hey I live just on the other side of that mountain, in the Italian city of Aosta – it’s an amazing city, full of historical Roman and Medieval remains… you are welcome to visit!
Does anyone have a “real” number to how much the FED was buying of newly issued treasuries…Basically without the FED, who I have read accounts for about 67% of new purchases, this leaves a rate rise in bonds to occur. But if we are concerned about deflation again, these bonds may be bought out of fear. So if the FED is a big buyer of issues, the only way rates can stay down(or accommodative) is if new buyers come in…the only buyers that may come in are the ones convinced about deflation…If they don’t come in, then rates rise until buyers do come in, pushing deflation potentially, and the result is the same. Either way pushing the long side on anything seems unwise, since both of what I believe to be most likely scenarios cause the same event. Politically impossible, I will agree with now to continue QE, won’t continue until another round of fear….perhaps Ben already has plans for the new round of perpetual QE…until then though! Back to sleep! For those trading good luck…
The meadows there at Zermatt look beautiful, all nice and green. I wondered whether there might still be snow on the ground in Zermatt, but looks like it’s gone for the summer.
But to those of you blown away by European sights, we have just as world class mountain views here in US of A (e.g. Oro valley, Tucson – right PimaCanyon?) Even Swiss visitors were impressed!
Anyone familiar with Clive Maund? He lives in Chile and was near that Volcano that just erupted, and took these pics ( scroll down). Great set of pics I.M.H.O.
I know a guy who picked up a few bucket fulls of ashs from Mt. St.Helens volcano. He brought it home and put the ashs on his garden and said he has never had a garden like it before or since. Unblievable growth! Kind of like it exploded…….
You don’t have to go to Switzerland to see beauty. I can go out and sit by my river and listen to the birds and sounds of nature uninterrupted at their work :o)
Looks like the dollar may make the swing low tomorrow/Wednesday. Figures I’ll be on a plane to Denver most of the day. I’ll just have to buy EUO first thing in the morning. More SKF and DUG too. Darn, though, I like shorting into rallies so I may slow walk a bit…
It may or may not matter, but Trichet (ECB) has his press conference on early Thursday morning where he’s expected to announce a July interest rate hike.
At his last conference, he took a dovish stance and didn’t even mention a rate hike and that sent the dollar soaring. If he confirms a hike this time, which is what the market is expecting, will that provide a lift to the Euro or is that already priced in?
At ease Sure I.ll get some weight back on soon…. What with may drop and tax bill for all Gary,s assisted 2010 profits , ouch FYI I have puts to about 20 % of portfolio value Gld July Slv July QQQ Aug Dug
Lol Oh in London next week, any good readonable restaurants round grosvenor sq anyone? Not 500 $ a head I mean So let’s see how it goes
Fatboy, In London proper… Victoria Pub on Sunday noon time, great family style roasts (good home cooking style). Rumored Diana used to meet her bou there upstairs in the library room. http://www.fullers.co.uk/rte.asp?id=243&itemid=317&task=View
at ease only there one night 14/15 then race back to the wales and then USA. bummer pub looks walking distance from hotel thanks. I sure would love to make some money on the downside with silver thats for sure.
Silver is breaking down out of bear flag. If this continues into market hours, I’ll add to my SLV OCT 32 Puts, increasing the position by half, bringing risk to portfolio to 1.5%. f
Looks like silver has broken it’s bear flag and were still waiting on the dollar to break it’s downtrend line. Think well need another up day to see that. Am very curious to see how the marks behaves when the dollar rebounds as it’s already oversold.
Poly Can I ask about shorts on SPY or qqq, I was thinking of lightning up here those and holding my GLD puts. Or would a bounce to the market just be a spot to add more?
Haggerty, I don’t know, depends on so many factors unique to just you. For me personally, I will never short gold. As Gary has stated, equities have a failed cycle and the action looks horrible. I like to play what I believe to have the best odds
WMP, besides the failed cycles, basically the tape on equities is horrible, it can’t find a bid where it should have.
I’ve placed some buy orders on miners below the market. If filled, will risk 1% of total capital using $1.50 stops on both EXK and SVM.
I’ll see how they bounce (if they do), but this trade has a likely hold time of only 6-10 days, unless a rally is stronger than I anticipate in which case I’ll hold and add into dips.
Covering shorts for a quick buck is the quickest way to losing a nice position. Many tried that Friday, Monday and yesterday and probably scrambled each time. Instead of covering, look to add to shorts on any significant strength.
I don’t have a big position, at 1280 ES it’s good enough for me. I covered it. I’m not going to push for that 5 points (1275). Everything is so oversold in multiple time frames that the risk and reward on the downside simply isn’t there at this moment. I see a bounce to 1310.
Currently still holding Gold short from 1545 and will probably just sit on it for a bit.
I have a low of 149.22 for gld, that’s pretty darn close. Would love to see gold breakdown and dollar break up. Not sure if it will happen today though.
The thing about shorting bear markets (assuming we are in one) is the rally are going to be SHARP and HARD. I really don’t want to be in a position to chase back up.
I doubt the market is going to bounce back to 1310. 1300 would be good in my opinion. You aren’t going to get the exact top of counter trend rallies so I wouldn’t even try. Just pick spots that are “good enough”.
The next significant rally shouldn’t occur until the half cycle low which is still a week or two away.
Given that the model portfolio is15% in each SPY and QQQ short, covering 25% is like 3-4% in each, for those of us w/ little fund, would it be worth the effort? Would appreciate anyone chiming in. Thanks
Gary, If you look at the 2007-2008 top, S&P have a history of bouncing back to the 50 dma until the final terminal move. Currently the 50 dma is at 1330 and trending up. The 200 dma is at 1251 and also trending up. I just can’t see how this would simply go terminal from here without back testing the 50 dma every 1-2 month. Those are my expectations.
I think the place to be short is gold and long USD instruments.
Is now the time to add to PM short positions as we seem to be breaking trend, or wait till tomorrow if today’s swing is confirmed? I know this is partly trader instinct but just asking.
test, At true buy and hold levels gold will be at or under it’s 200 DMA. The miners will have dropped so far that it will be almost impossible for you to pull the trigger.
The ease with which you bought today should tell you that we aren’t even vaguely close to the end of this yet.
Wait at least another 4-5 weeks and then decide if you are still willing to buy.
MD, There is no right or wrong level. I mentioned 1275 this morning.
The best way to play this is just to hold on. Trading will probably just cause you to underperform, but some people will do it anyway. If you can’t control your urge to trade then at least wait till truly stretched conditions are achieved.
I know you’re not a big fan of charting but beside the quick cycle top the difference between today and 2nd half of 08 is substantial. In 08, the market was already in a confirmed bear market (50 dma below 200 dma).
Another note, have a look at the high fliers in the tech sector.
GOOG, AMZN, NFLX, CMG, AAPL
Over the past 2 weeks while the NASD have been getting wrecked, these stocks are essentially flat. I won’t get too aggressive until i see breakdowns on these big names.
“GDXJ (the HUI) is incredibly oversold/undervalued, and is at buy-and-forget prices.”
The HUI at the end of 2008 fits that description a little better. I agree undervalued. I agree buy and forget would work just fine. But GDXJ at $28-$30 would not shock me in the least
I took 75% of the shorts I had on qqq and spy off the table. Kept the Aug ones. Still holding my puts on GLD as wee might be getting going soon, we’ll see?
Eric, Once you have confirmation you will also have very oversold conditions. If you wait for confirmation then not only will it be much harder to pull the trigger but you will also run the risk of selling in front of a sharp counter trend rally.
Of course you could say you will just wait until the counter trend rally runs it’s course, except there is no guarantee there will be a sharp counter trend rally or that you will be able to time it correctly.
Just look at the recent action where traders chose to wait for the counter trend rally once the daily cycle low broke. A counter trend rally that never happened and now those traders that tried to time a perfect entry gotten left behind by the bear.
Gann Nice charts pal, but with the dollar hopefully finding a low here I think that chart will soon break down as opposed to testing 40. Just added a little more to my SLV puts. I think the pms have held up well only because of the recent dollar weakness.
Given how incredibly weak hui & xau are, I think we are heading for a fall in the price of gold/silver however it doesn’t seem it will happen until the USD bottoms out and today’s action in the USD could be viewed as a short term bounce or bear flag as there doesn’t seem to be much conviction in today’s increase.
Miners are doing terrible, ABX, SLW, EXK, you name it.. People are washing their hands from this sector it seems but for some reason still clinging to PMs.
Silver formed a swing high. Dollar is late in its cycle. Going ahead and adding to SLV OCT 32 puts as stated previously…Adding one half of initial position with total risk of position at 1.5% of portfolio.
Will add more with a break of the swing low pivot in Silver from three days ago. Looking like the ask is around 1.97. Initial position was bought at 2.10. f
Hello everyone. I have 2 questions. First: is it too late to short QQQ/S&P? Second:
I’m a foreigner (European country, without Euro) I expect that Dollar will strengthen against my currency (10% won’t be surprise), so should I risk shorting anything?
I see many on the blog trade proshares, what other vehicles do you guys recommend trading? Im new to the game, and wonder how does one even find vehicles such as proshares, where do you even begin the search to find such to trade? Thanks everyone.
Gary, Rather than timing counter trend rallies to get good entries, why not just use one of your surest tools..the swing reversal. it has worked really well for me, and it provides a low risk entry in that a stop is always nearby. of course, near the end of a cycle, a stop may not be necessary, but I like to have them there to know my risk. I always try again on the next swing if stopped out.
Yes it is oversold, but it has been for many days, at times this condition can stretch for a very long time. We shouldn’t lose sight of what is happening in context of the IT cycle and it’s timing band/duration, that is where the low lying fruit is located.
Probably will see a bounce at some point, sooner rather than later. That’s why I like getting into position as early as possible. I’m also playing the IT cycle low in Aug, so from that prism, even a 20 point bounce here does not concern me.
Added to my EUO calls today, EUO and shorting gold/silver seem like the safest plays right here assuming the USD works with us and gives us that ellusive swing low. If it stays up at the top of the range today we should hopefully see it tomorrow.
Can someone tell me how to change my name under blogger, now that we have 2 William’s on the board it is too confusing.
@ William, They are likely listing near the money options. i imagine there is an option to get OTM or out of the money options. That’s how TDA does it and they are the same company. Good luck. You could always call customer service and they’ll get you there if it isn’t obvious. f
Poly, well said! I have leaned from previous missed opportunities that in declining markets you get your core short position as early as possible and then manage any trades you do around your core but don’t let it go until you almost can’t stand it anymore. Maybe even past that point! The market will try everything and every way to take it away from you!
I’m not playing the general stock market at all (I’m 100% long DGP & NUGT), but please keep this on your radar screens:
the Big Bottom Trend line in the SPX going all the way back to the 666 low in March, 2009, is down around 1250. And that would also be a double bottom with the “Japan disaster bottom” from mid-March of this year.
Maybe someone could throw up a chart showing that Big Bottom Trend line in the SPX? (Sorry, I’ll learn how to do this at some point. I’m just running on other things.)
Flatulence; the result of eating too many beans and also thrown in our diversity in accents perhaps one could be mistaken for the other, but was ultimately an attempt at humor to break a little stress and help clear the head after a long day in the salt trading mine.
And the chances are very slim, IMO, that 73 is going to be the 3-year-cycle low in the dollar. After maybe a 3-day bounce here for the start of the new dollar daily cycle, I bet it’s going to be an extreme left translated cycle, and we’re going to put in another leg down into the higher 60s, which will coincide with the end of the C-wave in gold sometime around the end of July.
James Turk is predicting a big summer rally in gold, and, yesterday, Jim Sinclair seemed to be also saying that will probably happen. (Both over on King World News.) I know that’s totally contrary to the seasonals for gold, but I believe this last leg down in the dollar is going to drive this.
It seems that some traders/funds might be assuming gold/silver/oil maybe a safe haven during this market weakness. I think that is going to be proven false!
I have the *GREATEST* respect for Gary and Doc and their cycle analysis (which I haven’t mastered at all yet), and they are MUCH more experienced traders than I am, *AND I MAY BE ENTIRELY DEAD WRONG,* but I’ll try to post a message tonight on why I think the dollar is going to put another leg down, and you can judge for yourself.
If nothing else, maybe it will cause you to watch your dollar long/Euro short bets more closely as things develop over the next week.
Remember it’s a 20Min Chart, So 20 Minutes Moves,Very Short Term
For a Scalper this Move is a Blast Off, (for a nice scalp) For a Swing Trader ,it;s a little Blip for Now.Not sure what going to come of it,But in any Case i am ready for anything,
Sinclair and Turk definately need ignoring…however there are a number of much more credible commentators( Hubbartt, Caldaro and Banister) who see a summer gold rally to around $1700-$1800, based solely on their track records i am ( very marginally !) inclined to follow their lead.
As you may realize I have no clue yet about options trading, so please forgive me if this is a stupid question. You said you added to your EUO calls, but when shorting dont you buy puts? Thanks.
Sent comment but didnt go through so here it is again.
As you may have realized I have no clue about options trading yet, so please forgive me if this is a stupid question. You said you added to your EUO calls, but when shorting shouldnt you be buying puts?
William #2, EUO is a short fund, its value rises as the value of the underlying asset, in this case the euro, falls. Thus, if the euro falls, EUO rises. Buying calls on EUO means ones is bullish on the EUO fund, which is in turn, bearish on the euro :o)
If this is like every other intermediate correction it will rally just long enough to kick everyone out of their shorts or drag them back in long. Then the correction will start in earnest.
Dollar sentiment is at historic lows — something like 7% bulls for the dollar. It’s hard to see how the dollar gets into the 60s when everybody is bearish on the dollar already.
The Gold:XAU ratio is at levels last seen during the meltdown. This is telegraphing a BIG decline in the metals, just as it did in 2008.
