152 thoughts on “Another portfolio change

  1. CMT

    Ryan, from the prior thread, I doubled up my EUO (and SLV puts) on that last dollar dive. Will unload them today as it was just a day trade hoping for a snap-back.

  2. Felix

    Gary, does this relieve the McClellan graph that was concerning you? Also, are you less concerned about rephasing the cycle now?

  3. Adam

    We would probably have to break thru the 65 day moving average to even consider re-phasing. While it’s not impossible, I’d say it’s rather unlikely seeing as how the rest of the markets fit into the current scenario pretty well.

  4. Haggerty

    did you jump in to DUG today?

    I have a stop at 29, my break even now is probably like 29.35 ish, being I added today.

    In your opinion should would you move the stop down to 28.50?

  5. Harry

    If we were to discount 6/2 as a daily cycle low for gold, yesterday would have been Day 27 by my count. That’s still within the normal timing band, though a shorter cycle following the long one that topped at $1575 would make more sense.

    But is it possible we had a daily cycle low yesterday? Look at the downtrend line starting from late last week – it appears we broke up through it today.

  6. Dan

    Must say gold and silver rebound is pretty weak considering how much they’ve fallen the past week and the dollar being red today.

  7. Gary

    you are looking for guarantees in a bear market. There just aren’t any.

    Bear markets are tough. The safest play is to just sit in cash until it looks like the gold cycle has bottomed.

  8. Gary

    The reason I think June 2 marked a cycle low is that I don’t think gold will be able to resist a rising dollar this late in the cycle. If that’s the case then it’s more likely that gold will drop for the duration of the dollar rally.

  9. Sandy101


    To best of my understanding, both DUG and DTO are 2 X leveraged.

    DUG tracks oil & gas, while DTO tracks oil only (which may be preferred at this point in time).

    DTO’s volume is less than DUG’s volume though, but it still has the critical mass.

  10. Edwin

    sophia –

    what’s driving the long play. sentiment. too many short players.

    big picture though, the best chance of going short will be best middle of august imho. i doubt the stock market can extend cycle into an intermediate low.

    for gold middle of july into it’s intermediate low.

  11. discreet shopping

    From Stewart Thompson’s 123gold article today: Morgan Stanley has the greatest track record in the world for calling stock market tops, with their phenomenal “triple sell signal”.
    MS sees the current stock market downturn as a “pause” in the uptrend, not a “crash alert”.

  12. ALEX


    F.W.I.W. I think EUO is fine here. I own it and it looks like it is dropping down on really light volume to fill that gap at $16.80.

    on your 3month chart with a 10sma…it is sitting right on the 10sma, I would even add more if it went to $16.80 if i wanted more and it continued down on light volume. It is in harmony with the dollar, which also shows strength.

    UUP has the same chart and look at the miniscule volume on that pullback.

  13. Ryan

    Thanks for the reassurance and helping me learn, really appreciate it. I see it now and will think about adding if it gets there.

  14. Harry

    Thanks, Gary. Thought I’d try playing devil’s advocate. If we do go with 6/2 as the daily cycle low, is it safe to assume this is now an officially failed daily cycle? I know you won’t short gold but…

    Also copper is now up 3% so yes I will call that a spike and demand an explanation đŸ˜‰

    Welcome back, btw, hope you’re not too jet lagged. I’m flying back to the US on Friday (12 hour difference from Shanghai) and should start adjusting now!

  15. Gary

    The current intermediate cycle is due to bottom in the middle of July. Waiting till then to go short will probably just get one caught in a monster bear market rally. Especially since I think the Fed will be ready to run QE3 at that point.

  16. Gary

    Copper has been in a down trend since Feb. The rally today hasn’t even broken the pattern of lower lows and lower highs. So at this point I would just call it a normal bear market rally.

  17. Gary

    Unless one thinks the Fed is going to seamlessly transition into QE3 (which they have clearly said they would not do) then it’s pretty clear the dollar has bottomed and that the dollar rally has a long way to go yet.

