UUP just closed the gap now and has the 20DMA and 50DMA right below it. If this holds it should be the springboard the dollar needs to push through that monster trendline above it and get to the 200DMA during this daily cycle.
If I’m not then we all have a lot of rethinking to do about the upcoming market direction. The market always tries to juke people the opposite direction before making its real move. It’s doing a good job. Looking for a breakout to the 200DMA, retest of the May 23rd high, one more cycle up that gets above the 200DMA (below 200DMA on gold), and then on that half cycle high in the dollar buying miners if there is capitulation volume (QE3?) to support it. My crystal ball doesn’t work very often though.
That’s the last place anybody should want to trade.
Remember me saying how hard it is to trade bear markets and counter trend rallies always look like the real thing? Which of course makes it nearly impossible to sell into a rally.
Folks do yourself a favor and let somebody else fight with stock market.
Driver, The Fed’s continuing purchases of treasuries is not considered QE3. It is just them continuing to reinvest the proceeds of maturing treasuries and MBS securities, and does not represent additional capital or an expansion of their balance sheet.
The Fed purchased about $1.2 trillion in treasuries and MBS securities during QE and about $600B in treasuries under QE2, so they expanded their balance sheet by about $1.8T. Now over time, this $1.8T portfolio of securities would be self-liquidating as the securities mature or the securitized mortgages in the MBS are prepaid or defaulted on. Instead, however, the Fed is taking the proceeds from these maturing securities and rolling it into the purchase of new treasuries. This way, they are maintaining the size of their balance sheet at its existing level and not allowing liquidity to drain from the system.
It’s the same as if you had purchased a treasury bond for $1000where you would receive a coupon payment over the life of the bond and then a return of your $1000 principal at the end. Instead of taking your $1000 principal back at the end, however, you decide instead to roll it over into the purchase of another $1000 bond.
I know what a lot of you are thinking you short the market, increase your capital, double it if you’re leveraged, and then you have more to invest when the A-wave it comes.
But what if you are wrong and all you do is half your capital?
I strongly urge everyone to just play it safe and get to the bottom of the intermediate correction with all of your capital intact.
Gary, if the market turns around and makes higher highs, Im out, anything over the 50DMA, and Im fully out. Again, its a risk trade, which is not suitable for all. Everyone is responsible for their own trade.
gough You’re welcome, I’m a futures trader and I’m holding a short position for a swing trade on Gold futures. It’s my pleasure to be here. Sharing it helps me to trade cleaner and with discipline.
“That’s the problem with trying to trade a bear market before confirmation, one can never be sure the bear market has actually started.
Remember we don’t have one single confirmation yet.”
Gary, nice to see a softening on the bearish rhetoric. Inexperienced traders on your blog need to hear this kind of advice, regardless of what the news, fundamentals, etc. may say.
Torreo, I still think we’ve begun the third leg down in the secular bear market but I have been saying for several weeks now to just leave the market alone.
We made a little money on our short and that’s good enough. Now we just need to get to the bottom of the gold intermediate correction and put that money to work.
DG, Regarding EUO, are you in as heavy as you were a couple of weeks ago or just in lightly? I was thinking of getting back into EUO myself, I’m assuming you bought some back this morning?
Keep in mind we tend to get counter trend rallies in the lead up to long weekends while all the big traders are leaving town for the holidays. The bear is likely to resume early next week.
Light volume should be the tell as Gary pointed out in yesterdays report.
Gary, Are you still expecting the gold intermediate correction to complete sometime in August? If I heard you correctly on the interview, you expected it to drop down to 1350 to 1400. We still have a way to go to reach that. Is your warning on the general stock market?
Thanks Gary, I have some puts on GLD and SLV that are profitable now, however going away for holiday weekend 3-8th coming up, so wanted to hold while away figuring I still have time.
Attention at ease, DG is standing by with electrodes hooked up to Gary. Whenever that CIC guy asks Gary what he thinks, DG points his finger and threatens to hit the shock button.
If TA indicators are the rearview mirror, then cycles must be stoping at the senic outlook restarea on top of each mountain and looking back to the previous mountain top with binoculars or a telescope.
Mind you, I wouldn’t want to drive without a rearview mirror. Probably required equipment.
Actually what cycles do is give one an expected timing band for a correction, either short term as in a daily cycle, or a much larger degree intermediate term.
Cycles are like looking out the windshield whereas charting is projecting the past into the future.
If the bear in stocks takes its time, max loss for bull and bear alike, will this affect our decision to re-enter gold timewise?
I think the market will probably stretch as far as possible. Would your cycles be consistant with a possible A-Wave purchase this early fall, instead of the next couple months.
Bascially I think this thing will not end hard and fast. Slow and grind a lot longer than expceted(I am guessing this one). I have decided to put two dollars in the lottery each week instead of the market; figure my losses will be minimal this way.
Cycles seems more like driving in the woods when it’s a little foggy. You see a road go by, you know you might need to take it, but you go a little further because it didn’t look right. A mile later you come to an old landslide and so you go back, and now the road definitely looks like the right one to take after all. Some of the roads look pretty good when you encounter them, and so you confidently make the turn; others, not so and you wander around using up precious gas or even have to stop and put some money into repairs.
keys, I’m just going to play this as a “normal” intermediate cycle for gold. Which means we should have a bottom at the end of this current daily cycle.
That doesn’t mean that the cycle can’t stretch, it’s just that I don’t know how to guess that ahead of time, so in real time I treat it as a normal cycle unless proven otherwise.
at ease, that’s my precise thought about Fib numbers… if everybody watches them and acts on them, it makes them come true, and if they don’t stick, they watch the next one and even more people try to make it come true.
Kind of like Hubble? With every upgrade we were able to see further away, until we reached the limit of visual light projections, due to the speed of light traveling from the dawn of creation, etc.
Yes from the top of a mountain, you can theoretically look ahead as far as the highest peak but not beyond.
I tend to think of it as driving down the highway and knowing that a huge pothole is coming. When I get to the mile marker with the pothole I start to slow down. Once I passed the pothole I can stomp on the gas again.
This rally is a perfect opportunity for the active fund managers to sell into strength, book month end profits and re-shuffle their deck. Energy and tech stocks are in the buy zone…
I’d agree with that, Gary. The stuff one looks out for varies up to the 8-year cycle, so one does have a very good idea of when to go faster and more boldly and when to go slower to keep from blowing out all the tires.
HAND (have a nice day) — I’m not saying anything about TA in particular, just that some things people chart can be self fulfilling. Or not… just something I ponder. Like the S&P bouncing off the 200 sma twice recently, and how so many people (bigger than me) were waiting with buy orders at that exact spot so of course it bounced. But for how long?
Same thing with $Gold hitting a new high or 1550. Everyone is lined up with their shorts galore. Will it work next time, or will it finally shoot through to near 1600, or has the hangover from the last attempt taken it down so far that the bulls will just let it spiral down?
Ryan: I bought back some, but have less than originally. I sold 1/4 at 17.59 and 1/4 at 17.45. Bought back on of them this morning at 17.05. It’s a dangerous short because of all the gov”t interference, as gary has said.
Wm, you never know where the next pothole is. It can be this intermediate cycle or the next, etc. Eventually, after you start getting into the next IT cycle timeframe, you have to LOOK BACK and mark the last low as the IT bottom/completion.
Bonds might be signaling caution to equity/commodity shorts. TLT selling off pretty strong today, following through on yesterday’s weakness and trading below June support.
Wm, stretch is a cycle analysis term. The corresponding EW term is extend (or something like that…)
Cycles stretch. EW waves extend. Waves can get very extended.
Incidentially, I think a lot of EW guys are currently dumbfounded still with a glimmer of hope for retest of SPX highs. The weekly chart is the simple way of seeing the same thing. As Gary would say, SPX appears ready to breach an IT low or whatever…
Sort of the same ideas with different semantics/terminology, kind of anyways.
so if this is a D wave there might be many intermediate cycles in it. which means this upcoming intermediate bottom (late july) might only be one in a larger D wave down?
would it then be smart to only put a portion of our capital to work at this upcoming intermediate bottom?
I was just wondering if we can apply cycle theory to A,B,C,D waves, because intermediate cycles are in all actuallity just smaller waves within big waves.
Mitchell, Only an eight year cycle low should have multiple intermediate cycles. But I do have a plan in case the intermediate bottom is tricky to spot.
“No the ABCD pattern has nothing to do with cycles other than major troughs will occur at intermediate cycle bottoms.
There can be many intermediate cycles in a C wave for instance.”
I take it investing long in gold during a D or B wave is not a smart thing to do no matter what degree the correction, as they would mostly offer lower lows for daily and intermediate cycle troughs?
Every intermediate cycle of this C-wave clearly had two bounces before bottoming on the 150SMA, one off the 75SMA (like we are seeing today)and then again off the 100SMA.
Gary, Exactly referring to buying a D or B wave bottom. What I meant was buying long at the front end of a D or B wave, especially if they last more than a few months. Looking forward to reading about your D wave indicator later on.
William, I got you bigtime. What I was referring to exactly was trying to play the daily cycle troughs long while in a D or B wave, especially if they last several months.
I hear you, but timing that will get you slaughtered almost certainly…your better off entering as close to the bottom as possible and weather the draw downs on the way up. Holding fast through the whole wave (entry as close to the bottom, exit as close to the top) is how the most money will be made for sure.
Would you agree that the market is only rallying today in anticipation of a good outcome in Greece tomorrow, then its back to business to the downside?
unless we get a dramsatic turnaround here, i will be stopped out of my TWM position with a 1% loss to my portfolio. I’m considering letting it ride over night with the Geek decision on the way as I believe this will be a sell the news event..after all, what does an austerity measure really do for Greece? It leads to an extensive deflationary depression. WHat does it do for the EU? It puts them on the hook for more bailout moneys to save Greece, then Portugal, Spain, Italy, and Ireland etc.
The rise in the Euro over the past few days is speculative money betting on the Parliament voting for austerity. Once they do, what reason is there for the Euro to rise? None that I can think of. When the Euro stops rising, the dollar will, and the markets will resumre their downward trajectory.
I’ll likely honor the stop in TWM as its bad practice to ignore stops.
I’ll be adding to my EUO on a swing low reversal in the dollar.
I dont understand how these birds by my house crap right on my windows, they fly into the window sometimes and scare the crap out of me, so I am assuming that sometimes they see the window last second and say “oh SH#@” get the crap scared out of themself and crap on my window!
I pulled spy fibo from March low to May hi; I`m showing 61.8% @129.86.
Then $NYMO, connect tops from March though June. Should these two be pulling into town about the same time? Or is it just another one of those deals where 75 cents will get you a cup of coffee any where in town?
Wm, $SPX is due to rally back to top of falling trendline from a technical prespective.
Birds get the crap knocked out of them when they try to fly through a closed window. I soap my windows outside with detergent so the birds can see them better and don’t think they can fly through, or close the curtains.
Willianm- Good observation on the 75DMA and then 100DMA causing gold price declines to pause during intermediate cycle lows. I’m not from Missouri, but I did have to be shown…so attached is the chat I created to test it. With the exception of the last Int Cycle low it’s on the money.
But who needs detergent or curtains when ya got bird crap all over ya window, you would think they would see that and get tired of flying into their own crap!!
LOLLLLLLLLLLLLLLLL, im gonna try that, then when they are in im going to close the window and tell them “now you cant leave” and shoot them dead! Im going crap shooting.
I am betting on Godzilla versus King Kong…The bulls vs. the bears, in an all and out blood bath of MMA action. At this point I only want to be a spectator, far away, with binoculars….the stories Euro VS Greenback…the battle to see which currency is the shittiest. People aren’t thinking cycles…the USD has been so hammered, I wouldn’t be surprised if the battle is long and hard…one where spectators keep changing sides…either way I expect extreme volatility…but this for the dramatic…I wouldn’t be surprised if we just go in circles for a couple months, like silver has been doing, waiting for both sides to tire out. Of course I could be wrong, but a bear making new highs, would be a very hard platform to work with.
Yes, keeping the crap on the window is an alternative that works, but I did not mention it. I would never consider it. Maybe draw an “X” across the window with a bar of soap. Better wash those windows or we will start calling you a crappy trader or crappy insights. Get a scarecrow. Post your pic in the window with scotch tape.
My dad and the neighbor did that one time with ducks in the neighbors porch. Those great big fat winter mallards. I think they wound up with 14 ducks. My neighbor cleaned the porch and my folks cleaned the ducks and I think my folks got done first. I guess when my neighbor snuck around the house and closed the porch door, it got REALLY radical. The ducks got Margin called for real! LOL!
I made a video yesterday to win a $50K kitchen makeover, i will know thursday if I win. My wife forced me to do it, I dont like handouts or legouts :), but she keeps trying to convince me I cant do everything alone, now that I am almost finished with the whole damn house!!!
William, Good luck on the video and I hope you win! It’s not a hand out, if you did something for it. I wanted to buy a dining room set from a particular store. The saleswoman told me they were running a contest and the prize was the exact table set and chairs I wanted. All that was required was to write a short essay on decorating and she said they never get a lot of entries, so was worth a try. I wrote it and had my DIL edit it and won! I wish you the same luck!
They were dropping bombs in my pool one year like a re-enactment of pearl harbor, it was crazy, I dont know what caused the all out attack that year, but I sat outside with my paint gun and unloaded on them like a maniac, shot up their trees and all! Could you believe it actually worked, they stopped. I dont want to do it out my windows my neighbors will really think im sick in the head then.
My history is a little fuzzy but I think it was William the Great, followed by William the conqueror and now SMT has it`s own William the Insane. Glad you showed up brother, it was getting a little quiet here by myself……….
86/William, We had two big old cherry trees near the driveway. Damn birds would sit in one and eat and sit in the tree that hung over the driveway and crap all over the cars. We cut the branches hanging over driveway, but they still were hitting the cars. Finally, just cut down both the trees as they were old and not really healthy looking anyhow. No more problems, cars stay much cleaner now. 🙂
LOL..quiet?? Yesterday, Edwin was saying that he wishes Dan was standing in front of him so he could knock his teeth out, just for telling him he should go to a numismatic forum because he said he is in PM’s for life!
William, I’m hoping this next A wave is really good to you so you can possibly pay for an exterminator to treat the bird problems. Somehow I doubt paintballs are a long term solution.
You gotta see the tree I had cut down in my yard, it cost me $1800, this tree was like 100 ft. tall and 100 Years old with like 100 crazy crapping dive bombers in it.
Believe it or not it really was a long term solution, to the pool problem that is…if I shot at you with a machine gun I dont think you would be back for more would ya?? LOL
William the Insane, I love roses, especially my dozens of pink rose bushes all around my house and up my driveway. They are just gorgeous with my blue Hydrangeas all around my yard in VA. It’s just killing me I can’t carry back or import some of these beautiful English roses back to the states from London. I have tried to find nuseries in the states that carry them, no luck.
Ben, Had a neighbors cousin take em down (who was in the business) and donated the wood to a neighbor who makes wooden bowls and such. He in turn gave us back a beautiful wood bowl and pepper shaker made from the tree.
Thanks Fergie, I will check them out! I hope I can find some of them.
They have some beautiful roses over here in London. My husband thinks I am nuts as I take a lot of photos of the rose bushes in peoples yards and the flower box and container combinations they do in downtown London.
My hope is to make enough money in the markets, so once we finally settle down, I can get back to painting. Meanwhile, I take lots of photos of the sights I see (and florals) wherever I go in Europe.
So many old things over here, that are old and have so much character.
My wife and I are thumbless when it comes to greenery; planted herbs, they all died. Planted tomatoes, struggling (with 20 hours of sunshine per day). Lawn, dry and dull, assorted plants, in various stages of mortality. We love nature but can’t grow it.
I think 7 Am Eastern, But you wont be able to see anything on CNN because of the tear gas, they like to get right up in the action…didnt Anderson Cooper get punched in the mouth like 3-4 times recently somewhere?
My wife just gave me a plate of samon and I thought it was a piece of french toast, thats what it looked like. I got Europe on the mind.
Mr M, Check this one out; the Big Book of Gardening Skills. No author, just from the editors of garden way publishing. Honestly, this is a really great book. It`s the whole enchilada on gardening.
If making money in financial markets were as easy as looking at the fundamentals, or as Seykota calls it “funnymentals”, than nobody would lose. Right now even my son´s nanny knows the world is in a mess and the US economy is in a bad situation, so I can garantee you that that information is useless.
David, Understood, but as I remember you used to post here somewhat frequently and I also remember you were one to listen too. I`m saying you didn`t just pick 1450 out of thin air; that`s a big number.
In my opinion the only way the market can go higher is if the dollar heads back down. One would have to assume that May was not the three year cycle low for that to play out.
Fergie, Thanks for the link, I found a few of the DA English roses I was looking for. I have to find my list to see if they have any of the others that aren’t the DA english roses. Thank you again! 🙂
1- Markets like to marginally break obvious support and resistance pivots before reversing. There is an obvious pivot from May 2008 at around 1437.
2- If we trade above the trading range that we are in since the beginning of the year (1250-1370), using a P&F count the projection would be around 1450 as well.
No problem. I’ve been to their gardens many times and know that they travel to the UK almost as much I have. They have the largest collection that I’ve ever seen. . .worldwide.
The past 20 days the market has been trading in a range, rotating up and down in bigger and bigger swings. This is the condition we need for a big trend to begin. Big trends begin when most market participants get tired of being thrown around and whipsawed to death and thus become reluctant to take the next signal. They are the ones who will fuel the upcoming trend.