I would make sure I had a “Plan B” in case I was wrong — some form of risk control/stop-loss in place. I rode these things down in 2008, and I can tell you that you don’t want to be around if that scenario comes to pass– particularly in 2x etfs like NUGT, which will punish you severely and permanently if you make a mistake.
William you can continue being William I am taking on a new laid back personna with Billy.
Eamonn thanks for clarrifying the EUO question and probably confusing William even more. It’s kind of like wrapping your head around a double negative.
It is amazing how many times I have read from people in the gold business, like GSA (Gold Stock Analyst) and many others, who never mention anything about cycles other than the traditionally weak months of the summer. Although they have been in the business of following gold and miners for a long time, they say you just have to ride out the corrections without having recognized the repeatable behaviour demonstrated by Gary and Doc via cycle analysis…
Wow great information regarding the Gold:XAU ratio prior to the 2008 declines. I am usually pretty good at finding these types of niche things so am surprised I never came across this. You can see the ratio spiked late july/early august ’08 right before the crash started. Thanks again.
I’m repeating a statistic I got secondhand, hence the “something like 7%”. That figure may be different on sentimentrader. Take it with a grain of salt.
Nonetheless, if you’re betting on a PM rally, you’re betting against cycles, dollar sentiment, the gold/xau ratio, and seasonality, not to mention the end of QE and the deflationary signals being flashed by the stock market. All the red flags are waving on this one.
If you want to make that bet, go ahead, but beware of doing it with 2x etfs, where you will take a double hit due to erosion. Buy GDXJ or something like that instead, and that way if you’re wrong, you will at least be bailed out by the gold bull market later in the fall.
David, I’m not long PMs. In fact I am short silver. I’m just wondering what sentimenttrader.com says about the US dollar sentiment at this time, as I don’t have a subscription to it. If it was 93% bearish then a rally in the dollar would be imminent
Right now the gold stocks are the very definition of a value trap — they’re incredible bargains, but they’re warning us to stay away. The higher that ratio goes, the uglier this summer is going to be for gold.
Dollar sentiment was at record lows when silver was peaking, it has since rebounded and sentiment has gone back to neutral levels as a result. Dont have the most current figures but I would assume it has gone down from neutral levels again.
Dan, I think Obama feels he needs to reduce unemployment in order to get re-elected. I imagine he would do pretty much anything to do that (as long as its within the law, obviously), no matter how short-sighted the steps taken may seem. Almost anything is possible
I mentioned earlier today that I don’t think 73 is going to hold for the dollar, and that we’re going to put in another leg down, which would coincide with the end of the C-wave in gold.
I also mentioned that I’d post my reasons for this belief tonight. But something has blown up in “my real job”, and I now find I won’t have the time to write such a long post.
Anyway, as I stated earlier today, Gary and Doc are *MUCH* more experienced traders than I am, and I don’t have a firm grasp yet of cycle analysis — so I’ll leave it at that.
• Every intermediate correction so far since this phase of the bull began has taken gold considerably below the 50 DMA and fairly close to the 200 DMA. We are looking at a minimum of probably 1400 and if this turns into a D-wave at least a 38% retracement of the prior C-wave which would be $1300.
I asked about the country thing because I grew up there… And prefer it. But, I am a city slicker now. Of course, in the South that means a suburb dweller unless you’re single or a DINK… I don’t know anybody with kids who lives downtown. Too hard to raise kids there for most people. Do you buy beef from the farmer dudes?
Thanks Eamonn, I understand completely what you mean about EUO being a short fund. Now I see why you would buy calls instead of puts, if the Euro were to rally then you would buy puts on the EUO.
eammon were those Jerrsy cows? we use to raise holstiens and sell them back to the dairy. to much work and to little money. God bless farmers of all types
I just like your buddies. I chuckle everytime I see them. We need some humor. I can just imagine what they are thinking about all this Gold and Silver, up, down all around chatter. 🙂
No I’m not going to be able to climb the Matterhorn on this trip. There is too much ice on the mountain and none of the guides will take people up till later in the season.
Well at least you can scout it out and see what you need for the next time. Don’t know how you would have done that one with snow and ice on it. Like climbing a church steeple straight up to heaven. Beautiful country. I am amazed how folks afford to live in Europe. Americans live so differently.
Im a newbie to this, never bought or sold an etf yet, just wondering if its actual shares of an etf that should be bought or sold or options, since I see options on etf’s are mentioned alot on this blog. In time I will have this all figured out, I appreciate evyone on this blog, you guys and girls are amazing to me right now.
What are you going to climb instead? Or are you reverting to just a nice vacation in awesome Switzerland? Thanks for continuing to do posts while there!
BTW what is the most outrageous price you’ve encountered on an everyday item if I may ask?
Gary, Yep, stick to the local food at the pubs and bars, it’s cheaper and much better. Anything imported costs more. Better off eating where the locals do.
Gary, You could have saved a lot of money and just gone to the Great Northwest! Enjoy the views, they are tremendous. Can you take a train ride to the sunny side?
You’ve got to be kidding me, then you are not eating where the locals are… stay out of the hotel restaurants. Do they have outdoor (what we call barbecue) stands? I don’t believe you are in a posh area, you are in the country right? However, you are in a tourist area, you just have to find out where the locals eat.
I’m about to move to St. Thomas in the Caribbean and will be in the same boat for those prices.
I hear it’s $7-$10 per gallon of milk. But what the hell the milk I buy now is $5 anyways.
I once looked at a graph that showed we Americans only spend 10% of our income on food and like 40% on housing. They say that is flipping now and eventually we’ll be spending 40% income on food. Makes total sense with supply/demand.
Gary, Locals eat in places that look more like private homes or inside of a barn, you wouldn’t think is a reataurant. You have to get off the main roads (tourist track) and go up the side streets. And those places probably won’t have the menu outside in English. Best I can tell you from my Oompah tromping days.
Gary, I just did a quick tour of Zermatt and I can see that you are in a tourist town (trap). Not sure you will find a cheaper place to eat unless you go out of that village or finds some locals to guide you. I go to Oberammergau every 10 years to attend the Passion Play and I cannot believe how expensive it has gotten every 10 years later. Zermatt looks similar to Oberamagau, which means you are stuck with the local prices as I see it as what we call a cooperative going on there with minimum price ranges. So just order up the local fare and enjoy. You are on vacation! God Bless America and long live Capitalism whohoo!
William, May I suggest you read up on trading in and out of ETFs and stocks and it also includes complete details on basic Options trading Calls and Puts. “Options Trading in Your Spare Time” Wendy Kirkland on Amazon. It’s an easy and very detailed read and what you will need to get started.
Eamonn, LOL… I think you might be on to something there. I cannot believe how expensive it is to travel in Europe. I think these Euro countries are really gouging tourists and will be suffering soon enough when Americans slow down their travels.
william i am being very passive right now. i have a little september dollar contract i entered yesterday at 73.94. that was a jump in early move. i am not going to do much of anything until gary says by gold. if everything is new, keep the trades, SMALL when gary says go long in gold in 4 or 5 weeks, then you can go forward hard.
Is anybody in here using FIB targets and entries. If so would like to colaborate. I have some PSQ’s(nasdaq short X1 etf) and some SDS’s (SnP short X2 etf). We are do for a bounce down here at the bottom. looking to maximize gains.
I just paid $4 for the same McDonalds meal here in Shanghai. And about $5.25/ea for some nice fake polo shirts. As bad as the dollar is right now there are still plenty of places left where it can get you pretty far.
Europe is expensive but still… Zermatt and Chamonix are the two jet-set ski resorts of europe and prices of everything around those towns are on that level. It’s sort of like Monaco where you can easily pay $15 for a cup of coffee.
Still $30 for pasta dinner seems reasonable considering current eur/usd. Dont think you can eat much cheaper in switzerland in general.
Ahhh. Was hoping to make a bike trip there to meet up and put Matterhorn off my to-see check list this weekend but i have obligations 🙁 Would have been 400miles of only alpine roads.
…at ease – Thanks for posting the website for Zermatt. By the way, it said “car-free,” so no renting a car to find a less expensive meal!
I’m going to the Netherlands and Belgium soon – are the restaurants as expensive there? I was going to allow $50/day for meals; breakfasts provided by the hotels. Do you think that will be enough?
Abc, if you buy a short sp500 etf and the markets goes down while the dollar rallies, you get a win-win situation related to your small european currency. The value of the etf will increase in dollar terms + it is valued in dollar which increases too compared to your national currency.
Gary if you are not allowed to climb the Matterhorn and are experienced in glacier crossing there are some outstanding trails over the glaciers. You can hike in two days to Saas Fee via Adlerpass or the other direction via Tete Blanche to Arolla. Very exciting and beautiful.
It’s a big assumption that the dollar and metals will always move in opposite directions, and in fact we’ve seen them both go the same way many times over the last several months.
Usually they move inverse to each other, but a flight to relative quality into the USD could see metals experience the same, in which case they could go up together.
If one wants to guess where the USD is going, that is where they should place their bets rather than assume it definitely means lower metals and short silver.
Trade one or the other on it’s own analysis. No need to complicate the situation.
Shorting silver is a poor bet, IMO. Not that I think it’ll scream to new highs, but it has poor risk/reward and there is a slight possibility the short metals trade could go terribly wrong.
SB – well put. If you’re a dollar bull, buy dollars. If you’re not sell them.
But don’t think that they necessarily correlate with Gold movement’s or commodity movements all times. Yeah they throw fire or water because the commodities themselves are priced in USD but they don’t necessarily correlate.
Anyways finally some relief on the SPX.
It’s neutral at the moment. So don’t know if it’s going to break down further or go up.
Cycles tell me due for a breakdown, but I also watching like a hawk.
I wouldn’t advise shorting metals or miners but if you are going to play the downside with puts do so because you are expecting an intermediate degree correction.
And go out far enough to give the cycle plenty of time to run it’s course. The last two intermediate cycles have rallied into week 19 and bottomed 5 to 6 weeks later. Gold is on week 19 this week.
I don’t recommend shorting gold. The profit potential just isn’t large enough to bother.
If you want to short something short the QQQ’s or SPY. They are both in left translated daily cycles.
Just sell into the rally either today or sometime in the next few days understanding you aren’t going to catch the exact top and you may have to hold through a draw down for a few days.
Trichet used language this morning (“strong vigilance” against inflation) which signals a rate hike for the Euro next month — which is good for the Euro and bad for the dollar.
Today or tomorrow might be the high for the new daily cycle in the dollar, leaving us with an extreme left translated cycle.
The fact that slow MACD in the daily dollar chart has also now gone negative is a very bad sign as well, IMO.
Gold popping now too. Both dollar and gold up nicely today. One is probably giving a false signal. I’m betting it’s the dollar. (Though sometimes the strong negative correlation between the two is broken.)
J, You would be betting that gold isn’t going to drop down into an intermediate cycle low then.
Ever since the 08 bottom gold has moved down into an intermediate low like clockwork about every 20-25 weeks and it hasn’t mattered whether the dollar was rising or dropping.
The miners are clearly telling us that something big is coming in the metals sector.
But like I said the other day. Virtually every intermediate cycle will rally long enough until almost everyone starts to believe there will never be a correction. Then it rolls over and takes everyone down into a scary correction where it knocks them off at the bottom.
When you can’t resist the urge to buy any longer that will be the top.
WMP: I rarely get heavy as I have good assets now and am not trying to shoot the lights out, so my portfolio is not like others’ here. That said, I am hoping to get heavy in EUO, but today’s action is not impressive so I am back on my heels again for now. I will not add again until it gets over 17.00
FWIW, max pain in SLV for this next expiration was in the 37-38 range. I don’t put a lot of faith in it, but in a dull, low volatility period prices tend to creep that way. Still looking for a day where big money dumps, on a gap up high in gold, retest of previous support in SPY, or new low in dollar.
Gary, I am going to imprint those words into my brain. Tthat is exactly what happened to me on the last run up and I would have been clear, but then… shoot it still looked like it was going to run up and …
“When you can’t resist the urge to buy any longer that will be the top.”
I still think yesterday was a good day to cover shorts and wait for entry. I know some of you are thinking old turkey on this trip south on S&P but there hasn’t been any discussion on exit points if the trade suddenly go against us. That seems to be a trend here. Everyone seems to be counting profits way to early and discussions of exit points are rarely talked about.
I get the feeling the popular belief here is to cover on a swing low which i really don’t understand. Since the initial short of SPY was at around 129.80 on June 7th, a swing low would require you to cover the position with a lost. For those that initiated short position on a cycle breakdown at SPY 131, your P&L would be about even.
Got out of my QID for a 5% profit, but funny thing is, minus commissions that’s 0% profit…haha.. ZSL already on negative, where’s that damn silver crash?
If you are looking for a swing low in the S&P you already got it today, yesterday was the low and we are well above yesterdays high. I suspect as we move down into the half cycle low we will see several of these swings. Just not sure how much they really mean until you get into the timing band for the half cycle low. 1329 would be a very strong rally during a period in which we expect a rallying USD.
EricH, It is because we are not even close to the timing band for a daily cycle low that it might be premature to cover. Stocks go down differently than they go up. You will see many swing lows in this move, but until we are in or close to the timing band you risk missing the moves.
Hanging out in your part of the planet was awesome! (Her Majesty was two steps behind me the entire time so I got to listen in on more politics than usual, then sat in a pub in Limerick listening to Obie speaking in Dublin.)
So happy to have discovered the ease of Shannon. Next time I’m skipping Dublin (and worse, Heathrow) and coming right into the west, making my way up to your Galway then Donegal.
Truly magnificent! I’d rather be scrambling over rock walls today, dreaming in roofless medieval abbeys than eyeing the market . . .
I still haven’t started my short yet (SPY). It looks like the bounce is pretty strong and should continue into tomorrow? Hmm I can’t decide if I should still remain patient. Any thoughts?
I am looking to add to shorts when this bounce is done, so I have drawn up something as a POSSIBLE guide.