    That will drive a deflationary period exactly like it did last year. So I wouldn’t be real comfortable long anything at this point.

  18. MikeStiller

    The transports setup is perfect. Made small new all-time highs only to fail. TRANS also bottomed a day before SPX in March. It looks like they are the leading indicator here.

  19. Keys

    Gary good to see you up and about..I hope you and the gang had a great trip!

    You mentioned that a left translated cycle at this late in the game is really a death strike to a bull stock market….

    Is this a probable event using logic, or is this a statistical occurrence with cycles, or something else?


  20. William


    On the Gold futures daily chart the lower trendline drawn from the jan 28 low doesnt show today as a retest, today we are actually sitting right on top of that trendline still.

  21. William


    Take a look at a weekly chart, Gold breaks below the 10sma at every intermediate cycle and finds its low at the 30sma.

  22. jhnewman

    Bought some more DGP this morning. The dollar will be going DOWN another leg into the high 60s by the end of July, IMO, and gold will be over $1700 by then.

    I’m 100% long DGP and NUGT.

    I believe today was the first day of gold’s new daily cycle, and that it will be a big UP cycle.

    [I noticed that Treasuries (TLT) dropped BIG today, and look like they MAY be in the process of putting in some kind of top. (If not, maybe the big drop is a drop into a daily cycle low? I don’t follow cycles in Treasuries yet.)

    IF this IS some sort of top being put in for Treasuries, it looks like money may be flowing from Treasuries into stocks and other risk assets. I’m not following the stock market that closely, but it’s POSSIBLE that today could mark the start of a summer rally in stocks, and the end of the correction. Always good to consider “the other side”.]

    Gotta run to my real job. Good luck to all!

  23. Éamonn

    I just bought me some Aug IWM Puts…seemed like a good time. I feel that the S&P will go to 1,250 before reaching substantive support

  24. JReality

    From Beanie’s blog last night:

    Don’t Get Sucked In By The Collective Bear Borg

    We’re seeing signs that insiders are finally coming back and buying stocks, for the very first time in a very long time.

    This coming gigantic bull market (green tech, mobile tech, and social media) is destined to pull everyone back from the brink of the collective Bear Borg depressive mind state. The chatterbox Borgs, who will probably never ever invest another dime in the markets again (aside from loading up on precious metals and burying them in the backyards), have been successfully converting the confused masses by endlessly feeding them black death juice.

    Hopefully, you won’t be the last one in as Dow marches towards 36,000. You can’t fight the bull anymore. Come back, come back to the light.

  25. Felix

    Gary – Thanks for your answer, I was away earlier.

    Appreciate your advice re: security in a bear market, you’re right of course. And your plays have worked, by the way, as you navigate us through.

    I’d like to think I’m also trying to learn and understand the “why” behind the moves and such but yes, that’s secondary.

    Lastly I can’t stand the name “Felix” but mine was taken.

  26. MrMiyagi

    Buyers vs sellers ratios for right now:
    SLV 1.1 to 1
    GLD 1.86 to 1
    SPY 1.49 to 1

    QQQ 1 to 1.14
    AAPL 1 to 1.18
    GOOG 1 to 1.62
    GDX 1 to 2.01

  27. Ms C.

    Beanie may be right about the bull not being over. I’m not shorting it. Not untill we have a confimed bear marked. Anyway, I’m saving my capital for the gold bull’s next intermediate low.
    Nadeem Wayalat is predicting that the DOW will breakout to new highs in august or september. He has been right on the DOW since the bottom of march 2009.

  28. Gann360


    yeah ,, i do look at all time frames…it’s just a matter of time.imo.. but i wanna get it right.i just bought 1/4 Swing position here, should we rally , i will add..should we fall i will add… So it all adds Up….


    To Funny ,,, With Silver
    * Dead Man Walking * LMAO

  29. hamvestor

    Poly said “Silver’s a dead man walking.” I’ve been all out of silver for a while now, but it sure looks to me like we could be putting in a double-bottom here, at least for the near term.