So my plan is to add to my longs tomorrow above 1294 (ES), and if the market trades back into the trading range and goes below 1270 or so, I will stop out and reverse to the short side.
One scenario would be a worsening of the macro environment (beyond what regional manufacturing/employment has shown) and a resumption of fed easing in some capacity come Aug/Sep. I would expect only the fed could push the 3yr cycle out?
I still see us needing to find a decent (correction) IT cycle low in Aug to support such a large move to say 1,450. But on the flip side another big move higher within the next IT cycle should come with 1,250 holding support.
We also also plenty of time left in the 4 yr cycle to support another IT cycle higher. Time will tell, this current IT cycle will reveal much of what is too come, IMO.
David & Poly, Thank you both for your input. I`m leaning for the drop personally, looking at the drop we have had so far, and David, while your points are good, I just can`t see it another way. The Fed NEEDS to have the wheels come off before they can start printing again and that,I feel, is one of the main objectives. Thanks again.
At ease, I try to schedule either Chelsea (May) or Hampton Court (June) Garden Shows, but two trips to Europe already this year and I’m avoiding long hauls ’til the holidays. Too bad you have to leave. UK is a great place.
Actually, a strong dollar is good for the US economy and good for America.
Somehow it got bastardized the last couple of years where strong dollar went with falling stock market. However, things are about to change from this point on.
Why would anyone want to invest in the stock market and maybe make 5 to 10% in 4 to 5 months if they were lucky and assuming this isn’t a new bear market?
They could instead just wait for gold to finish its intermediate decline and make 10% or more in three or four days in mining stocks.
I do drop by on occasions and check out what the resident bears are up to. Saw ya on minyanville and thought I post a contrary view.
Precious metals are no match for the several companies that are gonna be 20-100 baggers within the next 5-7 years. I think stock market bears since they normally like to short tend to lower the bar for themselves, as prices can only drop 50-100%. Some gold/silver miners, if assuming one went long, the last 10 years offered 10-20 baggers. That’s great…. but still nothing compared to what an intel or cisco offers (50-200 baggers). There will be Cisco’s and Intel’s coming right up this decade.
Who’s short. We are in cash waiting for gold to bottom.
When you find one of those 50 baggers you let me know. I’ll bet you a burrito that we have at least two bear markets before any of them even get close.
BTW the next bull market isn’t going to be led by the same old crap that led the last bull market. Don’t you ever study market history.
The next bull whenever it comes will be led by bio tech.
gary i guess im looking at the dollar and saying if that was the top we are in trouble. no higher highs. i have a very strong hand but we are running out of time to make a high.
Your cycles analysis of a coming bear market on SPX could have been used last summer, and it was, and it would have been wrong and will likely be wrong this time as well. It’s because we’re already in the beginning stages of a secular bull market (for the sake of argument, I give you that we were in a secular bear that supposedly started in 2000).
Though bears think the sole reason for the market rising the last 2.5 years was due to money printing, I think there is more to the story. It may actually be the 0 interest rate that did the job. The money printing may just be a psychological armor. Nobody really knows how much of that money went into the economy. It is likely the majority of the money is only beginning to make its way to the economy. On top of that, many corporations have held onto their cash since 2008 instead of spending to hire or grow. If that is the case, and combined with fed’s money, this stock market has much much much much higher to go.
On the contrary I was telling all the bears last summer that it was probably too early to short and the bull was probably not over, especially after Bernanke announced QE2.
Thats really funny. Since I have been here, which has not been long, although I definitely feel at home already because of how wonderful everyone here is, I noticed that when Beanie shows up every single indicator I use (stochastics, true strength index, money flow, RSI, etc. you get the point)are all showing signs of death. Beanie is the angel of death!!!
Good to have you on board. That was a good spot on the 75 too! Hey, wanted to ask you, where do you get your gold charts? I mean is it through your broker or stockcharts or what?
No doubt. I find a good laugh a few times relieves a lot of stress and pressure and let`s me think a lot clearer. Just makes it great to go to work. We really are blessed to able to partake in something like this. There`s a bunch of great people here all pulling in the same direction and what a difference it makes. Before I ran across Gary and this blog, I was seriously thinking about hanging it up. This is a beautiful thing here.
Also, it looks like every time gold bounced off the 75 it pops to around the center the candle of the previous low..which was the 6/13 low at 1511. The 10SMA and 50SMA are converging around there, so it looks like gold will bounce off the 75 and hit resistance on the 10 & 50 which right now is around 1523ish, before heading toward the 100 for its next pause.
Thats crazy you say that bro, its almost like Im listening to myself. I was telling my wife what a blessing it is to be here with gary and everyone, I too was ready to hang it up. I was laughing so hard today I was crying, she said what in the world is going on, I had to make her read some of the posts. Unreal, makes me happy man.
TOS has really got the charting packages don`t they? I use fido and they`ve got no gold, silver, oil, usd, xeu. I checked out tos and they`ve got some kind of hefty fees, yeah? $40 internet charge per month? So anyhow I`m sniffing around for new brokers. This is a good time to do it now before the Big A.
She sits right across the room from me working on her computer, we have a religious goods store on the internet she runs. She yells at me because i dont pay attention to her when she is talking to me, because im laughing!! I tell her wait until im done laughing I cant breath!
I didn`t open an account with them. They waive the $40/mo. if you place 40 trades or more. Maybe I used to do that but now gettin on the Old Turkey Express, my volume is down, profits are up and my futures so bright I gotta wear shades.
I’ve been short since June 2nd (still green on the trade I might add) and starting to question whether or not I should close the trade at my cost basis or take a small drawdown should we break SPX and close above 1300, but now that Beanie showed up screaming Dow 36,000 I’m going to stay short above 1300 even if we trade up to the 50 SMA until Gary gives the word on the start of the A wave. Thanks for being a great fade indicator Beanie!
William, nice Sherlock Holmes-ing on the 75DMA bounce, will be very interested to see if it follows the historical path and dives down in a 5-10 days or so. Also, hope there aren’t any animal rights activists in your neighbourhood! 🙂 (My personal opinion: Keep on gunning)
Let’s see what this day brings us then! I’m considering going long on the USD at this stage even though it looks like a daily cycle low is yet to come within a week or so. Suggestions anyone?
Gary, on USD daily cycle we are now on day 15.Top was made on day 6 at 76,01.It seems to be a left traslated cycle now.There only 10 days left to make a new high.Unlikely in presence to falling prices like these days…
How about we plan a London get together towards the end of the month? I will be traveling this week and next. Anyone else available towards end of July in London area?
I have been long and wrong since the 7th of June on NSQ…Suffered and was about to cut when Gary decided to buy back his short mid-JUne…Useless to say that I have sold back all positions this morning, made 15 points on NSQ and lost 3 years of my life…
For me, I think that there is more risk on the downside than on the upside…The market now is convinced that Greece is going to pass the austerity package, so why should it rally more? If not, wouf, mind the gap!
It appears the dollar is in the process of putting in a daily cycle low at the end of the month. The real test will come in July when QE2 comes to an end.
Then we will see if the market can survive without the constant drip of free money from the Fed.
I would point out that the dollar is moving into the timing band for its cycle low. Large gaps, especially after two large up days, are a sign of emotional trading and are usually better fades than continuations.
The market will also become extremely stretched above the 10 day moving average if the gap holds into the open.
What with the very light volume on this rally and all cycles still too early for an intermediate low I still think this is a counter trend move that will be followed by a move below the March pivot in July.
We do know that Greece has effectively defaulted…the banks have moved up due dates, which means in my books an effective default. Just more fancy accounting hiding reality again. The greatest tool for fiat printing is accounting…why change reality when we can change the appearance of it.
Alright probably done for the day, and most likely the week…too much action…I anticipate some major carnage going both ways.
We’re still in a failed daily cycle with plenty of days left. The bailout/vote is now fully priced in, we’ve reset sentiment and almost back to the 50dma, which has provided resistance to the upside of a failed cycle many times before.
With POMO ending in a couple of days, the market will be left standing naked and asked to stand on it’s own two feet. I say she is about ripe for the picking.
Originally I drew this chart saying we broke below the LOWER channel and could ‘re kiss’ it and DROP FAST, matching Gary’s thoughts.
Then on June 15-
Then we broke back INTO the channel, and I was NOW THINKING we are inside and will retest the TOP channel line ( and the 50 sma is here too About SPX 1315 area.
Every time gold bounced off the 75SMA it pops to around the center of the candle of the previous low (6/13 low at 1511). The 10SMA and 50SMA converge there. So if we see the same pattern as the previous intermediate declines presented, gold will bounce off the 75 and hit resistance on the 10 & 50 which right now is around 1523ish, before heading toward the 100 for its next pause before possibly bttoming on the 150 if this is a “normal” intermediate correction. If this turns out to be a D-wave im looking at the 60SMA on a weekly, which is around 1355
Looking at the 50sma for the $spx ( top of that down-channel line)…
I dont see how it possibly could get there, but it just chugs along. This kind of market may be good for ‘traders’ that can keep their eyes on it all day,maybe not those away from their P.C. all day
If I worked at my old job (40 to 55 hrs a week) it may be best to sit aside and wait for the low, OR just place small trades with Proper set ups…no guessing.
Yes good observations. Although personally I do not see any evidence to suggest a deeper IT Cycle consolidation (what Gary calls D Wave) even if we are in a new 3yr dollar cycle. I like the 30 on the weekly chart.
Look at the huge Dec 2009 top and subsequent cycle low, it held the 30 nicely.
I’ve said this before, gold is entering the latter stages of a bull market and it will decouple itself from correlations and trade within its vacuum.
Let me just add that this is a very important quarter-end with regards to manager’s performance as well. Given that we’re likely heading into a period of renewed selling pressure due to the end of QE2, the last thing that the markets needed was investor redemptions and forced position liquidations at hedge funds to add to the selling momentum. Closing this month/quarter with positive performance will likely minimize the impact of this.
“You’re suggesting that now is a good time to employ inverse positions on the S&P?”
Almost there, we should be able to hold or tag the 50dma in the next two days. I doubt the market falls two days shy of a quart end. I’m already short, but will add if we tag the 50dma. I’m looking to top off my Silver shorts in coming days with July OTM’s.
The previous intermediate bottoms of this C-wave all bottom on the 30, but if the dollar is rallying hard we might break lower and head for that 60, And from what I see this C-wave looks very extended now. We will see together in real time…glad your here 🙂
Poly, Thanks for your comments. I have plans for equity puts if SPY comes close enough to the 50 day or if it’s late Thursday. I want to be short before everyone wakes up Tues am with no QE. I also think Friday will be a tough day for longs to hang on to their profits over a long weekend.
IMO, it might be misleading to talk about QE2 “ending” this summer. What is ending is the bond-buying program now that the Fed has met its $600B schedule, but it’s not like the program will be wound down and the money reclaimed from the system. The news that they will roll their maturing securities doesn’t sound contractionary, either.
I guess the question will come down to whether the market needs an expanding Fed balance sheet to go higher, or simply a stable-but-large one.
The next piece of chart resistance for the S&P 500 sits at 1,312 from the lows in late May. Both the declining 50-day and 65-day exponential moving averages are at 1,308 and these averages act as resistance during an intermediate-term downtrend. Trend line resistance, off the peak since early May, comes in at 1,318 when projecting out about a week.
GDX is at a key technical test, imo … last summer’s pivot highs and the March low, as well as the descending trendline, are all in that 54.75 neighborhood. A solid break above puts a double bottom on the daily.
Dan, oil rising do to “a bullish U.S. liquid energy storage report.” Sounds like reqular talking-heads stuff. Probably just a rare bounce off lower brend line. $WTIC is about third week into a BB crash. Weekly chart nearing BB crash.
I went to the beach on sunday with the family and got scorched. Damn sunburn kept me up all night itching like a dog. I searched the house for a back scratcher, I found in the shower this thing my wife uses to wash her back, its like a netty spongey type thing on the end of a long stick. Let me tell you, this thing is like the ultimate sunburn back scratcher…not to rough…not too smooth. You can scratch nice and hard without ripping the skin off ya back, cuz you know when ya got itchy sunburn you’ll mutilate yourself and not even realize it until your gushing blood and your skin is hanging off!!
WtI, due to lack of atmosphere on Mars, the astronauts cannot be protected from the Sun’s radiation. I mean, nothing stops these particles racing from the Sun. Not steel. Nothing.
Thus, the Mars astronauts will face breakdown of the DNA in their cells and eventual cancer.
There is an atmosphere on Mars. It’s just a lot thinner than on Earth, and it does not have an ionosphere which would afford the protection one would need if walking around. The air pressure, if I remember correctly, is thinner than at the top of Mt Everest (plus little or no oxygen).
I wouldn’t spend a lot of time worrying about what will happen to humans trying to live on Mars, since it will take about 100-1000 million dollars each to get say 1000 people there and it’s not like we have governments running around with huge surpluses right now, nor too much energy they need to use up some more, etc.
WTI, I was looking at your estimates for bounce off DMAs. What do you expect the next price down on gold to bounce around at? Looking to put sell orders in on my GLD/SLV Puts over the holiday week. Would rather lock in gains, than worry about catching the bottom.
I asked you this towards the end of the C-wave. I’d like a new opinion please.
I have most of my wealth in physical PM’s. Obviously not any leverage there. Stocks provide leverage and a way in and out to increase profits. I plan to keep 10% in physical but if you were personally in the same situation would you convert physical at the top of this A-Wave like you suggested be done at the top of the C-wave? I missed the top of the C-Wave.
I’m also thinking about adding to my July Silver puts but I wasn’t thinking too far out of the money. What is your thinking and where do you think Silver will be as it is only a few weeks away.
I’m also thinking about adding to my July Silver puts but I wasn’t thinking too far out of the money. What is your thinking and where do you think Silver will be as it is only a few weeks away.
Thanks, good, I was looking at setting all sell orders at GLD $144.00, so that would fall within that range. Just wanted to check to see if I was within range. Like I said, happy with profits, don’t need to try for the bottom. Thanks!
I do think though that if this is the beginning of a D-wave and not just a normal intermediate correction, a bounce if any will be short lived (1-2 days)as we will drop hard and cut through the moving averages like butter.
This s&p chart and trend line you applied: http://www.screencast.com/t/8iJllaPU also fits in with the SLV chart so we could get another day or two of green action for silver.
WTI, I agree, look at today’s noon time rise. I already have my orders in ready to go. Just have to be triggered. That is why I wanted a pretty much guaranteed price hit, as I won’t be around this week to be monitoring the orders.
Yes But the Problem is Over Bought could Stay Overbought so a Long Time, But , anyways i started a Little Short, and will work Position , if i need to.
I’m thinking about $1 OTM, can’t get too cute, with so few days left and rising Silver they will be priced well, so plenty of $$$ to be made in 10-12 days if gold/silver turns as we expect.
We have a failed gold cycle and a move to an IT low. I like this play, it sets up very nicely and uses the predictability of cycles to profit from very time sensitive options.
The market has rallied back to the cycle breakdown level of 1311. It’s done it on weak volume and could possibly be forming the right shoulder of a head and shoulders topping pattern.
Not to mention there are large selling on strength numbers building as the day progresses. Of course will have to wait till the close to see if they hold.
Ben, It’s summertime here so we have to leave really early about 6 AM to get to the cliffs while they’re still in the shade. We’re usually done by 10 10:30 and then headed back home.
Gary, Our dog passed away 2 1/2 years ago from lymphatic cancer. 2 weeks from first sign to last breath, he was 12 years old. We miss him every day, I wish he was here so we could just hug him.
It could easily be a quirk of the dog, too. About half the dogs I’ve owned over the years have had some sort of quirk like that. And I had a cat who liked to lick people’s earlobes. Nothing like waking up out of a sound sleep with the dang cat using one paw to grip your neck while licking with it’s 80 grit sandpaper on your earlobe. Yessirree… a great way to awaken at 2:30 am… lol
MrMiyagi, the doctor visits her regularly. I wouldn’t feel too comfortable bringing up the issue of the dog licking her legs. Its just something that goes on and I awkwardly/politely don’t comment on it
We have two soft coated wheaten terriers, Dusty and Skipper. When I get home from running Skipper always licks my legs. I thought it might be the salt or something from my sweat.
The selling on strength numbers do sometimes come early, but the market almost always moves below those levels sooner or later.
The fact remains that it’s too early for oil the bottom, it’s too early for gold to bottom, and it’s too early for the daily cycle and intermediate cycle in stocks to bottom.
Is it possible that this is a very warped cycle? Sure it’s possible, but I wouldn’t bet on it.
I had to get rid of my bull dog, he farted non stop, it was like having an air-stinkerner (if thats a word) in every room! Im not even going to get into all the other reasons we couldnt keep him, if he licked my wifes legs non-stop that maybe I would have kept him.
The big Hedge Funds and smart money in general use limit orders more often then they use market orders.
When they sell, they don´t hit the bid, the wait for someone to lift their ask. So I don´t think that selling on strength is a sign of smart money selling.
The correlation between the selling on strength and buying on weakness numbers to market turning points is way too high to discredit it.
At almost every single intermediate bottom we will see a large buying on weakness number prior to.
And I think every top except one in the last five years has seen at least one if not several large selling on strength days. Often they are early but they are almost always predictive.
If 90% of major turning points are accompanied by SOS or BOW, that does not mean that 90% of BOW and SOS predict a turning point. In fact, you could have a situation where 90% of major turning points occur with BOW or SOS, but only 5% of BOW or SOS indicate a major turning point.
