep trying to improve our knowledge and skills and show them how it’s done. I am not an expert by any sense, which is why I am here with Gary and the SMT group here which provides me the confidence and more knowledge to invest more wisely. I imagine we will become one big family after going through the worst and best of times here with Gary. You know how family’s have so many different personalities, you can already spot a few already that stand out. I just think the best is yet to come for us, so here we go again!

  209. jhnewman

    …at ease: I hear ya. What I find effective is to show a family member my account results after a “good run” (“look at these numbers, I’m up 30% in 3 months”), and then to talk to them every once in a while about what this crisis is really about at this point: paper money losing its buying power, high inflation that’s going to keep higher, the global currency system coming apart.

    And you’re right about every one in here becoming a family. We’ll be going through financial warfare together, helping each other out as best we can.

    So — hey Bro!!!! ;^)

    I’m calling it a night. Good luck to all in this coming week!

  210. fubsy_cooter

    If this rally lasts a couple more days I would have to consider it a bear flag, and will unload all remaining positions.

    If it continues higher, no problem, I’d be buying OTM puts on SLV (3% of portfolio), also some EUO and SH/SDS, and will sit tight until Gary calls the A-wave.

    f

  211. ...at ease

    Fidelity folks… good news!
    With the A wave, I believe we are hearing the miners will be doing great. So for those of you with Fidelity accounts, the one fund that did terrific for me last A wave (last fall) was: FSAGX, FIDELITY SELECT GOLD.

  212. New York

    Gary,

    I understand your reasoning for the altered portfolio publication. I always say that we should never make any important decisions when emotions are at extreme highs or lows. Right now, we’ve all just come off of extreme highs and gotten clobbered in the extreme opposite direction.

    It’s quite obvious that your generosity in providing your market analysis provides some degree of personal gratification. It’s why we all do what we do. What’s more, your goal to help liberate as many of us ‘regular’ guys by providing the means for some financial freedom in this lifetime is commendable. It’s not everyday you find someone willing to stick their neck out for others.

    I can only imagine the backlash of emails from people still raw emotionally from the recent unforeseen smack down.

    I think we all need to recognize how fresh this experience is and how Gary must feel. I just wanted to put that ‘on the record’ and say thank you. Regardless of how much of a draw down I experienced I’m still grateful for being in a position to expeience one in the first place so thank you, Gary.

  213. KAL

    Thanks Pima, Bob, JH. I appreciate it. I have been out of the pastor role for a few months now. I guess the quick way to put it is my emotional well just ran dry. Too much watering your thirsty people and not enough filling up your own supply is not good. People sure have alot of problems and it’s great to be part of a solution (and of course I see myself as working for God on that) but I needed a break before I broke.

    I guess I just think maybe Gary’s heard enough and doesn’t need any more extra burden. I’m sure he’s as perfectionistic as anyone on the board and feels a strong responsibility for us. He wants to help us dig out, so we need to stop piling on more on top. Just my 2 cents. Y’all have a great week, watch out for bear flags!

  214. daniele

    Gary, i just now realize what happened with smt premium site.I’m not happy at all for this.I perfactly agree with jammer, elaine and felix and other that absolutely need to know your guideline and not a “standard” vision.Thank you for everything.

  215. Elaine

    Gary,

    Thank you for the “model” portfolio allocation information. That is the type of guidance I find useful.

    Best,

    Elaine

  216. Wav_ridah

    Big POMO operation May 9, 10, and 11. I don’t see how the USD can rise against these events.

    disclaimer: I’m very bullish on the beaten down and oversold metal.

  217. Juan

    Wav_Ridah,

    I noticed that too, three more days left on the most recent POMO scheudle of some of the biggest daily invidual fed purchases on the schedule. It seems this could help assist the USD form a swing high and retest the 08 Lows. I hope this is the case. So far so good DXY down .30

  218. aviat72

    Regarding the GC swing high.

    If we just consider the pit session, GC made a marginal new low on Friday.

    The Thursday post pit sell-off was very quickly reversed after the 4:00PM equity market close with a nice 17 point pop to 1390 as soon as Asia opened.

    Assuming we trade above the 1398 value during the pit-session, would we consider this as a swing high?

    The reason I ask is that it might take a few more sessions to take out 1522. If the expectation is of a marginal new high (1600), then waiting for a break of 1522 would mean that we are buying when almost 40% of the expected cycle swing (1462 to 1600) has already happened.

    Would you rather not pick a bottom after 4-5 days (given the cycle timing tool), instead of waiting for a swing low which in this case is quite some distance away from the cycle low?

  219. Juan

    Also the EUR fell so hard 4.25% On Thursday and Friday (Two big up days for USD). It appears after the emergency meeting on May 6 in Europe, word is already getting out that the Greece Crisis is under control (For Now) s the EUR bad news will start to dissipate (As can be seen a little already in the Asian Markets tonight). If the EUR fades the greece bad news throughout the next few days, that should also assist the USD Swing High and start another descend to 70.

  220. Ivan

    Gary,I am happy with your service and my advice is that you should not make any significant changes.Many people acsept their losses as your mistake.I totaly disagree with that.Everyone should be responsible for his own activities.
    Keep the good work!

  221. Juan

    Aviat,

    I think I would base that on what the dollar does next. The only way Gold makes a new marginal high to 1600 is if the Dollar turns around and starts heading towards 70. If gold keeps trading above 1500 and the dollar starts tanking then I think I will jump in feeling that it is on. Hopefully we can see this sign before 1522 so we do not miss out on 40% of the ride as you mentioned . At this point its still too early to tell.

  222. Rob L.

    I think Gary’s initial target of $1650 gold will be met but it sure has been/will be a rocky ride getting there.

  223. Douglas

    The idea that Greece might leave the € and print its own currency seems unrealistic. Who in their right mind would make loans to Greece and accept payment in drachmas?

    Greek drachmas sound like instant Weimer hyperinflation.

  224. diana

    I hear some have access to 24 hour trading. Could anyone respond as to whether they do or don’t, with whom they trade, and how important they think it is to be able to do this? Thanks!

  225. jabalong

    Hey Gary, no worries about the AGQ exit, figured it was probably all a rush as you were coming back from your trip. Last week was definitely a whirlwind and a vicious one at that!

  226. jabalong

    Here’s my two cents as a subscriber on this question of model portfolios.

    Personally I’m mostly interested in Gary’s thoughts on timing in terms of where we are in the cycles and his level of conviction at any given time on different scenarios in play.

    Beyond that I am also interested in what instruments he likes (AGQ, SIL, etc) and in what proportions between them (eg, percentage metals vs miners). I think Gary could keep it simple by just referring to a few levels, like no position, core position, all in, etc.

    But it’s up to each person to translate what that means into percentages for their portfolio. For instance, “all in” on PMs for some people might only be a small percentage of their portfolio, whereas others it might be as much as there whole portfolio.

    Personally I find the discussion of leverage and options interesting, but I haven’t gone anywhere near that as I don’t really understand options. People that are going into complicated trades or instruments that they don’t know enough about, only have themselves to blame.

    My view is that if you don’t understand a trade – in terms of what you’re investing in and how the particular instrument works – then don’t do it. If in doubt, keep it simple.

    I just hope that some people’s ill-considered choices don’t translate into noticeably less information for the rest of us. But I understand where Gary’s coming from on this and he’s got to do what’s responsible in his view.

    Anyway, onwards and upwards!

  227. CoreBuilder

    I am reading in a book that options are for all investors. Mostly they are used to hedge. So using options maks it SAFER.
    It’s a pitty Gary won’t buy puts with the model portfolio. I looked forward to it to allocate a small portion of my account to learn.

  228. Clarkatroid

    in the last 4 weeks ive slept about 3 hours a night, my hair fell out, i got sacked from my day job, i hit the refresh button on kitco app 2656 times, my missus left me,and my golf game went to shit in a silver lined handbag.

    apart from that everythings ok, thanks for asking

  229. LowTax

    Clarkatroid – the nice thing is you don’t blame it all on Gary!

    I can’t understand all these people giving Gary a hard time over their losses. I lost a ton, but I’m still ridiculously ahead of the game since I joined Gary’s service 2-3 years ago…

    Here’s hoping your gold, err golf, game gets back on track during the A-wave!

  230. pepper2009

    The comments which are starting now are really curious. Gary I want to thank you again for sharing your work. Every statement in the public reports the last weeks was very clear. Nobody could forcast this drop but your warning was always there. Some traders here were taken over by greed and paid the price. And now you are discussing a risk portfolio? I hope this will not change the fantastic maybe sometimes conservative guideline of this blog!

  231. Veronica

    Peter, you’re right. SLW CEO did say 50, and my mental note was to sell 48.It will be interesting to see what he says on the conference call.

  232. Gary

    Jablong,
    The SMT analysis will stay the same but from now on it’s going to be up to each individual to decide how heavy they want to be invested. The model portfolio will give everyone a base to start from and if you want to use an ultra fund instead of GLD that will be your choice. Or options instead of shares.

  233. Gary

    Bruce,
    Enough that almost no one will buy the service… and if too many people do then I will raise the price.

  234. v

    Hi Gary,

    As you said Gold might test previous highs, is it a good strategy to exit some Silver on these 5-6% up days like today’s pre market move and convert to Gold.

    V

  235. Gary

    V,
    We should get a strong enough bounce that a daily cycle low is clearly discernible. If that bounce forms a bear flag I will start exiting all positions. I will note any changes in the model portfolio.

  236. Gary

    So far today’s action is looking very much like a bear flag forming.

    I would really feel a lot better if gold would test the lows.

  237. Aaron

    Give it time Gary… we shall have a bottom tomorrow or Wednesday. Gold has a hard time rallying over 1% in one day.
    All in due time.
    Bottom is def in in my book.

  238. Gary

    Be careful about becoming married to the idea that gold is going to make new highs.

    Silver has clearly cracked and the dollar looks like it is putting in the 3 year cycle low.

    If the D-wave has started the first rally will be the one that keeps everyone hoping. And that hope will prevent you from seeing your exit.

    If this forms as a bear flag everyone needs to be prepared to get out.

  239. Aaron

    Gary, by the same token;
    The dollar looks exhausted to me, and the chances of it rallying beyond the 50DMA is slim to none,
    Silver is way too volatile to label as ‘cracked’ its simply not a good gauge. You yourself have said that we should only use gold to see where things are.
    All this talk of smart money doing this and that is absolute rubbish if one were to see the open interest numbers in silver.
    This is no D wave yet, and who sells into a cycle low anyway? who ever did, will regret it, as always. Even D waves have cycles and bounces.
    This C wave is not over, and I am fully invested (with leverage).
    PS. In my opinion, the bear flag, if formed would be a trap, since gold doesnt rise like it falls.

  240. Hot Rod

    Gary,

    Would you be so kind as to indicate the top and bottom target prices of the potential bear flag range?

    This will help know “when” we breakout to the top or “when” we break lower.

    Thanks a lot.

  241. ALEX

    I reviewed my personal trading notebook this wkend, thought I’d share my past to help some feel a bit better…

    An example of what I had done was that I “married ‘stocks because I knew they were good companies…but that doesnt matter when heavy selling comes in ( we just saw that).

    1 example ( It broke EVERY sell rule I had , and I emotionally ‘hoped’ this great company could recover ( BUT it was a D-Wave).

    In 2003-2004 , I rode GG from $10 (July 2003)to $17 to selling at $11 (April 2004)

    It broke the 50sma (My Old SELL RULE) bounced ( I “HOPED” it’d recover, (but they really RETEST the 50sma) crashed to the 200sma. YAY! Support! When the 50sma crossed BELOW the 200sma…that was a HUGE sell signal for me, but the stock started climbing…I “HOPED” it’d recover… CRASHED to $11.

    I Turned several 80% gains to 10% or less,even losses that yr…and started a notebook a couple yrs later, reviewing ‘trade confirmations’ for ‘hints’ 🙂 I was crushed .

  242. Keys

    Won’t be selling my puts(used as a hedge only) today…staying neutral in my metals at this point…if this continues, I might well just stay neutral down through the bottom of this…Ah well, I am certainly not trying to squeeze the last drop out of this orange.

    Does anybody know any good blog games,while we wait…how about blog chess? Or tic tack toe? lol

    Changed my icon to reflect my new investment strategy…

  243. ALEX

    Oh yes,

    on a 10 yr chart now, that looks miniscule since GG is $50 now ( and I’m not sure if it split since then either, that would be $100). So as Gary says, in a bull market, the timing mistakes are corrected with more time. But it hurt then–so your hurt now may not really hurt later (unless you needed the money now).

  244. Hot Rod

    Clarkatroid,

    If you are telling the truth, I feel for you. Hang in there and try to keep a clear head.

    BTW – I think you are lying about the # of kitco hits. That is only 95 a day.

