GOLD CRAWL

I’m assuming that gold’s latest cycle low was the mild pullback on June 2. If that’s the case then gold is now in a left translated daily cycle that topped in only two days. It’s also starting to form a crawling pattern along the 50 DMA.



Crawling patterns are usually continuation patterns and when they break down they tend to move aggressively down to the 200 day moving average.

Considering that gold is now 20 weeks into it’s intermediate cycle, has formed a weekly swing high, and the extreme weakness in the mining sector, I think the odds are high the crawl is going to break down soon and the aggressive part of the intermediate degree correction will begin.

319 thoughts on “GOLD CRAWL”

  3. Alpine

    QUESTION:

    How can I set up a twitter account
    with tweety mail that will notify me via email whenever a portfolio change gets posted by Gary.

  4. 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.

  5. Shawk

    Hey Gary,

    On the SPX chart, go to edit studies and look for comparison, which list a number of different securities. Pick any of them and add study. Then go into the properties and you can change where it says “secondary security” to whatever you want like $dxy. Then you can change the graph where it says “comparison style” to line, bar or candle. Also I usually uncheck “upper subgraph” on the options to the right and it puts it on the bottom.

  7. Gary

    OK, now is there a way to expand the lower chart so it’s not so small and also get rid of the volume chart that separates the two?

  8. Turning Japanese

    Some useful info for those concerned with EUR/USD and its impact on the markets in the coming months.

    Through my job, I have access to the expensive sell-side publication, FX Week. At the back of each report it publishes weekly updated individual and consensus forecasts by all the top FX dealers and brokers.

    Historically, the consensus forecasts have been off only slightly in magnitude, but virtually never off in overall direction for EUR/USD, and in the past couple of years, forecasts have served as a base (lows) for spot more than an average or ceiling (meaning forecasts have been consistently below spot, but nearly always eventually drag it down for at least a tag of the one and three month forecasts).

    Here are the latest forecasts:

    1 month: 1.4274
    3 months: 1.4090
    12 months: 1.3695

    Remember, these could be forecasted even lower (or higher) each week, so I will try and post again if I see any significant changes.

  11. SkepticSquirrel

    Gary RE: Charts,

    Looking at the TOS charts on the upper right by “symbols”, “reset” etc. you will see a yellow outlined box that allows you to select any number of charts to viewed at one time. Simply click on the box to expand the drop down, then click on the very upper left box and drag the cursor around to create a custom chart grid.

  12. SkepticSquirrel

    Re: charts, correction. Once the box is expanded you don’t have to click until you have your grid configuration that you want. The grid lights up as you move your mouse around.

  14. KAL

    Nice sharing Turning. I appreciate it.

    My idea for short sale of the month: Greek banks. Anybody on that action?

  16. 86d4life

    The more time goes by, the more I feel how stockcharts really threw a wrench in the gears. I just about jumped on the spring special banswagon too.

  17. Shawk

    You’d have to remove any other subcharts in the edit studies if don’t want them visible.

    Also under the style menu there are tabs for equities, options, futures and forex. On those tabs there is a setting for “show volume subgraph” and those can toggled on and off a long with other settings such as open interest or extended session charting

  23. Gary

    From what I’ve seen Armstrong isn’t very accurate. I think I’ll stick with my version of cycles… at least they work most of the time.

  24. ALEX

    Gary

    Its times like this that cycles really help, because the fact that the dollar was so early in its daily cycle helped many of us not to get suckered into long positions yesterday ( metals or SPX), despite seemingly oversold conditions.

    It now looks like the mini bull flag on the dollar broke out overnight, but even then it would have been selling the gap down this a.m. if one went long yesterday. The addition of cycles in my analysis has greatly added to ‘timing’ my trades. Thx

  28. Poly

    Today should clearly highlight again, that unless you’re a very experienced trader, the real money is to be made focusing and concentrating on the primary trend. Which of course, for now, is on the short side.
    Buying your stake early on trend change quickly gives you strong hand status and then sitting tight negates the violent bull rallies all too common in a declining market.

    We’re a maximum of 8 weeks from a gold IT cycle low, don’t forget where the real money is to be made.

    Good day to all.

  33. ALEX

    I wanted to point out two charts with regards to the SPX correction.

    The first is a POSSIBLE price target if this is an A-B-C move( the price move from A to B should repeat from C to D). I drew this Friday, June 10th as a basic guide. I actually thought a target of 1226 soon wasnt crazy…here’s why-

    http://www.screencast.com/t/MnYgm4hbvP

    This one is for POLY, who has stuck with his short position with solid conviction despite bounces, and rightly so…just wanted to mention this, as a guide for all of us –

    http://www.screencast.com/t/uHM53QQH

  34. Wav_ridah

    Gary,
    Armstrong’s reading are great, his cycles not so much. But one of his old subs Bill Downey is pretty sharp. I’m sure you heard of Goldtrends.net. FWIW Downey’s calls are identical to yours at the moment.

  36. Gary

    Sean,
    Give it time. The dollar is only on day 6 of it’s cycle. It should have 10 or more days left in this rally. Gold is at the beginning of it’s cycle. At some point the pressure from a steadily rising dollar is going to drive gold down into it’s intermediate low.

    Lately it seems to come suddenly as buyers give up causing a very rapid deterioration in price in a very short time span.

  39. Poly

    “Poly, isn’t gold and silver holding up well in the futures given the strength of the $ rally?”

    Yes and no. It’s more of a Euro drop than Dollar rally, for now at least, but of course the dollar index is more than 50% Euro weighted.
    Gold has held up well due to its perceived safety. Gary is 100% correct though, gold will soon move down $100+ to find it’s IT low, don’t see how we avoid that.

    Although I would never short gold and I’m leaning towards a “normal IT cycle correction, one that should find support around the 175 DMA or so.