So BOW and SOS could be an almost necessary condition for a turning point, but a horrible indicator of a turning point.
David, Large numbers like what we have today are usually significant.
Sometimes we will see numbers under 100 million that aren’t meaningful, but big days like today usually mean a turning point is coming soon.
The dollar has two more days before it enters the timing band for a bottom, so I would expect the rally to hang in at least that long, and the days before the Fourth of July holiday are usually positive.
But once we get into July and QE comes to an end I think the move down into the intermediate cycle bottom for stocks, gold and oil will resume.
if I was long, and I’m not, I would take the selling on strength numbers as a significant warning and at least tighten stops.
After working with these cycles extensively for the last three years and studying many more years of history I’ve learned that 90% of the time one will lose money if they ignore them.
I am not suggesting that it is perfect, but it is reliable enough that you should at least pay attention to it….kind of like a storm warning. Just need to be aware that big money is selling SPY which has some predictive value to it.
If the intermediate cycle had run a normal duration of 20+ weeks and we got a large SOS signal, then I would tend to ignore it.
But it’s still early in the stock market intermediate cycle, early in the oil cycle, and early in golds daily cycle.
On top of that we have a big warning sign in that the market dropped far enough during this intermediate decline to seriously test the March low. That should not be happening in a healthy bull market.
All in all I think bulls should pay attention to the SOS numbers this time.
This rally, driven by the dollar moving down into its daily cycle low, has sidetracked everybody from the fact that QE is going to end next month.
We saw what happened last year when QE ended. This year the market and the economy are much softer as QE comes to an end than they were last year.
Is anybody really under the delusion that the economy and the stock market are self-sustaining? If you are I have some beachfront property I’d like to sell you here in Las Vegas.
Gary, I posted a question earlier. I’ll post again in case you missed it. If you don’t answer this time I’ll assume you don’t want to answer, which is completely fine.
Based on my own judgement and your input I was going to sell 90% of my PM’s during the C-wave. I missed that opportunity.
Would you weight in on what you would do if most of your wealth was tied up in physical metal? Would you wait for the A-wave top or sell now and use the leverage for the beginning of the A-wave? Or C: Something completely different.
I have about 20% of my wealth in stocks and the other 80% in physical. I’d like to re-weight that to ETF’s and 10% metal.
90, 94 & 98 were all 4 year cycle lows. Don’t forget that entire period was during a secular bull market.
We are no longer in a secular bull market. Now we are in a secular bear market with cyclical bull markets being driven by currency debasement rather than real productivity.
In that scenario, and with the fundamental driver coming to an end (QE2), I take a serious test of an intermediate cycle low as a severe warning sign that the cyclical bull may be over. Especially if we are moving into the timing band where the market should begin to move down into the next four year cycle low.
You have said it a couple of times that the dollar is moving down into its daily cycle low. Based upon my count, we are day 15 into the dollar cycle. My expectations were for another pop higher before the daily cycle low occurs sometime around the employment report on July 8th.
Are you expecting a shortened cycle or am I missing something?
It’s not unusual for the market to bounce off the 200 day moving average, sometimes multiple times, as a cyclical bull market comes to an end.
Look at those charts in last night’s report and you will see the market rebounded off the 200 day moving average several times before succumbing to the forces of the bear.
I found this mutual fund while looking @ investments for my mutual fund only retirement account, TGLDX. A nice mix of big gold,& silver miners + 5% in physical gold.
TGLDX is the best gold mutual fund, IMO. We’ve discussed it many times on this blog too. Great management and amazing performance. I’m long this fund as a primary metals exposure in my non trading accounts, you know those don’t touch boring accounts 🙂
As mentioned in your report, the pivot point of 1311 should act as resistance against this rally – is there any point on the S&P that would confirm that this is merely a very short I.C. and that would convince you to re-calibrate?
Thanks.
Also keep an eye on Friday’s ISM #s. Anything below 50 is ugly.
Peter, A move to new highs would indicate a very short IC.
But in order to see the bull continue I think we would have to assume the three year cycle in the dollar hasn’t bottomed. That would mean an extremely stretched three year cycle.
The biggest problem with QE is that it’s warping everything. It has definitely stretched many of the stock markets daily cycles. Although the intermediate cycles for the most part continue to fall in their normal timing bands.
The gold cycle has stretched a little bit into the latter part of its intermediate timing band.
Surprisingly the dollar cycles have been pretty normal.
QE has also caused wild swings in sentiment. So sometimes it’s tough to decide whether to trust the cycle counts or the sentiment levels.
Sentiment has reached intermediate cycle bottom levels. However it’s still very early in both the daily and intermediate cycle for a bottom. So I guess one has to decide which one they want to act on.
Unless proven otherwise I’m going to stick with the cycles, and assume that we are seeing a counter trend rally in everything to work off the sentiment extremes, which will be followed by one more move down into a normal cyclical timing band.
Gary, Or anyone, In terms of QE2 ending and your mention of liquidity being stopped in the markets, how does that work in the first plac? How is the money pumped into the market, surely Benny doesn’t go door to door handing out cash with instructions to invest in stocks.
The Fed buys treasuries from the primary dealers. Then they have to decide what they want to do with that capital. Obviously a lot of it has been put to work in asset markets.
Just an add on to Gary’s point, once the primary dealers receive the billions from bond purchases, they immediately seek yield, so this free money is then pumped into risk assets. Keep in mind, that free money can also be leveraged to have a greater effect.
The big concern now, is that although the direct POMOs from QE2 are wrapping up – the fed has said that it isn’t going to sell off their bonds. It will just hold them. Their fear is a sell off would result in a panic.
An analogy: they are no longer pumping the balloon up – but they aren’t letting the air out either.
They go on the Fed’s balance sheet and they collect interest.
Buying bonds is the main vehicle for the Fed to pump money into the economy. The government floats a bond. The Fed prints the money out of thin air to buy it. Then the government takes that money and spends it on stimulus, Social Security checks, etc.
The Long term sentiment (1-3 months) reached extreme pessimist levels and I think that is why the market is rallying straight up to get the confidence back. What is making me nervous is that all the sentiments for stocks and commodities are still extremely bearish.
I am still new to sentiment trader and learning, but I think it is a great way to invest and make decisions if you know all the technicals behind it and what to look for.
It will devalue the currency if they print fast enough to stay ahead of deflation.
We live in an extremely deflationary periopd.
The Fed is trying to perform a balancing act between printing enough to hold deflation at bay but not printing so much as to unleash a major inflation problem.
The last couple of years the error has been on the inflation side as commodity prices and most asset prices other than real estate have soared.
If I may wade in here; I understand the Fed gets paid interest on the treasuries they buy, but don`t they also make interest on the money they print in the first place? I mean the way the deal is set up, the Fed is actually making a loan to the Treasury dept in the first place for making the dollars? Maybe I`m off base.
Dallas, Actually most of the short term indicators have now moved into oversold levels and the bullish and bearish indicators are just about balanced. This is what we needed to see if the market was going to continue down. We needed to have enough of a rally to work off some of the very bearish sentiment levels.
Most of the time sentiment is a pretty good tool but it too has been affected by quantitative easing. During the last bear market sentiment reached bearish levels that would normally result in a rally but the fundamentals overwhelmed them. During that period one was better off following cycles.
This past fall and spring sentiment reached extreme bullish levels that would normally trigger a correction but the market continued higher for months.
Just like all tools sentiment fails from time to time also. Just look at the sentiment levels on silver. They have dropped through the floor. That should’ve triggered a rally, but instead silver has continued lower and sentiment has just continued to get more extreme.
I have to be careful in what I am saying as I am not an American citizen, so I will refer to the “printing” of euros by the ECB to buy the government bonds of the PIIGS. Its total trickery. Its a scam. The only thing hiding it from ordinary people is that this policy is conducted by governments and smart sounding economists. How could any economist support this practice? Its crooked. To me it is a putrid sham. A con job and a sure sign of a basket case economy that we saw near the end of the Soviet Union
Along time ago the money makers lent to ordinary people, but then they realized they’d make TONS more lending to governments in which the loans are backed by the taxpayers.
The whole trickery is that all these banks, Bank of England, Federal Reserve Bank, International Monetary Fund, etc., all call themselves by names in which most people are made to think their public or quansi-pubic, but none of them are and the list of their shareholders are all kept private.
Obviously it is the Black Nobility, and the Rothchilds primarily that own them. Rothchilds net worth was estimated at 500 trillion decades ago I’m sure it’s grown, big time.
So all these big ass programs, SS, Medicare, wars, all of this is to increase the lending which increases the interest payments to the Fed. Eventually they bankrupt almost every government and then they privatize social services (eventually they will just toll every road in America when we’re broke in a few years) and liquidate the governments lands, etc, to even get richer.
Central banking is major kick ass and I intend to be one 🙂
It this kind of economic situation, its easy to see how the “middle class” have their wealth taken from them by governments by back door methods such as: devaluing savings by money creation, increased overt and covert taxes, reducing wages for “austerity” measures, raiding private pension funds – Ireland has started this practice. At the same time, those in the know, less than 1% of the population, can profit by their understanding what exactly is going on and profit by investing in commodities and precious metals
It’s about family, friends, tribes, alliances, and competition.
It’s not sinister, it’s just that there have been some very strong forces of groups that have been able to beat everyone else out and set up a position in which they’re on top.
did the dollar bottom? i feel i should be buying more but to scared. Im long 4 contracts and would love to double up . i cant bring myself to buy even one more. its going to rocket here. where is the zantac.
We’re nearing the timing-band but would need a swing low. We could always get an early swing low, let’s say this week, only for it to find a true bottom the following week. I’m leaning toward this week bottoming with QE2 ending tomorrow.
I basically undoubtedly believe that the dollar put in it’s 3-yr-c-l, and the market its bull market top. Being so sure is dangerous, but for a plethora or reasons I see both these being the case.
With PBOC buying up Euros hand over fist, is it possible that will stretch the cycle low for the dollar? How will the dollar ever rally if China is there to buy every Euro dip?
Is there any truth to having the markets damaged in order to shove through the increase in the debt-ceiling? I truly believe so.
Also if we don’t get the debt ceiling raise agreed upon by mid-July there were threats of a USA downgrade from the rating agencies. Will this setup for a violent drop in early July? Everything points to yes!
Also I was told that the Euro would disband long before the dollar (before I guess that was in question and being debated/decided upon).
All the frameworks still point to the Euro about to get clobbered, and dollar rising, but sure they bring those who are sticking to believe this to near max-pain!
When the Euro declines, so too does Gold, historically
If you think about it the media has been pounding through our heads for years, 10+, about China owning us and they’re (the media) always riling us up about China.
This is obviously a distraction from our true owners, but also creates an imbedded disliking for probably our next big opponent in War.
that EUO chart is an inverse, sorry should have said that, stockcharts I don’t know how to do a comparison only ratios without an account, and Yahoo I don’t think charts currencies only standard traded tickers.
18 days is only the lower end for the dollar daily cycle. A normal daily cycle can run to almost 30 days. Dollar futures tonight have traded below the minor pivot set on June 22 … much additional weakness could threaten the June low, which if violated would be a failed daily cycle.
Remember the last cycle as it formed a top made a lower low and then immediately reversed and made a higher high before rolling over into a powerful decline.
Don’t make the mistake of assuming absolutes. If this happens then it means that is guaranteed.
There are no guarantees in this business.
What I do know is that QE is coming to an end. That is going to change the fundamentals driving the market. Sure the market can ignore the fundamentals for a bit but eventually the fundamentals will overwhelm the technicals.
Without fail gold has moved down into an intermediate degree correction like clockwork about every 20 to 25 weeks and it has done it whether the dollar was rallying or declining. It appears that it has begun that move.
So all we need to do is wait for that bottom.
Stocks should have another leg down in July also. That being said I’ve done my best to steer people away from trading the stock market. The odds of whipsaws and losing money are just too great right now, and the profit potential too small to waste time fighting with the general stock market.
I promise, Gary, I’m making no assumptions about absolutes. I have a few scars from both bear claws and bull horns to remind me of that error, and I’m doing my best to avoid another trip to the ER. 😉
But I think the assumption error can be made in the bearish direction at the moment, too, and I might quibble ever so respectfully on the point that QE2 is “ending.” What is ending is the accumulation of Treasuries and expansion of the Fed balance sheet. However, the Fed seems to have communicated a willingness maintain the monetary base they’ve just finished expanding at its present level for the foreseeable future.
For me, the key question is not, “What will the market do now that QE2 has ended (i.e., reached it’s stated level of expansion)?” It is, “Does the market require continuing expansion to go higher, or is the present level enough for the bulls to put in another run?”
I’m presently (though lightly) positioned to favor the bullish side for the IT, but I don’t pretend to be certain of the answer.
Rosa, Doesn`t it seem that the market has been pricing in the end of QE? Meaning, having a known ending date, even just a stable balance sheet is cuasing the market to drop. It would appear the market needs an expanding fed just to keep it`s nose above water. Really good point too.
What really stinks is our kids will have to suffer for what these mutts are doing. Teach your kids to love good and hate evil, to farm and shoot guns and hope for the best.
86,
Your not a female so im assuming that your the brown hairy dude in the pic, what up dog!!!
I don’t know what the market has been pricing in. Could be QE2 in part or in full, or it could be a lot of other things.
Keeping it simple and technical, SPX is becoming ST overbought. What is important, imo, is not how high it goes before correcting, but how far and in what manner it will correct.
At very least, the bears will have to drag it back and close below the recent range break around 1295. Ultimately, they need to take out the March low and produce that failed intermediate cycle. IMO, the burden of proof shifted this week from bulls to bears.
another tool for the gov’t to maintain or increase the value of the dollar is to raise income tax. income tax pays for nothing. it is collected and then sent to the incinerator (to heat the fed lol). it is destroyed and never used to build or pay for anything.
imagine that only five paintings of Picasso exist and nothing else. each painting is worth 10 million. now, one gets destroyed. what happens to the value of the remaining paintings? goes up. if more picasso’s are discovered the value goes down.
there is a great video on google called “money masters” (I think). a must watch for everyone.
the value of the dollar has much to do with the amount in circulation. it’s no wonder why china ( and many other nation) have so much of it. if these nations decide to dump their dollars it will be the end of the world. china may be acting in the best interest of u’s all 😉
What were seeing here now in the market is called the Greek bounce, tomorrow it smacks its head on the 120sma and drops like a bear that just ate some lead. I hope 🙂
If you have a certain winner, I promise to shift every little long I’ve placed in equities at the moment into that. 😉
In all seriousness, I think the setup simply favors longs at the moment. If that double bottom in SPX fails, I will be out.
FWIW, in addition to those three white soldiers on the indexes, bonds broke down this week. Perhaps the Fed finishing up is the reason, perhaps the market is front-running a budget deal getting done, or perhaps it’s something else. If the trend has changed in bonds, equities(and particularly that lagging banking sector) and commods stand to benefit.
RB, Always appreciate your contributions as well as all others on this blog. I’m 100% cash and consider myself dumb money. Gary is a brilliant strategist and has definitely earned my respect. It just seems that the market is moving strangely right now as if the smart money knows something.
I’m with you on that. I’ve spent the last 18 months working on my masters degree. As soon as I graduate, I’m spending all my free time studying daily cycles. For now all I can do is follow Gary (and Toby).
Gold closed at the 60sma today, and tonight the futures are hitting resistance at this level. If we dont break the 60sma early morning or tomorrow gold will have begun a meltdown within 3 days of its bounce off the 75sma, which seems to be much quicker than previous intermediate declines, it looks like this only happens in D-waves. I said today that if the bounce off of the 75sma is short lived (1-2 days) I would begin to lean toward the D-wave side instead of a normal intermediate correction. Although gold is beating to its own drum right now I think the dollar would have to reverse tonight or tomorrow for gold not to break above the 60sma and continue its normal crawl along the 75sma for 4 or so days before heading to its next support at the 100sma. Lets see what happens.
I dont post all my trades here anymore, I’m a TRADER in markets like this…but Rosa knows me , so when I say I agree with Rosa, and am currently LONG some equities, he could back me on that.
I was watching some “things’ and as “coffee” said, the mkts ARE acting strangely – but I have been trading..and currently own PAL, DANG, XG.
Today , looking at some financials V, MC, BAC, USB, WFC…look pretty good SO FAR.
I was watching ERY this week. I thought energy short would be great…ERY looks UGLY now. It broke below the 20sma and the 50 sma on heavy selling volume. Meanwhile, some energy stocks look very good- not weak ( ex:SM , BAS , AXAS , GLNG and more).
THM and MHR are buys to me now. this is JUST my opinion, but for RIGHT NOW, I agree with Rosabarba
Elaine Congrats on the masters. Gary’s hard work at developing his cycle analysis has created a great tool for having an edge in the decision making process.
Alex, I too conservative to trade this market but if I could stomach more risk I’d probably have some long exposure for some of your reasons plus the transports closing above the 50dma.
If the $$$ cycle were to bottom in the next 2-3 days, this current daily cycle would bottom without setting a higher high or a lower low, if the early June low holds as you expect.
This means that it is a left translated daily cycle which has not failed – correct? Does this LT cycle which has not (yet) failed have any implications for the intermediate cycle?
Also, am guessing that such occurrences in either the SPX, Gold or $$$ are rare?