    When I’m not at the house, it’s like 95 per hour for me. 😉

  245. Mike

    Good call on the model portfolio change Gary. It certainly was too aggressive for the average investor. I have no issue with it personally, as I deviated from it frequently to suit my comfort levels. I will still use it as a relative benchmark to my own. (As in “ok, Gary is 100% in now” etc)

  246. Hot Rod

    To those that are in the process of doing a bear flag analysis,

    On the daily, we have a trendline bottom of about 1482 for today (which today’s bottom is above it). Our high so far today of 1510 believe it or not looks to be right at the top.

    So, if we break above 1510 and hold, to me it looks like the bear flag is lower probability. 1482 also should hold and to be honest, we don’t want to even see a single print down there.

    I haven’t tried changing the scope from daily, maybe it will be clearer on a 4 hour or similar.

  247. Alex in Montana

    Gary,

    Looking at first chart, I see

    2004 D Wave
    2005 D Wave
    2006 D Wave
    2008 D Wave

    Last Chart – C wave peaks in 2014.

    So D wave would be 2014,2015…

    Why would next ABCD cycle be so stretched? Any other interpretation possible?

    Thanks

  248. Hot Rod

    Are we wittnessing an international/global currency war in progress?

    Overnight Asia market, USD down and being sold, gold up and being bought.

    Into the NY opening and pre-market USD being bought and gold being sold.

    This isn’t which billionaire has the biggest @#$% anymore, this seems like a game of cat and mouse (chess) between central banks.

  249. ALEX

    PIMA

    I sent it. Hmm, I will resend. I know one person got back to me that they got it, so I thought all did.

    Let me try again.

  250. Gary

    Alex,
    After the kind of massive gain gold has put in over the last two years it’s going to need to consolidate for quite a while before the next leg up.

    I’m not really in the camp like Doc of a continuous climb higher.

    I think D-waves are critically important to shake out the retail crowd for as long as possible.

  251. Clarkatroid

    Thanks Guys but I’m 24% up this year, granted not 110% which I was last week, but it’s only may.

    So any sympathy is misplaced

    Many thanks Rose, but the k cast task bar won’t work on both my pc’s though,I think there’s a bug in it, I get the main program but not the task bar live price, unless I missed something?

  252. DG

    Two things about my short dollar signal from Friday:
    1. Strangely it exists on UUP but nor $USD. I have not seen that before and am not sure what it means. The Euro buy is clear. Today’s rally maintains the sell on UUP.

    2. The times when this doesn’t work is when the trend is super strong (like after the crash in 2008, when I got two an SPX sells that meant nothing). Has the dollar crashed enough to mute the effectiveness of the signal?

    Apologies for one other item Friday. I got a buy on silver Friday, but we so disgusted I didn’t post it (and figured no one would want to hear about it). In retrospect I should have to help those still long. Today’s rally already fulfills it.

  253. DG

    There’s no precise target. Since they are short term signals it means we have popped enough that it did what the signal suggested would happen. Generally I look for 1% plus. Silver being more volatile I’d expect more, but we already have a lot more.

  254. DG

    I sold 33% of my DGP at 47.06. I am leaning towards lightening up until things become clear. Clears my head and reminds me that I do not have to swing unless the pitcher makes an error. I have no trouble buying higher once things are clear and have no temptation to buy higher or lower until they are clear.

  255. RLK

    DG
    is your buy signal on EUO a short term one or is this your entry to follow the rise in US$

    RLK

  256. Blindweb

    I’m with Doc and Aaron. For all the damage done to the US, gold is only at 1500 in $’s, with talk of it tracing back to $1100-$1250. I see a surprise upswing to $1700 to $1800, putting $2000 into people’s thoughts, forcing some real action in the US; and then maybe a crash back to January prices.

    The silver people have not given up on their Comex theories. They will try to test it at least one more time. To them it has become a moral/religious type battle…i.e. they’ll fight to complete exhaustion.

    There’s real fear out there. People won’t stop buying until there’s higher prices, political hope, or there’s another event that decapitalizes them and forces them to liquidate

    I’m 40% in now dgb, looking for a spot to move to 80%

  257. james r

    Count me in with Doc and Aaron.

    The miners are just getting started!

    Took some profits on AGQ this morning.

    James

  258. james r

    My thinking is we will close the gap at 235. Then could back and retest the low of 180.

    Just be prepared if that comes to fruition.

  259. Robert

    From James Turk
    James Turk – “Silver Will Hit New Highs in a Matter of Weeks”from feed/http://kingworldnews.com/kingworldnews/KWN_DailyWeb/rss.xml
    With tremendous volatility in gold and silver, today King World News interviewed James Turk out of Spain, and subsequently Turk sent the following piece below exclusively for the KWN blog. When asked about gold Turk remarked, “I’m taking my cue here from the mining stocks. The XAU once again held above the 200 level which has been the bottom of its trading range. That suggests to me that both the mining shares and gold are sold out here and due for a big bounce.”
    Original enclosure (King World News – Turk 5:9:2011.jpg)

  260. CMT

    Poly, I was just thinking the same thing. Alex, maybe you could charge a really high fee for your high-risk trading rules, but a cheaper fee for the average-investor rules.

    😉

  261. Shalom Bernanke

    I don’t see anything to be done today so far. I won’t chase metals after last week. Maybe we can drift lower and test those lows. If so, that would be my entry for a shorter term bounce in which I’d also take profits.

    Hold times are shorter for me going forward.

  262. pimaCanyon

    Dollar still advancing. It’s traded above the downtrend line for the past couple of hours.

    DG, is there a dollar price that will invalidate your dollar short signal?

  263. Haggerty

    Robert

    That weird to hear Turk talk so confidently, even Peter Schiff thinks we might see new highs soon, saying the lions share of the correction is over.

  264. DG

    Interesting. The dollar is acting as if a bottom is in. Fighting through my sell signal is rare and happens most often during a recovery from getting smashed. What is also interesting to me is how the PM’s are up despite the dollar rally. Maybe European money flooding in? YOu can see why I sold 1/3 my DGP. Things seem quite unclear right now. Up? Down? Sideways? Test? No test? Silver? Gold? Who the hell knows. Happy to watch with mostly cash. Am having a decent year so far and would like to keep it that way.

  265. DG

    Pima: No. Going higher just strengthens the signal. If I play it (and I have not played this one) I just decide at some point that it has failed. Sorry, I do not have precise rules for these things (maybe Alex can write something up for me!)

  266. ...at ease

    Heading Gary’s warning Gold may not make any new highs, while selling to clear out accounts I noticed:

    The Leprechans are out scooping up DITM GLD options.

    All my GLD125 options were sucked up when I sold them today at higher price even though GLD was at much lower price.

  267. GottaHaveIt

    Alex,

    What’s your read on the silver miners at today’s prices?

    I’ve been watching some of my favorites such as AG, EXK and Revett which was listed today on the Amex as RVM.

    They are up strong for two days in a row … thinking I should have bought in last Friday, but I’m a short-term silver bear right now.

    If I want to get back in have I already missed the boat, or do you see more upside ahead?

    Still not sure I trust this move in silver, but a 15% gain in two days would have been nice to catch!

  268. pimaCanyon

    Thanks, DG.

    I agree that things are not clear here. Dollar UP, PM’s also UP. A lighter position looks like the way to go for now.

  269. ALEX

    Got it Felix

    I wish someone would come back on and say these rules really suck !!!

    I gotta run soon, and dont want people posting their emails and leaving them if they need privacy.

  270. funmike

    It didn’t take much for the dollar to start heading down last night. Today it is working hard to move up on the Greece news. Not sure I believe that the bottom is in.

  271. Poly

    Dollar/metals can and do move together for short periods of time, shouldn’t read too much into it.

    Gold is obviously finding its cycle low and is simply ignoring the dollar. This cycle low is an important trading strategy that should not be overlooked due to recent carnage.

  272. torero91

    For those who continue to look for gap fills on the 2X ETFS like AGQ, I caution you to step back and learn more about what you are trading. The market could absolutely care less about a gap fill on a derivative. The long term price targets of 2X & 3X ETFS is close to zero. The reverse split is their friend. 🙂

  273. ALEX

    Gottahaveit

    I still own AG and EXK and GPL and did buy more last week, But I was expecting a bounce only for now ( unless things change).

    more in a few minutes

  274. Dan

    I agree with Gary on this one.

    This really does look like a bear flag as 1. The dollar has now officially broken through it’s multi-month downtrend channel and 2. This is now the second day of the bounce and again hui/xau are lagging huge with big hammers on the charts.

  275. ...at ease

    PC,
    I assume it’s the difference in the premium value on those options (JULY), but happy with what i got today to clear out accounts. I had asked previously if we had time for July options or should I sell now with the prices I can get. I never got an answer, so sold for profits now as Gary advised don’t get married to GLD (Gold).

  276. pimaCanyon

    at ease,

    Nice going. You should see some premium on July options since it’s only May. However, options that are that deep in the money will likely have very little premium left in them. Right now I’m showing about 32 cents of premium on the July 125’s

  277. ...at ease

    MrMiyagi, I agree, I didn’t know what I would do today, but going to take today’s highs as a gift and clear my acounts for now. I want to wait and see what is going on and what direction I will trade when the clouds clear.

  278. Michael

    The line in the sand for the dollar is $76. If we go higher than 76 than we are going to be making a higher high which means that the 3 year cycle low is in. I doubt we are going to close above it though, so I am in the camp of a dead cat bounce for gold which would last roughly 2 weeks.

  279. ...at ease

    Thanks PC, just lucky, as soon as I posted they were scooped similar to the buys we experienced with AGQ a bit back. Strange…, figured it might signal something to experienced traders.

  280. T.J. Rand

    Alex-

    Sorry I can’t support your request to say that your rules suck. 😉

    To the contrary, the trade risk management practices that you have framed are absolutely essential.

    Thanks for sharing so selflessly.

  281. Poly

    Researching a small company called Standstorm Gold, using the SLW type model of financing gold miners for future gold stream royalty. Their board for a small company is very experienced and it’s being run by the former SLW CFO. They have some nice mines on board and are now cash flow positive.

    Anybody have any research or opinion on this company?

  282. rachel

    dollar index is getting close to double resist @75.32, and short term overbought. eur is approaching horizontal support @1.42 which is also the 50 sma. Euro is very oversold short term. I think a bouch to 1.46 is on the way. We will take one day at a time 🙂

  283. Aaron

    Something I learned from Gary;
    Gold can smell the coming weakness in the Dollar and is shrugging the rally in the USD off 🙂

  284. funmike

    Farm Girl posted this a while back:

    Dollar up, Stocks up, Gold up – Economy looks stronger, but inflation fears
    Dollar up, Stocks up, Gold down – Economy looks stronger, no inflation problem
    Dollar up, Stocks down, Gold up – Safe haven reaction to geopolitical problems
    Dollar up, Stocks down, Gold down – Deflation trade
    Dollar down, Stocks up, Gold up – Inflation trade and hyperinflation trade
    Dollar down, Stocks up, Gold down – Geopolitical problem resolved, reverse safe haven trade
    Dollar down, Stocks down, Gold up – Inflation raising corporate raw materials costs
    Dollar down, Stocks down, Gold down – Stagflation

  285. Gary

    I’m fairly confident we will see something that is easily discernible as a daily cycle low. That means a healthy bounce. I doubt it will top in less than 5-10 days. So there probably doesn’t need to be a decision made today.

  286. MrMiyagi

    I recall about two weeks ago that gold/silver were going up and so was the dollar.
    Then the dollar reversed and fell.
    I don’t know if it’s still the same game here but I will keep a close eye as the momentum is different now.
    A higher close today in PMs should drive the overnight market higher and hopefully give a leg up for this week.
    Unless gold takes off real hard, this is a bounce but cycles might be still right.

  287. Benjamin

    With everybody here requesting Alex’s rules makes me want to not feel left behind 🙂 I’m at Ravaru at gmail.com

    Thanks Alex! 🙂 btw, why don’t you post them here or in a wiki like previously mentioned and just share the link?

  288. Poly

    So late in the timing band, already $40 or so above recent lows, less than 1% away from a swing.

    I say we’re already a few days into the next daily cycle and many will start chasing again. Too many people still shocked from the hit they took, but will snap out once they feel they are missing this next run. That will likely be an opportune time to cash out with all recent losses more than recovered 🙂

  289. DG

    Gary:
    “I’m fairly confident we will see something that is easily discernible as a daily cycle low. That means a healthy bounce. I doubt it will top in less than 5-10 days. So there probably doesn’t need to be a decision made today.”

    Perhaps the final low is not in? might wee not drop sharply for a few days and that new lower price is where the 5-10 day bounce starts? We are lat, but a few more days down is not off the table, is it?

  290. Poly

    “That will likely be an opportune time to cash out with all recent losses more than recovered :)”

    Actually didn’t mean to imply recovering AGQ losses, sorry, don’t see that happening.

  291. P.K.

    Alex,

    It appears that most of Gary’s subscribers like your rules.

    Would you ask Gary to publish them on the premium site?

    Thanks.

  292. traderlady

    Speaking of rules, I am adding this one from Vestervest:

    “never allow the market to take back more than 1/2 of your gain”

  293. Robert

    Alex,
    Don’t mean to pile on but please send me a copy of your rule to [email protected]. BTW, new to this site and premium member now for about two months. Great community and lots to learn here. Looking forward to making money with you all.
    Kingfisher (Bob)

  294. CMT

    Holy Smokes!#@

    I just read Alex’s trading rules and my bald spot grew over! Also, I’m feeling amorous!