As time goes by, I will just keep an eye on things , and a weak bounce could change things ( as always). Right now we are quite oversold, bearish sentiment- I only expected a 2 day bounce, but this chart shows what would possibly happen, and suck people back to the long side and close their shorts.
Crappy day for my style of trading. Sitting here playing online games before heading out for grocery shopping. Casino stocks not joining in the S&P rally, usually they partake in it.
Alex, I also play TNA and TZA for short term trades.. but to avoid cantango, do you not feel it better to just play one of them both long and short.. ie short TNA instead of long TZA?
I only go long the TZA actually , and its usually not for a long ride, its just a short trade.
To me, it looks to have formed a bottom during April and May , and broke upward the other day. So a pullback for the next 1,2, or 3 days on lighter volume would have me looking to see if it holds above the $38 support area.
Something’s been bothering me about your interpretation that the three year cycle low in the dollar has already arrived. Given all the Fed shenanigans, it seems to me that a three year event would have been accompanied by more real concern for the future of the currency than we’ve seen. It just hasn’t felt like a currency crisis; more like too much trading momo on one side of the boat. Maybe that’s all we’re going to get but it doesn’t seem like the shoe that could drop has done so yet.
I’m sitting tight. Shorting here is “no man’s land”, IMO.
Also, when I short I’ll use the futures or short the leveraged LONG etfs (if they can still be borrowed, haven’t checked today), but you will never catch me going long a double short fund. They’re supposed to mimic price movement x2 but we’ve seen enough cases where they don’t, and the issuers make no guarantee that they will.
Just some thoughts from someone who has been trading the ES for some years. If you want to short the equities, then this is the only level that makes sense. If it goes up for a few more days the downtrend is over, so it doesn´t make sense to wait for a better price and/or time.
After the 3 violent up and down swings that we had during the month of may, the odds are very high that we just won´t have another similar swing. The markets never repeat themselves enough times so as to become highly predictable. What that means is that if the markets go up a little bit more, and this starts to look like the previous 3 swings, you can almost be sure that it won´t resolve the same way as the previous 3 swings (by going down). So if this is a true downtrend we should start moving down right about now and pretty much from these levels.
WMP: Sorry, I missed typed, I meant 17.00, though there is nothing technical at that price either. It’s just that for me at that price every share will be in the black and I don’t want to add again until I am somewhat profitable. (My average cost is aorund here now).
Remember me saying how hard it would be to pull the trigger if we got a rally? We’re seeing it already and the market has only rallied very weakly. Already the bulls see a return to new highs.
The longer the market rallies the more vocal they will get and the harder it will become to initiate shorts into the rally.
The fact is this should never have broken down and taken out the daily cycle low and it certainly should not have taken out the half cycle low.
This is a market that is in trouble. Now could it come back and surprise everyone and force a re-phasing of the last daily cycle? Sure anything is possible. The problem is it’s a low probability scenario. I have trouble betting on low probability events.
Now you are witnessing in real time why it’s so tough to make money on the short side.
Gary, Regarding the various phases of Gold waves(A,B,C and D), is gold always in one phase or another or does this wave pattern take breaks during this gold bull market?
I am willing to make a bet that if the S&P gets to 1310 than this downtrend is over and we are heading back to new highs.
So in my opinion waiting for the market to get to 1310 to short it is not a good idea. Either you should short it at these levels we are in or simply pass the trade.
INteresting SoS today. Looks like some of the big banks and at least one of the oil companies got dumped hard today. And if you look closer, you can see they were block trades, so not a bunch of individuals, but institutional selling. I think the “tells” for this market are continuing to line up.
It’s confusing because everyone becomes focused on the daily charts. If you concentrate on the big picture weekly charts it’s much easier to see what’s really happening.
Gary said “Already the bulls see a return to new highs.” Really? Any particular bulls you have in mind? I haven’t seen much evidence of investors expecting much from this bounce.
The chart on the wkly GLD really said a lot. You pointed out the recent rise and on your chart I couldnt help but notice it also just took about 5 or 6 weeks to recover that last 1 wk down too.
Under your Dollar commentary, you wrote something that I read a couple of times and I’m missing your point. Trying not to give too much away- you wrote on Paragraph 2 under the dollar, “…going to see another leak spring up in…”
I’m sensing some killer setups coming in a couple days. Especially watching the xlf for a good short. The closer it gets to its20 before rolling over the better.
I won’t find it difficult to short stocks into prices higher than we are right now, or lower for that matter, as long as they are tired of rallying. Price levels are almost useless, and especially without a time frame attached.
Alex, I believe Gary was referring to another “leak” (ie. problem)with the PIIGS (Portugal, Ireland, Italy, Greece and Spain)appearing in the near future, which would fuel continued strength in the dollar.
I won’t find it difficult to short stocks into prices higher than we are right now, or lower for that matter, as long as they are tired of rallying. Price levels are almost useless, and especially without a time frame attached.
At Ease: I trade EUO during NYSE hours and don’t worry about what happens overnight. If there is a move to be had it will show up on the NYSE. It can move a lot overnight but all stocks gap from time to time. I think EUO will be my major target like AGQ was this spring. Now I just need to see higher dollar prices…
On your GLD weekly chart in tonights report showing the intermediate declines pushing below the 10wma, how many weeks were there between the first two you pointed out?
It looks much shorter than the proceeding declines.
DG, What do you monitor to watch for entering / exiting EUO. I entered into EUO at the low today. So just want to know what you use to monitor the dollar action that will affect EUO. Appreciate your insights and hopefully will learn more on how this dollar moves and affects the market. Thanks DG.
Gary didn’t respond to my question as to his basis for saying “already the bulls see a return to new highs,” but that certainly is not supported by the latest AAII sentiment figures. They show the lowest level of bullish sentiment since last August, at 24.4%
Gary: Why is this half cycle low so important? I thought the main lows were Daily, Intermediate and Yearly. So how does the half cycle low fit in the picture? And what type of half cycle low is this? Daily / intermediate or yearly? Thanks!
HI Gary, For those that sold their short positions yesterday, can you watch the stock bounce and try to time us another entry for shorting? I can only buy inverse ETF’s, so a recommendation on one would be nice too! QID did ok for a short time. Holding on to SZL but the consolidation is not doing it good…
Gary, is the small profit potential the only reason you don’t short gold? Not that long ago you were talking about gold testing the T1 consolidation zone in the 1200’s later this summer. That’s over 20% below where we are now – I wouldn’t call that a small profit potential.
And if you were to short gold, wouldn’t this be a perfect setup? Late in the daily cycle, late in the intermediate cycle, possible D-wave decline, probable bottom in the dollar. Look, I’m not fishing for compliments on my recent trades (I did buy some $1535 and $1500 puts), I’m just looking for any good reasons not to short gold over the next few weeks.
Yesterday I got a little spooked and gave up a half of my puts on Gold. I currently am at break even but I assume that I will be in the money again once we open with far less exposure.
TGIF traders!! bubblin’ CL has a narrow range 7 setup (NR7) so on the lookout for the ‘trend day’ …CL now down off saudi arabia raising production and general ‘risk off’ around the world…. gold and silver followed crude as gold leaves the 1545 where it had closed for the last week.. silver march high or ‘stair step’ was 36.75
Lots of support at 1525. If it closes below that area, I’m buying my GLD puts on Monday. Holding SLV puts and will buy more once the RT shoulder is in.
Kept all my shorts, figured no point in selling until gold gets above 1550 or silver above 38.80. Until those resistance points are breached this cotinues to be nothing more than back and forth consolidation movements. Although with the dollar ready to head higher over the next few weeks, us entering the summer doldrums, the upcoming deflation scare (falling markets) and the hui/xau already collapsing, this Gold/silver consolidation should eventually break on the downside.
I think we’ll not drop too far from here the first half of the day in PMs, or at least the first few hours, but then in the latter half of the day and into next week the selling pressure will intensify.
An intermediate decline in gold will bring us to the 30dma on a weekly chart, but if this turns out to be a D-wave what moving average would we be looking at as support when it bottoms?
Harry, I don’t short bull markets. Sometimes if the conditions are right I will buy puts on overstretched bull markets. But that’s not appropriate for most traders, especially the ones who don’t understand options.
The amount of viewers very closely resembles gold’s price movements. As you can see from the ‘max’ view, higher highs during the C-wave and a peak in May.
This graph is a great rebuttal to the “gold manipulation” theory.
Yes im new. Dont remember seeing any info in the most recent reports showing what moving average would act as support in a D-wave decline bottom. If it is in the reports as you say can you please direct me to that report.
Michael: I cheated. Bought more EUO at 16.99. I am quite confident he Euro is toast. The only question is when and how to play it. I have a nice stake now and will keep adding intermittently on pullback or other clues. I am long some DUG and SKF, but EUO is my baby for this move I think, thought I plan to add to my oil shorts as well.
Nice add on EUO. I was tempted too around 16.91, just waiting to see if we get a small pull back after first hour… also short oil now too via puts on USO… good luck…
William, it’s not a clear-cut science, D-waves with moving averages, but I’d suggest going back and reading the May 28th weekend report for ideas on where this could bottom.
Michael: bear moves are quick and violent. If you hesitate you tend to miss them then chase, then get caught in a sharp advances (the rallies can be stunning and scary if you are short). Pick a target to add when nothing is going on, then mentally prepare to pull the trigger no matter what your gut says. I said i’d add at 17.00 and so closed my eyes and did. I’d rather be early than miss it and the euro drop has just started.
The financial have fallen quite a bit over the last few weeks ($BKX) and is about 8% under the 200DMA while the SPX is still above the 200 day. Do you think that the financials have a lot more room to fall, on a percentage basis, compared to the S&P?
Gary’s point is fair, but we are nowhere near panic levels that would warrant federal action yet. I do not plan to stay short them once I can sniff fear in the air. Oil and EUO are my major positions right now. They have been acting so badly I couldn’t resist 🙂
My brother, a 44 year old with a graduate level degree,who works for one of the largest financial institutions in the world, and I were just talking. He was asking me about options in his 401k and I explained why I thought the market was due for a correction. In doing so, I mentioned the end of QE2. He asked me what that was.
This is not a dumb guy. I just think 90% of Americans don’t know anything other than if the Dow is up or down.
Thanks Gary for your warning on the miners yesterday. I didn’t see what you were seeing as a warning, however had made some profit on a few days hold and with your warning I jumped out (NUGT, GDX, GDXJ yesterday! THANK YOU!!!
CMT, I hear you, have a similar situation, where I am told you can’t just trade in and out, you have to hold for the long term anything else is gambling.
DG, yes, good points regarding pulling the trigger… sure happened that way this morning.. have a good core position in EUO and UUP, so not feeling left behind just yet… thanks for the advice..
I agree with DG, the Euro is toast. Trichet said he would raise rates in July, yet it easy to say that he will not. The Spanish debt is up for review in July if Im not mistaken, it wont be pretty.
Think everyone is selling euro, sterling and stocks and putting their dollars straight into gold. Looks like it will be tough for gold to move down significantly in that environment.
Just a general observation based on the correlations during market hours the last couple of days. It very well could be temporary, but treasuries haven’t really taken off, so definitely looks like more people might seek gold during this next deflation event, keeping it afloat.
I still generally think gold is heading down, like Gary does, but how far and how quickly will depend a lot on where people put their dollars when they exit everything else.
The fund that I worked for in 2008 was massively short the financials and we got our heads ripped off when the short ban was implemented.
I agree with Gary that the banks will be protected, but with that said, I’ve been shorting the financials (via FAZ) since early May. We will not see a replay of the bear raids (buying the CDS and shorting the stocks) in 2008 when the banks were vulnerable due to overleveraged balance sheets, deteriorating asset values, and an inability to access short-term financing due to the seizing of the credit markets. I do, however, expect some downside to the stocks now more as a result of deteriorating fundamentals, lack of revenue opportunities and continuing margin pressures.
Yeah, you’re right, Gary, and this probably is just temporary, probably based on the naive reactions of the initial herd that has been hearing in the background about gold and it’s safe-haven status, but that don’t realize it will get sold with everything else once the margin calls begin.
Hmm I wonder, how many would be buying PM’s right now, if it weren’t for Gary’s cycles. Cycles have really added a valuable element to investing/trading! You really value Gary’s work in PM’s at moments like these.
I think we are heading towards a black hole decline still, where everything goes down, but I don’t think it will be as bad as 08/09.
Alright time to enjoy the sunshine…to those abroad enjoy the trip! The only thing cheap in Switzerland is beer, so drink up!
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.
You are actually going to climb that Gary?
WOW, your insane
Fantastic it is … enjoy the raclette and the fondue.
the view out my window is better
Eamonn LOL!
hey I live just on the other side of that mountain, in the Italian city of Aosta – it’s an amazing city, full of historical Roman and Medieval remains…
you are welcome to visit!
So Gary,
Are you planning on coming back or have things gone to limbo?
What a view and a climber’s paradise to boot. Enjoy!
hey, where are the 4-man bobsleds….I don’t see them.
Rick,
I don`t think you can see the cemetery in that shot.
Ok my bet too much snow I,d have a June put on Gary climbing the Roger of 5% of portfolio
Not Roger the Matterhorn
Wow!
I guess Ill have to make a trip out there, thats an amazing shot!
OMG fat boy, you are all bones….
Yeah, I could see how looking at that every morning could get a tad boring:-)
Pima, if you’re around (or if anyone else knows): What happened to Hammy’s site? I can’t access it anymore. Friday it was fine. Today, I’m rejected.
@Gann360
If you could, please shoot me an email? It’s on my profile.
Cheers.
Does anyone trade FXE?
Ok,
I’m a dumbass for not being there, but I gotta work.
: )
You independently wealthy blokes are hard to take at times.
Enjoy!! Man that’s luscious!
Mt Charleston never looked so good, although I do envy you having such easy access to the Mojave.