    Now that Gold is in it’s 11th year of a bull and the world economy getting ever deeper in crises, we need to begin adjusting our expectations on gold price and movement to reflect it’s maturing bull status. Look at past bull markets and notice the velocity and volatility of the move when it begins entering the latter stages!

  44. traderlady

    ALEX: Thank you for the charts.

    Gary and Poly: All your insight is sooo helpful.

    JEFF: I use SH as I can hold long time without decay of the double just
    as Gary shorts the SPY.

    SB: Miss you! lol

  46. ALEX

    In addition –

    Today and yesterday was also the release of P.P.I. and C.P.I. #’s .
    They didnt indicate strong inflation ( but most know the numbers are rigged…food prices are soaring, etc) so they keep possible inflation worries in the back of the mind– so reminders of inflation and quite violent Greece riots on T.V. could cause many to still view Gold as a safe haven also.

  47. Turning Japanese

    If anyone can make heads or tails from gold over the last few weeks, I am all ears.

    Everytime it looks ready to drop off and start a cascading fall into an IT low, it rallies $15-20 in a matter of minutes. I’m not short, but still tough to watch ’cause I want some cheap gold!

  53. TommyD

    Gary and All,
    Somebody look at the 1 minute chart of TBF and tell me how big an order that was at 10:04ish. This is a 1X the 20+ treasuries…
    Interesting to me at the moment…. Thanks.

  58. TommyD

    William,
    The dollar bottomed around 10:00. It’s on a .20 cent slide from 8:30 just up to 9:45ish… Dollar not the issue.

  62. T.J. Rand

    Gary-

    Does the Blees of 100 on silver and very bullish (for rises in the metal) sentiment at all dampen the strength of the link between gold and silver? Gold’s sentiment/Blees ratings are much more neutral. Left to it’s own devices, silver has the sentiment underpinnings for a nice move up.

    I’m personally betting that Silver falls, but am concerned by the sentiment/Blees readings.

  65. William

    Tommy,

    Im not talking about the dollar bottom, if you look at a 1 min chart you can see an extreme volume spike in both the TBF and Dollar minutes apart.

  66. DG

    My thought for the day: Go euro!

    I shorted a little more into this bounce (EEM). Disappointing about oil, but I agree with Gary that it will just take a little time for the deflationary fears and dollar-rally pressure to really take hold. No way we have a weak economy and high oil prices.

  68. Moneyman

    DG

    Im long the dollar..Nice call there from you and Gary..

    So you think this is just the beginning and the decline for the euro will remain?

  69. PST

    Tommy,
    You are probably aware of this, but TBF is short the 20 yr. treasury.

    There is a rumor circulating that the Fed, as part of their next easing policy, will look to cap the yield on shorter term treasuries, while encouraging (selling their inventory) the long end of the curve to rise. Many people are speculating that they will probably target the 10 year to cap, but Bill Gross was out tweeting yesterday that the Fed will focus on capping 2-3 year treasury yields instead.

    My guess is that, if there is any truth to this rumor, people might be trying to create some type of curve steepener (long ST treasuries and short LT treasuries), which was a successful trade for Julian Robertson during 2008.

  72. William

    Today is one of those days that gold could care less what the dollar is doing. If this continues for a couple days it looks like gold is getting a bounce off of the intermediate cycle lower trendline.

  73. DG

    Moneyman: Yep. This has just started. I plan to sell my EUO in the low to mid 20’s or when there are a number of “The Euro Can’t Survive” headlines, whichever comes first.

  83. ...at ease

    Gary,
    Bought in yesterday and seeing nice profits coming in.
    We still moving on our model portfolio?
    Just checking before I leave for the airport.
    Beautiful pics from your Matterhorn trip!
    Thanks

  84. Moneyman

    DG

    Oki..Thanks for the answer..:-)

    Im long US dollar thanks to you guys..

    It’s such a mess in greece and this makes it just a matter of time before problems arise in Portugal, Ireland and Spain..

    I read that the primeminister in Greece may resign and some kind of unity government may form?!?!

    That type of government are usually formed in wartime..

    Actually kind of scary!!

  86. William

    The dollar blasted off so hard my daily candle’s top wick is in the candle and the high is reading .20cents lower than the current high…anyone ever have this problem in ThinkorSwim?

  92. DG

    Careful about adding now. Just when it emotionally feels like “Wow! This is great!” is when bear rallies start. Frankly, I think it’s unlikely as we just rallied yesterday, but it’s a good habit to pause when you get excited about how you are doing. We should all be short already (if we have been intending to be) and now is a time to sit. If they crash—great! You are there. If they erode and then bounce, you can short the bounce. With strong hand status it doesn’t matter. Just like the long side, cover when the timing band for the IT low is upon us. Go take a nap!

  94. Felix

    DG, that’s fantastic and perfectly timed advice!

    William, you are right sir, Gary is a great coach and genius cycle master but he has created a blog atmosphere where all these other great coaches come together, really awesome.

  96. DG

    Felix: I have so many battle scars I look like a Frankenstein monster. Seems sad not to try to help others avoid a few cuts here and there. Now is a time to just smile.

  97. ...at ease

    Thanks DG! you answered my question. Will ride. Have to catch my flight so missing the rest of todays action. Geesh, just when something starts moving. LOL

  101. William

    Gary,

    Is there any relation between the dollars price and gold’s…in other words, if the dollar is at a certain price should gold be at a certain price?

  102. William

    Anyone know of a more profitable vehicle to go long the dollar than UUP, the dollar is up over a point today and UUP is up .30?

  103. Felix

    Precious metals traders attempt to discover the currency cost of the metals in throughout the trading day based on many factors, in recent years especially on commodities inflation or deflation trending, depending on Federal monetary liquidity policy.

  109. NJ

    DG:

    I got in small in EUO as well around 17 yesterday. Really appreciate yours, Poly’s and several others ideas and invaluable insights!

  112. DG

    William: I am short EEM and SPY, long DUG, and have puts on USO and SLV. EUO is my heaviest position and oil is a close second. I am looking to add on bounces after this mini-crash is done.