  30. Adam

    Gold probably won’t hit its intermediate bottom until mid-July. The GDX hit its lowest level since Sept of last year just yesterday and has been underperforming the S&P. The GDX has been leading PMs on the way down. Silver is a busted parabola. We’re on day 5 of the dollar cycle which is currently consolidating in a bull flag.

    I guess I just fail to see why Poly not getting bullish on a two day tweezer bottom is so funny.

  31. Edwin

    this is one up day. nothing will V.

    i hope it does to crush some short players though for at least a couple weeks. sorry guys. i needs some vacation money.

  32. Poly

    Adam, I suspect Gann agrees on the Silver outlook and just liked the analogy.

    CMT, I added more SLV puts here. Only thing to watch out for is that we’re on day 2 of a new gold cycle which could support Silver for a another one or two weeks max. It will be futile of course, Silver is going to get crushed once gold turns and the only support Silver will find is at around $26, the last IT cycle low.

  33. oa92000

    Bernanke warned a failure to lift the government’s $14.3 trillion debt ceiling risks a potentially disastrous loss of confidence in America’s creditworthiness. $USD may go down for this

  34. Edwin

    gary – i don’t bother shorting. i can’t get the timing perfect. this market is so rigged to the bull side.

    ben backstops everything.

    i just look for other bull markets to go long on

  35. Edwin

    just great gold breaks back over 1525 again. just when i sold some of it when it hit my stop at 1525 yesterday..

    anyways still holding a core position, old turkey style.

    velocity of money still hasn’t slowed down..

  36. DG

    Hag: Still long DUG. Long more USO puts though. Just bought back the EUO I sold Friday. Let’s see if the 10DMA on SPX stops the rally.

  37. coolkevs

    From Kevin Depew at minyanville.com
    Yesterday, the SP futures recorded a DeMark DAILY 9 BUY Setup – this means there should be a 1-4 day reaction (through the end of this week) of countertrend upside. We did qualify a break of 1308 level last week which means that the selling is not done. A full 13 TD Sequential Countdown is now expected which does not have to be consecutive days. Resistance is the 1308 level. Ultimate support seems to be at the 1210 level, a WEEKLY Demark level. WEEKLY down levels have not been qualified since Feb 2008, so it is pretty difficult to do.
    Reminder that we are on 1-4 bar setup on the MONTHLY in S&P and the other major indices, good from June to September, so the path of least resistance is down. However, the Nasdaq Composite and Russell 2000 have NOT qualified their respective DAILY down levels yet. Depew so far expects these to outperform the S&P during the summer doldrums. With regards to large cap tech, there was a graph on Business Insider showing that the GOOG, CSCO, and others of the world have not been so hated in the past 35 years – a contrary buy signal??? Hard to believe CSCO is so close to the March 09 lows…
    One final thought – the dollar still needs to put in that MONTHLY low in at 72.5 – be careful shorting the Euro right now, there might be one more rabbit in that hat…

  38. Poly

    Good chance we confirm a July 13th gold cycle low tomorrow. Gary, will a break of GLD $149.04 have you rephrase?

  39. Gary

    If the government rigs everything to the upside then how in the hell did we just go through the second worst bear market in history?

  40. Gary

    The current cycle whereabouts for gold are up in the air. The reason I think the cycle low occurred on June 2 is because I don’t think gold is going to rally against a rising dollar.

    That being the case then we should see gold generally falling for the next couple of weeks.

    We also have a weekly swing high for gold and it’s still holding under the 10 DMA.

    We saw something similar to this in Nov. 09 and in the summer of 10.

  41. Ben


    If the only trades on a stock today are me selling 100 shares and two different parties buying 50 shares each, then the Buyers vs sellers ratio would be 2.0 to 1

    Put in that light, it would seem a high number means retail investors are doing the buying and bigger investors/funds etc. would be doing the selling, in the aggregate anyway. Not sure if it means much tho…

  42. Poly

    Gary, fine point on the weekly swing.
    Only thing that matters now is the weekly chart and clearly we have or soon will be moving down the 3-5 week IT slide.