    Ok, I think I’m done. Slow day. You know I love you Alex.

  295. CMT

    But jlinks, if someone does that, how do you expect me to entertain myself for the rest of the morning?

  296. Ken

    Gary, why don’t you count this low as an intermediate low, I mean it certainly has the intensity and percent drop..

  297. Jim

    If we break above this 36.19 level and hold. Consolidate for a day or two. We should get a nice push up and a chance to exit any long positions if so desired..

  298. Mike

    If you look at just the GLD chart on a three month time frame, and ignore silver’s parabola collapse, it looks similar to the last daily cycle decline.

    It dipped under the SMA(20,1d) in mid-March and did the same last week. It is bouncing out of it now.

  299. Wav_ridah

    Gary,
    A while back you warned the next cycle low was going to be brutal and we would be convinced it was the start to the D-wave. Is this what you where talking about?

  300. ALEX

    OK

    I totally lost track of who I emailed ( its like 100 so far).

    Thanks guys, but there just ‘observations’…mistakes I’ve made or even ideas that I’ve read and said…”Hey, Thats where I screwed up”…like moving stops down as the price drops so I wont get stopped out…whats up with that?? 🙂 But I’ve done it long ago, and Lost.

    I would upload it to my ‘screencast’ acct and just post it, but its on Microsoft word, and I cant seem to pull it up for viewing. Not sure if it will allow it.

    I am a bit crazy busy off and on here this morning, but I’ll try to figure it out.

  301. oa92000

    Goldman Sachs believes that the pullback in major commodities prices last week may create an opportunity for commodities to stage a comeback by the second half of 2011.

    Anybody like to make comments on this?

  302. Ollie

    Hi Alex, would you mind sharing your rules with me as well?

    [email protected]

    I am just creating my trading strategy as I think it helps massively to write down what I want to achieve long term.

    One of the rules was not to buy overstretched conditions which has helped me to stay out of AGQ and stay in 100% cash…

    Thanks a lot

  303. Ken

    Mike, true, but consider the volume on the gld, and you have to figure silver in somehow,, and then I think it is necessary to also look at the HUI chart, and what it says. I would not take my idea off the table…..?

  304. MrMiyagi

    So… it pretty much all hinges on the US$…
    Maybe people will realize that Bin Laden’s “death” was bull. That’s what seemingly started the upmove.

    In other news, SLV volume is headed way above the average 56M shares. In the last few days leading to the downturn, it went from 30, 50, 80 188 200 million shares/day.

  305. Elaine

    Thanks, Alex. I would also like it. I don’t think you will be able to “view it” online unless it is a flash paper, or you recreate it in googledocs and post it.

    Googledocs is a good option sharing documents.

    Best,

    Elaine

  306. basil

    Gary,

    I think your target for silver in a D wave decline, which you see coming, is way too low. I don’t believe it’s going lower than $27 ever again during this bull. Even $30 might never be violated again. There is too much acknowledgement of the silver trade now and too many buyers ready to jump in at corrections. It would require a near catastrophic financial collapse with a flight into the dollar (which might never happen again) to send the dollar that high and silver that low. Also, I believe that the time frame for corrections and consolidations will be much shorter for the remainder of this bull; the time frames for these corrections will tighten up to even get the ascending curve in the charts and the price targets most of us are expecting. The realization has been sinking in that much higher prices are in the cards for silver. It is only the short term traders that add volatility, because they don’t know why they are buying silver and hence they move their price targets all the time. The underlying bias in the silver trade is way too bullish to let prices drop as low as you are predicting.

    By the way, your chart of prior D waves in your most recent post does not show price levels. The 2006 price drop for example was around 45%. Last week we dropped about 32%. I wouldn’t be surprised if we’ve already seen the full extent of the drop. I expected that we might go down to $31 dollar and we still might, but that is where I would see the low for the year (not withstanding a possible intraday flush out). Even if we were to slide 45% from the top, that would take us ‘only’ to $27, which I don’t expect to see for the reasons given.

  307. Gary

    Basil,
    I can guarantee that a D-wave in gold will take silver far below $30. You are banking on there being no D-wave.

  308. wmp

    FWIW:
    This level of dollar retracement happened early this year. $DXY had an 87% retracement of the 11/30/10 high of 81.44 on 1/10/11
    (81.31). We’d need to get to 75.80 ish to match that.

  309. Gary

    MrM,
    Bin Laden had nothing to do with the dollar. it was extremely oversold and sentiment had reached multi year bearsish levels. We just ran out of sellers.

  310. Gary

    What I don’t want to see is a bear flag. I have no idea how to gauge where to get out before they break.

  311. MrMiyagi

    Gary,
    I don’t think we can discount the effects of “good news fabricated at the right time” effect either but I know the oversold conditions were present.

  312. Jim

    oa92000,

    read operations of a stock operator or msnbc business news on a daily basis and you will laugh when you reread your last comment

  313. Slumdog

    Gary’s posting higher risk trade positioning is of very high value to me and to the blog readership.

    Sentiment was obvious among the newbies and main posters here.

    That was and will be priceless to me.

    That so many here are sharing openly their views is incredibly valuable (oops, repeating the key thought).

    Last Thursday, the number of posters abandoning their positions and posting so was the flip side of the prior week’s postings.

    Should Gary remove his aggressivity from subscriber and reader easy access, I think there will be a chilling effect.

    This blog is the most unusual I’ve seen. It has been so due to the frankness of you, the real market participants which has been facilitated by Gary.

    Gary, thank you for hosting this forum and your service.

  314. Gary

    Oh I see you don’t think he’s dead. Seems kind of a tough con to pull off if he all of a sudden shows up again.

  315. MrMiyagi

    Nah, he’s been dead for years.
    Conspiracy theories, one of my quirks. Admittedly, not as strong as cycle analysis though but still fun.

  316. Hot Rod

    A break above $1520 – $1525 is huge here. Not only does it likely give us a swing but it also looks to be a nice breakout from a potential bear flag on the 5 minute chart.

    It seems like someone wants a nice orderly climb from gold in todays new york action.

  317. DG

    Gary: A marginal new low is one thing, but if gold has another leg down now, the bounce off the daily cycle low could wind up short of these prices, right? I am not predicting it, but cycle theory does not really predict levels, just timing bands for the low. I am trying to separate out tactics from clear cycle predictions.

    Violating the daily cycle low seems part of cycle theory, so when we bounce we will have a clear stop implying the D wave, but levels are just guesses, right? Intelligent guesses, based on past behavior, but guesses only. Please clarify if I am missing something here.

  318. Jim

    …how much can one really understand about the market when they fail to grasp the parameters of which it operates…in the classic operations of a stock operator..The time 1900-1920’ish…One important point that you should note is they continually released BS news all the time to help “shear” the stupid money. It is no different today. News is fabricated and released all the time to help institutional investors and politicians

  319. Gary

    DG,
    You are correct cycle theory has nothing to do with price levels other than cycle pivots.

    I don’t really want to see another leg down. I just want to see a marginal new low and sign that buyers stepped in at that price level.

    I would feel much more confident about a sustained bounce at that point.

    An oversold bounce after a sharp drop isn’t that inspiring to me. It just say we temporarily ran out of sellers, but they are likely to return at higher prices.

  320. David

    Mr M,

    If Bin Laden were dead, why wouldn’t the Republicans have trotted him out prior to the 2008 election in an October Surprise?

  321. Slumdog

    Steven, did you see this?

    “ALEX said…

    Hey wise guy DG

    Rule #3…raise stops to protect gains / prevent losses? :)”

    IMO, this is the psychological hurdle you didn’t put in place. It’s clear your position was so large it would itself cause a vacuum as you exited if done all at one time. IMO, this is a trading therapy issue which should have been now “cured”. Stops must be in place. Your open gamble, unprotected, and amplified by the damage of “size” is a common trading issue.

    Years ago, I had a trading friend who traded sugar. He took his account from 100K to 4MM. I traded with him nearly daily, as friends, each on our own computers, phones accessible to us.

    That trader was so large in the sugar market at that time, he couldn’t liquidate in a down market as he would have blown a hole in the price.

    So, I watched over a period of 2 to 3 days as he “lost” a million a day, and still he would not liquidate.

    Of course, he blew out his entire account; he was sold out by the broker.

    He refused to place sell stops.

    The directional shift, also from up to down, was action paralyzing for him.

    I personally envy your wealth, and as you’re a very bright man, I’ve confidence that while more conservatively, you’ll find those balls out moments and seize them again, with a salvage trailing stop program.

    Your thoughts about trailing stops will be much appreciated.

    Thx for posting here.

  322. Shalom Bernanke

    discreet shopping,

    lol, good one!

    Gary,

    Do you really believe we couldn’t find OBL all these years? Try hiding out and see how long it takes them to find you Mr. Savage!

    And that he was directing “al qaeda” all these years while hiding in what amounts to a closet is ridiculous. People will believe anything, as long as their tv told ’em so. 🙂

    Anyway, no trades for me today so a good day for other discussion.

  323. Douglas

    So many people relying on the $USD to forecast gold is confusing to me. The $ value is based on a basket of currencies with the € being 58% . The $ mirrors the €. So when the € does poorly compared with the $, the $ “rallies.” But is the $ really rallying when both currencies are being debased and what is actually happening is that the € is doing worse than the $? The following chart shows the inverse relationship of the two currencies.
    http://stockcharts.com/freecharts/perf.html?FXE,$USD

    So when pundits say the $ is sinking/rallying, it is always in relationship to the €. Both currencies have major problems and the fundamentals for both indicate downward spirals. Thus most writing pontificating about the $’s strength or weakness is only in relative terms to the €.

    But the prevailing practice is to use the handiest measure without regard to its accuracy. Most of what is written about low inflation (say 1.5%) using the core CPI when the reality is the CPI is designed to under report inflation which is actually 6-8%. The same is true of government unemployment reports showing 9% when the reality is it’s around 16%. Most “experts” use the handy government stats while ignoring reality.

    So what to use for projections for the $? Use the $USD (inverse €) or to look at various $ currency pairs? I suppose the common use of $USD is something of a self fulfilling prophesy as it supercedes what’s really happening. But I think the better practice is to also look at the $ paired with various other currencies. Is there an alternative way to measure the $’s against a broader variety of currencies than the current € dominated basket?

    We could see the $USD rise against the € while the fundamentals for a debasing $ (and €) remain intact. Those are the same fundamentals that project rising gold prices. So we could see the $USD rise, the € fall and gold rise. That happened not so very long ago.

  324. Gary

    What I don’t believe is that the minute we got him we wouldn’t broadcast it from every rooftop, just like we did.

    So no I don’t think we got him years ago.

  325. fubsy_cooter

    I sold into this bhounce this morning. After an 80 percent gain sine the lows of late July, and with me feeling so uncertain, I decided to follow one of my mantras, wheb in doubt, get out.

    There is plenty to be made in the future, but I think I’m done for this C-wave. Now looking for my oppty to short the Euro, buy somwe treasuries, and short the SP500 and Silver.
    F

  326. catbird

    I have to say, selling last week was, um, “not ideal,” to put it euphemistically, but I feel very nice and clear-headed now as I watch the confusing action with a mountain of cash.

  327. Poly

    “I don’t really want to see another leg down. I just want to see a marginal new low and sign that buyers stepped in at that price level.”

    But the cycle analysis should tell us that probability at day 40 we should be forming a swing right here, not moving down to test lows, burning more days in the process?

    Also IMO it’s NOT an oversold bounce, the gold decline into a potential cycle low was normal, being it declined some 5% over a 5 day period. But when viewed through the horrific Silver experience, it looks as if it was much worse.

    I’m already sensing a feeling on the blog that many are cashed and worried they are missing this run.

  328. Gary

    Doug,
    There are times when a dollar rally is signaling deflation. The rally out of a three year cycle low is usually one of those times.

  329. Bob loves Hawaii

    A lot of people are saying bear flag this cycle low that, but watch the open interest on gold and silver June and silver respectively. If these do not fall, prices will grind higher.

    Three POMO’S this week

    Too many people have written them (gold and silver off) already for them to just sink.

    I have already clawed back most of my gold option losses by positioning and removing hedges from Wednesday on.

    Silver is more problematic for me (Gary did not get me out in time 🙂 )but I have six more weeks. Option spreads will work wonders.

  330. David

    I actually think that Bin Laden might have had something to do with the drop in Asian trading on Sunday night.

    The drop was instantaneous and huge. It was clearly one big holder slamming on the sell button. Normally big money is smart and sells gradually into large volume. Here somebody was dumping literally tons of silver into very light volume and moving the price against himself.

    What this suggests is that when the OBL news first leaked out, some hedge fund panicked and sold indiscriminately, trying to beat the news break a few hours later.

  331. Rob L.

    Since gold’s daily cycle has been extended to such an extreme already don’t the odds say that the pivot is in?