  113. DG

    Gary: Very nice work on the dollar. I could not have gotten so large or have timed this as well without your cycle work. I owe you a burrito (I’m still trying to figure out how to fax the damn things!)

  114. Éamonn

    DG, when you are shorting oil, do you not fear the geopolitical instability of the oil producing countries? That is to say, an event spiking the price of oil?

  115. DG

    Eamonn: Nope. Odds are heavily tilted towards lower prices.If an “event” happens my other shorts will way more than offset the oil spike as the dow would drop 500 points and the euro would crater. I would not go all in on an oil play alone.

  117. jeff

    DG Gary or anyone
    will we be looking for a top in the dollar on day 10 or 11 to sell and then buy the next cycle low?

  122. Éamonn

    DG, thanks. I never thought of that, believe it or not, that the S&P etc would plunge if such a geopolitical event took place.
    I also find your shorting of emerging markets quite interesting. Do you see a global downturn coming, and what sort of time-scale do you have for this? A lot of people are saying China has a recession coming in about a year.

  124. pimaCanyon

    William and anyone else thinking about a pure dollar long play:

    If you don’t want to do dollar index futures but you want more leverage than UUP provides, consider in the money UUP calls.

    Right now the September 20 calls have a whopping 2 cents extrinsic value (meaning that essentially the entire price you pay is extrinsic value, or the current price of UUP less the strike price). The spread is 5 cents.

    So these in-the-money calls are a way you can control a lot of UUP shares with a lot less money than buying the shares outright.

  125. gold silver troll

    gold and silver refusing to budge here…wow

    the USD rallying, oil getting trashed, stocks getting trashed BUT gold and silver showing very good strength…is the intermediate decline ever going to happen?

  127. DG

    E: If we have a deflationary event the weakest players get hurt the most, just like the small caps get hurt the most when the SPX declines. Emerging mkts will get smacked as they are more volatile. I have been wanting to buy FXP but just kept buying other inverse etf’s.

  131. Éamonn

    DG, thank you. I’ve noticed you tend to get in very early to the move e.g. with NYSE:PHM. I imagine you have made fortunes with this method. You just need to have the confidence to do it before the move starts. You must do a lot of research before making these trades.

  133. Michael

    Extremely strong performance for predominantly oil equity market Russia RSX which just as in the relationship between gold stocks/gold price is often a tell oil prices – it’s either a good tell here that oil price weakness is temporary … or a great short here because of the spiraling effect of lower oil prices on the equities.

  134. Aaron

    Sophia, a very large portion of the S&P is energy stocks. If oil gets crushed, they will get creamed, and drag down the market along.

  135. pimaCanyon

    Eamonn,

    You’re welcome.

    I noticed those because I was interested in a pure dollar long but didn’t want to tie up the money to buy a ton of UUP shares. So I haven’t spotted any other bargains, mainly because I haven’t looked.

  137. cklear

    Anyone one see the U.S. Dollar surge not happening until second half of 2011 when the economy start strengthening? Of course, second half is only 2 weeks away. EURO weakness is the secondary factor USD has pulling it up now, and Europe actauly has a few good economies like Germany. This goes along with oil weakening to prop up household spending. The deflationary scenario is a puzzle.

  138. William

    Gary,

    Do you realize how amazing your call to put back those shorts yesterday at the 10ma was. You sure you dont have a crystal ball?

  139. fubsy_cooter

    DG/Poly,
    Things are working put ok today, huh? The world is collapsing, but hey, we’re not. : )
    DG, your vision is playing out. Nice conviction.
    f

  142. sophia

    what happens if Papandreou resigns tonight? Markets up or down? If there is a unity gvt in Greece, we could have a brief rally and then Boum huge selloff as Greece is bankrupted anyway

  143. William

    Gary,

    Do you consider today to be a wasted ‘down’ day for gold, the way you considered a weak dollar not rallying gold to be a wasted ‘up day’??

  144. DG

    Heck, I don’t make that much because I don’t play as hard as some of these young pups. I did manage to make 1,000% one year but that was a LONG time ago (I then got cocky and lost it, BTW. More Frankenstein scars). I am short 40% of my net worth right now.

  146. Ben

    DG, be a man, like Goldman Sachs — go short 3000-5000% of your net worth, with taxpayer backing or a huge Fed Prop Job if you screw up.

  148. Edwin

    i come back from lunch hadn’t checked the markets, and see a sea of red.

    dollar spike going ballistic.

    my bonds are going to have a good day.

    but my stocks, oh well.. i didn’t see that spike coming.

    what’s this spike all about? news of more eurozone problems?

  149. William

    Gary,

    You recently mentioned another “leak” springing out of Europe, would you consider the resignation of Greece’s PM that “leak”?

  151. sophia

    I have only one issue regarding been too short S&P and NSQ if I may…
    The German market DAX is holding at the same level where it was last week when S&P was at 1300 and NSQ at 2300…Either one market was overvalued then, or it is undervalued now…
    Time will tell

  153. Harry

    Seriously, Gary – your call to put the stock short back on was legendary. I missed the original entry but the SPY puts I bought yesterday are up about 30%!

  156. hamvestor

    Eamonn, you’re kidding, right? What would you say if someone asked you “what’s Ireland like? I had an Irish friend and he didn’t like it”?

  158. hamvestor

    OK Eamonn, what if someone just asked you “what’s Ireland like?” That is the kind of question which can be answered simply only by simpletons. jmho.

  159. William

    Gary,

    The market falling today is all your fault, when you said yesterday “s&p touched the 10ma, oh well I guess I will put those shorts back on right now” You smacked the market right over the head into submission.

    All hail Gary…lol!

  160. ...at ease

    Thanks Gary, wanted to thank you before I head out for getting us back in yesterday so quickly. I wasn’t sure, but followed your lead back in and very very happy. 🙂 !!!