Hack, that’s just a way of re-investing already existing money on the Fed’s balance sheet, for it to be QEx material it would have to involve printing new money.
And to the comment about Income tax, well, if the US want to be a welfare country with Medicare etc. the money has to come from somewhere… I’m living in Northern Europe where we have a very high tax rate system, but we also have (somewhat) functioning public service and healthcare. This is something that has been present for 50 years, so although one can moan and bitch about it from time to time it does mean our government (at least the current one) has a budget surplus and it kinda works, you know?
I remember reading a Martin Armstrong piece where he advocated the removal of Income tax and instead using other means of financing the fiscal spending (but also to reduce the government machinery), so there is as always two sides of every coin. I think the key point is that you cannot eat the cake and still have it, as Obama did with the MediCare system, or with every over-dimensioned war that US wages. The Medicare et al. systems will mean a budget deficit the next 75 years or so of almost a trillion dollars annually… (Doesn’t it sound like a typical Dr Evil sum of cash? “What do I want? I want…. A TRILLION DOLLARS!!”)
Gary, I read from another source that QE2 is not ending until mid-July. “The Fed is scheduled to purchase around $4.5 billion worth of Treasury debt on June 30, and then there are a couple more $3 billion purchases on July 6 and 11.”
So actually there are a few more weeks of the Fed’s injection of liquidity.
“Gold closed at the 60sma today, and tonight the futures are hitting resistance at this level. If we dont break the 60sma early morning or tomorrow gold will have begun a meltdown within 3 days of its bounce off the 75sma, which seems to be much quicker than previous intermediate declines, it looks like this only happens in D-waves. I said today that if the bounce off of the 75sma is short lived (1-2 days) I would begin to lean toward the D-wave side instead of a normal intermediate correction. Although gold is beating to its own drum right now I think the dollar would have to reverse tonight or tomorrow for gold not to break above the 60sma and continue its normal crawl along the 75sma for 4 or so days before heading to its next support at the 100sma. Lets see what happens.”
Gary, Just looked at your June 30 post’s last chart on S&P 500 with extended lines going into the future month or 2. It is quite different from previous chart I was where you show the next month’s S&P lows testing the 2010 summer lows at just above 1,000. My question is if your latest chart is current and the lows only hit about 1270, then what will induce the Fed to loosen again. 1270 isn’t exactly a scary level.
I think there an important factor that hasn’t been mentioned this past week and that’s bond market which sold off hard this week.
Zero hedge had a piece that the 5-year market had the biggest one week % drop ever.
With the end of QE 2 and the HUGE supply of debt the Treasury will have to issue when the debt ceiling is raised I think the bond market is starting to price that in. A lot of funds from the bond market went into the stock market. I suggest that you read Martin Armstrong’s recent piece on capital flows and why he thinks the market will see news highs over the next few years…
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..it seems that the “cute&tiny” bounce it’s over…
Another great interview! Always good to hear the big picture.
Fergie
nice avatar…
QE3:
http://www.bloomberg.com/news/2011-06-27/fed-seen-buying-25-billion-a-month-in-treasuries-after-qe2-comes-to-end.html
Thanks! It conveys my pm support without having to say anything. I try to keep things as simple as possible.
Euro on fire… Getting ripe for a short soon.
Driver,
you’ll have to add a zero after that monthly figure if it should qualify as QE3…
Childish imbeciles, if you want to be successful grow up.
/DX watch 75.35 hourly IHS & 74.59 for a daily IHS.
Make that /DX 74.80~
DX 240min http://bit.ly/kxh4Hn
I will buy back some of the euo I sold if/when FXE hits 143.40
$USD p&f daily http://bit.ly/jmg5Q9
DG Im with you on that one.
Good luck!
If this keeps up, will augment my Euro short with an Aussie short…either later today or tomorrow.
UUP just closed the gap now and has the 20DMA and 50DMA right below it. If this holds it should be the springboard the dollar needs to push through that monster trendline above it and get to the 200DMA during this daily cycle.
Hoping you’re right Cory..
If I’m not then we all have a lot of rethinking to do about the upcoming market direction. The market always tries to juke people the opposite direction before making its real move. It’s doing a good job. Looking for a breakout to the 200DMA, retest of the May 23rd high, one more cycle up that gets above the 200DMA (below 200DMA on gold), and then on that half cycle high in the dollar buying miners if there is capitulation volume (QE3?) to support it. My crystal ball doesn’t work very often though.
thanks for those charts Valer..
why does anybody care what the market doing?
That’s the last place anybody should want to trade.
Remember me saying how hard it is to trade bear markets and counter trend rallies always look like the real thing? Which of course makes it nearly impossible to sell into a rally.
Folks do yourself a favor and let somebody else fight with stock market.
Christian,
Just a teaser to test the waters and break the ice.
I am short the SnP Gary, and will ride this hing into the end of July if not August. Wiggles dont bother me, as Im not a day trader.
What will you do if this turns out to me an intermediate bottom and the market goes on to make new highs?
That’s the problem with trying to trade a bear market before confirmation, one can never be sure the bear market has actually started.
Remember we don’t have one single confirmation yet.
Driver,
The Fed’s continuing purchases of treasuries is not considered QE3. It is just them continuing to reinvest the proceeds of maturing treasuries and MBS securities, and does not represent additional capital or an expansion of their balance sheet.
The Fed purchased about $1.2 trillion in treasuries and MBS securities during QE and about $600B in treasuries under QE2, so they expanded their balance sheet by about $1.8T. Now over time, this $1.8T portfolio of securities would be self-liquidating as the securities mature or the securitized mortgages in the MBS are prepaid or defaulted on. Instead, however, the Fed is taking the proceeds from these maturing securities and rolling it into the purchase of new treasuries. This way, they are maintaining the size of their balance sheet at its existing level and not allowing liquidity to drain from the system.
It’s the same as if you had purchased a treasury bond for $1000where you would receive a coupon payment over the life of the bond and then a return of your $1000 principal at the end. Instead of taking your $1000 principal back at the end, however, you decide instead to roll it over into the purchase of another $1000 bond.
I know what a lot of you are thinking you short the market, increase your capital, double it if you’re leveraged, and then you have more to invest when the A-wave it comes.
But what if you are wrong and all you do is half your capital?
I strongly urge everyone to just play it safe and get to the bottom of the intermediate correction with all of your capital intact.
Hi Gary.
My question is why the Nasdaq and Russell don’t count as confirmation. They both breached their March lows. What makes the SPX more important?
Thanks.
Gary, if the market turns around and makes higher highs, Im out, anything over the 50DMA, and Im fully out.
Again, its a risk trade, which is not suitable for all.
Everyone is responsible for their own trade.
quick GLD Gold 20Min Channel Chart :
http://screencast.com/t/K0v5zUhSi
gary,
SPY is on top list SOS with -166,16.Do you consider this considerable as import?
thk so much
Daniele,
It will be if it lasts till the end of the day.
gough
You’re welcome, I’m a futures trader and I’m holding a short position for a swing trade on Gold futures.
It’s my pleasure to be here.
Sharing it helps me to trade cleaner and with discipline.
Gold 30min http://bit.ly/mRhHQN is quite interesting how prices are “reacting to 1505 area
Dollar just did 74.99….
“That’s the problem with trying to trade a bear market before confirmation, one can never be sure the bear market has actually started.
Remember we don’t have one single confirmation yet.”
Gary, nice to see a softening on the bearish rhetoric. Inexperienced traders on your blog need to hear this kind of advice, regardless of what the news, fundamentals, etc. may say.
The market is strong, buyers are coming back into the market snapping up the bargains to be had.
Gary,what about two cycles in Gold until the bottom,instead of one?
Looks like corection is going very slow.Is that the way D wave unfold?
Torreo,
I still think we’ve begun the third leg down in the secular bear market but I have been saying for several weeks now to just leave the market alone.
We made a little money on our short and that’s good enough. Now we just need to get to the bottom of the gold intermediate correction and put that money to work.
DG,
Regarding EUO, are you in as heavy as you were a couple of weeks ago or just in lightly? I was thinking of getting back into EUO myself, I’m assuming you bought some back this morning?
Hack,
Anything is possible. We just have to play this as it unfolds.
Keep in mind we tend to get counter trend rallies in the lead up to long weekends while all the big traders are leaving town for the holidays. The bear is likely to resume early next week.
Light volume should be the tell as Gary pointed out in yesterdays report.
Gary,
Please see my question above.
Thanks.
Gary,
Are you still expecting the gold intermediate correction to complete sometime in August? If I heard you correctly on the interview, you expected it to drop down to 1350 to 1400. We still have a way to go to reach that. Is your warning on the general stock market?
You can always tell whether the market is goig up or down just by the tone of people here and the actual individuals that post.
at ease,
That was my best guess I just have to play it in real time and try and spot the bottom when it comes.
Peter,
The S&P is the best representation of the overall market.
Thanks Gary,
I have some puts on GLD and SLV that are profitable now, however going away for holiday weekend 3-8th coming up, so wanted to hold while away figuring I still have time.
Attention at ease, DG is standing by with electrodes hooked up to Gary. Whenever that CIC guy asks Gary what he thinks, DG points his finger and threatens to hit the shock button.
If TA indicators are the rearview mirror, then cycles must be stoping at the senic outlook restarea on top of each mountain and looking back to the previous mountain top with binoculars or a telescope.
Mind you, I wouldn’t want to drive without a rearview mirror. Probably required equipment.
haveaniceday,
I trust Gary’s judgement/guesstimates on the PMs. As long as I leave myself some leeway, no worries.
Actually what cycles do is give one an expected timing band for a correction, either short term as in a daily cycle, or a much larger degree intermediate term.
Cycles are like looking out the windshield whereas charting is projecting the past into the future.
Gary,
If the bear in stocks takes its time, max loss for bull and bear alike, will this affect our decision to re-enter gold timewise?
I think the market will probably stretch as far as possible. Would your cycles be consistant with a possible A-Wave purchase this early fall, instead of the next couple months.
Bascially I think this thing will not end hard and fast. Slow and grind a lot longer than expceted(I am guessing this one). I have decided to put two dollars in the lottery each week instead of the market; figure my losses will be minimal this way.
This comment has been removed by the author.
Gary,
Like the chicken or egg dilema, what came first the cycle or the moving average?
Cycles provide you a pretty reliable expected time frame. Can’t ask for more than that.
Cycles seems more like driving in the woods when it’s a little foggy. You see a road go by, you know you might need to take it, but you go a little further because it didn’t look right. A mile later you come to an old landslide and so you go back, and now the road definitely looks like the right one to take after all. Some of the roads look pretty good when you encounter them, and so you confidently make the turn; others, not so and you wander around using up precious gas or even have to stop and put some money into repairs.
Beats not looking out of the windshield, though.
keys,
I’m just going to play this as a “normal” intermediate cycle for gold. Which means we should have a bottom at the end of this current daily cycle.
That doesn’t mean that the cycle can’t stretch, it’s just that I don’t know how to guess that ahead of time, so in real time I treat it as a normal cycle unless proven otherwise.
at ease, that’s my precise thought about Fib numbers… if everybody watches them and acts on them, it makes them come true, and if they don’t stick, they watch the next one and even more people try to make it come true.
Kind of like Hubble? With every upgrade we were able to see further away, until we reached the limit of visual light projections, due to the speed of light traveling from the dawn of creation, etc.
Yes from the top of a mountain, you can theoretically look ahead as far as the highest peak but not beyond.
I tend to think of it as driving down the highway and knowing that a huge pothole is coming. When I get to the mile marker with the pothole I start to slow down. Once I passed the pothole I can stomp on the gas again.
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This rally is a perfect opportunity for the active fund managers to sell into strength, book month end profits and re-shuffle their deck. Energy and tech stocks are in the buy zone…
I’d agree with that, Gary. The stuff one looks out for varies up to the 8-year cycle, so one does have a very good idea of when to go faster and more boldly and when to go slower to keep from blowing out all the tires.
Sorry Gary, I did not mean pipe dream.
Ben,
Are you saying,
“If your TA gets obsscure enough noone will be trading based on it, so it will have no effective value or even affective value.
It always happens this way, but it never happens the same way. History … rhymes.
The highway needs paved every 8 years, and they never get around to it until someone gets killed on a pothole.
Not a charting expert by any stretch – but would the SPX consolidating action between the 150 and 200 DMA qualify as a bearish flag?
HAND (have a nice day) — I’m not saying anything about TA in particular, just that some things people chart can be self fulfilling. Or not… just something I ponder. Like the S&P bouncing off the 200 sma twice recently, and how so many people (bigger than me) were waiting with buy orders at that exact spot so of course it bounced. But for how long?
Gary,
What if you play this as a “normal intermediate cycle” and when you stomp on the gas long we fall off a cliff into a D-wave???
William,
That’s where “the plan” I talked about several days ago comes in.
Same thing with $Gold hitting a new high or 1550. Everyone is lined up with their shorts galore. Will it work next time, or will it finally shoot through to near 1600, or has the hangover from the last attempt taken it down so far that the bulls will just let it spiral down?
Gary,
Oh yeah, the plan, I forgot about you telling me about that.
Ryan: I bought back some, but have less than originally. I sold 1/4 at 17.59 and 1/4 at 17.45. Bought back on of them this morning at 17.05. It’s a dangerous short because of all the gov”t interference, as gary has said.
HaveANice Day—huh?
Wm, you never know where the next pothole is. It can be this intermediate cycle or the next, etc. Eventually, after you start getting into the next IT cycle timeframe, you have to LOOK BACK and mark the last low as the IT bottom/completion.
DG, cheers.
DG, thanks I guess I’m just getting a bit itchy fingered. I should just take Gary’s advice and sit in cash and wait.
haveaniceday,
Understood, thanks.
Bonds might be signaling caution to equity/commodity shorts. TLT selling off pretty strong today, following through on yesterday’s weakness and trading below June support.
Gary,
Do you view A,B,C,D waves as cycles, in other words…the way cycles stretch and correct, is it not the same with waves?
GC:Now I would like a close under 1490 please!!!
‘Squeezy’ Action
William,
No the ABCD pattern has nothing to do with cycles other than major troughs will occur at intermediate cycle bottoms.
There can be many intermediate cycles in a C wave for instance.
Wm, stretch is a cycle analysis term. The corresponding EW term is extend (or something like that…)
Cycles stretch.
EW waves extend.
Waves can get very extended.
Incidentially, I think a lot of EW guys are currently dumbfounded still with a glimmer of hope for retest of SPX highs. The weekly chart is the simple way of seeing the same thing. As Gary would say, SPX appears ready to breach an IT low or whatever…
Sort of the same ideas with different semantics/terminology, kind of anyways.
Vale,
Your almost certainly not getting a close below 1490 today, probably by friday.
so if this is a D wave there might be many intermediate cycles in it. which means this upcoming intermediate bottom (late july) might only be one in a larger D wave down?
would it then be smart to only put a portion of our capital to work at this upcoming intermediate bottom?
thanks
haveaniceday,
yeah I see that, I was just confirming. Thanks 🙂
Gary,
I was just wondering if we can apply cycle theory to A,B,C,D waves, because intermediate cycles are in all actuallity just smaller waves within big waves.
Gary …… HELP !!
the MACD on miners: GDX GDXJ SIL, looks like its printing a positive divergence
Talk me out of buying now, please!
This must be the sucking back in phase of the cycle?
Mitchell,
Thats what im seeing.
Bruce,
Thats hilarious…my ribs are cracking….lol
Gary help the man!
Mitchell,
Only an eight year cycle low should have multiple intermediate cycles. But I do have a plan in case the intermediate bottom is tricky to spot.
Bruce,
It is a bull market. Even if this isn’t the bottom the bull will correct your timing mistake.
I prefer to wait for gold to bottom before taking positions because one risks getting caught in a counter trend rally.
“No the ABCD pattern has nothing to do with cycles other than major troughs will occur at intermediate cycle bottoms.
There can be many intermediate cycles in a C wave for instance.”
I take it investing long in gold during a D or B wave is not a smart thing to do no matter what degree the correction, as they would mostly offer lower lows for daily and intermediate cycle troughs?
William ,
possible, but “IF” GC is in a IT bear mode surprise are on the south side.
anyone see that volume on gdx, 3min chart.
Buying into D or B-wave declines is exactly what one wants to do.
Even if you don’t time it perfectly the D wave decline is the single best buying opportunity we will get for the rest of this bull market.
Every intermediate cycle of this C-wave clearly had two bounces before bottoming on the 150SMA, one off the 75SMA (like we are seeing today)and then again off the 100SMA.
I’ll be happy with gold finishing at or below 1500$ today.
Today is a perfect example of why most people should listen to Gary, and ignore my trades 🙂
Cool Loser,
You want to try and catch the D-wave and B-Wave bottoms to invest long for the ride up.
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Gary,
Exactly referring to buying a D or B wave bottom. What I meant was buying long at the front end of a D or B wave, especially if they last more than a few months. Looking forward to reading about your D wave indicator later on.
William,
I got you bigtime. What I was referring to exactly was trying to play the daily cycle troughs long while in a D or B wave, especially if they last several months.
Cool Loser,
I hear you, but timing that will get you slaughtered almost certainly…your better off entering as close to the bottom as possible and weather the draw downs on the way up. Holding fast through the whole wave (entry as close to the bottom, exit as close to the top) is how the most money will be made for sure.
I’m with you William. Thanks.
Cool loser,
If you plan on playing it that way, I would say, and I know Gary would disagree, add to your initial short position on bounces during the way down.