Any clue why silver is acting so strong compared to gold and almost everything else? Thanks for the answers earlier.
The dollar is holding very steady at the moment. It seems strange to me since it is usually moving around at least some.
Fusby, independently wealthy or credit card users ;*)
don’t fall off that pointy rock in the center of the picture, savage … that would hurt more than AGQ dropping a couple hundred points in a week
Does anyone have a “real” number to how much the FED was buying of newly issued treasuries…Basically without the FED, who I have read accounts for about 67% of new purchases, this leaves a rate rise in bonds to occur. But if we are concerned about deflation again, these bonds may be bought out of fear.
So if the FED is a big buyer of issues, the only way rates can stay down(or accommodative) is if new buyers come in…the only buyers that may come in are the ones convinced about deflation…If they don’t come in, then rates rise until buyers do come in, pushing deflation potentially, and the result is the same.
Either way pushing the long side on anything seems unwise, since both of what I believe to be most likely scenarios cause the same event.
Politically impossible, I will agree with now to continue QE, won’t continue until another round of fear….perhaps Ben already has plans for the new round of perpetual QE…until then though!
Back to sleep! For those trading good luck…
Wow thats so beautiful it dosent look real!
WOW!
Gary,
What day will you be climbing it?
Have you decided on which route you’ll use?
The meadows there at Zermatt look beautiful, all nice and green. I wondered whether there might still be snow on the ground in Zermatt, but looks like it’s gone for the summer.
Enjoy! And be careful up there.
.
*
~
WOW! Like really WOW! Again, be safe:)
Jeez, Gary – why would you want to come back to Las Vegas after that?
For comparison, this is the view from the park across the street from my hotel: http://i.imgur.com/bCcyS.jpg
harry that is cool.. apples and oranges to gary , but that is very nice
traderlady, everyone want to come to your neck of the woods
alex is missing , is he in sarasota?
Jeff, Alex is July if he can take the heat,lol. A switch from that nice snow cap of Garys. You coming to town???
Thanks DG for EUO update in previous post!
Gary,
Nice view – more pics please!
But to those of you blown away by European sights, we have just as world class mountain views here in US of A (e.g. Oro valley, Tucson – right PimaCanyon?) Even Swiss visitors were impressed!
Traderlady,
I’ll be in sarasota within the next 2 months. In the meantime, I check this page everyday and long to be there.
http://seesarasotalive.com/siesta-key
Gary
That picture looks great and I’d love to be there (checking out the culture too).
Hey Jeff
Actually I was posting a bit on the previous post. Thanks for asking.
These markets are a tad jumpy, hard to really pick a great stock when theres no real market direction as of right now.
Traderlady, Your picture is a mighty fine one too. From New England and Palm trees do not grow here 🙂
Bamster, If you are here in July maybe we can do a SMT meeting with others. I remember now that you got a place here. Good for you!
im long the dollar at 73.94 september contract. this better be the bottom. way to many stomps lately
Traderlady , slight chance after layborday
Anyone familiar with Clive Maund?
He lives in Chile and was near that Volcano that just erupted, and took these pics ( scroll down). Great set of pics I.M.H.O.
http://www.clivemaund.com/article.php?art_id=2516
Goodnight, hopefully tomorrow is a clearer picture.
virgo’s? sept 4 here..
August 28 here.
i always sayif your birthday is from aug 27 to sept 6 mom and dad had a big newyears eve party = )
chile volcano.. hmmm i hope it drives the dollar up, but i dont really think it will
Thank you Gary for the nice photo.
The town looks very beautiful.
James
Oops, corrected zip.
traderlady
From one Virgo to another, I’ll definitely let you know. How far am i from Cougertown? The only thing I can tell you is my zip is 34232.
Sept 21-youngest,lol!
Bamster, you are in the middle of Cougartown,
i really hope the dollar can get a little footing and knock the heck out of gold and the s n p
Gary,
You ever climb Everest?
when is gold going to roll over?
Jeff, … we have to be
PATIENT!!!!
I’m with you…. it can’t be too many days left in this cycle for Gold to start the down hill slide.
Maybe it will be like the silver slide down, fast and furious. 🙂
Sept 19 here.
Alex, thanks for sending the pics. Just amazing!
I know a guy who picked up a few bucket fulls of ashs from Mt. St.Helens volcano. He brought it home and put the ashs on his garden and said he has never had a garden like it before or since. Unblievable growth! Kind of like it exploded…….
ALEX, There are palm trees in New England. This is Portland Headlight in Maine:
http://blog.rapidsea.com/wp-content/uploads/2007/11/20071116citifloridatomainepalmtree.jpg
Add this to the end
mtree.jpg
You don’t have to go to Switzerland to see beauty. I can go out and sit by my river and listen to the birds and sounds of nature uninterrupted at their work :o)
Or, I could just go out to these guys and talk to them about the price of silver http://i.imgur.com/N7GkP.jpg
Gold is sitting pretty on the 10DMA, if it breaks below it I think we will see 1460ish quick.
Eamonn! You are too much ROFLOL!!!
No desire to ever climb Everest.
Tonight’s report is up!
…at ease, if you have a story to tell, those guys will listen!
Hey, Eamonn. What kind of cattle are those? Do you live on a dairy farm?
Alright back to bed for me 🙂
Thanks for the report Gary. Hope you have a good rest.
Am I the only one that thinks Gary’s dollar chart is off?
KAL, those animals are bred for beef, not for milk :o) They are not mine
Movax2, it looks wrong to me too.
Movax,
How do you think that it’s off. It is dollar futures as opposed to DXY.
Best,
Le Fou
Oh, there is quite a difference.
OK, Eamonn… Gotcha. Do you live out in the country?
KAL, I have a house in the countryside
Out of curiosity, does anyone know how many SMT members made the trip to Switzerland?
Eamonn, I bet those buddies of yours get tired of hearing where’s the beef. So a little gold and silver chatter is a nice break for them. 🙂
…at ease, yes, they just like to keep things simple
Looks like Gary is back on schedule, up in the wee hours of the morning before the birds.
Looks like the dollar may make the swing low tomorrow/Wednesday. Figures I’ll be on a plane to Denver most of the day. I’ll just have to buy EUO first thing in the morning. More SKF and DUG too. Darn, though, I like shorting into rallies so I may slow walk a bit…
DG, does that mean I have a chance to get something from my cheapie EUO Call for June?
There’s always a chance 😉
DG, don’t miss your flight like Gary did. Don’t they have WIFI on the planes now, you can purchase your connection?
Some airlines do and some don’t. I am flying Southwest and they will have everything wired soon but do not yet. Maybe I’ll get lucky.
Probably as much a chance as I will make something from my June Call for EUO. 😉
It may or may not matter, but Trichet (ECB) has his press conference on early Thursday morning where he’s expected to announce a July interest rate hike.
http://online.wsj.com/article/BT-CO-20110607-709050.html
At his last conference, he took a dovish stance and didn’t even mention a rate hike and that sent the dollar soaring. If he confirms a hike this time, which is what the market is expecting, will that provide a lift to the Euro or is that already priced in?
Movax,
I think you are correct. Wasn’t today’s USD lower than low printed two days ago?
At ease
Sure I.ll get some weight back on soon….
What with may drop and tax bill for all Gary,s assisted 2010 profits , ouch
FYI
I have puts to about 20 % of portfolio value
Gld July
Slv July
QQQ Aug
Dug
Lol Oh in London next week, any good readonable restaurants round grosvenor sq anyone? Not 500 $ a head I mean
So let’s see how it goes
Fatboy, In London proper…
Victoria Pub on Sunday noon time, great family style roasts (good home cooking style).
Rumored Diana used to meet her bou there upstairs in the library room.
http://www.fullers.co.uk/rte.asp?id=243&itemid=317&task=View
This comment has been removed by the author.
at ease
only there one night 14/15 then race back to the wales and then USA. bummer
pub looks walking distance from hotel thanks.
I sure would love to make some money on the downside with silver thats for sure.
movax2 eamon and roL
yes, dollart chart is wrong.Bottom wasn’t friday but yesterday at 73,4950.
Gary,
http://www.fxstreet.com/rates-charts/usdollar-index/
.
Today will be the SnP’s 6th down day!
Impressive.
*
Silver is breaking down out of bear flag. If this continues into market hours, I’ll add to my SLV OCT 32 Puts, increasing the position by half, bringing risk to portfolio to 1.5%.
f
Deflation has begun.
Looks like silver has broken it’s bear flag and were still waiting on the dollar to break it’s downtrend line. Think well need another up day to see that. Am very curious to see how the marks behaves when the dollar rebounds as it’s already oversold.
That’s enough confirmation for me to double up all short positions.
Poly, are you shorting silver? Thanks :o)
Yes I’ve been short silver for a few weeks now. Modest short, gold as a safe haven/crises play has me limiting my greed on playing Silver short.
Beautiful. The closest I’ve ever seen to that in person was a trek I did in Bariloche, Beunos Aires. I’m sure child’s play to you.
Gary,
You can get the dollar on thinkorswim with $dxy. Maybe that helps.
Jenny
Poly
Can I ask about shorts on SPY or qqq, I was thinking of lightning up here those and holding my GLD puts. Or would a bounce to the market just be a spot to add more?
Poly:
What was the confirmation?
Thanks
Oil prices going up because OPEC agrees to increase production? What am i missing?
Scratch that…they decided not to increase AFTER they decided to increase…
Long GDXJ 50%+, QID 17%, EUO 13%
Short SLV 8%
Cash 12%
+increased position
Haggerty, I don’t know, depends on so many factors unique to just you.
For me personally, I will never short gold. As Gary has stated, equities have a failed cycle and the action looks horrible. I like to play what I believe to have the best odds
WMP, besides the failed cycles, basically the tape on equities is horrible, it can’t find a bid where it should have.
As noted by Gary, Looks like a good day to cover all short position and wait for the bounce.
I dont cover until Im satisfied, I simply add to winning trades. The short is two month-ish play.
I think if the S&P can reach 1275 traders might consider covering partial shorts.
On that note, lets hope the snp can muster a rally
PM stocks continuing to outperforming on the downside indicating we have more room for gold/silver to fall.
I’ve placed some buy orders on miners below the market. If filled, will risk 1% of total capital using $1.50 stops on both EXK and SVM.
I’ll see how they bounce (if they do), but this trade has a likely hold time of only 6-10 days, unless a rally is stronger than I anticipate in which case I’ll hold and add into dips.
Covering shorts for a quick buck is the quickest way to losing a nice position. Many tried that Friday, Monday and yesterday and probably scrambled each time.
Instead of covering, look to add to shorts on any significant strength.
Poly is right. Don’t lose strong hand status. It can be very hard to get back in. In bulls you buy dips; in bears you short rallies.
Eric,
I wouldn’t cover all shorts. You might consider covering 25% if the S&P can put in another hard down day (1275).
GLD low 149.72 so far, did this break the trendline? Looks close but not quite?
Long GDXJ 50%+, QID X, EUO 13%
Short SLV 8%
Cash 29%
+increased position
Xclosed position
Dg
Did bernanke speech support the dollar?
Gary,
I don’t have a big position, at 1280 ES it’s good enough for me. I covered it. I’m not going to push for that 5 points (1275). Everything is so oversold in multiple time frames that the risk and reward on the downside simply isn’t there at this moment. I see a bounce to 1310.
Currently still holding Gold short from 1545 and will probably just sit on it for a bit.
just filled on my miner purchase
Felix,
I have a low of 149.22 for gld, that’s pretty darn close. Would love to see gold breakdown and dollar break up. Not sure if it will happen today though.
The thing about shorting bear markets (assuming we are in one) is the rally are going to be SHARP and HARD. I really don’t want to be in a position to chase back up.
Thanks Dan
I doubt the market is going to bounce back to 1310. 1300 would be good in my opinion. You aren’t going to get the exact top of counter trend rallies so I wouldn’t even try. Just pick spots that are “good enough”.
The next significant rally shouldn’t occur until the half cycle low which is still a week or two away.
SB,
why would you try to pick a counter trend trade with gold & the dollar so deep in their daily cycle?
Seems like you would just be asking for losses.
Gary, You can see that picture in Seattle
http://www.tripadvisor.com/LocationPhotos-g60878-w2-Seattle_Washington.html
Took profits on my IWM and SPY Puts. Happy to wait for a minor bounce up before I jump in again :o)
You may very well be correct, Gary. I got the signal so took the trade with proper risk like always.
I rely on you for the cycles stuff and don’t like going against them, but not everything is cycles, you know? 🙂
We’ll see how it shakes out, and I don’t even feel the need to watch the ticks as my risk is defined.
Jeff,
CNBC headline takeaway from speech: Bernanke Not Ready for More Money Printing, Yet: Economist
I’m done for the morning but will check back before the close.
Good luck, fellow traders!
test,
why so big on GDXJ, 50% + are you expecting this to be the low and rally back up?
Gary:
Given that the model portfolio is15% in each SPY and QQQ short, covering 25% is like 3-4% in each, for those of us w/ little fund, would it be worth the effort? Would appreciate anyone chiming in. Thanks
GDX broke below its prior intermediate low.
James
Gary,
If you look at the 2007-2008 top, S&P have a history of bouncing back to the 50 dma until the final terminal move. Currently the 50 dma is at 1330 and trending up. The 200 dma is at 1251 and also trending up. I just can’t see how this would simply go terminal from here without back testing the 50 dma every 1-2 month. Those are my expectations.
I think the place to be short is gold and long USD instruments.
Gold diverging from Oil now.
It’s a positive sign the wheels might start to come off of this bull.
Long GDXJ 66%+, EUO 13%
Short SLV 8%
Cash 13%
+increased position
i have buy order for GDX@50
GDXJ (the HUI) is incredibly oversold/undervalued, and is at buy-and-forget prices.
Is now the time to add to PM short positions as we seem to be breaking trend, or wait till tomorrow if today’s swing is confirmed? I know this is partly trader instinct but just asking.