  332. Gary

    Poly,
    That bounce can be an oversold snapback rally before the next daily cycle down begins. Which is exactly what it will be if a D-wave has begun.

    All I’m saying is to stay sharp here. There is risk that the D-=wave as begun and if one is married to the idea that gold has to make new highs then they are going to get caught in the D-wave.

  333. basil

    Gary,

    I don’t find that any analysis in your newsletters actually supports your downside target for the D wave. It would require a price decline similar to 2008 to get there; but the crash of 2008 you suggested was a once in a life time event. D wave or not, there is no way silver will get down to 20 or 21 before this bull is entirely over. Waiting for that target will equal missing a buying opportunity that will come long before that.

  334. DG

    Gary: Thanks. My point then is that this distinction should be made in general. That is, saying, “If the previous daily cycle low is broken we are in the D wave” is a different sort of claim than “There is no way we are not going to hit 50 in silver during NYSE hours.” One is part of the theory itself; the other is conjecture. I think it would be a service to be emphatic on cycle claims, and less emphatic on tactics. You are a good trader but, frankly, so am I and a few others here. I cannot hold a candle to you in cycle theory, however. I will surely keep myself clear on distinction I just drew going forward, and I believe other EXPERIENCED TRADERS might benefit from noting this difference as well. When it comes to tactics you might even say things like “it seems very likely to me” rather than “There is no way…”

  335. Shalom Bernanke

    I agree about the miners. Not interested yet, and even if they pick up steam there are lots of knife-catchers that would like to sell and get out whole.

  336. basil

    PS: Actually I don’t believe that silver will ever go back down there, even once the bull is over, not in our life time.

  337. chrisb

    Bob loves Hawaii…
    Would love to hear about your option spread strategy, to lessen the risk on silver options.

  338. Poly

    Gary I agree there is a good chance its a snapback rally, but in a new cycle, not the existing. Your analysis on the coming (likely current) is good advice.
    I’m trying to say a lot of people are sitting around in shock or waiting for a pullback and may end up chasing this move higher because I believe we’re already in the new cycle. If it’s a new cycle, then we are well on the way to to testing the Gold high’s as you predict. I’m riding that expectation now and get defensive around the high’s.

  339. Gary

    DG,
    The silver target had noting to do with cycles. I just thought traders would keep buying until they hit $50 and then probably a little higher to let big money out of their positions.

  340. DizzyDean

    DG, are these day-trader picks that you are posting here? Can you at least give us a hint if they are based on 1 minute charts, 5 min., 1 hour, etc.?

    Short term to a day trader is a 1 minute time frame, intermediate to a day trader is 5 min, and long-term is 1 hour. When you say they are short-term that normally means a number of days up to a week, intermediate would be several weeks, long-term several months.

    Is there a dollar price that will VALIDATE your dollar short signal?

    “What is the market telling us”? is what they always tell me. The market doesn’t talk, so it never tells me anything.

    Got to be pushing against the top of the trend line by now.

  341. Gary

    Basil,
    Actually as I pointed out in this post every D-wave of this entire bull market has retraced at least 62% of the preceding C-wave. From the current high that would take gold back into the 1100’s. Do you really think silver will hold above $27 if gold drops to $1200?

    Even if this time is really mild and gold only retraces 50% that is still $1250 gold. Again it seems unlikely silver will be able to hold above $27 with gold down $250.

  342. Jim

    if we can stay up here we should and get some volume flowing in we should have no problem at least testing the 37.66 area lots of clear space …

  343. Slumdog

    Gary,
    All the D wave advice requests are coming from action junkies.

    Months ago you were very clear to the readers that your view of the D wave was to walk away and wait for the A wave as by then, your readers would have made meaningful money, and would again starting at the A wave.

    Now, the adrenalin is flowing like Kool Aid, and they want shorts and and and for the D wave.

    That’s really good to know insight.

    We’re witnessing mass delusion response to the high they were experiencing for the period prior to the reversal. It’s fascinating how fear and greed play out, as well as the feelings of abandonment, helplessness and hopelessness.

    Boys and Girls, the profitable action is to sell psychotropic drugs to the junkies here. Time will heal all wounds. Time is not for sale and can’t be purchased.

    The A wave will start the fortune generators again.

    The way to play the D wave is small handed and stand pat until Gary announces the A wave. Or, recognize that it’s a bet not to be taken.

    Everyone’s greedy. Drugs for sale.

  344. basil

    David,

    $27 is the low end of my expectation for a price decline, as I mentioned earlier, so we both might be right on this one.
    In my previous post I meant that we’ll never see $20 or $21 in our life time again. $27 is a possibility, but I still believe there will be buyers coming in even before that.
    I believe that what we are currently experiencing will, in hindsight, look more like a 1987 crash for stocks with a fairly quick bottom and recovery.

  345. PST

    For those of you trying to trade the currency pairs, welcome to the world of competitive currency devaluations.

    I’m not a currency expert so take this post for what it’s worth. However, it looks like the powers-that-be (central banks) are trying to defend certain ranges for their currencies, at least in the short term until the fundamentals ultimately win out. For USD/JPY, it appears as though ~78-80 is that level and the EUR/USD level is ~1.40-1.45. Japan’s modus operandi is direct intervention while the ECB and European governments are using psychology/sentiment (no mention of interest rate increase by Trichet last Monday, Germany again talking about the EU breaking up this morning, etc). Clearly at 79 and 1.5 respectively, we were bound to see some efforts to weaken their currencies and a corresponding dollar bounce. For this reason, I would not be too quick to look for cause and effect for every new piece of domestic economic data that is released (ex. reaction to NFP numbers).

    Ultimately the fundamentals will exert themselves and we will break out of these ranges, but until then, I personally wouldn’t try to trade against the trends at the upper and lower bounds. In the future, however, we can probably assume that the ECB will need to raise rates to combat Eurozone inflation, the Fed will likely need to undertake some form of additional monetary stimulus, and the yen likely remains the most undervalued of the three.

  346. Ben

    David, I posted that obvious correlation last Monday morning, to be met with blank stares. In reality, it was just the first whisper of “Fire!” in a crowded theater. Lots of things could have been the trigger, or spontaneous combustion. The obvious (and ridiculous) fear was that a dollar rally would ensue. It actually did, but as nothing has really changed in anything that I can tell, it is either transitory because it was too early or it will stick because it was time anyway.

  347. DizzyDean

    Psychotropic drugs have different uses and are broken into four major groups: hallucinogens, antipsychotics, depressants and stimulants.

  348. pimaCanyon

    interesting action on the SoS list today. Both GLD and SLV are on the list, numbers are small so far, but what’s interesting is that in the block trades column then numbers are positive. IMO that indicates that the large traders placing block trades are buying, not selling.

  349. grimweasel

    Gary,
    Best defence against the bear flag is trailing stops under the last lows on the hourly or H4 charts I find.

    I also set targets to take 1/4 profits as the 50% and 61% fib retraces from high to low.

    If the 61% gets busted then usually the tl break test has failed and the next leg down begins.

    Al Brooks in his book said the best and usually most rewarding trade is the bounce back after a sell off post significant TL break. Just needs closer attention. I just hope the big money doesn’t sell in the final market hours!

    Grim

  350. pimaCanyon

    Dan,

    Yeah, the low volume on GLD is a bit worrisome. SLV however has larger than normal volume. It is lower than the volumes of the past week, but those volumes were extreme! By the end of the dayGLD will probably end up with a volume that is above average, so maybe it’s okay.

  351. jhnewman

    PST: THANKS for the currency post. I found it valuable. I’m moving toward learning more about the movements of currencies as a way to understand the movement of gold.

  352. Jim

    just noticing that myself dan, I think that bods well for accumulation at these levels and hopefully a little push back above 40

  353. MrMiyagi

    Also,
    DIA, SPY, QQQ all lower than average volume.
    Shell shocked buyers a little reluctant to enter back in tomorrow might be a better day encouraged by today’s slight rises.

  354. Ben

    Basil, I agree that corrections will tend to be faster and less predictable going forward. But I don’t agree they’ll necessarily be less severe. Always, since the first rock was sold 1 million years ago, the easy way to make sense of the market becomes diluted as major players adopt the new strategy and other big players try to exploit those using the strategy that worked before. Why I think cycle theory works is that it relies on humans being human. But what I’ve observed since I’ve followed Gary for about eight months is that there are many head fakes that cause something to happen that’s “never happened before” like a meek end of a C wave. Knowing that C waves “always” end with a very strong wave means there will be more strong hands to stay invested while the smart money rushes the doors. There was that major head fake at the end of December when we thought the intermediate decline was finished, but we were fooled. I started to feel thrashed, which is what big money loves to inflict on others.

    It’s always a moving target; live and learn. But the cycles will continue and still, I think, give us the best long term results. The obvious reason to me why the D wave will likely be severe is the withdrawal of the punch bowl by the fed and the strong dollar rally — I wouldn’t underestimate it’s effect. The wild card is an early announcement of major QEIII which I think is low probability.

    The bottom line of all this is pretty obvious to me, too: don’t short this bull market!

  355. basil

    Gary,

    from your target of 1650 in gold to say 1150 in gold it would be a 30%+ decline. That was the type of decline we had in 2008, and that was an Armageddon trade on everything including gold. Gold is in fairly strong hands now, I believe, because everyone who was out for a quick buck traded in silver for the past 10 months, so I don’t see that type of decline. Even if we’d already be in a D wave, we have entered a stage of the bull where dips and steeper corrections will be bought with much more vehemence and conviction. 2006 saw a 20% decline, which still worse than what I’d expect in 2011. The demise of the dollar is just more obvious and irrevocable than it was in 2006.

  356. Bob loves Hawaii

    Chris B, if the 10 day is above the 30 day (Daily), I am selling weekly calls above my strike price of my June Calls. If it falls below, I am selling 1 strike below.

    I have 147 and 150 GLD June. Right now I have my second 151 sold weekly trade on. I will hold until expiry, doubtful we get there by Friday.

    If we get a swing low, I will remove that strategy and monitor to exit the calls completely.

    I hope that helps.

  357. DG

    Gary: you wrote “The silver target had noting to do with cycles. I just thought traders would keep buying until they hit $50 and then probably a little higher to let big money out of their positions.”

    Yes, I get that, but my point is the level of confidence in such a guess should be lower than “If we beak the daily cycle low we are in the D-wave.” I agreed with your thought, but it was just a thought. I suspect your confidence in your guesses (which makes you a good coach for hand-holding the newer folks) is dangerous when the guess turns out to be wrong. “My best guess is…” would distinguish levels of confidence. You seem to have two possible outlooks: “No way in hell” and “I don’t know.” You are great in admitting when you don’t know something, but some nuance might be helpful regarding tactics.

    For others: I am not ragging on Gary. This is an important distinction I believe. I am not blaming him for my or anyone else’s reduce profits/losses. There is simply no way to learn from the past without trying to see if something was done wrong. If not, and it was a black swan, leave everything just as it was. But you can’t even know that without examining the data. I actually wrote to Gary asking whether I could post something like this and he said “LOL Go right ahead—I have a thick skin.” I have a commitment to getting better at everything I do, including trading. My second commitment is to try to help others. If I have irritated anyone with this post, I am sorry for that, but I’ll have to ask that you just get over it and move on to the next post.

  358. basil

    Ben,

    you are right that there will always be wild cards, but I think a delay in the announcement of QE3 is already expected and therefore priced in. At the same time everyone is expecting the Fed to continue QE at some point, not too far out. So that is going to be priced in as well. As for the dollar, how strong that rally will be, and how vertical or horizontal it will be, remains to be seen. I don’t expect a 2008 type run up and therefore I don’t expect a 2008 type decline in gold and silver.
    Overall, I just don’t foresee the same level of bad news that we had when gold and silver were forced into such a massive decline; and that is what it would take to push down PM prices to levels in the very low 20s.

  359. DG

    Dizzy: These are not day-trade signals because they can take a few days to start to work. I use them either for a trade or for an entry point for something i have an opinion on. For example i got a buy on SIL at the exact day of the low in late January. There you just buy it and hold for months. It basically says EWe are so stretched now that the next move is in the opposite direction.” The rest is up to you.

  360. David

    I am selling today, and will be for the next week. I’m going to take my time, so I don’t get caught out if the rally proves stronger than I think and catches me on the sidelines.

    Whether the dollar has bottomed or not, we are in the final inning. The easy money has been made; what I see on this board is a lot of guesswork. The probabilities are not favorable right now. At some point I will buy UUP in the hopes of picking up a few points of return in the D-wave.

    It’s going to be a lot easier to make money in July/August.

  361. DG

    David: You might consider buying EUO rather than UUP. Very similar idea, but the euro seems doomed to me.

  362. pimaCanyon

    MrMiyagi,

    (Don’t want to start an argument among other commenters here, so I hope you all will not jump on me or MrM. As the saying goes, move along, nothing to see here… 🙂

    Can you share the info that led you to your conclusion that bin laden has been dead for years? Links or books or whatever.

    Thanks!