Pathetic volume on SLV and GLD today, I doubt SLV will crack 20 million shares.
Gary,
Would you agree that the market is only rallying today in anticipation of a good outcome in Greece tomorrow, then its back to business to the downside?
Don’t anticipate any good news on Greece.
unless we get a dramsatic turnaround here, i will be stopped out of my TWM position with a 1% loss to my portfolio. I’m considering letting it ride over night with the Geek decision on the way as I believe this will be a sell the news event..after all, what does an austerity measure really do for Greece? It leads to an extensive deflationary depression. WHat does it do for the EU? It puts them on the hook for more bailout moneys to save Greece, then Portugal, Spain, Italy, and Ireland etc.
The rise in the Euro over the past few days is speculative money betting on the Parliament voting for austerity. Once they do, what reason is there for the Euro to rise? None that I can think of. When the Euro stops rising, the dollar will, and the markets will resumre their downward trajectory.
I’ll likely honor the stop in TWM as its bad practice to ignore stops.
I’ll be adding to my EUO on a swing low reversal in the dollar.
fc
f
I dont understand how these birds by my house crap right on my windows, they fly into the window sometimes and scare the crap out of me, so I am assuming that sometimes they see the window last second and say “oh SH#@” get the crap scared out of themself and crap on my window!
I don`t know guys, try this;
I pulled spy fibo from March low to May hi; I`m showing 61.8% @129.86.
Then $NYMO, connect tops from March though June. Should these two be pulling into town about the same time? Or is it just another one of those deals where 75 cents will get you a cup of coffee any where in town?
fb,
Well thought out line of logic. Thanks for sharing, it’ll help me sit tight. A
Wm, $SPX is due to rally back to top of falling trendline from a technical prespective.
Birds get the crap knocked out of them when they try to fly through a closed window. I soap my windows outside with detergent so the birds can see them better and don’t think they can fly through, or close the curtains.
Willianm- Good observation on the 75DMA and then 100DMA causing gold price declines to pause during intermediate cycle lows. I’m not from Missouri, but I did have to be shown…so attached is the chat I created to test it. With the exception of the last Int Cycle low it’s on the money.
http://tinypic.com/r/iz5h1e/7
Here’s a closer view of just the last 4 Int lows…you can see it more clearly here..
http://tinypic.com/r/6sv2o4/7
Fubsy,
That seems like the real deal. Thanks.
William,
Thanks for that “laugh out loud” story about the birds. Hysterical!
Anyone adding to DUG on this pullback?
haveaniceday,
yeah, I got no curtains thats why they keep flying.
TJ,
second link is blank like my mind.
William,
Kudos for renovating your place on 3/4 limbpower. Sometimes I need a fifth.
William,
What if you just opened the window and let them fly through? Maybe you could even charge them a toll. Sort of like selling covered calls…
haveaniceday,
But who needs detergent or curtains when ya got bird crap all over ya window, you would think they would see that and get tired of flying into their own crap!!
86,
LOLLLLLLLLLLLLLLLL, im gonna try that, then when they are in im going to close the window and tell them “now you cant leave” and shoot them dead! Im going crap shooting.
TJ,
Thanks for posting that chart.
I am betting on Godzilla versus King Kong…The bulls vs. the bears, in an all and out blood bath of MMA action. At this point I only want to be a spectator, far away, with binoculars….the stories Euro VS Greenback…the battle to see which currency is the shittiest. People aren’t thinking cycles…the USD has been so hammered, I wouldn’t be surprised if the battle is long and hard…one where spectators keep changing sides…either way I expect extreme volatility…but this for the dramatic…I wouldn’t be surprised if we just go in circles for a couple months, like silver has been doing, waiting for both sides to tire out. Of course I could be wrong, but a bear making new highs, would be a very hard platform to work with.
Yes, keeping the crap on the window is an alternative that works, but I did not mention it. I would never consider it. Maybe draw an “X” across the window with a bar of soap. Better wash those windows or we will start calling you a crappy trader or crappy insights. Get a scarecrow. Post your pic in the window with scotch tape.
My dad and the neighbor did that one time with ducks in the neighbors porch. Those great big fat winter mallards. I think they wound up with 14 ducks. My neighbor cleaned the porch and my folks cleaned the ducks and I think my folks got done first. I guess when my neighbor snuck around the house and closed the porch door, it got REALLY radical. The ducks got Margin called for real! LOL!
Mr M,
I made a video yesterday to win a $50K kitchen makeover, i will know thursday if I win. My wife forced me to do it, I dont like handouts or legouts :), but she keeps trying to convince me I cant do everything alone, now that I am almost finished with the whole damn house!!!
One comment on currencies was none are especailly strong or weak. They will trade in normal ranges, except a currency in trouble like the EURO.
William, Good luck on the video and I hope you win! It’s not a hand out, if you did something for it. I wanted to buy a dining room set from a particular store. The saleswoman told me they were running a contest and the prize was the exact table set and chairs I wanted. All that was required was to write a short essay on decorating and she said they never get a lot of entries, so was worth a try. I wrote it and had my DIL edit it and won! I wish you the same luck!
86,
They were dropping bombs in my pool one year like a re-enactment of pearl harbor, it was crazy, I dont know what caused the all out attack that year, but I sat outside with my paint gun and unloaded on them like a maniac, shot up their trees and all! Could you believe it actually worked, they stopped. I dont want to do it out my windows my neighbors will really think im sick in the head then.
Keys,
Your scenario sounds just like last year before the flash crash.
at ease,
Im happy you won, thanks for wishing me luck. I will let you know if I win.
My history is a little fuzzy but I think it was William the Great, followed by William the conqueror and now SMT has it`s own William the Insane. Glad you showed up brother, it was getting a little quiet here by myself……….
86/William,
We had two big old cherry trees near the driveway. Damn birds would sit in one and eat and sit in the tree that hung over the driveway and crap all over the cars. We cut the branches hanging over driveway, but they still were hitting the cars. Finally, just cut down both the trees as they were old and not really healthy looking anyhow. No more problems, cars stay much cleaner now. 🙂
86,
LOL..quiet?? Yesterday, Edwin was saying that he wishes Dan was standing in front of him so he could knock his teeth out, just for telling him he should go to a numismatic forum because he said he is in PM’s for life!
William,
Try hanging a wooden windchime or a couple of stramers near the windows.
William,
I’m hoping this next A wave is really good to you so you can possibly pay for an exterminator to treat the bird problems. Somehow I doubt paintballs are a long term solution.
at ease,
You gotta see the tree I had cut down in my yard, it cost me $1800, this tree was like 100 ft. tall and 100 Years old with like 100 crazy crapping dive bombers in it.
Fergie,
Believe it or not it really was a long term solution, to the pool problem that is…if I shot at you with a machine gun I dont think you would be back for more would ya?? LOL
Mr.Miyagi,
Maybe we get another chance at NFLX. This time it might be from 300$ though?
Ironically this is one of my favorite personal companies as i use there service daily.
Fergie,
True, but look at the money he saves on cable because his entertainment is imported.
William,
Alright save the money on the exterminator and use it for the court ordered psychologist.. : )
Fergie,
Thats a paintball machine gun!
I gotta export these birds.
aklaunch
NFLX is nuts. It is one of the stocks that might get hit hardest in a downturn because of its overvaluation.
I ain’t touchin’ it!
William the Insane,
You must have quite a colorful yard!
Massive buying volume at the close. So much for the bears, they had their chance and failed.
People getting tear gassed in Greece now, so the market starts to rally, what the hell is this world coming to.
Tear gas, thats a good idea for the birds!
William, that just goes to show that even if cars are parked, they can contribute to an increase in atmospheric carbon… 🙂
Too funny! Thanks for the humor at your expense. I completely missed the close, but not playing the bounce anyways.
at ease,
Actually I do, I got alot of beautiful big rose bushes.
oops, I mean At Ease (who cut down the trees to keep his cars clean)
Ben,
Are you talking about the birds or the Greeks? lol
Laughing so hard it hurts! Do you believe we get paid to do this? Who says there`s no justice!!!
Market hit resistance at the 150SMA
Hack,
Mild selling on strength numbers today. Again I would warn against trying to chart this market.
These kind of volatile swings back and forth are how bull markets top. They chew up bulls and bears alike.
William the Insane,
I love roses, especially my dozens of pink rose bushes all around my house and up my driveway. They are just gorgeous with my blue Hydrangeas all around my yard in VA. It’s just killing me I can’t carry back or import some of these beautiful English roses back to the states from London. I have tried to find nuseries in the states that carry them, no luck.
Short the world; here come the Greeks. William; hit `em with the paintball gun, maybe they`ll drop their gyros and baklava!!
BIRD just hit resistance at my window!
Dirty rotten scoundrel, sorry bird lovers!
At ease,
Try Heirloom Roses in Oregon. Just google the name and you’ll find them. I’d be surprised if they didn’t have what you were looking for.
Ben, Had a neighbors cousin take em down (who was in the business) and donated the wood to a neighbor who makes wooden bowls and such. He in turn gave us back a beautiful wood bowl and pepper shaker made from the tree.
86,
You crazy, they will stone me with gyros and baklava!
at ease,
Spring Hill Nurseries. google them, I would be suprised if they didnt have what you want.
At Ease, sounds like a good trade to me!
Thanks Fergie, I will check them out! I hope I can find some of them.
They have some beautiful roses over here in London. My husband thinks I am nuts as I take a lot of photos of the rose bushes in peoples yards and the flower box and container combinations they do in downtown London.
My hope is to make enough money in the markets, so once we finally settle down, I can get back to painting. Meanwhile, I take lots of photos of the sights I see (and florals) wherever I go in Europe.
So many old things over here, that are old and have so much character.
Is that what`s called sweet sorrow?
Anybody know when the greek debacle announcement is to be made or just watch CNN for an increase in Molotov cocktails?
Thought I’d share the USD chart as I see it right now. Head and shoulders pattern developing on the hourly chart.
This chart includes the action in Asia/Europe market hours as well.
Target for the USD Sept Futures is about 74.50…
2011-06-28 USD (60 Min)
My wife and I are thumbless when it comes to greenery; planted herbs, they all died. Planted tomatoes, struggling (with 20 hours of sunshine per day). Lawn, dry and dull, assorted plants, in various stages of mortality.
We love nature but can’t grow it.
86,
I think 7 Am Eastern, But you wont be able to see anything on CNN because of the tear gas, they like to get right up in the action…didnt Anderson Cooper get punched in the mouth like 3-4 times recently somewhere?
My wife just gave me a plate of samon and I thought it was a piece of french toast, thats what it looked like. I got Europe on the mind.
Mr M,
Try water, it works buddy.
WTI,
Water also drowns them, apparently…
If the ES trades above 1294 tomorrow during regular trading hours, I will add to my longs. Stop would be around 1270 on the ES.
I think there is a very decent change we are going to 1450.
W-I,
I thought that was Dan that took it in the puss a few times! Are you sure that wasn`t napalmed greek salmon?
Mr, M
Dont over water them!
David,
What do you feel could propel the market that much higher? No matter how I try, I just can`t see what it could be. Thanks.
86,
lol..Dan got lucky, he had a place to hide. I never tried greek salmon, is it good, probably stinks?
David,
You must be Greek, am I right?
Mr M,
Check this one out; the Big Book of Gardening Skills. No author, just from the editors of garden way publishing. Honestly, this is a really great book. It`s the whole enchilada on gardening.
86,
I’ll see if the library has it.
Willy,
yeah, kind of an onion/green pepper smell. They also have dark hair and a bad attitude!
Mr M,
I just found one on Amazon(paperback)new, for $4.49.
86,
LOL… I thought that was my wife’s hair, it must have been greek salmon then!!
86,
Your question is your answer.
If making money in financial markets were as easy as looking at the fundamentals, or as Seykota calls it “funnymentals”, than nobody would lose. Right now even my son´s nanny knows the world is in a mess and the US economy is in a bad situation, so I can garantee you that that information is useless.
David,
Understood, but as I remember you used to post here somewhat frequently and I also remember you were one to listen too. I`m saying you didn`t just pick 1450 out of thin air; that`s a big number.
In my opinion the only way the market can go higher is if the dollar heads back down. One would have to assume that May was not the three year cycle low for that to play out.
WI,
You are just Touched man!
This comment has been removed by the author.
Fergie, Thanks for the link, I found a few of the DA English roses I was looking for. I have to find my list to see if they have any of the others that aren’t the DA english roses. Thank you again! 🙂
Peter,
Concerning your question why SP500 is more important than Nasdaq and DOW — 75% of stocks are correlated to SP500.
The 1450 is a rough guess based on a few things…
1- Markets like to marginally break obvious support and resistance pivots before reversing. There is an obvious pivot from May 2008 at around 1437.
2- If we trade above the trading range that we are in since the beginning of the year (1250-1370), using a P&F count the projection would be around 1450 as well.
No problem. I’ve been to their gardens many times and know that they travel to the UK almost as much I have. They have the largest collection that I’ve ever seen. . .worldwide.
The past 20 days the market has been trading in a range, rotating up and down in bigger and bigger swings. This is the condition we need for a big trend to begin. Big trends begin when most market participants get tired of being thrown around and whipsawed to death and thus become reluctant to take the next signal. They are the ones who will fuel the upcoming trend.
So my plan is to add to my longs tomorrow above 1294 (ES), and if the market trades back into the trading range and goes below 1270 or so, I will stop out and reverse to the short side.
Agree Gary.
One scenario would be a worsening of the macro environment (beyond what regional manufacturing/employment has shown) and a resumption of fed easing in some capacity come Aug/Sep. I would expect only the fed could push the 3yr cycle out?
I still see us needing to find a decent (correction) IT cycle low in Aug to support such a large move to say 1,450. But on the flip side another big move higher within the next IT cycle should come with 1,250 holding support.
We also also plenty of time left in the 4 yr cycle to support another IT cycle higher.
Time will tell, this current IT cycle will reveal much of what is too come, IMO.
Fergie,
Do you come to the UK for work or vacation? I will be here at least til Sept, if you hit the London area, would love to meet up with you.
David & Poly,
Thank you both for your input. I`m leaning for the drop personally, looking at the drop we have had so far, and David, while your points are good, I just can`t see it another way. The Fed NEEDS to have the wheels come off before they can start printing again and that,I feel, is one of the main objectives. Thanks again.
At ease,
I try to schedule either Chelsea (May) or Hampton Court (June) Garden Shows, but two trips to Europe already this year and I’m avoiding long hauls ’til the holidays. Too bad you have to leave. UK is a great place.
.
Don’t leave the market alone. This is the time to get in for the ride to Dow 36,000.
New Cisco’s and Intel’s will be formed in mobile computing and green energy.
Actually, a strong dollar is good for the US economy and good for America.
Somehow it got bastardized the last couple of years where strong dollar went with falling stock market. However, things are about to change from this point on.
Beanie,
It’s pretty hard to take you seriously. You only show up on the days the market rallies and then you disappear for months during declines.
Why would anyone want to invest in the stock market and maybe make 5 to 10% in 4 to 5 months if they were lucky and assuming this isn’t a new bear market?
They could instead just wait for gold to finish its intermediate decline and make 10% or more in three or four days in mining stocks.
Beanie, is that the advice you were offering 11 years ago when the DOW was quite a bit higher than now? 🙂
http://www.amazon.com/Dow-36-000-Strategy-Profiting/dp/0609806998
Eventually, with currency debasement, your utopia will arrive and you will discover that your real purchasing power has declined.
D’oh!
Gary,
I do drop by on occasions and check out what the resident bears are up to. Saw ya on minyanville and thought I post a contrary view.
Precious metals are no match for the several companies that are gonna be 20-100 baggers within the next 5-7 years. I think stock market bears since they normally like to short tend to lower the bar for themselves, as prices can only drop 50-100%. Some gold/silver miners, if assuming one went long, the last 10 years offered 10-20 baggers. That’s great…. but still nothing compared to what an intel or cisco offers (50-200 baggers). There will be Cisco’s and Intel’s coming right up this decade.
Who’s short. We are in cash waiting for gold to bottom.
When you find one of those 50 baggers you let me know. I’ll bet you a burrito that we have at least two bear markets before any of them even get close.
BTW the next bull market isn’t going to be led by the same old crap that led the last bull market. Don’t you ever study market history.
The next bull whenever it comes will be led by bio tech.
gary is the dollar looking as bad as it feels on this end?
BEANIE!!!!!!!!!!!!
Long time no see!
Why would two down days be bad?
gary
i guess im looking at the dollar and saying if that was the top we are in trouble. no higher highs.
i have a very strong hand but we are running out of time to make a high.
Your cycles analysis of a coming bear market on SPX could have been used last summer, and it was, and it would have been wrong and will likely be wrong this time as well. It’s because we’re already in the beginning stages of a secular bull market (for the sake of argument, I give you that we were in a secular bear that supposedly started in 2000).
Though bears think the sole reason for the market rising the last 2.5 years was due to money printing, I think there is more to the story. It may actually be the 0 interest rate that did the job. The money printing may just be a psychological armor. Nobody really knows how much of that money went into the economy. It is likely the majority of the money is only beginning to make its way to the economy. On top of that, many corporations have held onto their cash since 2008 instead of spending to hire or grow. If that is the case, and combined with fed’s money, this stock market has much much much much higher to go.
On the contrary I was telling all the bears last summer that it was probably too early to short and the bull was probably not over, especially after Bernanke announced QE2.
Get your facts straight Beanster.
My proprietary Beanie indicator is flashing a sell signal.