Eric,
Don’t make the mistake of thinking this is going to do the same things it did in 07.
This is a daily cycle that has topped in only 3 days. If you want to look for a similar period look at second half of Sept. 08.
Hi Gary,
In your report you mentioned the 10 day moving avg. What do you consider stretched above/below it (percentage wise)?
Thanks!
test,
At true buy and hold levels gold will be at or under it’s 200 DMA. The miners will have dropped so far that it will be almost impossible for you to pull the trigger.
The ease with which you bought today should tell you that we aren’t even vaguely close to the end of this yet.
Wait at least another 4-5 weeks and then decide if you are still willing to buy.
MD,
There is no right or wrong level. I mentioned 1275 this morning.
The best way to play this is just to hold on. Trading will probably just cause you to underperform, but some people will do it anyway. If you can’t control your urge to trade then at least wait till truly stretched conditions are achieved.
Gary,
I know you’re not a big fan of charting but beside the quick cycle top the difference between today and 2nd half of 08 is substantial. In 08, the market was already in a confirmed bear market (50 dma below 200 dma).
Another note, have a look at the high fliers in the tech sector.
GOOG, AMZN, NFLX, CMG, AAPL
Over the past 2 weeks while the NASD have been getting wrecked, these stocks are essentially flat. I won’t get too aggressive until i see breakdowns on these big names.
Jeff: I did not listen to Bernanke’s speech. I don;t care what those guys say as the mkt shows what to do next regardless.
DG, Did you add on with EUO?
“GDXJ (the HUI) is incredibly oversold/undervalued, and is at buy-and-forget prices.”
The HUI at the end of 2008 fits that description a little better. I agree undervalued. I agree buy and forget would work just fine. But GDXJ at $28-$30 would not shock me in the least
At Ease: Not until the dollar swing low is established.
Thanks, was waiting to hear this morning… How was your flight?
I took 75% of the shorts I had on qqq and spy off the table. Kept the Aug ones. Still holding my puts on GLD as wee might be getting going soon, we’ll see?
update on Weekly SLV Chart :
http://screencast.com/t/eTOBK8oa
Thanks Gann360, looking good!
Eric,
Once you have confirmation you will also have very oversold conditions. If you wait for confirmation then not only will it be much harder to pull the trigger but you will also run the risk of selling in front of a sharp counter trend rally.
Of course you could say you will just wait until the counter trend rally runs it’s course, except there is no guarantee there will be a sharp counter trend rally or that you will be able to time it correctly.
Just look at the recent action where traders chose to wait for the counter trend rally once the daily cycle low broke. A counter trend rally that never happened and now those traders that tried to time a perfect entry gotten left behind by the bear.
Follow up to Weekly SILVER CHART :
http://screencast.com/t/YGhf5vh2st4e
Is it possible the market daily cycle has not yet bottomed?
Gann
Nice charts pal, but with the dollar hopefully finding a low here I think that chart will soon break down as opposed to testing 40. Just added a little more to my SLV puts. I think the pms have held up well only because of the recent dollar weakness.
I agree with you Haggerty.
Reason why i am short, but just in case i am wrong. and Silver rallies to High 39-40 Bucks,i will add there…
i am not 100% Inn ,my normal size position,But it seems to be forming a Bearflag on the weekly,which could breakdown at any time..
Quick 5 min short term observation chart :
http://screencast.com/t/6sTP3drOJkiV
Another sideways day, S&P might be ready for a bit of a bounce here, just a small one.
Given how incredibly weak hui & xau are, I think we are heading for a fall in the price of gold/silver however it doesn’t seem it will happen until the USD bottoms out and today’s action in the USD could be viewed as a short term bounce or bear flag as there doesn’t seem to be much conviction in today’s increase.
Miners are doing terrible, ABX, SLW, EXK, you name it..
People are washing their hands from this sector it seems but for some reason still clinging to PMs.
Silver formed a swing high. Dollar is late in its cycle. Going ahead and adding to SLV OCT 32 puts as stated previously…Adding one half of initial position with total risk of position at 1.5% of portfolio.
Will add more with a break of the swing low pivot in Silver from three days ago. Looking like the ask is around 1.97. Initial position was bought at 2.10.
f
SLV daily volume is even lower today. The average was 78 million a few days ago it is now 53 million.
Hello everyone.
I have 2 questions.
First: is it too late to short QQQ/S&P? Second:
I’m a foreigner (European country, without Euro) I expect that Dollar will strengthen against my currency (10% won’t be surprise), so should I risk shorting anything?
Thanks for your help!
Markets are not healthy, smart money is half way out the door, others are only just noticing the commotion coming from the exit-ways!
I see many on the blog trade proshares, what other vehicles do you guys recommend trading? Im new to the game, and wonder how does one even find vehicles such as proshares, where do you even begin the search to find such to trade? Thanks everyone.
Poly, your descripton of the market sounds like a reaction to a Charlie Sheen event.
Gary,
Rather than timing counter trend rallies to get good entries, why not just use one of your surest tools..the swing reversal. it has worked really well for me, and it provides a low risk entry in that a stop is always nearby. of course, near the end of a cycle, a stop may not be necessary, but I like to have them there to know my risk. I always try again on the next swing if stopped out.
When she breaks, all hell will break lose. Anybody thinks for a second they will get on board the short side when this happens is mistaken.
I bet you every trading room of every firm is shitting bricks right now. They’re on alert and their survival instincts are kicking in.
Gold:XAU spiking indicates we’re headed for a mini-2008.
Damn, I was kind of hoping for a dead cat bounce
Wow PM stocks are just pathetic, guess I should of shorted the shares instead if the metal.
@ Gann360.
Would mind sending me a quick email, I have something to run by you. Email is on my profile.
Thanks.
Isn’t it a bit oversold down here?
William,
DG posted this one recently and it has a ton of info. ETF til you drop! Good Luck.
http://www.etftips.com/
Buying some GLD puts here, I can’t think of anything else right now yesterday was clearer.
Sophia,
Yes it is oversold, but it has been for many days, at times this condition can stretch for a very long time. We shouldn’t lose sight of what is happening in context of the IT cycle and it’s timing band/duration, that is where the low lying fruit is located.
Fubsy,
I use the ThinkorSwim platform, I dont see any SLV Oct 32 puts, only 34,35,36,37…why is that?
Poly,
What do you think of taking of taking on some SDS at this point? Do you feel the market is getting ready to seriously head south? Thanks.
SLV October 32 puts, 1.98 bid 1.99 ask.
have buy order for NG @9
William,
I own 32s also so they definitely exist….
Any idea why I dont see them (SLV Oct 32 puts) on ThinkorSwim guys?
William,
adjust the range on your strikes.
buying Goldman
86,
Probably will see a bounce at some point, sooner rather than later. That’s why I like getting into position as early as possible. I’m also playing the IT cycle low in Aug, so from that prism, even a 20 point bounce here does not concern me.
Swing in the dollar?
Scary part is the market is working it’s way through short-term oversold conditions by just consolidating, it’s not even put in any bounces.
anyone buying uup or euo now?
”
buying Goldman”
Not Gold
86,
Got it. Was trying to figure out how to do it in ThinkorSwim. Thanks alot
Thanks Poly. Just seems like the $ and market are stretched so far apart, which one is going to snap first. Big tug of war.
Who’s going to take one for the team and put a big short position on so we can finally get the bounce we’re looking for? :o)
assuming Goldman boys will save themselves..
Niven,
Filled in the last of the EUO this morning. I started a little early on the way down, but think shortly it will be covered.
Added to my EUO calls today, EUO and shorting gold/silver seem like the safest plays right here assuming the USD works with us and gives us that ellusive swing low. If it stays up at the top of the range today we should hopefully see it tomorrow.
Can someone tell me how to change my name under blogger, now that we have 2 William’s on the board it is too confusing.
Thanks
William, edit your profile http://www.blogger.com/edit-profile.g
@ William,
They are likely listing near the money options. i imagine there is an option to get OTM or out of the money options. That’s how TDA does it and they are the same company. Good luck. You could always call customer service and they’ll get you there if it isn’t obvious.
f
William to WM, go to your profile. You may have to start a fresh page and log into SMTP.
Poly, well said! I have leaned from previous missed opportunities that in declining markets you get your core short position as early as possible and then manage any trades you do around your core but don’t let it go until you almost can’t stand it anymore. Maybe even past that point! The market will try everything and every way to take it away from you!
86 and william,
would be interested to know which expiry dates and strikes u guys are buying for the euo
SB, were your two orders for miners long?
Niven,
no options here, just shares.
Thanks Eamonn, made the change and feel like a new man. Using my given name was too formal anyway.
Niven I have been buying the EUO July 16 calls to play this daily cycle in the dollar
I’m not playing the general stock market at all (I’m 100% long DGP & NUGT), but please keep this on your radar screens:
the Big Bottom Trend line in the SPX going all the way back to the 666 low in March, 2009, is down around 1250. And that would also be a double bottom with the “Japan disaster bottom” from mid-March of this year.
Maybe someone could throw up a chart showing that Big Bottom Trend line in the SPX? (Sorry, I’ll learn how to do this at some point. I’m just running on other things.)
Good luck to everyone!
jhnewman, you are flagellating yourself by holding NUGT
JHNewman, you expect NUGT to go any lower?
Eamonn,
Isn`t that what happens when you eat too many beans?
86d4life, you lost me there. flag·el·late:= Flog (someone), either as a religious discipline or for sexual gratification
Eamonn, I don’t think JHN is doing it for either reasons. He’s in it for the $s.
Don’t like this silver strength…might cover eod
Flatulence; the result of eating too many beans and also thrown in our diversity in accents perhaps one could be mistaken for the other, but was ultimately an attempt at humor to break a little stress and help clear the head after a long day in the salt trading mine.
Out of my ZSL for now, I need more evidence. think there is a good chance SI moves to 40.30 area before turning tail…
86d4life, Oh I see. apologies
This comment has been removed by the author.
No sweat Eamonn. I`m still chuckling, so it worked. And my head is cleared. A mini vacation of sorts.
I don’t expect NUGT to go much lower, if at all.
And the chances are very slim, IMO, that 73 is going to be the 3-year-cycle low in the dollar. After maybe a 3-day bounce here for the start of the new dollar daily cycle, I bet it’s going to be an extreme left translated cycle, and we’re going to put in another leg down into the higher 60s, which will coincide with the end of the C-wave in gold sometime around the end of July.
James Turk is predicting a big summer rally in gold, and, yesterday, Jim Sinclair seemed to be also saying that will probably happen. (Both over on King World News.) I know that’s totally contrary to the seasonals for gold, but I believe this last leg down in the dollar is going to drive this.
As always, I may be dead wrong on all this.
I gotta run to my real job. Good luck all!
June 8, 2011 12:26 PM
at ease,
Yes, I bought EXK and SVM after the first hour of trading, risking 1% of total capital with stop $1.50 below my entry prices on both.
So far I’m down .3%, so two more days like this will take me out.
jnewman
You must carry your balls around in a wheel barrel. That is Ballsy my friend!
I am following miners as I believe they are the next rally for PM sector. So checking with everyone on their sentiment on miners. Thanks SB and JHN.
Wow. At this point that would really put a twist in my shorts. Anybody else agree with JH? Talk about the Maalox mustache…..
This comment has been removed by the author.
Jhnewmam,
Anyone who has been playing the PM bull market for a while will tell you Turk and Sinclair are permabulls. Market never goes down for those two.
It seems that some traders/funds might be assuming gold/silver/oil maybe a safe haven during this market weakness. I think that is going to be proven false!
I have the *GREATEST* respect for Gary and Doc and their cycle analysis (which I haven’t mastered at all yet), and they are MUCH more experienced traders than I am, *AND I MAY BE ENTIRELY DEAD WRONG,* but I’ll try to post a message tonight on why I think the dollar is going to put another leg down, and you can judge for yourself.
If nothing else, maybe it will cause you to watch your dollar long/Euro short bets more closely as things develop over the next week.
Gotta run!
dan,
not exactly.Turd now is thinking that gold will reach 1750 on december, not in june as thought before.
Inverse H&S Still in Play SILVER:
http://screencast.com/t/uw8J3dyfoh
Gann wheel,
I’m with you on the back and fill to the 40.30ish area…
Gann360, getting close…
Silver short term blast Off ?
http://screencast.com/t/C0IXHh4FOpPq
Gann,
Silver completed a swing high today. Not much of a blast off.
Best,
Le Fou
Gann,
P.S. Very much appreciate your charts. Follow you on Twitter.
Best,
Le Fou
Le Fou
Thanks
Remember it’s a 20Min Chart, So 20 Minutes Moves,Very Short Term
For a Scalper this Move is a Blast Off, (for a nice scalp) For a Swing Trader ,it;s a little Blip for Now.Not sure what going to come of it,But in any Case i am ready for anything,
Have a Great Weekend Gang..
Hope we all made $$$$ This Week
I was impressed you predicted a possible outcome on this. 🙂
Thanks for sharing!
I want to hear Beanie’s opinion!
Sinclair and Turk definately need ignoring…however there are a number of much more credible commentators( Hubbartt, Caldaro and Banister) who see a summer gold rally to around $1700-$1800, based solely on their track records i am ( very marginally !) inclined to follow their lead.
I was thinking of USO puts but passed. Not my kind of market today.
William,
As you may realize I have no clue yet about options trading, so please forgive me if this is a stupid question. You said you added to your EUO calls, but when shorting dont you buy puts?
Thanks.
P.S. You can be William #1, i’ll be #2
William,
Sent comment but didnt go through so here it is again.
As you may have realized I have no clue about options trading yet, so please forgive me if this is a stupid question. You said you added to your EUO calls, but when shorting shouldnt you be buying puts?
Thanks!
P.S. You can be William #1 and i will be #2
Hulbert’s gold timer index is dead neutral as is the public sentiment poll.