  43. MrMiyagi

    You can look at a Level II Quotes stream and it will show you the buy orders vs the sell orders.
    More buy orders usually means price going up and sell orders price going down.
    More sell orders with price going up is not a strong foundation and I would stay away from this type of activity. You have to also look at the size of the orders, if, for example, there are 20000 for sale at 30$ and the other prices are 4-5000 shares, then there might be some resistence at that level.
    This tool in combination with MACD, RSI, Williams R%, Stochastics, On Balance Volume and BBands are what I use for INTRADAY trades. Quick moves that are held on the average 30 minutes, some as short as a minute.

    Level 2 Quote interpretation is a little tricky at first but gives you a very quick glance at the “right now” picture.

    Not for everyone but it works for me.

  44. CMT

    Poly, thanks. I added to my SLV puts, doubled up on the EUO and wound up holding it, and even took another nibble on my QQQ shorts.

  45. MrMiyagi

    Looks like you had quite a good time in Switzerland Gary, glad to see some of the members were there as well.
    Good report as usual.

  46. Harry

    Gary, thanks for tonight’s report. When you talk about when Ben will turn the presses back on, you mean to say “late July or early August,” right?

  47. William


    What makes you think that Gold will drop to the 40 week moving average, and not bounce off the 30 week like it has done the last 4-5 intermediate declines?

    Right now the 30 week sits at around 1435.


  48. Gary

    I think it will be a D-wave just a mild one because gold never stretched very far. Possibly just back to or slightly below the 200 DMA is about all I’m looking for.

  49. William


    I was just looking at John’s (TSI Trader)C-wave charts and was thinking,this will be the 5th intermediate decline of this C-wave, the previous three or four C-waves had about 4-5 on average before a D-wave, correct?

    Does that not suggest this may turn into a D-wave?

  50. fubsy_cooter

    Hey DG,
    Looks like I’ll be joining you in EUO tomorrow. The Euro’s pain is definitely not discounted. Easy stop below the low of today.

  51. Veronica

    The sell stop on my system has now moved above the buy in and will eventually generate it’s seventh straight winning long trade.Previously I had stated that it was on on it’s 2nd long winning trade but that was just from the IT low. The last losing long trade was in July 2010.One of the trades barely made any $ and with slippage was probably a loss so I guess mentally I really did not notice the win streak was so long.7 straight winning long trades will be a record for my system, but it has had a streak of 7 straight winning short trades.The profit curve has streaked up the last year with the long wins and the occasional short win and small short losses so it would be normal for my system to now consolidate and underperform for a little while.Maybe a sideways consolidation without any strong moves either way?

  52. Gary

    I haven’t seen any sideways consolidations in gold in a long time. Intermediate corrections have to scare people. That doesn’t typically happen during a sideways consolidation.

    It certainly looks like gold is rolling over in preparation for an intermediate decline what with the failure to break to new highs.

    I expect that as soon as the dollar starts to rally again gold is going to continue down.

  53. William


    The last D-wave bounced right off the 175SMA on the weekly chart, if this D-wave took us to that moving average its sitting at 1088 right now. Its sitting at 1419 on the daily.

  54. Gary

    Don’t waste your time trying to pick the bottom ahead of time. We’ll just see where we are when we get into the timing band for the next cycle low and try to pick the bottom in real time.

  55. Veronica

    Gary, I hope you’re right, and I just finished your nightly report.It sure seems and “feels” like a big decline is imminent but that means my system would pick that up and the profit curve would just keep climbing parabolically,and looking at it through the eyes of my system and past performance it just doesn’t make much sense.FWIW, I’m mostly cash and looking for gold to hit some key MA’s where I will just hold as much of a long futures position as I can stomach for as long as I can.I will certainly buy unleveraged silver also with a multi year time horizon as I think that trade will eventually pay off bigtime.