    THANK YOU!

  163. niven

    Its weird how silver isn’t going down today as the us dollar has spiked.. could it have anything to do with the increase in China’s CPI

  164. oa92000

    ” Éamonn said…
    Harry, what is Shanghai like?”

    Shanghai? you can live cheap or you can live expensive ..I paid $5000/month for my apartment when I was there.

  165. Harry

    Ireland is a big place and might be a little harder to describe, but Shanghai is just a city and I can describe it fairly well.

    I agree with your Chinese friend, Eamonn – I don’t like it! I’m actually up in Beijing this week and boy is there a difference. Shanghai is too much flash and glamour, there’s no substance. Plenty of overpriced bars but that’s about it. Everything is more expensive that elsewhere in China (prices of a lot of things are close to double what they are in smaller cities). It’s the Chinese NYC, and I don’t like the original NYC. It’s oppressively hot and humid for much of the year. And I hate everyone’s Shanghai accent, which to my white ears is hard to understand. Half the time they don’t even speak Mandarin! Shanghainese is a separate dialect and is completely unintelligible. So, overall, I’m not a fan.

  167. james r

    The VIX broke higher today. Could quite see a possible gap up tomorrow. Which of course would mean a big down day for the SP500.

    James

  168. hamvestor

    Harry, I’ve spent a lot of time in China, and while I agree with many of your comments about Shanghai, it sounds unfortunately like you have also missed a lot of what the city has to offer.

    As for your analogy to NYC, while many of us find a lot not to like there, imagine all the things that can be found there and virtually nowhere else. I won’t belabor the point, but even as a rabid Red Sox fan and season-ticket holder at Fenway Park, I wouldn’t dream of writing off a city so complex and fascinating as readily as you have. The world just ain’t that simlpe.

  169. Gary

    Gold briefly resisted the deflationary pressures last year too. Remember me saying gold would do whatever it had to do to draw everyone in at the top and then it would take them down and kick them off at the bottom.

    As far as I can remember there has never been a time where gold didn’t drop down into an intermediate cycle low most of the time in the normal timing band. Every once in a while the cycle will stretch but it usually stretches because the correction lengthens not because the rally expands.

    As of today gold topped on week 14 and so far it’s showing no ability to better that high. It’s just struggling to hold above $1500. Ultimately it will correct and the longer it holds out the more violent the correction will be when the selling finally takes hold.

  170. Éamonn

    Harry, thanks for that info. China sounds interesting, culturally. Very interesting place to visit, I would say. Hopefully I can visit some day. Shanghai sounds like a boom town

  171. niven

    You could definitely head up to Taiwan. The people here are very friendly and its not like China where they have hundreds of different dialects. You’ll have no problem getting around since most people here speak English as a second language.

  173. Gary

    TJ,
    The blees ratings for silver have become mostly worthless. They were becoming extremely bullish right into the top.

    I would suggest you ignore the silver Blees rating and focus on gold.

  178. PST

    Gary,
    If we take out the March intermediate pivot in the S&P soon, what range would you be expecting for the half cycle low in a few weeks?

    Thanks

  179. sophia

    ok guys, let’s admit, I find the whole situation depressing…Greece is bankrupt and dragging down all of Europe in the downhill spiral…I lived the birth of the Euro in the dealing rooms of the City of London and there was great hope then and there.
    The US is playing with fire with its crazy debt levels…I agree with Pimco that the situation in the US is far worst than the one in Greece in the fact that nobody,I mean nobody is ready in the US to tighten their belt for the sake of a better future..The Greeks did the same for the last 10 years…

  180. Ben

    DG, I’ve been looking for where you apply to e.g. borrow a billion at 0.1% like the big boyz… no luck so far. I’ll let ya know when I find the missing link.

  185. Gary

    PST,
    Prepare for a significant counter trend rally once the March pivot is broken.

    Breakdowns almost always fail to follow through.

  186. sophia

    I agree Poly, but I live in Europe…I have family in the US and for years I looked at them spending and borrowing without understanding how they could do it while us we were tightening our belts since the late 80s.

    Ben Bernanke helped the American people by printing money and not by tightening their belts.. The day of reckoning is coming close…
    I want to see that day where the US Treasuries are going to be dumped like hot potatoes…It will be interesting as then our favorite GOLd will be at 2000-2500$

  187. hamvestor

    Yesterday I suggested that SLV seemed to be putting in a double-bottom, at least for the near-term, and got no response. Silver (and gold) certainly seem to be strong today in the face of a strong dollar and unsupportive seasonal tendencies. I know Gary has said it is just a case of there being a lag in gold and silver acting inversely to the rising dollar, and that the cycles will ultimately rule, but what would be the ultimate fake-out to fool the most investors? It will be fascinating to see how this plays out.

  188. TommyD

    Sophia,

    Those of us that SAVED and did our best to keep low debt, we will suffer for all of those that didn’t save and took on much debt.

    That is the part that makes it hard for me to handle. I have a friend that hasn’t paid a mortgage in 4 years. He has had the best vacations I could just hope to one day have.

    Europe and the rest of the world have had an unfair advantage on NAFTA and GATA, yet the world still wants to see the USA depreciate and go bankrupt. I see everyone in the world going down with the USA ship.

    Unfair but it’s life…

  189. Michael

    Gann, thanks for the charts.. I follow them closely… looking to add to SLV puts…

    Gary, does a stagflationary vs deflationary environment change gold’s cycle length or depth?

  190. Gary

    I’m not sure what you mean by a double bottom. Silver would have to dip to $32.31 to form a double bottom. It’s still quite a ways from that yet.

  193. Gary

    Michael,
    QE has tended to stretch all cycles a bit but other than that cycles are governed by human emotions. Those don’t usually change.

  194. Gary

    I seem to remember someone bet me a burrito that the dollar was going to continue down and make new lows. I think it’s safe to say at this point that the daily cycle has bottomed and the dollar will not be making new lows in the near future.