As long as that’s the case I have to go with the cycle counts.
I’m watching the $VIX index and there’s absolutely NO FEAR out there.
Gary
my comment referred to Hubbartt not Hulbert, he posts on 321gold and has done pretty well over the last 12 months.
William #2, EUO is a short fund, its value rises as the value of the underlying asset, in this case the euro, falls. Thus, if the euro falls, EUO rises. Buying calls on EUO means ones is bullish on the EUO fund, which is in turn, bearish on the euro :o)
It seems a stretch to think that gold can rally when the miners sure seem to be discounting the intermediate degree correction
Was out to the pub…thanks Poly for the message
If this is like every other intermediate correction it will rally just long enough to kick everyone out of their shorts or drag them back in long. Then the correction will start in earnest.
Jhnewman,
Dollar sentiment is at historic lows — something like 7% bulls for the dollar. It’s hard to see how the dollar gets into the 60s when everybody is bearish on the dollar already.
The Gold:XAU ratio is at levels last seen during the meltdown. This is telegraphing a BIG decline in the metals, just as it did in 2008.
I would make sure I had a “Plan B” in case I was wrong — some form of risk control/stop-loss in place. I rode these things down in 2008, and I can tell you that you don’t want to be around if that scenario comes to pass– particularly in 2x etfs like NUGT, which will punish you severely and permanently if you make a mistake.
David, may I ask you, your statement “7% bulls for the dollar”: did you get this statistic from sentimentrader.com ?
William you can continue being William I am taking on a new laid back personna with Billy.
Eamonn thanks for clarrifying the EUO question and probably confusing William even more. It’s kind of like wrapping your head around a double negative.
Billy, yes, its a bit twisted :o)
http://news.goldseek.com/GoldSeek/1307558341.php
http://www.cxoadvisory.com/calendar-effects/any-seasonality-for-gold-or-gold-miners/#more-5710
It is amazing how many times I have read from people in the gold business, like GSA (Gold Stock Analyst) and many others, who never mention anything about cycles other than the traditionally weak months of the summer. Although they have been in the business of following gold and miners for a long time, they say you just have to ride out the corrections without having recognized the repeatable behaviour demonstrated by Gary and Doc via cycle analysis…
David,
Wow great information regarding the Gold:XAU ratio prior to the 2008 declines. I am usually pretty good at finding these types of niche things so am surprised I never came across this. You can see the ratio spiked late july/early august ’08 right before the crash started. Thanks again.
SLW down 3.95%
SIL down 3.26%
yet AGQ is only down .74%
Someone help me make sense of this.
Eamonn,
I’m repeating a statistic I got secondhand, hence the “something like 7%”. That figure may be different on sentimentrader. Take it with a grain of salt.
Nonetheless, if you’re betting on a PM rally, you’re betting against cycles, dollar sentiment, the gold/xau ratio, and seasonality, not to mention the end of QE and the deflationary signals being flashed by the stock market. All the red flags are waving on this one.
If you want to make that bet, go ahead, but beware of doing it with 2x etfs, where you will take a double hit due to erosion. Buy GDXJ or something like that instead, and that way if you’re wrong, you will at least be bailed out by the gold bull market later in the fall.
David, I’m not long PMs. In fact I am short silver. I’m just wondering what sentimenttrader.com says about the US dollar sentiment at this time, as I don’t have a subscription to it. If it was 93% bearish then a rally in the dollar would be imminent
Dan,
Unfortunately, I remember it all too well 🙂
Right now the gold stocks are the very definition of a value trap — they’re incredible bargains, but they’re warning us to stay away. The higher that ratio goes, the uglier this summer is going to be for gold.
Here it comes! http://www.zerohedge.com/article/here-it-comes-obama-considering-another-fiscal-package
Eamon/David,
Dollar sentiment was at record lows when silver was peaking, it has since rebounded and sentiment has gone back to neutral levels as a result. Dont have the most current figures but I would assume it has gone down from neutral levels again.
This comment has been removed by the author.
Gary,
I was wondering which would be the better play to long gold at the D wave bottom, GLD or GDX? And does GDX follow the same cycles as gold?
Eamonn,
All they keep talking about is how much to cut so now are they really going to go back to spending?
Then again, it is politicians so who knows.
Cool,
Gary in previous posts mentioned that it depends on what happens in the D-Wave… is miners get hit hard, then the play with be GDX…
“if”, not “is”
Dan, I think Obama feels he needs to reduce unemployment in order to get re-elected. I imagine he would do pretty much anything to do that (as long as its within the law, obviously), no matter how short-sighted the steps taken may seem. Almost anything is possible
“will’ not “with” … apologies..
Thanks Michael. Where do you think the bottom will come for gold during this daily cycle?
Gary has said he prefers GDXJ to GDX.
GDX consists of the majors, who will be buying out the juniors as the bull market continues.
I like GGGG especially, but there’s no volume at all in it.
I mentioned earlier today that I don’t think 73 is going to hold for the dollar, and that we’re going to put in another leg down, which would coincide with the end of the C-wave in gold.
I also mentioned that I’d post my reasons for this belief tonight. But something has blown up in “my real job”, and I now find I won’t have the time to write such a long post.
Anyway, as I stated earlier today, Gary and Doc are *MUCH* more experienced traders than I am, and I don’t have a firm grasp yet of cycle analysis — so I’ll leave it at that.
Good luck to everyone in your trading.
Cool,
This from one of Gary’s posts:
• Every intermediate correction so far since this phase of the bull began has taken gold considerably below the 50 DMA and fairly close to the 200 DMA. We are looking at a minimum of probably 1400 and if this turns into a D-wave at least a 38% retracement of the prior C-wave which would be $1300.
Rgds,
For those wondering, ST shows dollar approval at 30%.
Wes, thank you
Eamonn,
I asked about the country thing because I grew up there… And prefer it. But, I am a city slicker now. Of course, in the South that means a suburb dweller unless you’re single or a DINK… I don’t know anybody with kids who lives downtown. Too hard to raise kids there for most people. Do you buy beef from the farmer dudes?
This comment has been removed by the author.
Gold and silver, please drop so I can buy some more. Thank you
Equites 6 straight down days on the back of a dollar moving to a cycle low………yikes, what more do you need……
Poly, can you recommend/suggest an oil security to buy puts on?
Ok “Billy” you got it. I’ll stay William.
Thanks Eamonn, I understand completely what you mean about EUO being a short fund. Now I see why you would buy calls instead of puts, if the Euro were to rally then you would buy puts on the EUO.
USO
Poly, thank you. I did look at it before I asked you but I thought the options volume on USO was a bit low…
Does anyone trade e-mini Gold futures?
Eamonn,
What about buying calls on DUG? What was the picture you posted last night? I couldn`t get it to come through.
gold futures yes
mini gold futures sometimes
e mini?
Yeah Jeff, e-mini gold futures. You in any position now?
86d4life, ok, you asked for it
http://i.imgur.com/hd7Jq.jpg
i have 2 puts
but what is the e mini? the 10oz contract?
100 oz full contract
33 oz is a mini
10 oz is a macro
Jeff,
Im refering to the 33oz mini contracts. Does anyone trade these, or just gold etf’s and options?
There is a 50 oz contract also. It depends if your broker trades CME or NYMEX futures.
mini is a good idea, if you want to do a small position and get 3 mini instead of one full contract, just so you can peel off some proffits.
you pay 3 commitions and the spread can get a little wider
Apparently CME owns NYMEX now.
Oh. Friends of yours? 🙂
i just do futures, i do have a little roth acount, but i just trade futures
Nice pictures, Gary! Did you know that the Bilderberg group is meeting in Switzerland starting tomorrow? Are you going? 🙂
Another peace of heaven eh Gary… minus the expense of Europe.
Hope you are enjoying your trip.
Thanks for sharing the photos 🙂
william
was there another question?
Eamonn,
I love that photo! A picture says a thousand words, I think you should use that as your avatar.
It speaks volumes!
eammon
were those Jerrsy cows? we use to raise holstiens and sell them back to the dairy. to much work and to little money. God bless farmers of all types
Ok Gary, I have to ask you again… are you really going to climb that?
…at ease, hmmmmm, that photo as my avatar……you’re not trying to tell me something here are you?? hmmmmm
Jeff,
Will you be trying to short the gold e-mini’s during a D-wave?
jeff, no, they are not Jerseys. I’ve never met a Jersey, but they are supposed to have a lovely temperament
I just like your buddies. I chuckle everytime I see them. We need some humor. I can just imagine what they are thinking about all this Gold and Silver, up, down all around chatter. 🙂
Eamonn, Your ponies show your sweet side, those other two show your mischievous side. 🙂
No I’m not going to be able to climb the Matterhorn on this trip. There is too much ice on the mountain and none of the guides will take people up till later in the season.
Gary,
Do you buy or sell shares of etf’s or just options on etf’s? Hope thats not a stupid question.
Thanks
Well at least you can scout it out and see what you need for the next time. Don’t know how you would have done that one with snow and ice on it. Like climbing a church steeple straight up to heaven.
Beautiful country. I am amazed how folks afford to live in Europe. Americans live so differently.
William,
Have you ever heard Gary mention buying ETF options in any of the evening reports?
Thanks for the pics Gary!
As always you are a soldier. I wish i could be there….
Unfortunately this desert life in Texas has it stronghold on me. At least Cochise doesn’t!
aklaunch,
Im a newbie to this, never bought or sold an etf yet, just wondering if its actual shares of an etf that should be bought or sold or options, since I see options on etf’s are mentioned alot on this blog. In time I will have this all figured out, I appreciate evyone on this blog, you guys and girls are amazing to me right now.
Gary,
Im an above knee amputee, I started training to climb Everest on forearm crutches.
Gary,
What are you going to climb instead? Or are you reverting to just a nice vacation in awesome Switzerland? Thanks for continuing to do posts while there!
BTW what is the most outrageous price you’ve encountered on an everyday item if I may ask?
BTW crowd I took more colloidal silver today, that stuff is awesome, kills all germs/bacteria.
William, now that’s a challenge!
It’s been raining almost nonstop since Tuesday so we haven’t been able to do much here. If it ever quits I’ll at least do some hikes.
Spent $40 on two McDonald’s hamburgers with fries and a coke yesterday. How’s that for outrageous?
Gary,
Yep, stick to the local food at the pubs and bars, it’s cheaper and much better. Anything imported costs more. Better off eating where the locals do.
Gary, You could have saved a lot of money and just gone to the Great Northwest! Enjoy the views, they are tremendous. Can you take a train ride to the sunny side?
William,
Check out:
http://www.etftips.com/
http://www.proshares.com/funds/
Be careful!
Options on regular stocks are dangerous enough….
Good trades and wish me some too!
I think the Euro has made Europe much more expensive to travel around and on top of that VAT added.
40$ Gary….
Are you F____ing kidding!
That’s insane! Wonder what a real high class restaurant would cost you?
I’m sure you’ll get some decent weather in the next 48 hours- I’d bet on it.
You obviously didn’t know about the ice on the mountain prior to going or did you just expect it to have melted by now?
Still can’t get over $40 for mickeydees. You must be spending $500 a day or so easy possibly with hotel or close to.
aklaunch,
I am reading from many etf sites right now, powershares, ishares,spdr,direxion, etc. What I need to learn is how to know what to buy and when!
Switzerland is probably priceless though- it’s just one of those places. Or so I’ve heard.
Too bad though it’s not winter and you can shred the Alps!
Local food is much more expensive. I spent $30 for one small bowl of pasta and a coke last night at the hotel restaurant.
That is the thing about beautiful places in that range above the equator. It rains…. kind of like the PNW.
William just short anything double or triple direxion, they are the scammers, and you’ll probably do fine. lol, and I’m only half kidding.
That is the thing about beautiful places in that range above the equator. It rains…. kind of like the PNW.
You’ve got to be kidding me, then you are not eating where the locals are… stay out of the hotel restaurants. Do they have outdoor (what we call barbecue) stands? I don’t believe you are in a posh area, you are in the country right? However, you are in a tourist area, you just have to find out where the locals eat.
You are on vacation or I would suggest hitting up the local grocery store. 🙂
I’m about to move to St. Thomas in the Caribbean and will be in the same boat for those prices.
I hear it’s $7-$10 per gallon of milk. But what the hell the milk I buy now is $5 anyways.
I once looked at a graph that showed we Americans only spend 10% of our income on food and like 40% on housing. They say that is flipping now and eventually we’ll be spending 40% income on food. Makes total sense with supply/demand.
In the model portfolio Gary has a 15% short position on QQQ and SPY, how many shares of each about?
William, the 15% of each would depend on the amount of money in your broker account(s).
In Gary’s portfolio that means he’s short 20,000 shares QQQ, and 12,000 SPY.
Gary, Locals eat in places that look more like private homes or inside of a barn, you wouldn’t think is a reataurant. You have to get off the main roads (tourist track) and go up the side streets. And those places probably won’t have the menu outside in English.
Best I can tell you from my Oompah tromping days.
Eat silver,
Thats about right! LOL
Is it not cheaper and more profitable to buy options on etfs?
william got to dash board and you will see how to change your name
William Click on your own name in the blog and you will see how to change your profile
Gary, I just did a quick tour of Zermatt and I can see that you are in a tourist town (trap). Not sure you will find a cheaper place to eat unless you go out of that village or finds some locals to guide you. I go to Oberammergau every 10 years to attend the Passion Play and I cannot believe how expensive it has gotten every 10 years later. Zermatt looks similar to Oberamagau, which means you are stuck with the local prices as I see it as what we call a cooperative going on there with minimum price ranges. So just order up the local fare and enjoy. You are on vacation! God Bless America and long live Capitalism whohoo!
…at ease, might be cheaper to buy a car and drive out of zermatt to eat
William,
May I suggest you read up on trading in and out of ETFs and stocks and it also includes complete details on basic Options trading Calls and Puts. “Options Trading in Your Spare Time” Wendy Kirkland on Amazon. It’s an easy and very detailed read and what you will need to get started.