So is the SoS number today.
Beanie’s blog will be gone in a few years, probably at the 2012 4-yr cl and he’ll be asking Gary to borrow money
I see tech pumpers all over the net- not looking to good for you Beanie, paid pumpers too.
Dollar probably at a low, odds stacking against you buddy, but I do like the Au in your Avatar 🙂
that 74.87 dxy today filled the gap (thanks for the chart Vale)
http://www.flickr.com/photos/valeriobr/5880619919/sizes/l/in/photostream/
Fergie,
I will be back in London in Dec until Spring 2012. I will be visiting Hampton Court Palace this trip with family, one of my favorite places.
Like clockwork:
Beanie appears.
David notes.
Gary confirms.
I too love it when the big shiny golden B appears. It’ll make it all the more cozy tucking in my puts tonight.
Vonda, Your right! It is like clockwork. 🙂
The market is currently overbought. I almost went short the SPY this afternoon but it’s not worth the trouble at this point.
yes, now that Beanie has reared his golden head my Puts will sleep better tonight
I forgot about window dressing…markets may stay up until June is over…need to keep up appearances you know!
I am in trouble, I did not sell my SPY calls today and now beanie showed up… Hope I get chance to sell them in the morning with decent profit…!!
Keys, Like your avatar. LOL
Yeah Keys, I’d bet the big moves hit in July
Vonda,
Thats really funny. Since I have been here, which has not been long, although I definitely feel at home already because of how wonderful everyone here is, I noticed that when Beanie shows up every single indicator I use (stochastics, true strength index, money flow, RSI, etc. you get the point)are all showing signs of death. Beanie is the angel of death!!!
William The Insane, yes, its the Beanie Indicator. Very reliable
Eamonn,
Beanie is more like 5 indicators in one!
P.S.
You can just call me Willy…lol
Willy,
you are truly `The Man` Dawg! You were in the nightly report. You just rocketed to the center of the Universe!!!!
86,
Im blushing bro, thanks for keeping me humble!
Good to have you on board. That was a good spot on the 75 too! Hey, wanted to ask you, where do you get your gold charts? I mean is it through your broker or stockcharts or what?
86,
I was rolling today, my ribs were cracking…some funny stuff. It really makes my day man.
No doubt. I find a good laugh a few times relieves a lot of stress and pressure and let`s me think a lot clearer. Just makes it great to go to work. We really are blessed to able to partake in something like this. There`s a bunch of great people here all pulling in the same direction and what a difference it makes. Before I ran across Gary and this blog, I was seriously thinking about hanging it up. This is a beautiful thing here.
86,
Im glad your here with me!
I use ThinkorSwim from TD.
Also, it looks like every time gold bounced off the 75 it pops to around the center the candle of the previous low..which was the 6/13 low at 1511. The 10SMA and 50SMA are converging around there, so it looks like gold will bounce off the 75 and hit resistance on the 10 & 50 which right now is around 1523ish, before heading toward the 100 for its next pause.
86,
Thats crazy you say that bro, its almost like Im listening to myself.
I was telling my wife what a blessing it is to be here with gary and everyone, I too was ready to hang it up. I was laughing so hard today I was crying, she said what in the world is going on, I had to make her read some of the posts. Unreal, makes me happy man.
TOS has really got the charting packages don`t they? I use fido and they`ve got no gold, silver, oil, usd, xeu. I checked out tos and they`ve got some kind of hefty fees, yeah? $40 internet charge per month? So anyhow I`m sniffing around for new brokers. This is a good time to do it now before the Big A.
I recommend watching this every day http://video.ft.com/short-view
Did she threaten to make you pay if you were going to be home and having that much fun? Lol.
LOL @ 86d4life
86,
Does TD make you pay $40 monthly internet fee??? If so, I had no clue! I use Interactive brokers also, but TD got much better charts.
86,
She sits right across the room from me working on her computer, we have a religious goods store on the internet she runs. She yells at me because i dont pay attention to her when she is talking to me, because im laughing!! I tell her wait until im done laughing I cant breath!
I didn`t open an account with them. They waive the $40/mo. if you place 40 trades or more. Maybe I used to do that but now gettin on the Old Turkey Express, my volume is down, profits are up and my futures so bright I gotta wear shades.
http://www.youtube.com/watch?v=8qrriKcwvlY
See you guys in the morning!! We can have coffee to the greeks getting tear gassed!!
86,
Talk to you in the morning , sweet dreams of Greece.
Fergie, please give me a buzz whenever you come to London. I am based there.
I’ve been short since June 2nd (still green on the trade I might add) and starting to question whether or not I should close the trade at my cost basis or take a small drawdown should we break SPX and close above 1300, but now that Beanie showed up screaming Dow 36,000 I’m going to stay short above 1300 even if we trade up to the 50 SMA until Gary gives the word on the start of the A wave. Thanks for being a great fade indicator Beanie!
So far, despite any large draw-downs in Gold and Miners, this miner is acting perfectly ( SO FAR), so…
I bought XG @ $11.70 since it dropped to the 20sma AGAIN. It may just be a quick trade to $13+
I am Not bullish gold here, I have been trading both short and long, flipping as I see trades appear…its also just a trade.
http://www.screencast.com/t/pojmWmOMwn
William,
nice Sherlock Holmes-ing on the 75DMA bounce, will be very interested to see if it follows the historical path and dives down in a 5-10 days or so.
Also, hope there aren’t any animal rights activists in your neighbourhood! 🙂 (My personal opinion: Keep on gunning)
Let’s see what this day brings us then! I’m considering going long on the USD at this stage even though it looks like a daily cycle low is yet to come within a week or so.
Suggestions anyone?
Take it easy.
/C
I’ve Eaten Silver
You’re welcome.
DX 60min http://bit.ly/llywTg
yes. DX filled the gap and past res @74.80 supported prices.
“In chart veritas”
Now the chart works
DX 60min http://bit.ly/llywTg
Gary,
on USD daily cycle we are now on day 15.Top was made on day 6 at 76,01.It seems to be a left traslated cycle now.There only 10 days left to make a new high.Unlikely in presence to falling prices like these days…
thanks
Sophia,
Would love to meet up with you also while I am in London this summer. I knew there was someone else here besides me. 🙂
I travel to London on a fairly regular basis, am actually in London now, until Thursday, and back again at the end of July
How about we plan a London get together towards the end of the month? I will be traveling this week and next. Anyone else available towards end of July in London area?
I would be happy to host a get together in London end of July timeframe, if anyone is interested, send me an email to:
[email protected]
Ken,
I have been long and wrong since the 7th of June on NSQ…Suffered and was about to cut when Gary decided to buy back his short mid-JUne…Useless to say that I have sold back all positions this morning, made 15 points on NSQ and lost 3 years of my life…
Morning everyone..so we need to see the $USD firm up quickly now don’t we, and start making it’s move higher. Futures are going through the roof!
For me, I think that there is more risk on the downside than on the upside…The market now is convinced that Greece is going to pass the austerity package, so why should it rally more?
If not, wouf, mind the gap!
Adding to Euro short and initiating Aussie short too.
It appears the dollar is in the process of putting in a daily cycle low at the end of the month. The real test will come in July when QE2 comes to an end.
Then we will see if the market can survive without the constant drip of free money from the Fed.
.
I think the dollar is forming a triangle. It will probably break down from the triangle for one last leg down.
Here`s Jimmy Rogers telling like it is again;
http://www.bloomberg.com/video/71610674/
BTW, one more leg down in the dollar seems right. Right now everyone knows the dollar should be going up, no QE3, Europe is in trouble…
Another leg down would probably scare away all the Dollar bottom pickers.
With QE2 coming to an end I was thinking the dollar triangle would probably break to the upside.
I would point out that the dollar is moving into the timing band for its cycle low. Large gaps, especially after two large up days, are a sign of emotional trading and are usually better fades than continuations.
The market will also become extremely stretched above the 10 day moving average if the gap holds into the open.
What with the very light volume on this rally and all cycles still too early for an intermediate low I still think this is a counter trend move that will be followed by a move below the March pivot in July.
Spot FX (mini) EUR_USD 30min http://bit.ly/kcP56y
Looks like a double top. EUO maybe?
defaut greek ….
maybe not, mah!
Fowarding link
ECB FIGHTING NOW…
Gary,
DXY in TOS charts show a cycle high on Day 7. If the dollar cycle is moving into the low, would it not be a left translated cycle?
If so, would up expect the cycle to fail?
5min chart http://bit.ly/kwwN16 this is what I mean , talking about EBC
Looks like today is shaping up to be a wild one.
http://www.bearishnews.com/post/4360
Marc Faber Still Likes Gold and Silver, But Says Next 3 Months May Be Rough
Looking at the GLD ( as a trader)
Yes, Gold has broken down, but often this pattern gets retested ( Its called the “kiss” goodbye)…OR maybe it just re tests the moving averages,
But this gives it the possibility of more room to the upside.It may suck in longs thinking its a double bottom, then drops to a low.
http://www.screencast.com/t/y8w6VKSHyHH
I am long XG for a short trade
Austerity Package Approved.
I’m off to climb rocks this morning.
Have fun at the rocks!
We do know that Greece has effectively defaulted…the banks have moved up due dates, which means in my books an effective default. Just more fancy accounting hiding reality again. The greatest tool for fiat printing is accounting…why change reality when we can change the appearance of it.
Alright probably done for the day, and most likely the week…too much action…I anticipate some major carnage going both ways.
We’re still in a failed daily cycle with plenty of days left. The bailout/vote is now fully priced in, we’ve reset sentiment and almost back to the 50dma, which has provided resistance to the upside of a failed cycle many times before.
With POMO ending in a couple of days, the market will be left standing naked and asked to stand on it’s own two feet.
I say she is about ripe for the picking.
Just an idea where we MAY be going…
Originally I drew this chart saying we broke below the LOWER channel and could ‘re kiss’ it and DROP FAST, matching Gary’s thoughts.
Then on June 15-
Then we broke back INTO the channel, and I was NOW THINKING we are inside and will retest the TOP channel line ( and the 50 sma is here too About SPX 1315 area.
http://www.screencast.com/t/t2htRLRp
Every time gold bounced off the 75SMA it pops to around the center of the candle of the previous low (6/13 low at 1511). The 10SMA and 50SMA converge there. So if we see the same pattern as the previous intermediate declines presented, gold will bounce off the 75 and hit resistance on the 10 & 50 which right now is around 1523ish, before heading toward the 100 for its next pause before possibly bttoming on the 150 if this is a “normal” intermediate correction. If this turns out to be a D-wave im looking at the 60SMA on a weekly, which is around 1355
Looking at the 50sma for the $spx ( top of that down-channel line)…
I dont see how it possibly could get there, but it just chugs along. This kind of market may be good for ‘traders’ that can keep their eyes on it all day,maybe not those away from their P.C. all day
If I worked at my old job (40 to 55 hrs a week) it may be best to sit aside and wait for the low, OR just place small trades with Proper set ups…no guessing.
The dollar and SPX will put in reversal candles today. Lets see what happens.
Poly,
You’re suggesting that now is a good time to employ inverse positions on the S&P?
William,
Yes good observations. Although personally I do not see any evidence to suggest a deeper IT Cycle consolidation (what Gary calls D Wave) even if we are in a new 3yr dollar cycle. I like the 30 on the weekly chart.
Look at the huge Dec 2009 top and subsequent cycle low, it held the 30 nicely.
I’ve said this before, gold is entering the latter stages of a bull market and it will decouple itself from correlations and trade within its vacuum.
I think Poly nailed it in 6:37 AM post.
Let me just add that this is a very important quarter-end with regards to manager’s performance as well. Given that we’re likely heading into a period of renewed selling pressure due to the end of QE2, the last thing that the markets needed was investor redemptions and forced position liquidations at hedge funds to add to the selling momentum. Closing this month/quarter with positive performance will likely minimize the impact of this.
“You’re suggesting that now is a good time to employ inverse positions on the S&P?”
Almost there, we should be able to hold or tag the 50dma in the next two days. I doubt the market falls two days shy of a quart end.
I’m already short, but will add if we tag the 50dma.
I’m looking to top off my Silver shorts in coming days with July OTM’s.
Good point PST.
The financials are all struggling big time and facing layoffs, last thing they need is to send out negative quarterly statements.
Later all, happy trading.
Poly,
The previous intermediate bottoms of this C-wave all bottom on the 30, but if the dollar is rallying hard we might break lower and head for that 60, And from what I see this C-wave looks very extended now. We will see together in real time…glad your here 🙂
SPX 1303 IS 90 DEGREE’S UP IN Price FROM THE 1267 Low, it should be at Least short term Resistance.imo
If we are about to enter a D-wave and not a normal intermediate correction, these pit stops on the 75sma and 100sma are going to be short lived.
Poly,
Thanks for your comments. I have plans for equity puts if SPY comes close enough to the 50 day or if it’s late Thursday. I want to be short before everyone wakes up Tues am with no QE. I also think Friday will be a tough day for longs to hang on to their profits over a long weekend.
Copper on the verge of breaking out of a 2 month consolidation. If you are short, you might want to re-evaluate those positions.
“I want to be short before everyone wakes up Tues am with no QE.”
QE2 runs until mid July.
EricH; Its June 30th. Do you have a reputable link for the changed date of mid July?
I look at many factors ( dollar, SPX, GDX etc and try to look ahead and see if there are any indications that change is coming, etc…BUT
I just take it one step at a time and trade whatI see now too.
I’m looking DRV as a short EFT. It has dropped back and filled a gap, but its not quite ready yet. I dont want to get in too early.
I’m with family today, great posts guys, I look fwd to catching up later!!
William the insane–you look like a warrior in your pic 🙂
IMO, it might be misleading to talk about QE2 “ending” this summer. What is ending is the bond-buying program now that the Fed has met its $600B schedule, but it’s not like the program will be wound down and the money reclaimed from the system. The news that they will roll their maturing securities doesn’t sound contractionary, either.
I guess the question will come down to whether the market needs an expanding Fed balance sheet to go higher, or simply a stable-but-large one.
The last scheduled purchase will be made on July 11th. Watch what they do and not what they say….
http://www.newyorkfed.org/markets/tot_operation_schedule.html
Alex,
Thanks..Have fun with the family!
Copper p&f daily http://bit.ly/mGhQncr
I believe thats the reinvestment program which is why its spaced out like that.
Yes it is, but it’s doing the exact same thing.
“Outright Treasury Coupon Purchase”
The next piece of chart resistance for the S&P 500 sits at 1,312 from the lows in late May. Both the declining 50-day and 65-day exponential moving averages are at 1,308 and these averages act as resistance during an intermediate-term downtrend. Trend line resistance, off the peak since early May, comes in at 1,318 when projecting out about a week.
PMs just popped. News?
GDX is at a key technical test, imo … last summer’s pivot highs and the March low, as well as the descending trendline, are all in that 54.75 neighborhood. A solid break above puts a double bottom on the daily.
Reinvestments will not end in mid July.
http://lh5.ggpht.com/-SFk5vMz2umE/Tgp3DCEW0MI/AAAAAAAAK-g/V31913HLF1A/s1600-h/EvilPlan%25255B2%25255D.png
my bet…
Dan, oil rising do to “a bullish U.S. liquid energy storage report.” Sounds like reqular talking-heads stuff. Probably just a rare bounce off lower brend line. $WTIC is about third week into a BB crash. Weekly chart nearing BB crash.
Possible safehaven play due to Greece riots.
Possible U.S. dollar nearing lower trendline.
http://www.kitco.com/reports/KitcoNews20110629JW_update.html
I went to the beach on sunday with the family and got scorched. Damn sunburn kept me up all night itching like a dog. I searched the house for a back scratcher, I found in the shower this thing my wife uses to wash her back, its like a netty spongey type thing on the end of a long stick. Let me tell you, this thing is like the ultimate sunburn back scratcher…not to rough…not too smooth. You can scratch nice and hard without ripping the skin off ya back, cuz you know when ya got itchy sunburn you’ll mutilate yourself and not even realize it until your gushing blood and your skin is hanging off!!
WTI, where are you on LI?
WtI, due to lack of atmosphere on Mars, the astronauts cannot be protected from the Sun’s radiation. I mean, nothing stops these particles racing from the Sun. Not steel. Nothing.
Thus, the Mars astronauts will face breakdown of the DNA in their cells and eventual cancer.
at ease,
Im in Huntington, Thats Suffolk County.
haveaniceday,
Then the astronauts on mercury are even worse off than the ones on Mars!!
My husbands family is originally from Franklin Sq, Nassau. Have a SIL in Massapequa. I spent my high school years on LI, lots of fun!
Poly,
July OTM for silver?
That’s a tight timeframe unless you’re expecting a major decline.
Have a nice day,
There is an atmosphere on Mars. It’s just a lot thinner than on Earth, and it does not have an ionosphere which would afford the protection one would need if walking around. The air pressure, if I remember correctly, is thinner than at the top of Mt Everest (plus little or no oxygen).
I wouldn’t spend a lot of time worrying about what will happen to humans trying to live on Mars, since it will take about 100-1000 million dollars each to get say 1000 people there and it’s not like we have governments running around with huge surpluses right now, nor too much energy they need to use up some more, etc.
WTI,
I was looking at your estimates for bounce off DMAs. What do you expect the next price down on gold to bounce around at? Looking to put sell orders in on my GLD/SLV Puts over the holiday week. Would rather lock in gains, than worry about catching the bottom.