    If you’d rather do it via email, you can reach me at [email protected]

  363. MrMiyagi

    pC,
    There’s a link to infowars on my 9:29am post.
    Also, just google Bhutto, kidney failure in conjunction with the name.
    For starters…

  364. aviat72

    at ease:
    I noticed the same about AGQ options. I think it is more likely that there are people who sold these options, and who believe that the swing low is in so they want to go flat. I noticed that wild pricing near the market open, indicating that it was decisions taken over the weekend. Within a few minutes the price of the options went down significantly.

    So far the PM price action is consistent the bearflag scenario. Higher prices are attracting sellers and while lower prices are being defended, the longer we stay without a pop, the larger the chance that the slide continues.

  365. Blake

    How are others here on the board planning to play the D Wave? I am disappointed that we will not be privy to Gary’s put options strategy anymore so I guess a discussion of how to play the D Wave would be informative to me and other fairly experienced traders.

    I am thinking long the UUP, maybe some DITM UUP September calls for a little more juice. Thoughts?

  366. David

    Basil,

    Sometimes it’s better to think in terms of time and not price.

    I have no idea where silver will bottom, but I do know that August will be a better time to own it than right now, based in seasonals and a coming dollar bounce.

  367. David

    DG,

    I think a lot about EUO, but it’s leveraged and inverse, both of which carry risks.

    Now is a time to preserve capital for August.

  368. aviat72

    OT: That Bin Laden dead and Bin Laden with kidney failure etc were all disinformation. That Bhutto video is a slip of tongue as the person who took the interview himself clarified.

    He was kept at Abottabad for the past 5-6 years; that area has excellent doctors since it serves the Army.

    On a related note, I do not sleep very well when I realize that Pakistanis are going crazy when it comes to producing fissile material. They have more nukes than UK!! Assuming that it was just rogue elements of the ISI/PA which were involved in sheltering OBL (and not the entire establishment), what is the guarantee that such rogue elements will not lose some plutonium?? The Japan saga shows that you do not need a working bomb. All you need is to spread the radioactive material in a major urban area and you are done. Imagine if some place like London or Manhattan or Tokyo becomes unlivable because some Jehadi delivered Plutonium. Yet the world is not doing anything about it. That OBL arrest should have been a wake up call but no one seems to care.

  369. James

    Mr Miyagi – I am constantly amused and troubled at how willing some people are to buy the “world is a giant conspiracy” garbage perpetrated by infowars and similar sites. I sure hope that’s not where you look to get your info on what’s going on in the world. jmho.

    DG – thanks for persisting in trying to make the points you have been offering to Gary on improving what is already a terrific product. The distinctions are subtle but important. I am constantly impressed by the trading prowess and insights of many on this blog.

  370. Haggerty

    Gary
    I understand the whole model portfolio change but I am disappointed. Anyway I was hoping to know if you are still holding your 38’s on SLW. If so could you just post when you get out of that one. TIA

  371. MrMiyagi

    James,
    I like to keep an open mind instad of blindly believing everything “leaders” say. It would be assinine to think that we are told the truth 100% of the time (or even 50%).
    All in good fun.

  372. abc

    Poly,

    In your posts you said, that you think swing low has already occurred (as I understood it). Can you share with us: are you fully invested? Do you prefer gold to silver now?

  373. oa92000

    ” Bob loves Hawaii said…
    Nice bull flag on SPY, this should support gold and silver today.”

    agree with you, how do you play this?

    bgu, tna ready to go..

  374. Poly

    @abc,

    I believe the cycle low has occurred. Swings can not be “guessed” we still have a little work to get one.

    I’m fully invested in seeing gold rally for 10-15 days of this new cycle. Fully invested meaning as much as I’m willing to commit to the trade, not in terms of overall allocation.
    At this point I won’t no part of further draw-downs. I hold no Silver.

  375. Eric S

    Gary,

    Prior to last week’s correction, you have warned us that we’re overdue for a daily cycle correction, where we shall see gold tagging lower bb, break trend line and rsi at oversold levels. At the same time, you wanted to see a USD rally because sentiment on USD was already at all-time low and it would be difficult for USD to test 08 low at such bearish level of sentiment. We got all those in the past week and everything played out as you expected. However, you seem to have grown a lot less confident about the chance of final parabolic C wave move after things played out the way you wish. May I ask what you saw in the past week that caused the change in your game plan (other than bigger than expected drop in silver) and what you need to see now to conclude that the D wave has started? Thanks

  376. gold silver troll

    for those who do options, question:

    even though GLD is up more than 1% today, the June GLD 155s are in the red.

    is that a tell that gold is headed south?

  377. abc

    Gary,

    Few weeks ago you said, that correction before parabolic wave would be severe and everyone would think that D-wave stared. Also, you noticed that dollar tops on job report or one day after.

    I understand that you took a huge hit (like most of us), and many people didn’t help you (accusations etc.). I think you mood has great impact on your report and decisions (avoiding silver etc.).

    But honestly: what’s changed? Silver took hit of 30%, but anything more? Fundamentals didn’t change…

  378. Douglas

    SB
    I noticed you posting about ignoring the $ several days ago. Got me thinking. Is the price of gold going up or down based on the relative strength of the $ to the €?
    PST
    Nice summary. Thanks. The current rationales for the €’s weakness are mind numbing. Greece will return to the drachma? Instant Weimer hyperventilation. Greece doesn’t have the money and will have to restructure or default. Ditto Ireland at bank bailout costs of over $120,000 per household. This is common knowledge and, as you say, is not driving the €.

  379. Gary

    Eric,
    Silver dropped much further than I thought it should and the dollar has rallied much stronger than it should if this was just a daily cycle that was destined to roll over quickly.

  380. GottaHaveIt

    @ Poly, Wes, fubsy_cooter, MrMiyagi, Hot_Rod, jhnewman, Pima Canyon …

    Please click my profile link and email me, I have a personal question I want to ask you.

  381. Poly

    “is that a tell that gold is headed south?”

    It’s a tell that these options are ticking to expire worthless….

  382. Kate

    Grim & DG, Considering your posts today, would you sell SIL & SLW today and wait for the A wave? (That’s all I have left, and no interest in options or D wave downside).

    Alex, or anyone who got Alex’s trader rules, could you please forward to: [email protected]

  383. 86d4life

    Hot Rod,
    You really said it. After a couple of years stumbling around in the dark, this is like coming into the light!

  384. ...at ease

    PST, no sorry, nothing by colony. Just like ducks as they paddle like hell underneath, but look like they are gliding on ice on top. So just been partial to them by observing them. 😉

  385. DG

    Kate. Yes. Preserve capital. SIL and SLW may go up, They may go down. IMO opinion it’s better to have money for the best bet, which is the A wave. If you knew you could only place one more bet this year would it be now with those or later, after a multi-month smash? At the very least we are very late in the game.

  386. DG

    Dizzy. EWe stands for “I make typos.” It should just read “We. are so stretched…” Sorry.

    By the way, here’s one I am not sure I posted: I got a sell on UNG at 11.75 on 4/28. It went against me for a few days and I had no predetermined stop. A nice drop since then. In fact, it is close to a buy at which point I will cover and MAY go long (though it erodes terribly so is a better short than long).

  387. Baba Ghanooosh

    Hey Gary,

    Thanks for all you do. I’ve made a lot of money in silver and even done well with stocks based on your calls.

    I’ve found that even with stocks trading parabolic moves is extremely difficult and the optimal window to get out is very slim. Too early and you miss a chunk of the move up and too late and you give up plenty of gains.

    The only clue I had with silver in retrospect was the number of friends who were asking me if they should buy. Oftentimes, this has marked a top. Of course it is obvious IN RETROSPECT.

  388. DG

    Hey Alex: Keep the rules, just send me some of the money I gave back in AGQ! 😉

    (Actually I’d love to see them too but I am waiting for the hubbub to die down before emailing you about it.)

  389. James

    Mr Miyagi, thanks for your temperate response to my intemperate comment. I spent my first (of two) careers in the government on the foreign policy side, I know how it works, and I’m comfortable that most of the time it is operated by well-intentioned, intelligent people who are trying to do the right thing under difficult and complicated circumstances.

    I’m a member of another investing blog where one of the participants seems to spend his whole life on infowars, and takes everything they publish as the gospel truth, to the extent of disbelieving any and every source that contradicts them. It’s really very scary.

    Trust me – they would have nailed OBL sooner if they could have, and it took a monumental effort to find him, even if he ultimately was hiding in “plain sight.”

    Sorry to everyone else for the OT stuff.

  390. Michael

    DG: I do not get it. Are you giving up here? The way I see it we are going to bounce hard here for the next couple of weeks.

  391. MrMiyagi

    James,
    Not a problem.
    OT is part of life, we can’t spend most of the week conversing with one another and not talk about other things.
    Concerning OBL, the US had nothing to gain by dumping the body. If I found the body of a Sasquatch (bigfoot), you can bet I would not cart it off to the Pacific to appease the gods. I’d be on the phone to the highest bidder.

  392. catbird

    DG,

    Come here buddy, let me give you a hug. I just made enough on your Euro long to buy a month’s worth of groceries.

    Don’t worry, I only risked 1/2 of 1% of my portfolio.

  393. James

    Mr.M, imho the US had EVERYTHING to gain by burying his body at sea. Among other things, had he been buried on land somewhere, it would have been a martyr’s site and a rallying point for terrorists. There’s much more to be said on this subject that I think you would find compelling, but this isn’t the place for it I guess.

    More on topic, now I have to decide whether to sell my remaining position in AGQ into this bounce, or let this play out for a few more days. Decisions, decisions…

  394. james r

    James,

    I also have AGQ, bought back in Friday. I believe that gap at 235 will get filled. That would be the time to unload. I also believe we will retest the 180’s. A double bottom will form.

    That will be my buy point for the final leg of this C-wave.

    James

  395. ALEX

    DG

    I didnt know you didnt get them!

    I sent them to you first , you and a few others whose emails I already had and already wrote to.

    You gave me 2 emails one day, I sent it to the non-business one.

    F.W.I.W.

    I just sold 1/2 my EXK and 1/2 my AG. I just bought AG Thursday for a trade.

  396. Gary

    I’m confident we will get at least enough of a bounce to form an easily recognizable daily cycle low before heading back down.

    Plus like I said in the weekend report the dollar should test the lows and maybe break them before a sustained rally.

    FWIW the Bollinger band signal came at roughly $42 on silver. This is a very high expectancy trade so the odds are about 94% that silver will close back above that level sometime in the next 13 days.

  397. ALEX

    GARY

    Based on your wkend report, any chance that Friday and todays leg up in metals can still go down to the recent low, then rally hard? ( with the dollar fumbling around for a low).

  398. jammer

    Gary,
    What if you wrong again and silver breaks out to the upside. The technicals support that this is a real possibility. I was/am long silver with slv calls while covering with agq puts. I was closing some call positions on the way up and closed all my agq puts on the collapse. This is a much better strategy than all-in long and with just having slv calls.

  399. Gary

    Alex,
    Hard to say on that one. The rally looks to be strong enough to stick but it also has a chance of forming a bear flag.

    We should know one way or the other by the end of the week I would think.

    Any rally out of a daily cycle low should rally at least that long (I hope)

  400. James

    james r, I agree that would be a good point to sell my remaining AGQ (at the gap fill around 235), at least based on current trends. Fortunately I sold most of mine by front-running Gary when he said he would sell silver at $50, but I did buy some back on the decline.

    Maybe I should change my handle so we won’t be confused?

  401. DG

    Michael: I sold 1/3 of me DGP. I’m not sure what “give ing up” means. I have certainly not given up on making money! I no longer have a strong opinion on whether gold will make a new high or not. I am just looking at upside vs. downside, degree of confidence, etc. If I told you that a fantastic money making opportunity was coming in 3 months, you might consider making sure you had the maximum amount of money available to take that trade. If I were really “giving up” I’d sell a lot more than 1/3, and if I know gold was going down I’d short it. I missed a great move in cocoa two years ago and it didn’t bother me a bit. If I miss one in gold, that won;t bother me either. I think more people lose money due to the desire for “action” than any other reason. And i still have 2/3…

  402. Gary

    Jammer,
    Then I will miss the rally except in my calls and SIL and SLW positions which I’m still holding.

    If a swing is formed I may take a position in DGP but I will be ready to exit on a moments notice if it looks like it’s forming a bear flag.

  403. DG

    Catbird: No hugs here or you’ll make Alex jealous. Glad the FXE trade gave you nice pop.
    (I probably ought to lay off teasing him, but it’s too much fun…)

    Alexi: Sorry to hear about your account. Hang in there, learn, and use the lesson to burn humility into your brain. I always get in trouble whenever I think I am smart! Yeah, that turned out to be a pretty good call on oil last Friday!

  404. ALEX

    Thanks Gary

    I was asking because I have am uneasy feeling “holding” with the volume up off this bottom Friday and today getting weaker on most miners.
    SLV, AGQ, GLD , GDX If we run out of buyers on a bounce , it doesn’t bode well. BUT, a sell off to retest the bottom soon on lighter and reset may work.