Eamonn,
LOL… I think you might be on to something there. I cannot believe how expensive it is to travel in Europe. I think these Euro countries are really gouging tourists and will be suffering soon enough when Americans slow down their travels.
william
i am being very passive right now.
i have a little september dollar contract i entered yesterday at 73.94. that was a jump in early move.
i am not going to do much of anything until gary says by gold.
if everything is new, keep the trades, SMALL
when gary says go long in gold in 4 or 5 weeks, then you can go forward hard.
Is anybody in here using FIB targets and entries. If so would like to colaborate. I have some PSQ’s(nasdaq short X1 etf) and some SDS’s (SnP short X2 etf). We are do for a bounce down here at the bottom. looking to maximize gains.
william
who is your broker?
If you all want a little of Zermatt:
http://www.ski-zermatt.com/zermatt.html#eats
Jeff,
Interactive Brokers.
I just paid $4 for the same McDonalds meal here in Shanghai. And about $5.25/ea for some nice fake polo shirts. As bad as the dollar is right now there are still plenty of places left where it can get you pretty far.
Europe is expensive but still… Zermatt and Chamonix are the two jet-set ski resorts of europe and prices of everything around those towns are on that level. It’s sort of like Monaco where you can easily pay $15 for a cup of coffee.
Still $30 for pasta dinner seems reasonable considering current eur/usd. Dont think you can eat much cheaper in switzerland in general.
Ahhh. Was hoping to make a bike trip there to meet up and put Matterhorn off my to-see check list this weekend but i have obligations 🙁 Would have been 400miles of only alpine roads.
$40 for mcdonalds is mindblowing though 🙂
Speaking of the dollar, it looks like we’ve gotten a break of the trendine here. I’m thinking of buying a Sep oil put, any thoughts?
…at ease – Thanks for posting the website for Zermatt. By the way, it said “car-free,” so no renting a car to find a less expensive meal!
I’m going to the Netherlands and Belgium soon – are the restaurants as expensive there? I was going to allow $50/day for meals; breakfasts provided by the hotels. Do you think that will be enough?
Diana,
Switserland has always been an expensive country to live, for europeans too.
Begium is much cheaper.
Christel
$40 for McD hamburgers? Quick, buy McD stock – some serious top line growth there! (j/k)
Amazing pics Gary! Enjoy the rest of your stay fellow SMT-ers!
switzerland has always been extremely expensive. its debt free, got rich and stayed rich from mainly banking.
Its where the worlds elite store their wealth in confidential bank accounts, and have done for decades.
Abc, if you buy a short sp500 etf and the markets goes down while the dollar rallies, you get a win-win situation related to your small european currency. The value of the etf will increase in dollar terms + it is valued in dollar which increases too compared to your national currency.
.
Gary if you are not allowed to climb the Matterhorn and are experienced in glacier crossing there are some outstanding trails over the glaciers. You can hike in two days to Saas Fee via Adlerpass or the other direction via Tete Blanche to Arolla. Very exciting and beautiful.
test
Although not as strong as I would have liked, I believe we have a swing low on the dollar.
Haggerty,
a look at eur/usd looks more convincing that top is in (so bottom will be for usdx which is in large part made of euro).
Especially now that eur broke down minutes ago after ECB announcement to leave rates unchanged.
So dollar just popped up finally…..and so did gold and silver right in tandem. Anyone else tired of these bizarre moves?
ah ah, I was thinking that as well!!
Fubsy: Are you using yesterdays high as your SLV option stop or going back to the 5/31 pivot?
Have you DUG’d yet?
Well good news is if we hold current levels then the dollar has officially broken it’s downtrend line, bad news is PMs don’t seem to care.
Dan, I guess we just have to give it time to work. That’s part of the game I think :o) Just has to be done
Actually, Dan, nothing seems to be reacting. Not oil, stock futures, pm’s, nothing. Very odd.
Long 2 days on the dollar September at 73.94
For a early guess
Eamonn is right, must just give it some time…
I will be buying EUO this morning and on pullbacks herefater.
Learning from this board, perhaps gold is up on Euro weakness/Euro inflation fear, but that will correct in the face of dollar uptrend
wow…strong up in the dollar
LOL gold stocks opening in red again
bot some Oct 40 USO puts..risking 1%… short SLV, XRT, AMZN. Long EUO and UUP Sept 19 Calls
When trading metals it’s best to not rely on predictions of what the dollar might do.
Trade the metals, or trade the dollar. 🙂
Shalom Bernanke, could you expand on that statement?
I believe the document mentioned stocks and gold might initially ignore the dollar rally
Inverse Target Hit SILVER :
http://screencast.com/t/Mv2KJUBH5wDU
Gann, thanks for your charts, they are terrific… is the target getting hit bullish, calling for more upside?
Eamonn,
It’s a big assumption that the dollar and metals will always move in opposite directions, and in fact we’ve seen them both go the same way many times over the last several months.
Usually they move inverse to each other, but a flight to relative quality into the USD could see metals experience the same, in which case they could go up together.
If one wants to guess where the USD is going, that is where they should place their bets rather than assume it definitely means lower metals and short silver.
Trade one or the other on it’s own analysis. No need to complicate the situation.
Shalom Bernanke, thanks. good point
DAX squeezing 0.90% up….more be some news on Greece
Shorting silver is a poor bet, IMO. Not that I think it’ll scream to new highs, but it has poor risk/reward and there is a slight possibility the short metals trade could go terribly wrong.
DG, EUO long?
I’m outta here for the rest of the morning. Will check back this afternoon.
Good luck!
SB – well put. If you’re a dollar bull, buy dollars. If you’re not sell them.
But don’t think that they necessarily correlate with Gold movement’s or commodity movements all times. Yeah they throw fire or water because the commodities themselves are priced in USD but they don’t necessarily correlate.
Anyways finally some relief on the SPX.
It’s neutral at the moment. So don’t know if it’s going to break down further or go up.
Cycles tell me due for a breakdown, but I also watching like a hawk.
ng hit 9
definitely a short squeeze on the oversold DAX… maybe the NSQ is going to get the same treatment…For how long though?
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My understanding is that if gold breaks $1533.24 we have a failed daily cycle
It looks like we have a swing low in the SPX and a broken down-trend line, although that line is really steep.
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This comment has been removed by the author.
Bought more EUO this morning
I hope that many begin to believe that shorting metals could go terribly wrong. That should shift the sentiment enough for it to go incredibly right.
DG,
Do you mind if I ask about heavily weighted your initial EUO position is and what you’d expect it be be as you add?
Thanks, your insight is always appreciated.
I wouldn’t advise shorting metals or miners but if you are going to play the downside with puts do so because you are expecting an intermediate degree correction.
And go out far enough to give the cycle plenty of time to run it’s course. The last two intermediate cycles have rallied into week 19 and bottomed 5 to 6 weeks later. Gold is on week 19 this week.
Can anyone tell me what a good gold etf would be to short?
Thanks alot guys.
DRV playing fun today…
William, GLD
I don’t recommend shorting gold. The profit potential just isn’t large enough to bother.
If you want to short something short the QQQ’s or SPY. They are both in left translated daily cycles.
Just sell into the rally either today or sometime in the next few days understanding you aren’t going to catch the exact top and you may have to hold through a draw down for a few days.
The 1310 target I had for the snp to add to my shorts, is no longer valid. I doubt the snp can make it past 1295. I added a little bit here.
my Gold & Goldman are green today
gary
was iyr doing a crawl on the 50dma? it looks like it’s starting to break down now, are you having second thoughts about ditching your iyr shorts?
not
No not a crawl. I’m happy with SPY. The trade was a wash so no harm done.
Why haven’t you mentioned shorting the Russell 2000, namely TNA?
Gary
Don’t you think one gets a pretty high odds entry by shorting a swing high reversal rather than randomly shorting into a counter move?
FC
Because there’s no need to get involved with a 3 times ETF.
We’re just trying to preserve gains until we get to the A-wave not lose a load of capital which is what you are asking for with the triple funds.
FC,
How well has that strategy worked with gold?
Trichet used language this morning (“strong vigilance” against inflation) which signals a rate hike for the Euro next month — which is good for the Euro and bad for the dollar.
Today or tomorrow might be the high for the new daily cycle in the dollar, leaving us with an extreme left translated cycle.
The fact that slow MACD in the daily dollar chart has also now gone negative is a very bad sign as well, IMO.
Gold popping now too. Both dollar and gold up nicely today. One is probably giving a false signal. I’m betting it’s the dollar. (Though sometimes the strong negative correlation between the two is broken.)
Gotta run. Good luck all!
Steve Jobs’s presentation to the Cupertino City Council
http://www.youtube.com/watch?v=gtuz5OmOh_M&feature=player_embedded
J,
You would be betting that gold isn’t going to drop down into an intermediate cycle low then.
Ever since the 08 bottom gold has moved down into an intermediate low like clockwork about every 20-25 weeks and it hasn’t mattered whether the dollar was rising or dropping.
The miners are clearly telling us that something big is coming in the metals sector.
But like I said the other day. Virtually every intermediate cycle will rally long enough until almost everyone starts to believe there will never be a correction. Then it rolls over and takes everyone down into a scary correction where it knocks them off at the bottom.
When you can’t resist the urge to buy any longer that will be the top.
WMP: I rarely get heavy as I have good assets now and am not trying to shoot the lights out, so my portfolio is not like others’ here. That said, I am hoping to get heavy in EUO, but today’s action is not impressive so I am back on my heels again for now. I will not add again until it gets over 17.00
FWIW, max pain in SLV for this next expiration was in the 37-38 range. I don’t put a lot of faith in it, but in a dull, low volatility period prices tend to creep that way. Still looking for a day where big money dumps, on a gap up high in gold, retest of previous support in SPY, or new low in dollar.
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Gary, I am going to imprint those words into my brain. Tthat is exactly what happened to me on the last run up and I would have been clear, but then… shoot it still looked like it was going to run up and …
“When you can’t resist the urge to buy any longer that will be the top.”
I still think yesterday was a good day to cover shorts and wait for entry. I know some of you are thinking old turkey on this trip south on S&P but there hasn’t been any discussion on exit points if the trade suddenly go against us. That seems to be a trend here. Everyone seems to be counting profits way to early and discussions of exit points are rarely talked about.
I get the feeling the popular belief here is to cover on a swing low which i really don’t understand. Since the initial short of SPY was at around 129.80 on June 7th, a swing low would require you to cover the position with a lost. For those that initiated short position on a cycle breakdown at SPY 131, your P&L would be about even.
A close above 1295 on S&P and i see no reason why it can’t go back and test the 50 dma (still trending up) at 1329.
EricH,
And if the close is below 1295?
Gary,
Do you think we are that top in gold now, where people are no longer able to resist buying?
EricH,
And if the close is below 1295?
Vonda, wb. I hope you found Ireland to your liking :o) Your dog must be happy to have you back
Got out of my QID for a 5% profit, but funny thing is, minus commissions that’s 0% profit…haha.. ZSL already on negative, where’s that damn silver crash?
I sold my IWM Puts yesterday and bought them back again today. I’m starting to feel I’m really clever :o)
“And if the close is below 1295?”
If that’s the case, the swing low would not occur and there’s no reason to close it out. Right?
If you are looking for a swing low in the S&P you already got it today, yesterday was the low and we are well above yesterdays high. I suspect as we move down into the half cycle low we will see several of these swings. Just not sure how much they really mean until you get into the timing band for the half cycle low. 1329 would be a very strong rally during a period in which we expect a rallying USD.
Billy,
I stand corrected. We did get a swing low today on SPY when it broke 129.19.
EricH, It is because we are not even close to the timing band for a daily cycle low that it might be premature to cover. Stocks go down differently than they go up. You will see many swing lows in this move, but until we are in or close to the timing band you risk missing the moves.
Here’s a great options Delta tutorial for anyone interested.
DG
Thanks. I bought a little this morning..thinking to add as well. Why $18? I don’t notice anything technical around that level..
Eamonn,
Hanging out in your part of the planet was awesome! (Her Majesty was two steps behind me the entire time so I got to listen in on more politics than usual, then sat in a pub in Limerick listening to Obie speaking in Dublin.)
So happy to have discovered the ease of Shannon. Next time I’m skipping Dublin (and worse, Heathrow) and coming right into the west, making my way up to your Galway then Donegal.
Truly magnificent! I’d rather be scrambling over rock walls today, dreaming in roofless medieval abbeys than eyeing the market . . .
Thanks Mr. M for the tutorial link.
Ditto Sensei
Swings are irrelevant unless they are in the timing band.
I still haven’t started my short yet (SPY). It looks like the bounce is pretty strong and should continue into tomorrow? Hmm I can’t decide if I should still remain patient. Any thoughts?
Ryan, try layering in.
F.W.I.W.
I am looking to add to shorts when this bounce is done, so I have drawn up something as a POSSIBLE guide.
As time goes by, I will just keep an eye on things , and a weak bounce could change things ( as always). Right now we are quite oversold, bearish sentiment- I only expected a 2 day bounce, but this chart shows what would possibly happen, and suck people back to the long side and close their shorts.
http://www.screencast.com/t/QBl1HPQeF
IVE EATEN SILVER
3x is risky, but some use it…I use the TZA for what you were referring to (TNA), and was considering $38ish on a pullback
Crappy day for my style of trading. Sitting here playing online games before heading out for grocery shopping.
Casino stocks not joining in the S&P rally, usually they partake in it.
Alex,
I know, I’ll actually never go long any double or triple (besides for gold or silver), I only short them or their inverse.
Right now I’m short QLD.
Mind you that initially you have to establish a 50k position to short those type of funds. But then you can always buy some back to reduce exposure.
http://etfstocks.typepad.com/
Alex,
I also play TNA and TZA for short term trades.. but to avoid cantango, do you not feel it better to just play one of them both long and short.. ie short TNA instead of long TZA?