  56. William


    Just checking out the history, hoping it repeats itself. In all honesty, im glad I will have you guiding me when we are experiencing it in real time.

  57. Éamonn

    Veronica, would you describe your “system”?
    ave you determined how many times has it given you a “prediction” and how many times it has produced a profitable trade?

  58. Veronica

    I shorted on the spike in the last employment report, but it was a very small position.Sometimes I don’t follow my system exactly and that’s why I’m blessed to be able to have extremely talented people like Gary( and others here too)to learn from.

  59. DG

    Fubsy: Glad to have your company in EUO. Waiting turned out to be fine as it hasn’t done much yet. I traded around and made a little but scarcely worth the mental effort.

  60. Veronica

    Eammon, 66.2% winning long trades, and 44% winning short trades, with the winning long trades 2.13 times the size of the long losers since the inception of globex gold futures trading in 2001.

  61. Veronica

    I always trade large gold futures positions as long only, and the shorts are done more for entertainment, and always very small.

  62. Veronica

    Eammon,If you run a hedge fund, let’s talk:)Seriously though, I don’t want to give the parameters away, but I’ve been posting my trades in real time for a little while now.

  63. Éamonn

    Veronica, I understand that fully, and I never meant to suggest at all that you reveal your system. Just my nature to want do a full egg-head type statistical analysis of your system so I could quantify its behaviour :o)

  64. Mighty

    Thanks for sharing your pictures of Switzerland, the vistas are stunning.
    So sorry you didn’t get to climb the Matterhorn, will you be returning to do so?

  65. Veronica

    Gary, I just ran MACD test at 12,26,9 and the results are abysmal.It’s showing a loss per gold contract of over 40k the last 10 years, with winning long trades at exactly 50% and winning short trades at 29%.Profit curve is nasty and all over the place with no consistany whatsoever.

  66. Edwin

    Gary – they are rigged to the upside.

    doesn’t mean that they don’t go down first.

    something has to go wrong and the money taps starts to flow. this has been happening forever credit easing, quantitative easing

    there are times of prosperity, inflation and deflation.

    know where to be in those times

  67. William


    If you have a system that works this well, and you trade only large futures contracts, what are you doing here?

  68. TZ(8155)


    The default coloration of the TOS charts is horrible (no fault of your own.)

    Would you consider doing what DOC did and change the ever-so-impossible-to-see LIGHT GREEN candles to BLACK. (It doesn’t help that green denotes “up” which usually is also hollow…unlike down which is thus solid and filled in.)

    Will make the charts much more readable as you will see when you try it. Thanks.

  69. Fergie

    I’m fortunate enough to call Gary my friend. He’s made me enough to enjoy the finer things in life full-time, which he gloats over every chance he gets.

  70. Fergie

    Yes, I’ve been trying to remind him of that since 2008, when I became a subscriber and had the opportunity to meet in Vegas. If I had never shared how profitable his methodology had become, he’d be much better company. Now, he just reminds me what a day trader I used to be.

  71. Harry

    So, what you’re saying is, Gary’s still available?

    Well, umm, Gary, I’d like to introduce myself. I like cycle theory, burritos, and long walks in the woods. My US number is 48457…

  72. Fergie

    With a name of Harry, I doubt that’s going to get you far, but Madoff or Rajaratnam maybe looking for companionship in the klink so all hope is not lost.

  73. ALEX

    Maybe Harry is short for Harriet? mI also thought Fergie and Gary looked good together when I first saw that group photo…

    Anyways, dollar up pretty good so far , added DRV and EUO yesterday.Not necessarily recommending 3x ETF’s (like DRV) to anyone-added risk if holding too long.

  74. Fergie

    In Prophet, I used to click on chart settings/comparison chart and it’d do what you’re attempting. Other option is clicking on grid charts, but that will default to four charts vs. two. However, you can just copy/paste with jinga the two charts you want at that point.

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