    I think we ran out of sufficient buyers vs sellers last wk ..Wondered if it still fit your plan “cycle count” or more likely bear flag. thx

    EX: SLV was down on 200& 300 million 4 days in a row..

    Today up on 100 million? Ouch.

  405. aviat72

    FWIW as an example of a hedge:
    I sold a GLD 149 call and bought a GLD 146 put for 6c each against my core position (expiring this Friday). That means I agree to sell my position around 1530 with the right to sell below 1500. I see resistance in my charts at the 1530 level; hence the protection. 1533 is the 62% retracement of the entire drop and I expect a significant wall to be put up in that area (volume profile also suggests an area where sellers will be present).

  406. Visitor

    Seller’s are premature and will regret and buy back in. Fundamentals trump all. Most of you sound like a bunch of addicts looking for your next quick, cheap high with Gary acting as a dealer. You’re like the down and out in most major cities that huddle together to make yourselves feel better, in this case trying hard to justify your moves. This blog is your street corner.

  407. Rick 4779

    Visitor – and you are the snobby old lady that drives by the street corner and looks down on poor people, making herself feel superior.

  408. Gary

    visitor,
    If this turns out to be the beginning of the D-wave that attitude is going to cost you dearly. Much more dearly than the silver investors that got caught last week.

    I would keep an open mind if I were you. Gold is very very deep into it’s C-wave and even if it’s not finished its very close.

  409. Poly

    Do wish Silver would take a break though, rather worrying to be moving like this. Suggests speculative action or more short squeezing, as apposed to any orderly accumulation.

    Hey if that’s what get’s Gold up to fresh new high’s before rolling over, so be it.

  410. ALEX

    “Fundamentals trump all”

    If you’re invested for the next 3-5 yrs , yup. If one just got in 2 weeks ago , it didnt feel like the stellar fundamentals trumped all.

    And in the D-Wave…NO ONE will come on posting , YAY , fundamentals trump all 🙂

  411. DG

    Rick4779: Very funny! I love guys like Visitor who post so they can see themselves in print. Useless and self-serving. Oh well. People get their jollies in lots of different ways I suppose. It is really great we have so few of them on this blog.

  412. CMT

    Maybe still a bit shell shocked, but just sold my DGP and many of my SLV calls. I’ll be traveling for the next week and don’t want to have to worry.

    Still have my GPL, EXK, SLW, GDXJ, and various options, including some calls: July GLD 140s and some July SLV 38s (I should have sold the latter last week, or really the week before, but got greedy) among others. No puts. North of 60% cash.

    Wanting to buy, just can’t see anything that makes me think I have to have it.

  413. Blake

    Just too much uncertainty, right now such that we don’t have any edge in trading PMs. Gold could form a swing low tomorrow only to retest 1462 (which would be healthier) or gold could continue the bear flag and roll over, signaling the D-Wave.

    Squeezing another 200 points out of gold may be worth it to some but better to look down than up. Preserving capital for a discernible A wave seems more prudent than throwing money at speculative calls in gold/silver.

  414. pimaCanyon

    Gary,

    One of the possibilities that you’re expecting to happen is that we move back down to test the low or make slightly lower low.

    If this unfolds and we DO make a slightly lower low, then you would NOT consider the low we just made to be a daily cycle low, is that correct? But that would make this daily cycle EXTREMELY stretched, no? Because of that, wouldn’t this scenario be a LOW PROBABILITY scenario (just because 40+ day cycles almost never happen).

    But if we move down and just retest the low, but don’t go below the low that’s already in place, then would you consider the low that is in place a daily cycle low, right?

  415. Gary

    PC,
    If gold dips back down and makes a slightly lower low especially before forming a swing then no I would not consider Thursday the cycle low.

    It needs to happen quickly though. This is already a stretched cycle.

  416. Poly

    Some much uncertainty on this blog is not a bad thing for gold. The previous D-Wave have come crashing on VERY high bullish % levels. This would be a first.

  417. Kate

    Hi All, If Alex is ok with it, I’d be happy to forward his “Risk Rules” to anyone who still would like a copy – just email me: [email protected]. Hope to save you some time Alex – much appreciation for your continuing the generous SMT spirit to those of us “still learning”. Many thanks, Kate

  418. ALEX

    Jack

    You know theres a steep fee for negligence , it’ll now cost you 100% more!

    I sold half my EXK , and 1/2 AG today purchased last week. Good enough profit for a quick trade ( $17.70ish area )

    Still thinking a bounce, and sell off ..or back down to retest the lows, maybe bottom for 1 more run??. I may get back in then if it looks good.

    Still see this (for now)

    http://www.screencast.com/t/c6lLqCiy8AX

    Gone for the night- my mother is coming over for dinner -GOODTIMES!

    San Diego…got ya

  419. Wes

    Poly,

    Maybe this is just the normal silver outperforming gold that has been in place for this entire IT cycle.

    Still holding the May 230 AGQ options, which may grow up and be somebody.

    I did sell the SLV May 32’s into this strength. They are what cost me so dearly last week and I had a grudge against them.

  420. Poly

    @WES, I think they will be somebody!

    @CMT, Even if it started last week, that wasn’t anywhere near the nosebleed levels you expect for a collapse to a D-Wave.
    Add in both a lengthy C-wave, Dollar 3yr cycle and two rounds of QE, this would surely be a fairly benign top and crash.

  421. Bob loves Hawaii

    Poly, I agree and am positioned for further upside. Also, would not the BLEES rating be lower, as well if this is a D wave starting?

    Watch the open interest, if it remains firm, we move higher. POMO tomorrow.

  422. Poly

    @Veronica,

    I agree, Shakeouts often leave folks dizzy and tentative to jump back on.

    Now if we can get near the recent high’s, that would be a place to be on guard and watch for a sharp reversal.

  423. Moondoggie

    Hi Kate,

    That is nice of you to help ALEX with the requests for his Trading Rules .

    I really appreciate the community spirit on this blog and also ALEX’s generousity …. (and his sense of humor !)

  424. DG

    grim: I don’t think anyone here thinks the bull in gold has finished. The only question is whether we have started a few months of mean reversion. The debt/GDP level has no bearing on that specific question, I don’t believe.

  425. Felix

    Bob – POMO – Fed Cash Party tomorrow? Are you anticipating dollar drop/PM surge on account?

    Isn’t Congress raising the debt ceiling this week sometime?

  426. grimweasel

    DG – I’m doing an MBA currently and we spoke with our professor about this recently. He thinks the key level at 95% is when investors question the ability of the principal to pay back the lender. At this level major institutions get very twitchy. If these lot suddenly decide to cash in their bonds because they think it will be much harder for the US to repay them then think what that will do for the USD – and so gold, you would think, would rocket as a safe store of value?
    Happy to take other views of course!

  427. james r

    I believe this so-called ‘bounce’ is forming the left leg of silver and gold’s double bottom.

    We are going to need two strong legs to get above $1700 and silver above $60.00

    James

  428. TheBookGuy

    Gary,

    You have mentioned before that the cycles are stretching. Could it be that the dollar cycle is also getting longer and what we just experienced was exactly what you were expecting and that we will still see new major dollar lows and a parabolic C-wave blow off top?

    Being that the PM market is so volatile wouldn’t they become more volatile as the Bull moves forward? If that is the case, could this be right in line with what you expected, not on price or time but in the way we get to the end of the C-wave?

  429. Poly

    Sandstorm was me.

    I REALLY like what I read, they seem like a little long term gem play, but there is not much out there to read on

  430. PST

    Grim,
    Your professor was probably referring to what’s known as the “Keynesian Endpoint”. This is a point (often considered 90-95% debt/gdp) when a country’s debt service exceeds its revenues.

  431. DG

    Grim, yes that makes sense, but it doesn’t mean gold will never have a down day again (or a down month). Such notions do not help with trading/timing, but they do establish whether w e are in a bull market or not.

  432. Mr. T

    Tried [email protected] twice with no luck (hand entered without spaces etc)

    Delivery to the following recipient failed permanently:

    [email protected]

    Technical details of permanent failure:
    The email account that you tried to reach does not exist. Please try double-checking the recipient’s email address for typos or unnecessary space

  433. grimweasel

    PST / DG – agree and thanks for the debate. I guess I tend to trade out here on the weekly and monthly charts so I have a more ‘strategic’ view rather than the tactical short term view.

  434. jhnewman

    After an hour-and-a-half of this morning’s price action, Jim Sinclair reiterated his “gold call” from the other day. He sounds pretty confident:

    **********

    Dear Friends,

    Today’s action totally eliminates any and all remaining concerns for the price of gold. Today’s action lights up the $1764 Angel in gold.

    Technical damage always requires technical repair. That type of price action is a perfect set up for a major launch of the gold price in June.

    Relax and enjoy your protection and insurance positions.

    Regards,
    Jim

    **********

  435. grimweasel

    “You must think long term now before entering this silver market, because you may well get stuck with a silver position for a longer term than you may expect. But if the manipulators do press the price down below the $22.50 level, you should buy with every dollar you have available, because even though things will look bleak by then, with every media outlet heralding the “bursting of the silver bubble”, a few months later, the price will be back to way above $50 again. Prefacing the big fall will probably be a huge technical rally in the U.S. dollar, and a big fall in the stock market. These events may not happen until the end of QE-2 in late June”

    ZeroHedge must have been reading Gary’s blog!!

  436. grimweasel

    To be fair that ZH article is a must read – lengthy and it could play to our confirmation bias.

    I will try and search for some negative silver news for balance. One should always read the news that counters your view, not agrees with it!

  437. PST

    grim,
    If you’re interested, Kyle Bass (Hayman Capital) did a series of fantastic interviews on CNBC of all places on this topic. In my opinion, Kyle Bass is one of the sharpest minds in the hedge fund world and the interviews are well worth a listen.
    Before I get blasted, I realize that Bass has made some bad (or early) lately. He’s the one who advised UT to take delivery of physical gold and he’s also been shorting Japanese Govt Bonds lately (“the widowmaker”), so he’s not infallable. He is incredibly bright though and did nail the sub-prime trade a couple of years ago.

  438. alexi

    DG
    Thank you for your kind words and encouragement. I feel fortunate that I got burned this time instead of the final mass parabolic move later. I always enjoy the joke you had with Alex. It’s like watching the office show everyday. You are Dwight and he is Jim. Of course Gary is the boss. He is treating us like his family, feel fortunate to be here.

  439. Dan

    Starting adding a few slv October put options at the close(less than 1%). Fipping through gld, slv, and gdx todays rise was either on the lowest or second lowest volume in two weeks. The dollar has clearly broken out of its multi-declining channel. A parabolic move has never resumed after such a crash.

    I think we will see silver up for a few more days but dont think we will see new highs until winter or next year. Will continue adding if the rise keeps losing strength.

  440. Wes

    grimweasel,

    Nothing like a stupid professor. Remind him that the US doesn’t borrow money to pay off it’s bonds, it prints the money.

    Until we give out of ink or paper, we will never default.

    Seems like he would know this.

  441. grimweasel

    Wes – agree that is the way things should work but thanks to Keynes and his ‘governments must save the day sketch’, the downturn and the greatest transfer of wealth ever has happened and robbed the common man of even greater sums!
    We should have just let market forces work this out and we may have been in a better place today rather than this printed money idiocy!

  442. PST

    Grim,
    I removed the prior posts because I always make the mistake of asking personal questions on a public blog.

    Anyways, good for you. Enjoy your time and learn all you can.

  443. Dan

    jhnewman/San Diego,

    The problem with Jim Sinclair is he is a perma-bull. I have been reading him for so many years and have never heard him say anything bearish about gold ever, even short term. If you ever have a bad day and are questioning the bull market then visit his site. He will always make you feel more confident.

    Having said that, he is a legend in this community.

  444. Gold Lion

    An interesting note on silver from Hecla Mining’s earnings release…
    “Characteristics like it being the most conductive of all metals, more than copper, more than gold, the next two most conducted metals and when silver tarnishes it maintains its high conductivity. Silver is also the most thermally conductive as well as the most light reflecting elements and we can talk about a lot of the new uses but one that one that is having the biggest impact on the market is the photovoltaic or solar panels.

    In 2004, only four million ounces were consumed and that increased to 40 million ounces last year and GFMS’s study says they expect it to double in the next five years times. This means that while investors in mining companies will likely experience volatility, the long-term outlook or sliver will include a far greater amount of new non-forecasted uses.”

  445. Kate

    Brian, not that it’ll get you anywhere, but the blog seems to pick-up whatever handle a person is signed into at the time of posting, so sorry for the confusion everyone, as I was signed into the [email protected] account (“Steve”). Rgds, Kate, Steve & Copyc:)

  446. Blake

    Dan-
    What was the strike you went for on those October slv puts? Since we are not privy to Gary’s D wave strategy, I’m looking to see what other traders strategies are so that I may formulate my own. Any info is much appreciated! Thanks 🙂

  447. Poly

    Jim Sinclair is a perma-bull. When gold drops he just waits it out and comes out to say, ‘see, I told you it will go up”

    James Turk is much more predictable, he’s just out saying Silver makes new high’s in weeks! That’s a big bold statement. He has made many of them and many of them have been spot on.