Gary,
I asked you this towards the end of the C-wave. I’d like a new opinion please.
I have most of my wealth in physical PM’s. Obviously not any leverage there. Stocks provide leverage and a way in and out to increase profits. I plan to keep 10% in physical but if you were personally in the same situation would you convert physical at the top of this A-Wave like you suggested be done at the top of the C-wave? I missed the top of the C-Wave.
Just Checking in on the market at lunchtime ( Eastcoast).
Possibility ( Eamonn, this is in harmony with your 8:20 timestamped post)
http://www.screencast.com/t/8iJllaPU
BUT…If for some reason it broke ABOVE that top trendline…something huge has changed ( QE3?).
I am watching slv vs ZSL / and GDX , GLD, DXY for clues in the metals…
AND if the markets go down soon–DRV looks pretty good pulling back lightly.
Just some thoughts-
Time will tell, good day all.
I think everyone fell asleep to the President’s speech.
WTI, Didn’t know he was giving another one. Same old tune, different stanza.
At Ease,
If we continue the same pattern of the previous intermediate declines the next bounce will be off the 100sma, which sits at 1472 now
Poly,
I’m also thinking about adding to my July Silver puts but I wasn’t thinking too far out of the money. What is your thinking and where do you think Silver will be as it is only a few weeks away.
Thanks.
Poly,
I’m also thinking about adding to my July Silver puts but I wasn’t thinking too far out of the money. What is your thinking and where do you think Silver will be as it is only a few weeks away.
Thanks.
Thanks, good, I was looking at setting all sell orders at GLD $144.00, so that would fall within that range. Just wanted to check to see if I was within range. Like I said, happy with profits, don’t need to try for the bottom. Thanks!
At ease,
I do think though that if this is the beginning of a D-wave and not just a normal intermediate correction, a bounce if any will be short lived (1-2 days)as we will drop hard and cut through the moving averages like butter.
Alex
This s&p chart and trend line you applied: http://www.screencast.com/t/8iJllaPU
also fits in with the SLV chart so we could get another day or two of green action for silver.
$HUI GOLD BUG Index:
Daily Channel:
http://screencast.com/t/RyOW3jb5
Hey Gann,
You’ve been quiet for a few days..
RUT above 50 dma and leading.
This can’t be good for the bears.
This could turn out to be the 2nd day in a row with decent SoS numbers on the SPY.
WTI,
I agree, look at today’s noon time rise. I already have my orders in ready to go. Just have to be triggered. That is why I wanted a pretty much guaranteed price hit, as I won’t be around this week to be monitoring the orders.
Long SPY, Tech and FTSE, SLW, ANV and EXK. Will add on any decent pull back…
Hey Mr M
I was long the SP-500 On Monday . @ the Lows and Sold Yesterday Morning….Sold early, but that’s OK.Still Banked some $$
I started a little short 1/4 Position,on Silver here.Going to see if it Reacts to the Channel & Fib Hit.
Gann,
Seems like silver, gold, S&P and the rest are now overbought and hitting upper channels.
Yes But the Problem is Over Bought could Stay Overbought so a Long Time,
But , anyways i started a Little Short, and will work Position , if i need to.
Where is 86d4life today?
I think he mentioned yesterday he was going out to eat gyros today for lunch to celebrate the austerity vote in Greece.
@bullion Trader,
I’m thinking about $1 OTM, can’t get too cute, with so few days left and rising Silver they will be priced well, so plenty of $$$ to be made in 10-12 days if gold/silver turns as we expect.
We have a failed gold cycle and a move to an IT low. I like this play, it sets up very nicely and uses the predictability of cycles to profit from very time sensitive options.
Poly,
So what is your entry point?
The market has rallied back to the cycle breakdown level of 1311. It’s done it on weak volume and could possibly be forming the right shoulder of a head and shoulders topping pattern.
Not to mention there are large selling on strength numbers building as the day progresses. Of course will have to wait till the close to see if they hold.
“So what is your entry point?” Oh the million dollar question.
Actually I just took 1/2 the trade, SLV 07/16/2011 33.00 P @ $0.63
Gary, I’m always amazed at how quickly you can go climbing and then be back. You must live pretty close to them rocks!
Ben,
It’s summertime here so we have to leave really early about 6 AM to get to the cliffs while they’re still in the shade. We’re usually done by 10 10:30 and then headed back home.
Did Toby enjoy his climb as well?
Gary,
I clearly see the H&S potential on the $RUT, but I fail to see it on the $SPX at this point in time.
Thanks.
Toby got to be pee on lots of bushes.
It’s what he lives for… well that and treats every once in a while.
AAPL & the SOX are already negative for the day.
Peter,
It’s more easily seen on a weekly chart.
Alex, thanks for that chart. I’m sitting here worried about my shorts. Time will reveal all
plus the Russell.
I have a 92 year old aunt and her large dog sleeps in the bed with her at night. He also likes to lick her legs quite heavily
I’ve grown rather attached to Toby over the years. It would probably be better for me if I go first.
Eamonn,
Your old aunt might have some medical issues if the dog is licking her like an ice cream cone in hell.
MrMiyagi, yes, heavy licking of her legs. Never seen anything like it. Its a little bit erotic to be honest
Eamonn,
I will try not to picture an erotic image of a 92 ye…. oh crap.. too late.. here comes my lunch.
Seriously though, there might be some circulation or growth issues.
If the ES goes below 1292 without retracing as much as 5 points I will sell my position.
Gary,
Our dog passed away 2 1/2 years ago from lymphatic cancer. 2 weeks from first sign to last breath, he was 12 years old.
We miss him every day, I wish he was here so we could just hug him.
SPY still on top of the SoS list. I would bet it is a set up for another left translated daily cycle. A lot of oil and ag names on it as well.
Mr. M,
It could easily be a quirk of the dog, too. About half the dogs I’ve owned over the years have had some sort of quirk like that. And I had a cat who liked to lick people’s earlobes. Nothing like waking up out of a sound sleep with the dang cat using one paw to grip your neck while licking with it’s 80 grit sandpaper on your earlobe. Yessirree… a great way to awaken at 2:30 am… lol
MrMiyagi, the doctor visits her regularly. I wouldn’t feel too comfortable bringing up the issue of the dog licking her legs. Its just something that goes on and I awkwardly/politely don’t comment on it
Ben,
Maybe you’re right, could be that Eamonn’s aunt trained the dog to lick her legs, the old peanut butter trick.
I am sure 86 is sorry he is missing out on this discussion. LOL
Gary,
If the dollar is putting in it’s daily cycle low, do you have an idea of where the swing might come?
Thx
Today’s thread took a turn for the worse…
GLD 30min http://bit.ly/jyLbGX
Michael,
I’ll let you know in a week or two.
Its always best to have pets in pairs because when one dies the devastation is not so severe. I still think of dogs I loved from when I was a child
Gary – not intending to be obvious or dull, but this alters our weekend perspective on the dollar’s key short-term moves, right?
What is the SOS list that thye S&P is at the top of?? Not familiar with SoS
Look at the size of the SoS on SPY…never seen it so high
We have two soft coated wheaten terriers, Dusty and Skipper. When I get home from running Skipper always licks my legs. I thought it might be the salt or something from my sweat.
I’ve seen days between 500-700 SoS before and they were not predictive. Not questioning it, just saying I’ve seen plenty of high numbers in the past.
Eamonn,
Im sorry but either your 92 yr old aunt or her dog has enter an intermediate decline!!!
William The Insane, hmmm maybe
If you had Visa or MasterCard shares, you’re grinning like a fool.
Unfortunately I’m not one of them.
The selling on strength numbers do sometimes come early, but the market almost always moves below those levels sooner or later.
The fact remains that it’s too early for oil the bottom, it’s too early for gold to bottom, and it’s too early for the daily cycle and intermediate cycle in stocks to bottom.
Is it possible that this is a very warped cycle? Sure it’s possible, but I wouldn’t bet on it.
I had to get rid of my bull dog, he farted non stop, it was like having an air-stinkerner (if thats a word) in every room! Im not even going to get into all the other reasons we couldnt keep him, if he licked my wifes legs non-stop that maybe I would have kept him.
Marty, it is the Sell on Strength list from the Wall Street Journal. It is fairly useful in predicting major market moves.
http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html?mod=mdc_leader
Thx Dude
Gary,
Do you climb with rope? If not, please do, I dont want to ride these waves without you!!!
Does Toby flip out as he sees you disappearing into the sky, or is he too busy pissing on bushes?
I use a rope.
Gary,
You should teach Toby how to climb, you can do like a traveling dog show.
-$340M SOS on SPY…
Off to the basement I go.
The big Hedge Funds and smart money in general use limit orders more often then they use market orders.
When they sell, they don´t hit the bid, the wait for someone to lift their ask. So I don´t think that selling on strength is a sign of smart money selling.
The correlation between the selling on strength and buying on weakness numbers to market turning points is way too high to discredit it.
At almost every single intermediate bottom we will see a large buying on weakness number prior to.
And I think every top except one in the last five years has seen at least one if not several large selling on strength days. Often they are early but they are almost always predictive.
David,
It’s this rising market strength that affords them that luxury. Panic selling occurs at the bid, but a rising market can mask the selling.
The shorts had to cover again today, getting punished by the bulls. Heavy volume in SLW, looking good. Tomorrow will be interesting…
For example, here is the April 28 SOS number. That marked the most recent high.
http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow-20110428.html?mod=mdc_pastcalendar
Dude,
If A then B does not imply that if B then A.
If 90% of major turning points are accompanied by SOS or BOW, that does not mean that 90% of BOW and SOS predict a turning point. In fact, you could have a situation where 90% of major turning points occur with BOW or SOS, but only 5% of BOW or SOS indicate a major turning point.
So BOW and SOS could be an almost necessary condition for a turning point, but a horrible indicator of a turning point.
BIG FAT SOS# —> 350 mill
Its still way too early for gold to put in a daily or intermediate cycle low.
The odds are high that this is another counter trend rally just like the one in May.
The stop I had on ZSL sold me out today with a small profit. Back to 100% cash. Don’t know if I will get back in or just wait for the A wave.
David,
Large numbers like what we have today are usually significant.
Sometimes we will see numbers under 100 million that aren’t meaningful, but big days like today usually mean a turning point is coming soon.
The dollar has two more days before it enters the timing band for a bottom, so I would expect the rally to hang in at least that long, and the days before the Fourth of July holiday are usually positive.
But once we get into July and QE comes to an end I think the move down into the intermediate cycle bottom for stocks, gold and oil will resume.
if I was long, and I’m not, I would take the selling on strength numbers as a significant warning and at least tighten stops.
After working with these cycles extensively for the last three years and studying many more years of history I’ve learned that 90% of the time one will lose money if they ignore them.
I am not suggesting that it is perfect, but it is reliable enough that you should at least pay attention to it….kind of like a storm warning. Just need to be aware that big money is selling SPY which has some predictive value to it.
massive dumping post-market
Dumping what? SPY/IWM/QQQ are up a little AH.
150+ td on morgan
Keep in mind SoS failed good in November.
my wife has my dogs right now
Eaten Silver’s Dogs With Wife
If the intermediate cycle had run a normal duration of 20+ weeks and we got a large SOS signal, then I would tend to ignore it.
But it’s still early in the stock market intermediate cycle, early in the oil cycle, and early in golds daily cycle.
On top of that we have a big warning sign in that the market dropped far enough during this intermediate decline to seriously test the March low. That should not be happening in a healthy bull market.
All in all I think bulls should pay attention to the SOS numbers this time.
This rally, driven by the dollar moving down into its daily cycle low, has sidetracked everybody from the fact that QE is going to end next month.
We saw what happened last year when QE ended. This year the market and the economy are much softer as QE comes to an end than they were last year.
Is anybody really under the delusion that the economy and the stock market are self-sustaining? If you are I have some beachfront property I’d like to sell you here in Las Vegas.
RBY lays an egg today.
Exactly why I like ETF’s 🙂
A seldom looked at but eye catching look at SPY and the Fib Time Series.
http://screencast.com/t/jnj7bpiHHieq
Another coincidence I suppose.
I went all-in OTM July SPY 135 calls today… 🙂
Gary,
I posted a question earlier. I’ll post again in case you missed it. If you don’t answer this time I’ll assume you don’t want to answer, which is completely fine.
Based on my own judgement and your input I was going to sell 90% of my PM’s during the C-wave. I missed that opportunity.
Would you weight in on what you would do if most of your wealth was tied up in physical metal? Would you wait for the A-wave top or sell now and use the leverage for the beginning of the A-wave? Or C: Something completely different.
I have about 20% of my wealth in stocks and the other 80% in physical. I’d like to re-weight that to ETF’s and 10% metal.
Gary,
I can see the S&P intermediate cycle breaking the previous intermediate cycle low or at least getting close to it several times during the 90’s.
There is one in 1990, one in 92, 94, 96, 98 and 99.
Then there is one in 2004 and in 2010.
90, 94 & 98 were all 4 year cycle lows. Don’t forget that entire period was during a secular bull market.
We are no longer in a secular bull market. Now we are in a secular bear market with cyclical bull markets being driven by currency debasement rather than real productivity.
In that scenario, and with the fundamental driver coming to an end (QE2), I take a serious test of an intermediate cycle low as a severe warning sign that the cyclical bull may be over. Especially if we are moving into the timing band where the market should begin to move down into the next four year cycle low.
book guy,
we are 22 weeks into an intermediate cycle. It’s too late to sell now.
I eaten silver,
I hope you are kidding.
Gary,
You have said it a couple of times that the dollar is moving down into its daily cycle low. Based upon my count, we are day 15 into the dollar cycle. My expectations were for another pop higher before the daily cycle low occurs sometime around the employment report on July 8th.
Are you expecting a shortened cycle or am I missing something?
Maybe the market is starting to sniff out some form of QE3. I wonder if Ben figured out a way of getting it started under the radar.
I have a feeling somebody is about to eat some SPY……
I second matt’s question above.
Matt,
Today was day 16. At 18 days we move into the timing band for a cycle low.
coffee,
Ben has been very clear that QE would end.
This is just an oversold rally to clear the extreme bearish sentiment that had built up.
It’s not unusual for the market to bounce off the 200 day moving average, sometimes multiple times, as a cyclical bull market comes to an end.
Look at those charts in last night’s report and you will see the market rebounded off the 200 day moving average several times before succumbing to the forces of the bear.
Gary,
I love it when politicians want to be perfectly clear.
I found this mutual fund while looking @ investments for my mutual fund only retirement account,
TGLDX. A nice mix of big gold,& silver miners + 5% in physical gold.
Up 2.22 today.
TGLDX is the best gold mutual fund, IMO. We’ve discussed it many times on this blog too. Great management and amazing performance.
I’m long this fund as a primary metals exposure in my non trading accounts, you know those don’t touch boring accounts 🙂
Gary,
As mentioned in your report, the pivot point of 1311 should act as resistance against this rally – is there any point on the S&P that would confirm that this is merely a very short I.C. and that would convince you to re-calibrate?
Thanks.
Also keep an eye on Friday’s ISM #s. Anything below 50 is ugly.
Peter,
A move to new highs would indicate a very short IC.
But in order to see the bull continue I think we would have to assume the three year cycle in the dollar hasn’t bottomed. That would mean an extremely stretched three year cycle.
The biggest problem with QE is that it’s warping everything. It has definitely stretched many of the stock markets daily cycles. Although the intermediate cycles for the most part continue to fall in their normal timing bands.
The gold cycle has stretched a little bit into the latter part of its intermediate timing band.
Surprisingly the dollar cycles have been pretty normal.
QE has also caused wild swings in sentiment. So sometimes it’s tough to decide whether to trust the cycle counts or the sentiment levels.
Sentiment has reached intermediate cycle bottom levels. However it’s still very early in both the daily and intermediate cycle for a bottom. So I guess one has to decide which one they want to act on.
Unless proven otherwise I’m going to stick with the cycles, and assume that we are seeing a counter trend rally in everything to work off the sentiment extremes, which will be followed by one more move down into a normal cyclical timing band.
Gary,
Or anyone,
In terms of QE2 ending and your mention of liquidity being stopped in the markets, how does that work in the first plac? How is the money pumped into the market, surely Benny doesn’t go door to door handing out cash with instructions to invest in stocks.
The Fed buys treasuries from the primary dealers. Then they have to decide what they want to do with that capital. Obviously a lot of it has been put to work in asset markets.
Hmmm..
Buying treasuries, then what do they do with it? I have to read up on this, it makes little sense to me.
Mr. M,
Just an add on to Gary’s point, once the primary dealers receive the billions from bond purchases, they immediately seek yield, so this free money is then pumped into risk assets. Keep in mind, that free money can also be leveraged to have a greater effect.
The big concern now, is that although the direct POMOs from QE2 are wrapping up – the fed has said that it isn’t going to sell off their bonds. It will just hold them. Their fear is a sell off would result in a panic.
An analogy: they are no longer pumping the balloon up – but they aren’t letting the air out either.
They go on the Fed’s balance sheet and they collect interest.
Buying bonds is the main vehicle for the Fed to pump money into the economy. The government floats a bond. The Fed prints the money out of thin air to buy it. Then the government takes that money and spends it on stimulus, Social Security checks, etc.
Huh… and is this sham expected to keep afloat forever? Does this not devalue the currency?
Or am I wrong.
The Long term sentiment (1-3 months) reached extreme pessimist levels and I think that is why the market is rallying straight up to get the confidence back. What is making me nervous is that all the sentiments for stocks and commodities are still extremely bearish.