  195. Sang

    Love it – for those who have been around… we’ve seen this sideshow before.

    Dollar goes up, and Gold/Silver tread water and don’t go down.

    This lasts just long enough to suck in the remaining late comers, and the longer the charade lasts, the harder the fall.

    I can see some comments here now, thinking, perhaps even hoping that this time, somehow, Gold and Silver somehow will rise in tandem with the dollar.

    Yes, it can do that. In fact, it has done that in the past, many times actually.

    But to invest in those rare instances, which all have a 100% ending of Gold and Silver finally blowing up and tanking after a “lag” as Gary puts it, is foolhardy. There are so many other ways to make money than to focus on this fleeting temporal distortion if you are long Gold or Silver.

    In fact, even though I agree with Gary that one should never short a bull market (and we are in one for Gold and Silver), you’d be better off shorting Gold and Silver and taking advantage of this temporal “lag” than clinging on to hopes if you are long Gold or Silver.

    Full disclosure: I am short silver, in a big grand way =D

  196. William

    Sang,

    It is like a big show, this morning gold pops on high volume within minutes because institutional investors run it up, then after that you can see all the retail investors are all confused and gold bouys for the rest of the day.

  198. Keys

    Clear as day, as is to many that going long doesn’t make sense. Gary and many others on this blog have been confirming this move down for months…nothing out of the play book.
    Gold looks real weak, so does silver…However it is showing relative strength in other currencies…the Euro being one….
    But yikes, who wants to put money to work on this…The world wants deflation to purge out debt, very obviouse..Gov’s want to inflate out of it…up and down up and down…sustained deflation is not possible without the economy blowing up, so the FED and other gov’s print…clear as day that we are entering another round of falling prices, until interest rates creep up, or some other cause forces the FED to print again. This after all is the big story for the last decade…
    Great short calls and congrats to all that participated!

    I found it great that Pandora IPOed today(if such a verb exists)…no profit for ten years, and people blindly buying…Pandora’s box has been opened! Ominous sign.LOL

    Back to the depression again!

  199. hamvestor

    Gary, by “double bottom” in SLV I mean the low in Mid-May and the subsequent low over the past few days (forming a higher low than mid-May, fwiw), making for the beginning of a potential “W” pattern. I think that’s a lower probability than a break down out of of the triangle on Monday and a retest of the breakdown today (leading to further downside), but still, the strength of PM’s in the face of a strong dollar makes me slightly nervous (I have modest positions in DZZ and ZSL), as does the prevalence of the view, at least on this blog, that any significant move up in PM’s is not in the cards for the near-term. We’ll know soon enough I guess.

  200. Poly

    Agree Gary, gold forming a flag and the timing for moves down ti IT low get sweeter by the day.

    Guys, don’t forget, when gold is ready, it does not waddle down, it base jumps!

  201. Vonda

    “Pandora’s Box.” Nice Keys!

    Decided not to go with Euro or equivalent play, though I believe in it. Just didn’t have the energy to muster risk-reward preferences.

    Besides, I like swingin’ at fences. Beats the rip-roaring bore that is the PM market of late.

    Sticking with line-up of SLV puts, various strike prices/dates, purchased at different times with risk carefully calculated to save the bulk for the A-train. At the moment am at dead break even. Ho-hum.

  206. Gary

    The Bollinger band trade doesn’t work on an upside breakout. Market go up differently than they go down.

    More often than not a move above the upper bollinger band is a continuation sign.

  208. Slumdog

    Anybody see a cup and handle in SI and GC on the 5 minute, now?

    That cup is double bottomed, but that handle is downsloping and pregnant to jump up.

  209. PST

    Gary,
    I do expect a snap-back rally, especially if we do trade down to 1250. I guess worded differently, do you expect a lower low at the half cycle low?

  212. DG

    It’s not so hard to short after all…

    Don’t chase lower. If you got in at a good price, go Old Turkey. If you are heavy, cover a little when you start to think you are smart or soon-to-be-rich. Don’t get clever or too aggressive. No adding when there is fear on the Street (look at tomorrow’s headlines. Where have all the “here comes the recovery/housing has bottomed” ones now? That was the time to short.) We have a few weeks to go. Don’t look at your account balance and “count” today’s profits—you’ll be afraid to give them back and cover too soon.

  213. Farm Girl

    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

  215. Gary

    DG,
    Easy to say, very hard to do. I think you yourself backed out of some of your EUO trade.

    Bear markets wreck havoc on our emotions simply because the rallies are so intense. It makes it very hard to pull the trigger. And if you do pull the trigger you better be prepared to weather a severe draw down as one never knows where the top of the counter trend moves will occur at.

    We could have easily seen the market rally back to 1300 or even the 50 DMA before rolling over again.

    It was pure luck that I got the timing right on the tag of the 10 DMA. I can virtually guarantee I won’t get it right on the bounce out of the half cycle low.

  216. DG

    I trade a lot, so I will probably take at least partial profits. The risk is failing to get back in and missing much of the move. For me it will depend on the sentiment. If there are lots of “Euro about to fail” headlines I will sell it all. I will post here what I do.

  219. PST

    Before we all get too giddy about the dollar (euro), this will certainly not be a straight line up (down). The fed/treasury want a weak dollar to boost exports and corporate earnings (via fx repatriation), so they will certainly try to talk it down over the coming days/weeks. I wouldn’t be surprised if they parade out all the Fed doves over the next few days to talk about how additional stimulus should be considered to support the economy. In the end though, they will fail…that is until they turn the presses back on

  220. 86d4life

    Sophia, Poly, Tommy and others,

    I suspect we all know in one form or another that someday the wheels are going to come right off this whole show. And that really is sad, because we probably know the suffering will unprecedented. But I had to come to realize this; most people choose ignorance. I feel no guilt or remorse for choosing to see the truth of what is happening in our world. And preparing. My personal mission is to try to show the people that I run into along the way what is really going on and to try help those closest to me to be prepared. And I think to some small extent, it works.