    Hard to see us not making a genuine effort here to reach the high’s. The oversold levels are too deep to roll over right here and long/deep sustained corrections such as D-waves typically put the bulls through repeated torture. Already many here are talking puts as if we’re just going straight down. Fear amongst SMT’ers is prevalent, out on Kitco those boys got fried.
    A good rally is in order I say.

  448. fubsy_cooter

    I am 100% cash for the first time in…years. And you know what? I still have no clarity. When that happens, I figure its time to take a couple weeks off. After all, if this becomes stressfull, I figure its not worth it. Its fun to ride a C-Wave, A-Wave, and even a D-Wave if in cash or short. But, hanging on every move wondering what comes next is just not for me.

    The way I see it, I’m in a win-win situation here. If Gold goes higher, the setup to buy puts in Silver gets more tasty. If the dollar drops to a new low, the set up to short the Euro and stocks becomes more tasty. If Gold drops to a new low before heading higher, perhaps I could nibble on a swing reversal at lower prices.
    No matter which way this market goes I get a better setup on a low risk trade.

    At this point, I feel like I’m in no man’s land, thus out..But, part of the voice you’re hearing is my action addict talking myself into a calmer state at being on the sidelines. A desolate and unfamiliar place, but one which i know I need to reside at times, if I want to be a better trader. Ahhh, the mind is a beautiful and dangerous tool.

    Cheers!

    f

  449. grimweasel

    Whilst it’s great Alex has posted his trading rules traders should understand that they will have to develop and ‘own’ their own rules for personal psychological reasons.

    To be able to fully understand and believe in your rules in the quest to beat ‘Hyde’ (the damaging internal voice) one needs to own and fully believe in the rules and why they were formed. Specific learning examples need to be attached to each rule so that you can reflect on why that rule is so important; it helps to reinforce the rule and make it meaningful!

    So, have a good look at his rules but spend time learning in the markets and developing your own rules with lessons attached. That way you are much more likely to adhere to them!!

  450. alexi

    DG
    I love Dwight! You can whip Gary sometimes. 🙂
    Ok, Alex can be Kevin. He was Jim though before this black swan event.

  451. Blake

    Can someone explain why we wouldn’t play the D Wave with DITM put options on slv as opposed to out of the money put options on slv?

    Obviously there is more premium on the DITM Puts, but this is also a more conservative approach to playing the D Wave event?

    Any information is appreciated!

  452. David

    Poly,

    If silver is going to make new highs, I’d like to see the miners outperform the metal first. That’s not happening. I’d also like to see more volume.

    Right now silver is guilty until proven innocent.

  453. Moneyman

    Polly!

    I think you will nail this one. I also think that we will se a rally in the next 2-3 weeks..

    The problem is that most are so afraid that they will miss the entire move.

    The thing is that Gary told us that the move down will be so hard that everyone will think that this is the D-wave..Look at the board now..Everyone is bearish..Afraid..

    The problem is that most of us will miss the entire c-wave.

    I think that silver will go to at least 42..But everyone will sell at that point so i will not be surprised if it goes higher..

  454. DizzyDean

    Blake, my understanding of the OTM put stradegy is buying at new highs before the the down cycle is recognized. There arn’t going to be any OTM puts once the decline begins. Two Mondays ago all the puts were in the money, no? Can anyone give me a simple explanation of where I look for the OTM puts?

  455. Aaron

    One more note on Sinclair, he did sell at the peak in 80 and only became bullish on gold again at the beginning of this decade. The man knows when to go old turkey and when to go home.

  456. David

    Moneyman,

    Unfortunately, the reverse is also true. When a D-wave hits, many people think they’re in a C-wave.

  457. Kate

    Re: Alex’s Rules Distribution

    Ok, just figured it out emailing myself, it’s “[email protected]” (my “L” looks like a #1, and it’s been awhile). Huge apologies for my error. The ones that got thru must have typo’d it right. So, email [email protected] if you’d like Alex’s Rules. Duly chagrined, Kate

  458. fubsy_cooter

    Moneyman,
    I wouldn’t say those of us who are cautious will miss the entire C-Wave. I bought my first position with gold at 700. Then a lot more in the 850-900 range. And more at 1000, 1200 etc… The C-wave is 90 to 99% over, dude. Now, there may well be a nice move from here, but hey, its not nearly as clear as it was from July till a couple weeks ago.

    Look at any top. Things get really wanky. I remember CSCO/QCOM in early 2000 losing 20% in a day and then roaring back to peaks, staggering and dropping. That is what tops do. They get volatile. So, there was some easy money made here. For those of us that made it, stepping aside is a reward.

    And, there will be more to come.

    f

  459. Brian

    After a review of the mechanical buy-sell charts, we will need a reversal or sideways tomorrow for Gold and silver not to get daily buy signals and for the buck to get rejected on the intermediate level.

    Makes sense because any further strength will give the metals a swing low, and any weakness the buck a swing high.

  460. fubsy_cooter

    James R,
    If that happens, there is going to be an amazing trade in risk off positions. Dollar sentiment is starting to look like stocks did in March 09. The rally in the dollar following such a sell of will be epic.
    f

  461. TheBookGuy

    Poly
    It is funny, I was going to right the same thing about Jim Sinclair. I love the guy but don’t trade off his comments!

    I have the same feeling here about this C-wave not being over. Not sure if you are saying that but I think we are going to be surprised to the upside.

    I wrote before that the first day of the correction people here were too happy, almost ecstatic. They were leveraging in harder and harder. The big down day people were blown away and that is the type of feeling we need to see. Now no one believes we can get a huge move. I think we can get a huge move simply because no one believes we can.

  462. David

    BookGuy,

    Playing the back side of a parabola is a very low-percentage bet.

    I can think of very few instances where it paid off.

  463. Rob L.

    I’m with DG and Fubsy on this one.

    Gary has been the greatest proponent of this C-wave so if the dive in silver even rattled him to the point where he won’t buy any more silver during the remaining days/weeks shouldn’t we all be wary of jumping back in so quickly? That includes gold as well.

  464. TheBookGuy

    David,

    I’ll just do what Gary says to do, I don’t know enough to do other wise. I might risk 10% of my portfolio if I feel differently than what he does, but I paid him for a service for a reason.

    I’m certain you are right, I just have this gut feeling. It could be gas. 🙂

  465. james r

    I firmly believe the market has already priced the damage QE1 and QE2 has created on the dollar and no matter what happens in the near future nothing will change it.

    Same thing happened with the annoucement of TARP. Congress passed TARP, but the markets continued to fall.

    James

  466. GottaHaveIt

    fubsy_cooter,

    I’m in the same position as you. I’m practially 100% in cash, just have a few GLD calls I’m waiting to cash in.

    It’s weird because I have been an “all in” guy during this ride, but I just don’t have a good feel for which way this thing is going to go in the short run.

    So like you, I’m just sitting on cash watching and waiting.

    BTW, please click my profile link and email me. I have a personal question I want to ask you. Thanks!

  467. David

    Book Guy,

    I have the same uneasiness. A day like today makes me want to stay in for fear of missing the upside.

    That’s why they call them sucker’s rallies.

  468. james r

    Anyone sitting on cash, I believe will have a great opportunity in the near future when gold/silver retest their Friday’s low.

    James

  469. James

    David, fear of missing the upside may or may not equal a “sucker’s rally.” Your basis for stating one automatically equals the other?

  470. fubsy_cooter

    Eammon,
    Like Gary says, the rubber band is stretched pretty tight on the dollar, so it will have to work off those excesses. I would imagine the rally would last until sentiment got stretched in the opposite direction. As far as time goes it seems at least a few months, maybe up to a year. Who knows?

    David,
    Yes, I like EUO as one way to trade a strong dollar. I also like DUG, SH/SDS. The XLE is setting up for a breakdown. I need to check Gary;s cycle counts for the stock market, but when the break below a pivot in the XLE aligns with a swing reversal down and a potential left translated cycle in stocks, and a swing reversal up in the dollar I’m going for it.

    Atthis point, I don’t care if I’m a little early on a strong dollar trade as sentiment is so radically negative. I’ll just start small and scale in on the way up using cycles to increase my odds of catching daily cycle bottoms.

    f

  471. DG

    Fubsy: Every time you write I find myself nodding my head (your 3:47 post) . I am long a moderate amount of gold as I believe we will at least attempt the highs, but your thinking is much like my own. If we rally there’ll be juicy stuff to short while we wait for the A wave. Now if you would just lose the Dodgers cap… (j/k)

  472. David

    James,

    I was referring to my own emotions, not anyone else’s. I am not calling anyone here a sucker, even indirectly.

    We’ve just had a massive parabolic top break on us. The rally that follows a parabolic top is always incredibly powerful and convincing, but 95% of the time it fails. Hence the term sucker’s rally.

  473. DG

    Gary: I think your portfolio change is appropriate. While it is true that everyone is responsible for their own trades, giving an alcoholic liquor has to also at least partially be the responsibility of the server. I can see it either way, but we know for sure that many people will go broke mimicking your personal portfolio, and those with enough experience to play that hard won’t need your template, so I think the change is probably a good one.

  474. fubsy_cooter

    Oh Come On DG,
    As if I’m not eating enough humble pie with my beloved Lakers pathetic showing last week. What a week. I’ll tell ya, there was something in retrograde, silver and the lakers crashed. Yuck!!

    But hey, I’m happy for Dallas and there fans. Dirk Nowitsky is a class act, and they’ve been waiting a long time. Funny, with the Lakers out of it, I’m cheering for the Celtics (WTF?!), Dallas, and The Bulls. I definitely need to be in cash right now. My whole world is upside down.

    f

  475. Peter

    perhaps someone can refresh my memory .. didnt Gary say that the D Wave usually lasted only a few weeks …like 6 to 8 weeks ?

  476. Poly

    @ David
    “Right now silver is guilty until proven innocent.”

    I’m NOT trading Silver, just posted Turk’s comments.

    I’m trading Gold and it never went parabolic or reached insanely bullish levels. So right now I say innocent until proven guilty.

    I’m also saying that I don’t know where it is going, if its a C or D wave.
    I don’t care too much at this point. I’m trading a way overdue cycle low, deeply oversold rally to new high’s, that’s it. So far it’s yielded some $50 and counting, while many are still in shock.
    There are many trades to consider at any given time and I agree the intermediate time-frame is sketchy and warrants caution, at some point a discussion on puts possibly. But for now, I will take the oversold bounce (if that’s what we all want to call it) and get back my losers of last week, then some.

  477. New York

    David,

    If one can regroup and trade this rally with that exact expectation I think there is significant upside here. In fact, if we can learn from what just happened and manage our expectations better ( be a little more fearful then we were) we may be able to make 50% of what we just lost.

    I think a large part of what happened is that we were all looking right past $50 silver…

  478. jhnewman

    About Jim Sinclair: I am no expert on the guy. I’ve followed him on and off since 2008. (I was in a chat room of some very good gold/silver traders, and I asked Andy Maguire, who is an incredible PM trader (used to do it for Goldman Sachs in London), who the best is in gold and he said: “Jim Sinclair”. Andy has since become somewhat famous as the guy who blew the whistle on the big banks for rigging the gold/silver market.)

    Anyway, Sinclair is incredibly good. I wouldn’t call him a perma-bull, necessarily, but someone who seemed to be maddingly selective about what “directional information” he gave out. He would point to targets up ahead, but wouldn’t seem to give out “we’re going to be going down now for a while in a D-wave” stuff. And I’m sure he could see these down moves coming. I think he does this mainly because he knows that gold/silver is the big lifeboat in these dangerous times, and he wants people to get physical and stocks to hold them through this crisis, and not try to trade them.

    I know, from his Web site, that he is giving lots of people a lot of free great advice on how to weather this hurricane, and he seems like a great guy. He seems to help a lot of people.

    As for this call for approaching 1764 in June sometime, it has surprised me, because I don’t think he usually gets so specific in price AND time. But I could be wrong about this. I haven’t followed him religiously since 2008, so there are some serious gaps in my” Jim Sinclair knowledge.”

    A couple of Sinclair stories though (I don’t know definitively how accurate these are):

    –Sometime in the 70s, I believe around 1976 (so 4 YEARS before gold topped), he supposedly sat down to figure out how high the gold bull market would go. He did calculations based on how much debt there was outstanding, and how high the price of the known supply of gold would have to go to equal all that debt, and he supposedly came up with the number “850”, which is where the 70s bull ended.

    –He also supposedly accumulated a positively MASSIVE number of gold futures contracts as the final parabola kept screaming higher day after day, and sold ALL of them THE DAY the gold bull topped in early 1980.

    –He’s also the guy Paul Volcker hired to get all the Hunt Brothers “cornered silver” back into the market with minimal price disruption.

    Again, I can’t vouch for the accuracy of all this, but in my wanderings, that’s what I’ve run across.

    And he does seem like a positively great, nice guy, helping many, many people.