I am still new to sentiment trader and learning, but I think it is a great way to invest and make decisions if you know all the technicals behind it and what to look for.
Poly good to know, thanks.
It will devalue the currency if they print fast enough to stay ahead of deflation.
We live in an extremely deflationary periopd.
The Fed is trying to perform a balancing act between printing enough to hold deflation at bay but not printing so much as to unleash a major inflation problem.
The last couple of years the error has been on the inflation side as commodity prices and most asset prices other than real estate have soared.
If I may wade in here; I understand the Fed gets paid interest on the treasuries they buy, but don`t they also make interest on the money they print in the first place? I mean the way the deal is set up, the Fed is actually making a loan to the Treasury dept in the first place for making the dollars? Maybe I`m off base.
i think all this creating money out of thing air is pure trickery
Dallas,
Actually most of the short term indicators have now moved into oversold levels and the bullish and bearish indicators are just about balanced. This is what we needed to see if the market was going to continue down. We needed to have enough of a rally to work off some of the very bearish sentiment levels.
Most of the time sentiment is a pretty good tool but it too has been affected by quantitative easing. During the last bear market sentiment reached bearish levels that would normally result in a rally but the fundamentals overwhelmed them. During that period one was better off following cycles.
This past fall and spring sentiment reached extreme bullish levels that would normally trigger a correction but the market continued higher for months.
Just like all tools sentiment fails from time to time also. Just look at the sentiment levels on silver. They have dropped through the floor. That should’ve triggered a rally, but instead silver has continued lower and sentiment has just continued to get more extreme.
Thanks for the information.
Well yeah,
that was the point of having a pm backed currency in the first place, now it`s just turned into an all out free for all.
Actually it’s counterfeiting. And me and you are the ones that get penalized.
RYDEX funds anyone? No short term redemption fees.
`Why`s the Fat Man busy dancing, while the thin man pays the band?` Travis Tritt, you gotta love the guy.
I have to be careful in what I am saying as I am not an American citizen, so I will refer to the “printing” of euros by the ECB to buy the government bonds of the PIIGS. Its total trickery. Its a scam. The only thing hiding it from ordinary people is that this policy is conducted by governments and smart sounding economists. How could any economist support this practice? Its crooked. To me it is a putrid sham. A con job and a sure sign of a basket case economy that we saw near the end of the Soviet Union
Along time ago the money makers lent to ordinary people, but then they realized they’d make TONS more lending to governments in which the loans are backed by the taxpayers.
The whole trickery is that all these banks, Bank of England, Federal Reserve Bank, International Monetary Fund, etc., all call themselves by names in which most people are made to think their public or quansi-pubic, but none of them are and the list of their shareholders are all kept private.
Obviously it is the Black Nobility, and the Rothchilds primarily that own them. Rothchilds net worth was estimated at 500 trillion decades ago I’m sure it’s grown, big time.
So all these big ass programs, SS, Medicare, wars, all of this is to increase the lending which increases the interest payments to the Fed. Eventually they bankrupt almost every government and then they privatize social services (eventually they will just toll every road in America when we’re broke in a few years) and liquidate the governments lands, etc, to even get richer.
Central banking is major kick ass and I intend to be one 🙂
And it keeps happening because most people don`t WANT to know! They would rather live in ignorant bliss rather than understand how it all works.
We’re nearing several resistance points on the SPY’s around the 1311 -1313 area…
2011-06-29_1746
This comment has been removed by the author.
I wonder how many people have to live in misery to pay for that.
It this kind of economic situation, its easy to see how the “middle class” have their wealth taken from them by governments by back door methods such as: devaluing savings by money creation, increased overt and covert taxes, reducing wages for “austerity” measures, raiding private pension funds – Ireland has started this practice. At the same time, those in the know, less than 1% of the population, can profit by their understanding what exactly is going on and profit by investing in commodities and precious metals
maybe I should don a Che Guevara beard and join the local communist party
Eamonn LOL
What not stay on the side of good? We need all the people we can get!
It’s about family, friends, tribes, alliances, and competition.
It’s not sinister, it’s just that there have been some very strong forces of groups that have been able to beat everyone else out and set up a position in which they’re on top.
That’s it, and competition is natural.
I can’t see DXY going much lower, what’s wrong with a 17-day cycle with it bottoming tomorrow or 18 on Friday? Seems ordinary to me.
After 2 daily-cycles out of 3-year low, dollar tends to rocket.
did the dollar bottom? i feel i should be buying more but to scared. Im long 4 contracts and would love to double up . i cant bring myself to buy even one more. its going to rocket here. where is the zantac.
We’re nearing the timing-band but would need a swing low. We could always get an early swing low, let’s say this week, only for it to find a true bottom the following week. I’m leaning toward this week bottoming with QE2 ending tomorrow.
I basically undoubtedly believe that the dollar put in it’s 3-yr-c-l, and the market its bull market top. Being so sure is dangerous, but for a plethora or reasons I see both these being the case.
Gary,
With PBOC buying up Euros hand over fist, is it possible that will stretch the cycle low for the dollar? How will the dollar ever rally if China is there to buy every Euro dip?
http://www.zerohedge.com/article/its-official-china-mystery-daily-buyer-billions-euros
Is there any truth to having the markets damaged in order to shove through the increase in the debt-ceiling? I truly believe so.
Also if we don’t get the debt ceiling raise agreed upon by mid-July there were threats of a USA downgrade from the rating agencies. Will this setup for a violent drop in early July? Everything points to yes!
Also I was told that the Euro would disband long before the dollar (before I guess that was in question and being debated/decided upon).
All the frameworks still point to the Euro about to get clobbered, and dollar rising, but sure they bring those who are sticking to believe this to near max-pain!
When the Euro declines, so too does Gold, historically
GLD vs EUO (~2X fund)
China will end up walking away with all the pieces. They`ll own the u.s. and europe.
Is Portugal or Spain going to be the event that drops the Euro in the coming few weeks? Probably.
heavy selling of the big Italian banks is under way too
Who says we’ll ever pay China? There’s going to be a major war in the next 10 years, I bet we just war with them.
If you think about it the media has been pounding through our heads for years, 10+, about China owning us and they’re (the media) always riling us up about China.
This is obviously a distraction from our true owners, but also creates an imbedded disliking for probably our next big opponent in War.
ok ill add ” war with china” to my list
destrying the dollar
20 years water shortages
hyper inflation
world domination ( by who i dont know)
socialist takeover
next depression
all i know is this flea is biteing the gold bull in the ass
THANKYOU GARY
that EUO chart is an inverse, sorry should have said that, stockcharts I don’t know how to do a comparison only ratios without an account, and Yahoo I don’t think charts currencies only standard traded tickers.
Actually I should have just linked this
GLD vs EU
18 days is only the lower end for the dollar daily cycle. A normal daily cycle can run to almost 30 days. Dollar futures tonight have traded below the minor pivot set on June 22 … much additional weakness could threaten the June low, which if violated would be a failed daily cycle.
18 to 25 is normal. The dollar is just nearing the lower trend line of the triangle consolidation.
Remember the last cycle as it formed a top made a lower low and then immediately reversed and made a higher high before rolling over into a powerful decline.
Don’t make the mistake of assuming absolutes. If this happens then it means that is guaranteed.
There are no guarantees in this business.
What I do know is that QE is coming to an end. That is going to change the fundamentals driving the market. Sure the market can ignore the fundamentals for a bit but eventually the fundamentals will overwhelm the technicals.
Without fail gold has moved down into an intermediate degree correction like clockwork about every 20 to 25 weeks and it has done it whether the dollar was rallying or declining. It appears that it has begun that move.
So all we need to do is wait for that bottom.
Stocks should have another leg down in July also. That being said I’ve done my best to steer people away from trading the stock market. The odds of whipsaws and losing money are just too great right now, and the profit potential too small to waste time fighting with the general stock market.
I promise, Gary, I’m making no assumptions about absolutes. I have a few scars from both bear claws and bull horns to remind me of that error, and I’m doing my best to avoid another trip to the ER. 😉
But I think the assumption error can be made in the bearish direction at the moment, too, and I might quibble ever so respectfully on the point that QE2 is “ending.” What is ending is the accumulation of Treasuries and expansion of the Fed balance sheet. However, the Fed seems to have communicated a willingness maintain the monetary base they’ve just finished expanding at its present level for the foreseeable future.
For me, the key question is not, “What will the market do now that QE2 has ended (i.e., reached it’s stated level of expansion)?” It is, “Does the market require continuing expansion to go higher, or is the present level enough for the bulls to put in another run?”
I’m presently (though lightly) positioned to favor the bullish side for the IT, but I don’t pretend to be certain of the answer.
Rosa,
Doesn`t it seem that the market has been pricing in the end of QE? Meaning, having a known ending date, even just a stable balance sheet is cuasing the market to drop. It would appear the market needs an expanding fed just to keep it`s nose above water. Really good point too.
RB,
With all the uncertainties in the stock market why would you want to be positioned there at all?
What really stinks is our kids will have to suffer for what these mutts are doing. Teach your kids to love good and hate evil, to farm and shoot guns and hope for the best.
86,
Your not a female so im assuming that your the brown hairy dude in the pic, what up dog!!!
86,
I don’t know what the market has been pricing in. Could be QE2 in part or in full, or it could be a lot of other things.
Keeping it simple and technical, SPX is becoming ST overbought. What is important, imo, is not how high it goes before correcting, but how far and in what manner it will correct.
At very least, the bears will have to drag it back and close below the recent range break around 1295. Ultimately, they need to take out the March low and produce that failed intermediate cycle. IMO, the burden of proof shifted this week from bulls to bears.
FWIW.
another little lesson in gov’t scam/shams…
another tool for the gov’t to maintain or increase the value of the dollar is to raise income tax. income tax pays for nothing. it is collected and then sent to the incinerator (to heat the fed lol). it is destroyed and never used to build or pay for anything.
imagine that only five paintings of Picasso exist and nothing else. each painting is worth 10 million. now, one gets destroyed. what happens to the value of the remaining paintings? goes up. if more picasso’s are discovered the value goes down.
there is a great video on google called “money masters” (I think). a must watch for everyone.
the value of the dollar has much to do with the amount in circulation. it’s no wonder why china ( and many other nation) have so much of it. if these nations decide to dump their dollars it will be the end of the world. china may be acting in the best interest of u’s all 😉
What were seeing here now in the market is called the Greek bounce, tomorrow it smacks its head on the 120sma and drops like a bear that just ate some lead. I hope 🙂
Gary,
If you have a certain winner, I promise to shift every little long I’ve placed in equities at the moment into that. 😉
In all seriousness, I think the setup simply favors longs at the moment. If that double bottom in SPX fails, I will be out.
FWIW, in addition to those three white soldiers on the indexes, bonds broke down this week. Perhaps the Fed finishing up is the reason, perhaps the market is front-running a budget deal getting done, or perhaps it’s something else. If the trend has changed in bonds, equities(and particularly that lagging banking sector) and commods stand to benefit.
RB,
Always appreciate your contributions as well as all others on this blog. I’m 100% cash and consider myself dumb money. Gary is a brilliant strategist and has definitely earned my respect. It just seems that the market is moving strangely right now as if the smart money knows something.
Coffee,
I’m with you on that. I’ve spent the last 18 months working on my masters degree. As soon as I graduate, I’m spending all my free time studying daily cycles. For now all I can do is follow Gary (and Toby).
🙂
Elaine, out of curiosity, what’s your major?
Gold closed at the 60sma today, and tonight the futures are hitting resistance at this level. If we dont break the 60sma early morning or tomorrow gold will have begun a meltdown within 3 days of its bounce off the 75sma, which seems to be much quicker than previous intermediate declines, it looks like this only happens in D-waves. I said today that if the bounce off of the 75sma is short lived (1-2 days) I would begin to lean toward the D-wave side instead of a normal intermediate correction. Although gold is beating to its own drum right now I think the dollar would have to reverse tonight or tomorrow for gold not to break above the 60sma and continue its normal crawl along the 75sma for 4 or so days before heading to its next support at the 100sma. Lets see what happens.
I dont post all my trades here anymore, I’m a TRADER in markets like this…but Rosa knows me , so when I say I agree with Rosa, and am currently LONG some equities, he could back me on that.
I was watching some “things’ and as “coffee” said, the mkts ARE acting strangely – but I have been trading..and currently own PAL, DANG, XG.
Today , looking at some financials V, MC, BAC, USB, WFC…look pretty good SO FAR.
I was watching ERY this week. I thought energy short would be great…ERY looks UGLY now.
It broke below the 20sma and the 50 sma on heavy selling volume.
Meanwhile, some energy stocks look very good- not weak ( ex:SM , BAS , AXAS , GLNG and more).
THM and MHR are buys to me now. this is JUST my opinion, but for RIGHT NOW, I agree with Rosabarba
Elaine
Congrats on the masters. Gary’s hard work at developing his cycle analysis has created a great tool for having an edge in the decision making process.
QE 2.5 continues http://tinyurl.com/3q7zrpn
I wasnt clear in my last post on 1 thing…
–I was taught was that if financials and energy dont join the rally, it wont last..but I saw both enter the race today.
I look at IO, SM,Bass , GLNG , etc for energy stocks and they look good among others-( BUT…ERY looks sickly below the 50sma and 20sma)
Finance…MC, V, BAC, USB, WFC…looking at the volume on MC, V, BAC…WOW!! I see strong entry, its conviction to me (AT THIS POINT).
The banking index (BKX)IS breaking above a 1 month bottom/consolidation. Its above the 20sma…lets see if the 50 sma stops it.
For Right Now, I was short 2 wks ago, but went long this week – FOR NOW.
Time will tell the big picture, but I just keep trading the set ups I see for now.
Alex,
I too conservative to trade this market but if I could stomach more risk I’d probably have some long exposure for some of your reasons plus the transports closing above the 50dma.
Hi Gary:
If the $$$ cycle were to bottom in the next 2-3 days, this current daily cycle would bottom without setting a higher high or a lower low, if the early June low holds as you expect.
This means that it is a left translated daily cycle which has not failed – correct? Does this LT cycle which has not (yet) failed have any implications for the intermediate cycle?
Also, am guessing that such occurrences in either the SPX, Gold or $$$ are rare?
Thanks!
Alex, I guess the status boils down to if you believe in the cycle theory, If you believe in the cycles, you would be very cautious long.
Hack,
that’s just a way of re-investing already existing money on the Fed’s balance sheet, for it to be QEx material it would have to involve printing new money.
And to the comment about Income tax, well, if the US want to be a welfare country with Medicare etc. the money has to come from somewhere…
I’m living in Northern Europe where we have a very high tax rate system, but we also have (somewhat) functioning public service and healthcare. This is something that has been present for 50 years, so although one can moan and bitch about it from time to time it does mean our government (at least the current one) has a budget surplus and it kinda works, you know?
I remember reading a Martin Armstrong piece where he advocated the removal of Income tax and instead using other means of financing the fiscal spending (but also to reduce the government machinery), so there is as always two sides of every coin. I think the key point is that you cannot eat the cake and still have it, as Obama did with the MediCare system, or with every over-dimensioned war that US wages. The Medicare et al. systems will mean a budget deficit the next 75 years or so of almost a trillion dollars annually… (Doesn’t it sound like a typical Dr Evil sum of cash? “What do I want? I want…. A TRILLION DOLLARS!!”)
Very interesting to see what today brings.
NJ,
The dollar is consolidating in a triangle. By definition that would mean a failure to make a higher high but also hold above the prior low.
Thanks Gary:
A relative newbie here and learning a lot from you and several others!
.
new post
Gary,
I read from another source that QE2 is not ending until mid-July.
“The Fed is scheduled to purchase around $4.5 billion worth of Treasury debt on June 30, and then there are a couple more $3 billion purchases on July 6 and 11.”
So actually there are a few more weeks of the Fed’s injection of liquidity.
Here is my post from last night.
“Gold closed at the 60sma today, and tonight the futures are hitting resistance at this level. If we dont break the 60sma early morning or tomorrow gold will have begun a meltdown within 3 days of its bounce off the 75sma, which seems to be much quicker than previous intermediate declines, it looks like this only happens in D-waves. I said today that if the bounce off of the 75sma is short lived (1-2 days) I would begin to lean toward the D-wave side instead of a normal intermediate correction. Although gold is beating to its own drum right now I think the dollar would have to reverse tonight or tomorrow for gold not to break above the 60sma and continue its normal crawl along the 75sma for 4 or so days before heading to its next support at the 100sma. Lets see what happens.”
Gary,
Just looked at your June 30 post’s last chart on S&P 500 with extended lines going into the future month or 2. It is quite different from previous chart I was where you show the next month’s S&P lows testing the 2010 summer lows at just above 1,000.
My question is if your latest chart is current and the lows only hit about 1270, then what will induce the Fed to loosen again. 1270 isn’t exactly a scary level.
I think there an important factor that hasn’t been mentioned this past week and that’s bond market which sold off hard this week.
Zero hedge had a piece that the 5-year market had the biggest one week % drop ever.
With the end of QE 2 and the HUGE supply of debt the Treasury will have to issue when the debt ceiling is raised I think the bond market is starting to price that in. A lot of funds from the bond market went into the stock market. I suggest that you read Martin Armstrong’s recent piece on capital flows and why he thinks the market will see news highs over the next few years…
http://www.10sigma.com/files/Borrowing%20from%20the%20Rich%2006-30-2011.pdf