  221. ALEX

    HAMVESTOR

    “–even as a rabid Red Sox fan and season-ticket holder at Fenway Park–“

    WHAT! Suddenly I hate you ( just really jealous, thats all…dont take it personally)! Sox 0-9 start , now CRAZY hot!

    🙂

  222. Sleeper

    Gary,

    I’m confused on the current gold daily cycle. Why can’t June 13th be the cycle low? I can see it from across the room, it tagged the 50-day sma. I don’t see “failed cycle” with left translation, I see day 3 of new cycle with rising prices. I’ll be curious to see how this week finishes out and how fits on the weekly chart.

    I’m short PMs, as many here are, but getting wiggly. Ready for the IT low to materialize! Trying to get the hang of these cycles.

    Thanks, coach! 🙂

  223. rose

    CLASSIFIED AD – HELP WANTED 🙂

    Unfortunately, I did not heed DG’s advice to take a nap today.

    Seeing my nice gains (per model portfolio plus some EUO plus some GDX puts), I became emotional. I closed out the model portfolio but was able to stop myself from liquidating the rest.

    What is the strategy to remedy getting out too soon?

    With sincere thanks in advance and with kindest regards to all,

    Rose

  226. Gary

    Sleeper,
    That is still a possibility, and if the rally continues for a few more days I will revert back to the original phasing.

    I must say that would make counting the days much easier so maybe we should hope for a few more days of continued strength.

  228. ALEX

    ROSE

    asked..”What is the strategy to remedy getting out too soon?”

    I either decide to sell a portion on the way up,not all, and let the rest ride if I think there may be more upside( or downside 🙂 and for the occasional pullback ( or rally), I add again IF CONDITIONS ARE RIGHT ( cycle timing, volume analysis, etc).

    but next time…indecisive= Sell some, not all.

  229. Peter

    Gary,

    Bill Gross recently suggested QE3 come in the form of operation twist (2-3 year bond curve flattening).

    I know you believe QE3 is inevitable and that it will come once the intermediate cycle has finished – but if these are the details, do they change your opinion on how the market would react or when?

    I apologize for the nature of the question but it does seem like the big wildcard to holding shorts is QE3.

  230. Gary

    QE is the cause of the recession not the cure. More QE is not going to change that it will only compound the problems. I went over this in one of the recent weekend reports although off the top of my head I can’t remember which one is was.

  231. Poly

    If or when QE3 comes, it will come at a favorable “Cycle point”, they often do.

    It’s these extremes that spur hasty fixes like QE. It’s the extremes where you find cycle lows/tops.

  232. hamvestor

    Alex, lol. Who woulda thunk the Sox would find themselves in 1st place with one of the best records in baseball this quickly after such a horrid start.

    But NY still has the best sushi this side of Tsukiji/Tokyo.

    As for the main topic of the blog, it sure takes more discipline than I can usually muster to sit out this market right now and wait for Gary to say it’s time to buy again…

  233. ALEX

    Hamvestor

    I actually was in Aruba end of March and for some reason, all I saw was redsox hats/shirts, and i wore my hat. They were 0-9 then and EVERYONE said , “it s not Oct yet, and we all knew they had the Batting power to kill. Now I’m spoiled all games are in double digits 🙂

    as for the Market , I am a trader short term or long , so I own DRV, EDZ , and EUO currently, but even now I will sell and get back in from time to time , until things change.

    Really looking fwd to the next gold/silver bottom.

  234. PST

    Peter,
    The objective of Operation Twist would be a steeper yield curve. They’ll cap the 2-3 yr treasury yield and let the long-end rise. They’ll effectively sell off their holdings of long dated maturities to finance the purchase of 2-3 yr treasuries. It would basically be another way to help recapitalize the banks with the steeper yield curve (carry trade)

  235. GottaHaveIt

    Rose,

    I’ve done the exact same thing in the past … sold and then regretted it.

    I did what DG suggested and bought it all back at a slightly higher price and chalked the expense up to experience.

    In the long run I came out well ahead, so if you think you should have held … but it back and hold!

  236. Poly

    “Really looking fwd to the next gold/silver bottom.”

    Yeah Alex, as much fun as being on the short side of a waterfall is, there is nothing like riding a gold bull from an IT low.

    Time for a cold shower.

  237. ALEX

    POLY

    Yup-

    I can make money in a down market, but it just seems funner and for everyone when we’re riding a bull market. Jumping into P.M. stocks at an I.T. low and you can relax and everyones happy,making nice money.

    Come on August!! ( I.m.o.)

  238. Felix

    Just a thought in an increasingly belligerent moment of history. We all have been taught that wars are the routine end to depressions.

    Any ideas on how the market behaves in wartime (world war)? You may say, “All bets are off” and sure they are, but maybe we ought to have a general idea what to do immediately if a major conflict erupts? Dump all equities and go to physical, for example?

  239. Gary

    No need to worry about that right now. There will be plenty of time to prepare, as it takes months to move an army into place, not to mention we would have to concoct a reason to go to war and that can take years.

  241. Peter

    Gary/Poly,

    Thanks for the insight. Gary I did read your weekend report on this but still find it very confusing how predicting major events (like QE) can play into expected cycle behavior.

  243. Poly

    Go get it, the Euro is toast.

    Short some FXA too, Aussie dollar, most overvalued currency out there will be toast later this year when deflation hits, world economy grinds to a halt and raw commodities demand drops. Aussie as a good 30% drop in her.

  244. DG

    That’s damn cute, Fubsy. If God does that for you let me know as I have my own lists of requests! Of course it might be hard for us to tell whether it was Divine Intervention or a normal prosaic bull flag, I suppose.