  479. Bob loves Hawaii

    I kind of like that everyone is so skittish, we can build a wall of worry, and no leverage for the sharks to take down. Nice steady climb all day like today works for me.

  480. jhnewman

    Eamonn: you nailed it (as did Le Fou when I first got here). John Henry Cardinal Newman was an early hero of mine. And when I needed to come up with my first “Internet handle” when I tried day-trading the end of the Internet boom (who DIDN’T do that?), I went for his name.

    Some very well informed people on this board. In all my wanderings, nobody has ever spotted that before, let alone 2 people.

  481. Poly

    I agree Bob. These just climb while many lick their wounds. By the time they buy into the rally it’s already up $100.

    I’m also become intrigued with this dollar up/gold up setup. If this can continue, we could potentially have a decent gold blow off c wave top while having already printed the 3 yr low. By havingthe dollar rally another 10 days or so and say gold at around all time high’s, the dollar could be a good 6 points from the 70.70 lows and plenty of room for a fast and furious collapse that still holds the 3yr lows and the new dollar IT cycle. Just an idea, Gary?

  482. Eamonn

    Fortunate for you jhnewman that you were inspired by something of real substance, and not as in porn mags as most young men do.

  483. TheBookGuy

    jhnewman,

    I don’t disagree with you. I think he speaks long term on his website, but don’t look to him for short term direction. He knows when it is going to be over and knows when it starts, I don’t think he cares about the wiggles and I think only a fool would look to him for short term advice.

    Also, he tried betting $1 million that gold would reach $1650 by January 11, 2011. He then said if it doesn’t make it then we will see a much higher number in June. He at least stays true to his word and never makes excuses for his mistakes. He owns them, for that alone I highly respect him.

  484. Felix

    Y’all do realize that we’re waiting for a specified trigger to buy in, right? SMT disciples, I mean. Your comments suggest we poor saps are out of luck – already.

  485. Ben

    Gary, I think the PF change is great. Options I think cloud the picture for many and unnecessarily clutter it for others. And it’s definitely more in keeping with your stated philosophy of helping as many through these waters as possible. I also want your role in our financial lives not to get overly complicated and crazy, so you can be around to help us for another five or six years. I do appreciate your work!

  486. jhnewman

    Eamonn: Newman had a big effect on me. I was 18, in an English boarding school for 1 year (which I paid for myself by investing my dishwasher & busboy savings in the stock market — though I don’t deserve the credit), and I read Newman’s “The Idea of a University” as I was getting ready to go to college back in the U.S. And it just had a big effect on me.

  487. jhnewman

    TheBookGuy: you’re right. And I don’t think anybody took Sinclair up on that bet (which he started to offer, I think back in 2008). Nobody in their right mind would take that bet.

    But I think he was using that bet mainly as a “motivational tool” for those who visited his Web site, basically saying: “I’m so confident gold will do this, I’ll bet a million dollars”, so that his followers would have more confidence to get into gold and just hold on to it.

  488. Poly

    Felix, Up until this evening report not even Gary was sure if he would buy a swing. In any case, there are many other triggers than just swings, they’re just not definitive numbers. Plus were hear to trade ideas, not only play Gary’s trade signals. Which BTW Gary I agree with not disclosing your specific trades.

  489. jhnewman

    Eamonn: ;^) You’re too funny. The food was the worst part.

    But, as for the rest of it, I actually dodged all the bad stuff and it turned out to be one of the best years of my life. (In Norfolk, about 3 miles from the North Sea.) But I certainly know all the horror stories you’re hinting at.

  490. Bullion Trader

    Gary,

    Question. Why do you think we will get to $42 on the BB crash trade? I read the terminology section but I see that it is 15 days or any day that is profitable. Why then the specific target of $42? Is there some other part of the rule that it usually goes back above the BB?

    Thx

  491. Gary

    The rule says a profitable close. The entry was the open on Wednesday morning which was $41.33. Any close above that will fulfill the requirements for the BB trade.

  492. Bullion Trader

    I see. Then the $42 was just a rough guess.

    Any other means to guess where it could stop or would you just sell (assuming you has SLV) at $41.33?

    Thx again.

  493. eric

    CME raised oil margin requirements late today. Seeing how this wreaked havoc on Silver, could this have the same effect on oil and thus can we say that oil may not have put in it’s intermediate cycle low? just thinking out loud.

  494. Elaine

    Gary,

    Thanks so much, I actually laughed out loud at the comment about lighting our hair on fire. Reminds me of the time in Cleveland when the the Mayor’s hair caught on fire. Some really quick photographer got a shot of it and it’s indelibly etched in my memory.

    Good humor for a Monday.

  495. Bullion Trader

    A follow-up question on the raised margin req for oil is what will it do to silver & gold, if anything.

    I wasn’t following last week but did the silver raises affect oil?

    I question because it seems like the hedge funds bounce back between many of the commodities especially the precious metals and oil and wonder what people think it will do to the PMs.

    So far gold & silver down a bit here since the announcement but the dollar is also up a bit so hard to tell which one is the culprit.

  496. Bob loves Hawaii

    Actually gold has been correlated to oil, so in my view it is a back handed way to shake out gold longs. It certainly stopped the AH advance.

    We will see every trick in the imaginary book of manipulation to save the COMEX.

  497. niven

    Gary,

    Is it possible that we might see a double bottom on gold at the 1490-1500 level. It looks as if there might be some resistance at 1520 followed by another downside to test the low. If that happens, could that be a good buy entry. This is coming from Turd’s analysis

  498. catbird

    I currently am all cash…but that BB crash trade in silver looks too juicy to pass up.

    I’m thinking it’s worth risking 1% of my cash.

  499. KAL

    Evening folks!

    So, if the silver BB trade is profitable with silver above $41.33, that makes the corresponding price in SLV at, roughly, a buck below at around $40.30?

    I’m trying to make a plan to get out from under my SLV and SLW options at the least-painful price. I was thinking if $silver hits that profitable BB trade price, of setting up a stop there to minimize the bloodletting.

    Any other ideas, or maybe Gary will work that out for us in real time so he can get out from under his options too? Gracias compadres.

  500. New York

    Gary, you mentioned for those still holding silver you’d wait on gold. If gold doest reach 1521 to form a swing the expectation is that it may retest the lows. If that happens is there still and expected bounce out of this lows or it could go either way at that point?

  501. fubsy_cooter

    Following up on my win/win scenario of being in cash right here, this is my trade plan going forward for various scenarios in USD and Gold.

    Trades

    USD: If it forms a bull flag from here,
    EUO: Buy 20%
    DUG: Buy 15%
    On breakout
    EUO: Buy 10%
    DUG: Buy 10%

    USD: If USD makes a new low and reverses on volume,

    Place mental stop 1% below bottom pivot.
    EUO: Buy 20%
    DUG: Buy 15%
    On Bull Flag
    EUO: Buy 10%
    DUG: Buy 10%
    On Breakout
    EUO: Buy 10%
    DUG: Buy 10%

    Gold: If it forms a bull flag from here,
    DGP: Buy 20%
    On breakout:
    DGP: Buy 10%

    Gold: If it makes a new low and reverses,
    DGP: Buy 20%
    On Bull Flag
    DGP: Buy 10%
    On breakout
    DGP Buy 10%

    Gold: If it continues higher from here to new highs, on high volume spike in price on Gold,
    SLV: Buy 3% OTM Puts

    That’s my plan for now.

    f

  502. Hot Rod

    New York,

    I believe that if Gold gets to 1521 to form a swing, we won’t test the low.

    Gary was looking for a test of the low before a swing is confirmed. For reasons that he outlined in tonight’s report.

  503. Hot Rod

    Please take this with a grain of salt (I think I am reaching here) and know that this is my 2 cents and when added with a dime is barely worth 10 cents in this inflationary environment.

    Ok, all disclaimers aside….

    http://stockcharts.com/h-sc/ui?s=$GOLD:$USD&p=D&st=2011-01-01&en=2011-06-01&id=p63178522778&a=233561314

    The last chart is the gold silver ratio. I was eyeing a trend over the weekend with regards to the really big spike up from 32 to 42 and then a small dip back down on Friday’s regaining of some strength.

    Now, here is a longer term chart with some annotations:

    http://stockcharts.com/h-sc/ui?s=$GOLD:$USD&p=D&st=2000-01-01&en=2011-06-01&id=p53170354973&a=233561314

    Something I am following closely is the real time changes to the ratio (pulled from Kitcosilver.com or use good old calculator) off of this bounce.

    My opinion is that if we keep the trend of lowering back into the 30’s and down, we are still in the strong uptrend and last week may have been a reset button, however if we reverse and start to show we may potentially rise again going above 42, silver is done for, for the time being.

    I have no experience or other info to base this off of other than the long term chart does show the differences when the trend continues upward (correction periods) and when it reverses quickly (climbs).

    As of now, the ratio is 40.2.

  504. james r

    Gary,

    Do you see the potential setup on silver?

    Could be the greatest five day rally any of us has ever witnessed.

    James

  505. Mighty

    Gary,
    Thanks for including a “Balls of Steel” strategy in the post. Even without your personal trades and the options, I appreciate having a few different trade strategies to choose from. Ladies with balls of steel like to test them now and again. 🙂

  506. Veronica

    GDX chart has a candle inside of a candle, which is inside of a candle at a low; and support at the 200 EMA.Looks pretty bullish to me:)!

  507. Elaine

    WoooHooo,

    According to Gary I’ve got balls of steel, still holding my AGQ and SLV. Not by choice, only because I started a new job last week and can’t trade during the day.

    Waiting for $42.

  508. ALEX

    ELAINE

    Now you just have 1 more thing to worry about…where the market can Kick you! 🙂

    FUSBY

    I liked that strategy that you posted – I’m thinking of the same things if this thing falls through

  509. Felix

    Cooter,

    I am surely nobody here but I thank you for posting your plans. They are complementary to SMT and help me in my adaptation of Gary’s determinations in view of what I can do.

  510. ...at ease

    FC, thanks for sharing your intended trades. Gets us back to putting our thinking caps back on and ready for the rest of this bull ride ;).

  511. Natanarchist

    Hotrod..interesting charts…look at a weekly Gold:silver ratio chart. Basically we have moved from high 60’s last summer to 31 at the peek. There was a big gap at 45, now filled and a big gap on the way down to 31. Now there is a big gap back to 31. Scotia macotta had a 27 target. Their customers trade the ratio.

    Too much talk D wave strategies. In my mind the fat lady hasn’t sung yet. Gold will make 1600 or higher before we call it a C wave. Its the gold bull we are riding ultimately. That many played the under valued Silver and made some huge gains or got shook off doesn’t change the gold ride. Gary always said the bull will do whatever it takes get you off. Silver may just surprise, again.

    By the way….nothing wrong with stepping aside after the C wave and waiting until the PM
    s bottom. When you buy THAT bottom, always keeping some as we go through the cycles, buying all IT bottoms, you will have super strong hand status so when the scary corrections come late in the bull, they don’t shake you off. This is more directed to the late comers who suffered losses. If you are patient and don’t try and get it all back in a D wave, or leverage crazy and try and time the next 3-6 weeks or so, a year from now you will be sleeping comfortably.

    On Sinclair. He has been 100 % right. He provides no guidance to a trader. He doesn’t want to provide any guidance to traders. He doesn’t want his readers to use leverage. He advocates physical gold. He refers to Gold as insurance.

  512. ...at ease

    Gary, I must ask where you grew up? Or do you have a comedy act in Vegas? Your euphemisms are a real kick in the butt. The dynamite factory had me rolling on the floor. Thanks for getting back to Gary.

  513. ...at ease

    I spent a year at Fort Leavenworth, KS and between Kansas and MO, I met some of the nicest people you will meet on this earth. Just good people.
    I knew you were raised right. 🙂

  514. james r

    Bullion,

    Silver once it hits its target of 42 will pullback and retest the 34 area.

    The left leg will be completed and the right leg will commence.

    Silver should bounce hard from the 34 area and in about 5 trading days should hit the short term target of 50!

    To calculate the 50 target:

    simply subtract 42 – 34 = 8

    then add 42 + 8 = 50

    I’m sure hedge funds all over the world see this setup!

    James

  515. Juan

    James,

    I would be interested in elaboration as well. I feel like you might be right but I just can’t put my finger on the evidence.

  516. ...at ease

    Command and General Staff College is there as well as the prison. The prisoners do some nice upholstery work as well as welding work and work around the post. Neat old Calvary post, we lived in the old Quarters with the stables below (now garage space). Lots of Buffalo in the area is what I remember and as I said, some of the nicest people you will ever meet living in KS and MO.

  517. ...at ease

    KS, but the hardest thing to learn to live with was the many tornado sirens going off. I had to keep reminding myself, that the building we lived in survived all the others, so odds were in our favor to survive the year. 🙂

  518. Rob L.

    James,

    From $34 to $50 in one week? Damn, James, if things unfold as you predict, please start your own newsletter because I will be your first subscriber.

  519. Ben

    Gary, the lighting one’s hair on fire was the funniest thing I’ve ever read in a report — unfortunately, spot on.