  247. I've Eaten Silver

    Could this be true:

    “By the end of 2011 we should see 14% real inflation as we predicted over a year ago. If QE3 type of polices are followed next year we’ll see 25 to 30 percent and in 2013 50 percent or more. That is the beginning of hyperinflation.”

    -Bob Chapman, International Forecaster

    This guy is well researched and as we all know most likely the addicts are going to need a fix of QE3 and beyond. 50% inflation would be nuts, it is hard to imagine.

  248. Gary

    Doubtful as we will almost certainly be in a recession by next year (we’ve probably already started).

    Recessions are deflationary.

  249. Mr. T

    Gary, are we seeing signs of the transports rolling over? U.S. sales of pickup trucks collapsed 12.7% from the previous May, worse than average
    decline of 3.7%. This is more fire to drive the confirmed bear…

  250. I've Eaten Silver

    It looks like the most people are short silver via puts right now. The last time there was such a homogeneous trade altogether here that I recall was last summer everyone getting on the silver bull. We were all right, and so, I do believe again, we will be right again.

    Note that though some people did not make as much money as they could starting out last summer due to improper position sizing leading to emotional trading. Right now I want to have a small enough position where I can just sit tight. Any bigger I would be tempted to trade, and that usually under-performs as you all know.

    Well like a lot of you, just speaking out loud to further clarify the trade/position to myself.

  252. Marty

    Gary. Dragon Voice is great. I use it a lot on reports and it helps me get my thoughts out more quickly. I had to train it on some words yet it is simple and user friendly. I definately recommend it if you type like myself (fairly quickly yet with eyes on the keys). It helps save some mental energy also (for myself atleast).

  254. Gary

    The transports aren’t car sales. That would fall under retail sales. Transports are the rails, trucking and airlines.

    Companies that transports the goods produced by the industrials.

    The trannies need to break below 4900 to confirm a bear market.

  256. Mr. T

    Gary, let me understand this… what your really saying is “I pity the fool who thinks retail sales are DOW transports”? I think I get it now…

    Thanks for the response (seriously). The point was from a very well known and respected economist… Your clarification is great!

  259. Rob L.

    Quiet, Silver. One of your players broke the back of Mason Raymond. That wasn’t dirty?

    To hell with the Bruins and their fans. Keep concentrating on the Red Sox and your most famous celebrity…Ben Affleck.

  260. ALEX

    ROB L

    I agree that the tit for tat in hockey is getting a little rough. Maybe Brutal. I think some of it from BOTH teams was intentional hit,accidental serious injury. I will keep it neutral here- tho you werent talking to me…back to MKTS.

    How about that TZA and TWM! SDS and DXD and EUO have great volume coming in

  261. I've Eaten Silver

    I can’t believe how poor of fans you guys are. Classy fans would never create excuses and call that hit dirty. No 3rd party non-biased viewer would have ever seen anything out of the ordinary with that hit making it dirty or intentional.

    It was the first shift of that game, Raymond lost his balance and the defenseman was trying to push him away from the play. It just so happens there was too much pressure on a vertebrae and he’ll be needing a few months to recover.

    Talking about dirty, let’s talk about Rome. Blind side leading to severe concussion. Super childish and selfish play.

  263. Matt

    Gary,

    Dragon Naturally Speaking software works very well. We have several people in our office who use it and my staff is responsible for support. It takes a little while to “train”, but after it’s setup and familiar to your voice, the accuracy rate is 95-99%. Highly recommended.

  264. Rob L.

    Silver, Rome’s hit was late – he is an idiot. Thomas is a fantastic goalie – he’s the reason why you guys will win tonite. Canucks are passionate, and there are a lot of us – province-wide. Bruins fans jump on and off the bandwagon so much you guys have contracted vertigo.

    Alex, You are a cool dude. I like ya, even if you are a Bruin fan. 🙂

  265. I've Eaten Silver

    Part of the problem is the amount of pressure the Canadian players have on them from the citizens, being that hockey is the most popular sport by far in Canada, similar to soccer is SA.

    There isn’t really any other sport in Canada that draws the masses like hockey. The players are Godly. I know some on the Maple Leafs and Canucks. It is hard for kids to deal with that kind of pressure.

    The game can end up going over the line in such intense circumstances.

  266. Rob L.

    As we type, there are 100,000 people in downtown Vancouver watching the game on 3 huge screens brought in just for the game. much of the downtown core has been shut down – no cars allowed. The city will be in morning tomorrow and for the rest of the summer. 🙁

  268. KAL

    Hockey seems like it would be fun for a kid to play growing up… Kinda makes me wish I’d lived in a cold place as a kid. Snow woulda been nice too. Did you all play hockey outside as kids?

  270. I've Eaten Silver

    I live in Minnesota, and played hockey all my life. I’m from Edina, we have one of the best high school teams in the state- we won last year.

    A lot of my friends have gone on to play college and some pro. Hockey is all a lot of us knew growing up here in Minnesota.

    Canucks are a great team, I wouldn’t have been upset at all to see them win, Sedins are very classy and good. I have mad respect for the Sedins. Thought it may have been smart to play Schneider tonight, but hindsight’s always 20-20.

    Anyway good run my friend!

  271. Rob L.

    I played organized hockey, as well as playing outdoors on a frozen lake in the Muskoka region of Ontario- I live in Vancity now.

    Silver, I am kind of joking around with you…..kind of 😉

    Gonna drink more beer to ease the pain.

  272. Rob L.

    Silver,

    Some of here think that Schneider is a better keeper than Louie, but Louie has signed a 10 or 12 yr deal with a no trade clause…they had to start him. Nucks offense is the reason we lost this series. Ya gotta score goals to win.

  274. Allenupl

    Gary,
    Suggestion for displaying the TOS charts on the nightly report: Switch to the metal background on the TOS login screen by clicking on the configure button. With the metal background, your charts will be far more legible, especially the right hand axis that displays the prices points. I think you can then adjust the background color behind the candles (I use a white background).
    Thanks.

  275. tinchro

    First blog post. Been subscribed since just before the parabola. Love this blog and all the SMTer comments. Lots of smart people on here, excited to learn. Giddy up.

  276. KAL

    Hmmm…. Minnesota and Canada? I heard they have wind chills below zero up there all winter. I’ll take the humidity and the mosquitoes over that. Well, we play a little sport down here called football, so I guess I’m OK. You may have heard of our conference, it’s the one with all those national championships.

  278. ALEX

    Its hand shakes and respect time on the ice…Some are actually hugging each other …so in the end, theres still next year.

    And it took greatness to get there, and make it 7 games to win, not 4.

  279. Gary

    One person says use the white background another gray.

    I think no matter what I use it’s going to be a very poor replacement for stockcharts. But unless stockcharts decides to bring back commodity charts we are stuck with TOS.

  280. ALEX

    I tried to look up Copper, Dollar , Gold etc…Stock charts REALLY let us down!

    I CANNOT imagine them thinking this improves the site in any way. 🙁

  281. Harry

    While we’re on the topic on sports, anybody see the end of that Phils game? 17 games over .500 now and it’s not even July yet!

  282. William

    Gary,

    John Doody the Gold Stock Analyst said he doesnt see gold going much lower then 1545 because of real interest rate, whats your take on that?

  285. Gary

    I’ve never seen an intermediate cycle yet that didn’t have a correction. I expect this one will to especially with the dollar rallying hard.

  287. Gary

    This is just what happens at intermediate cycle tops. Gold rallies long enough to convince everyone to buy in at the top.

  293. Allenupl

    Gary,
    Regarding TOS charts: it really doesn’t matter what the background behind the candles is. White, grey, or even light green work fine. Setting the metal background after clicking on the configure button on the login page is what makes the right hand axis legible. That is what Doc now uses for his nightly reports and it works great. Very easy to read.
    Just a suggestion…
    Thanks.

  296. Glen

    Gary

    You really should check out what DOC has done with TOS charts.

    He has found a way to make the price and time scales legible by changing the background to a light color instead of black.

    The dark brown text on a black background being used now is unreadable (at least on my screen).

    Just a suggestion.

  298. Allenupl

    Eamonn,
    I don’t do much with China and I’m not that knowledgeable. I have a small position right now which I will probably cover (or put a tight stop on) when Gary covers his shorts of the US markets. It does seem to me the fundamentals for equities in China are deteriorating (government raising interest rates and tightening bank reserves, huge property bubble, etc.) and China seems to be correlated with the US markets. But China could go down faster if the real estate bubble pops there so it seems to be worth shorting when the US cycles are heading to their lows.
    But I’m no expert on China so take this with a grain of salt….

  301. Éamonn

    Harry, thanks for your post. I had a rather daft idea. Today we had a big down day in the US stock markets. Such days are usually followed by down days in the Chinese stock markets. One could take advantage of the time difference by shorting a Chinese ETF based in the US.

  302. Beksachi

    Looking great with euo and iyr short

    Thx DG,Fubsy for your regular comments around Euo. As Gary said I plan to hold till dollar hits 200 dma

  303. Wav_ridah

    Eammon,
    EWV double short Japan. Low volume though, 32,000 today and 201,000 average. Remember we are not smarter than the market.

  306. Wav_ridah

    FWIW Armstrong’s turn date on his Economic Confidence Model is not saying gold will make a low this week. It’s indicating a money flow change in the global community. His last turn date was 2009.3 (stock market bottom after crash). Before that was 2008.225 which happened to be the Gold and silver peak before it crashed (Gary’s 8 year cycle low) and before that was 2007.15 (real estate peak). He may have nailed it with fleeing of the Euro into the USD. So I take back what I said about his cycles this AM, about them being off.

  310. samppa_nyman

    Silver holding steady, I got out of QID a bit too early, have the itch to get back on but stocks seem a bit too close to bottoming (are they?).
    Can’t buy options or sell short atm, so how abou ZSL, does it suffer a lot from sideways movement?
    Buying in Euro btw, so is this a bad timing since € is so cheap?

  311. Silverhound

    Morning / Evening All where ever you may be.

    Probably late in stating the obvious here. It looks like the cycle tool nailed the bottom in the dollar pretty good.

    We didn’t get the early tell of MACD divergence this time. A higher low on Price and MACD looks to be confirmation of the bottom with fresh volume kicking in. Final confirmation should be price breaking and holding down trend resistance.

    UUP chart

  312. ALEX

    jobless claims and housing starts report due out at 8:30–

    I would imagine if jobless claims increases and housing starts decreases, we would gap down pretty hard…

    but will it be capitulation selling to the SPX march low and then bounce?
    Or a total washout sell off lower and close down there?

  313. Silverhound

    While the triangle consolidation on the daily gold chart was “imaginary” when it was first drawn in. Price has confirmed the upper boundary with a break and a test for support. Suggests it’s trying to push higher in the short term. How long the rally lasts remains to be seen and we can’t ignore the upper boundary of the flag pattern which is still in play.

    Gold daily chart

  314. Keys

    Samppa,

    You can always buy options on FXE to effectively make your Euro investment into a USD investment. Depends on what you want to do.

  315. 86d4life

    Silverhound,
    Great chart work man! I hadn`t noticed the bear flag on GC going back to the collapse. Outstanding. So you think on the uup we`re right on the trendline break?

  316. ALEX

    SILVERHOUND

    I like that dollar chart, clear and easy to read (mine get a bit cluttered 🙂

    I look at that chart and thinking of possibilities, I could see the dollar break above that downtrend line ( GAP over it today?) and then if the markets rally from oversold..it would just drop back in a day or two and re test that downtrendline / break out.

    OR

    Just break out and run, markets get flushed down the toilet.

    Nice work

  318. Russell

    Is there any evidence eg money flow data, that the Euros are buying more PMs because of their currency crisis and this is supporting the PM prices.

Comments are closed.