Alex,
Thanks for the chart.
Aaron,
Thanks I think that’s a good idea.
Michael,
Yes,
I only go long the TZA actually , and its usually not for a long ride, its just a short trade.
To me, it looks to have formed a bottom during April and May , and broke upward the other day. So a pullback for the next 1,2, or 3 days on lighter volume would have me looking to see if it holds above the $38 support area.
I may buy it there for a quick trade.
Gary,
Something’s been bothering me about your interpretation that the three year cycle low in the dollar has already arrived. Given all the Fed shenanigans, it seems to me that a three year event would have been accompanied by more real concern for the future of the currency than we’ve seen. It just hasn’t felt like a currency crisis; more like too much trading momo on one side of the boat. Maybe that’s all we’re going to get but it doesn’t seem like the shoe that could drop has done so yet.
SLV appears to have bottomed, consolidated and started a new uptrend.
Alex,
Will keep an eye on the 38 target for TZA..
SLV volume 1/3 the average, 21mil.
SLV volume is pathetic today, hasnt been this low since before the parabola couple months ago.
Bottom line is silver is range bound with a double top at 38 and 33-34 at the bottom. I wil be adding shorts at 38 if we get there.
All,
I cannot pull the trigger on the short etf’s i.e. SDS, QID SRS. Anyone have gut advise for me here??
Should I wait?
SRS= “widowmaker” 🙂
Another few days up in the SPX and RUT and I’ll look to short those.
Silver miners working out today, might double up my longs just before the close, or tomorrow morning.
On a side note, NG is a standout of the downside. Something wrong with that name.
TommyD,
I’m sitting tight. Shorting here is “no man’s land”, IMO.
Also, when I short I’ll use the futures or short the leveraged LONG etfs (if they can still be borrowed, haven’t checked today), but you will never catch me going long a double short fund. They’re supposed to mimic price movement x2 but we’ve seen enough cases where they don’t, and the issuers make no guarantee that they will.
Shalom,
Sitting tight here as well, no idea.
reverse.. 🙂 i hope you guys did cover your shorts yesterday. some were too bold.
shorting everything and anything.
ah the resume of the bull..
Thanks gang. Sitting tight never hurt me unless my underwear was rubbing me wrong. TMI, I know…
lol
I’ve decided to add 25% more to my miners long, but keep total account risk to 1% of capital, so have to raise my stops a bit.
Stops were $1.50 below my entry prices, but are now $1.20/share below my average cost on both EXK and SVM.
tommyd – the setup for the short isn’t there.
i think for anyone who entered short for the past few days and collected got extremely lucky.
real war out there pushing the prices around at around this level.
i see some more upside coming for tomorrow.
anyways for a longer term like 2-3 month hold go short if you believe in cycles…
day trading well wait for a better setup.
Edwin and all… Great advise… THANKS… Everyone have a great evening.
Just some thoughts from someone who has been trading the ES for some years. If you want to short the equities, then this is the only level that makes sense. If it goes up for a few more days the downtrend is over, so it doesn´t make sense to wait for a better price and/or time.
After the 3 violent up and down swings that we had during the month of may, the odds are very high that we just won´t have another similar swing. The markets never repeat themselves enough times so as to become highly predictable. What that means is that if the markets go up a little bit more, and this starts to look like the previous 3 swings, you can almost be sure that it won´t resolve the same way as the previous 3 swings (by going down). So if this is a true downtrend we should start moving down right about now and pretty much from these levels.
WMP: Sorry, I missed typed, I meant 17.00, though there is nothing technical at that price either. It’s just that for me at that price every share will be in the black and I don’t want to add again until I am somewhat profitable. (My average cost is aorund here now).
Ms C – Thanks!
Remember me saying how hard it would be to pull the trigger if we got a rally? We’re seeing it already and the market has only rallied very weakly. Already the bulls see a return to new highs.
The longer the market rallies the more vocal they will get and the harder it will become to initiate shorts into the rally.
The fact is this should never have broken down and taken out the daily cycle low and it certainly should not have taken out the half cycle low.
This is a market that is in trouble. Now could it come back and surprise everyone and force a re-phasing of the last daily cycle? Sure anything is possible. The problem is it’s a low probability scenario. I have trouble betting on low probability events.
Now you are witnessing in real time why it’s so tough to make money on the short side.
Gary,
Regarding the various phases of Gold waves(A,B,C and D), is gold always in one phase or another or does this wave pattern take breaks during this gold bull market?
I am willing to make a bet that if the S&P gets to 1310 than this downtrend is over and we are heading back to new highs.
So in my opinion waiting for the market to get to 1310 to short it is not a good idea. Either you should short it at these levels we are in or simply pass the trade.
and then David, may I ask what is your opinion? Up or Down?
will gold ever correct?
1700 looks in the cards at this rate
HUI and GDX seem to be following SPX very closely rather than gold. This is not normal for them, right?
Could be David Kafrick. First test of the 21 on the 4h.
I’ll wait for 1295…
INteresting SoS today. Looks like some of the big banks and at least one of the oil companies got dumped hard today. And if you look closer, you can see they were block trades, so not a bunch of individuals, but institutional selling. I think the “tells” for this market are continuing to line up.
Very confusing indeed
The more confusion there is, the more confident one can be in thier trades.
It’s confusing because everyone becomes focused on the daily charts. If you concentrate on the big picture weekly charts it’s much easier to see what’s really happening.
Gary said “Already the bulls see a return to new highs.” Really? Any particular bulls you have in mind? I haven’t seen much evidence of investors expecting much from this bounce.
A CNN/Opinion Research poll just released showed that 48 percent of Americans fear there may be a Great Depression in the next 12 months.
Thanks Gary, nice report.
The chart on the wkly GLD really said a lot. You pointed out the recent rise and on your chart I couldnt help but notice it also just took about 5 or 6 weeks to recover that last 1 wk down too.
Under your Dollar commentary, you wrote something that I read a couple of times and I’m missing your point.
Trying not to give too much away- you wrote on Paragraph 2 under the dollar,
“…going to see another leak spring up in…”
You mean…trouble, like a leak in a balloon ?
Thanks
I’m sensing some killer setups coming in a couple days. Especially watching the xlf for a good short. The closer it gets to its20 before rolling over the better.
Gary
I don’t short gold, but I’ve had good success shorting other sectors using that tactic.
fc
I won’t find it difficult to short stocks into prices higher than we are right now, or lower for that matter, as long as they are tired of rallying. Price levels are almost useless, and especially without a time frame attached.
DG,
Do you use the overnight and London markets to track your next days trades for EUO? Just curious as to what you use as indicators for EUO?
Alex,
I believe Gary was referring to another “leak” (ie. problem)with the PIIGS (Portugal, Ireland, Italy, Greece and Spain)appearing in the near future, which would fuel continued strength in the dollar.
I won’t find it difficult to short stocks into prices higher than we are right now, or lower for that matter, as long as they are tired of rallying. Price levels are almost useless, and especially without a time frame attached.
Eammon
48 % of the people are paying attention? wow that supprises me
At Ease: I trade EUO during NYSE hours and don’t worry about what happens overnight. If there is a move to be had it will show up on the NYSE. It can move a lot overnight but all stocks gap from time to time. I think EUO will be my major target like AGQ was this spring. Now I just need to see higher dollar prices…
I’m hoping Gary will get tired of $40 cheeseburgers and get back to the US soon. 🙂
Gary,
On your GLD weekly chart in tonights report showing the intermediate declines pushing below the 10wma, how many weeks were there between the first two you pointed out?
It looks much shorter than the proceeding declines.
Thanks
DG,
What do you monitor to watch for entering / exiting EUO. I entered into EUO at the low today. So just want to know what you use to monitor the dollar action that will affect EUO. Appreciate your insights and hopefully will learn more on how this dollar moves and affects the market. Thanks DG.
Vonda, Glad to see you back safely. Sounds like you had a wonderful time in Eamonns part of the world. Welcome back. 🙂
How do we determine when a new cycle begins and ends, be it a yearly, intermediate, daily?
Hope thats not too much to ask. Thanks everyone!
Gary,
Would you say Gold has been “crawling” along the 10dma for the last 7-8 trading days?
I noticed on the weekly chart every intermediate decline bounces off the 30wma.
Interesting tidbit:
http://www.zerohedge.com/article/guest-post-fun-inverse-etfs
Gary didn’t respond to my question as to his basis for saying “already the bulls see a return to new highs,” but that certainly is not supported by the latest AAII sentiment figures. They show the lowest level of bullish sentiment since last August, at 24.4%
Ham,
Can you show me that AAII Sentiment. Thanks.
The AAII poll has been historically wrong.
During bear markets the AAII poll gets bearish, the market bounces, then continues down.
driver, my recollection is that whenever the sentiment gets that bearish, which isn’t that often, it results in a decent bounce.
Gary:
Why is this half cycle low so important?
I thought the main lows were Daily, Intermediate and Yearly.
So how does the half cycle low fit in the picture?
And what type of half cycle low is this? Daily / intermediate or yearly?
Thanks!
Because the dollar cycle is shorter than the daily cycle for stocks we usually see a half cycle low around day 15-25.
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Hi Aklaunch:
Lol…I don’t know $h1T either, but learning along from Gary and several others here.
I was referring to the SPX – Gary has mentioned the half cycle low in tonights and couple of other previous reports.
Thanks Gary:
So we are looking at the previous DAILY half cycle low in the SPX and not intermediate (or weekly).
HI Gary,
For those that sold their short positions yesterday, can you watch the stock bounce and try to time us another entry for shorting? I can only buy inverse ETF’s, so a recommendation on one would be nice too! QID did ok for a short time. Holding on to SZL but the consolidation is not doing it good…
Thanks!
At: I expect to hold EUO until it gets late in the dollar’s recently started daily cycle rally. Or if the dollar gets severely enough overbought.
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Thanks DG, just trying to see where I am exiting on EUO. Checking Gary’s cycle counts and what you are saying, got it.
Gary,
Is that a bear flag on your GLD weekly chart from tonights report? Looks like it has a price target or 131.
Gary, is the small profit potential the only reason you don’t short gold? Not that long ago you were talking about gold testing the T1 consolidation zone in the 1200’s later this summer. That’s over 20% below where we are now – I wouldn’t call that a small profit potential.
And if you were to short gold, wouldn’t this be a perfect setup? Late in the daily cycle, late in the intermediate cycle, possible D-wave decline, probable bottom in the dollar. Look, I’m not fishing for compliments on my recent trades (I did buy some $1535 and $1500 puts), I’m just looking for any good reasons not to short gold over the next few weeks.
Also, Gary, any thoughts on oil or copper?
.
DG, EUO almost hitting your target of 17.00, I plan to add this morning..
Nice to see metals finally reacting to the strengthening dollar. Hopefully this holds up and we get some trendline breaks so we can add to shorts.
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Yesterday I got a little spooked and gave up a half of my puts on Gold. I currently am at break even but I assume that I will be in the money again once we open with far less exposure.
Was easy to get spooked out of GLD puts yesterday as it looked like it might break up to new highs…can always add back…
TGIF traders!! bubblin’ CL has a narrow range 7 setup (NR7) so on the lookout for the ‘trend day’ …CL now down off saudi arabia raising production and general ‘risk off’ around the world…. gold and silver followed crude as gold leaves the 1545 where it had closed for the last week.. silver march high or ‘stair step’ was 36.75
Lots of support at 1525. If it closes below that area, I’m buying my GLD puts on Monday. Holding SLV puts and will buy more once the RT shoulder is in.
Let’s let this D-wave party begin
Gann,
Do you have an update on your SLV chart? Perhaps this move this morning will violate the H&S??
I wish we could get the stats on hits on Kitco. That would for sure allow us to trade this bull to perfection!
Maybe I’ll try and get a job there one-day or put a mole there 🙂
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Michael,
I don’t think charts will do you much good. Why not use far superior tools, cycles and sentiment?
Kept all my shorts, figured no point in selling until gold gets above 1550 or silver above 38.80. Until those resistance points are breached this cotinues to be nothing more than back and forth consolidation movements. Although with the dollar ready to head higher over the next few weeks, us entering the summer doldrums, the upcoming deflation
scare (falling markets) and the hui/xau already collapsing, this Gold/silver consolidation should eventually break on the downside.
WavRider,
What level do you have for the RT on SLV?
I think we’ll not drop too far from here the first half of the day in PMs, or at least the first few hours, but then in the latter half of the day and into next week the selling pressure will intensify.
An intermediate decline in gold will bring us to the 30dma on a weekly chart, but if this turns out to be a D-wave what moving average would we be looking at as support when it bottoms?
I’ve Eaten Silver,
Go to alexa.com and plug in any website you want.
William,
Gary has already gone over this in recent previous reports? Are you a brand new member?
Harry,
I don’t short bull markets. Sometimes if the conditions are right I will buy puts on overstretched bull markets. But that’s not appropriate for most traders, especially the ones who don’t understand options.
This is really interesting.
The amount of viewers very closely resembles gold’s price movements. As you can see from the ‘max’ view, higher highs during the C-wave and a peak in May.
This graph is a great rebuttal to the “gold manipulation” theory.
http://www.alexa.com/siteinfo/kitco.com#
I am away from my computer but it appears gld has officially broken it’s uptrend line.
Eaten,
Definitely follow cycles, just looking for timing point to increase my shorts…
Eatin Silver,
Yes im new. Dont remember seeing any info in the most recent reports showing what moving average would act as support in a D-wave decline bottom. If it is in the reports as you say can you please direct me to that report.
Thanks
Michael: I cheated. Bought more EUO at 16.99. I am quite confident he Euro is toast. The only question is when and how to play it. I have a nice stake now and will keep adding intermittently on pullback or other clues. I am long some DUG and SKF, but EUO is my baby for this move I think, thought I plan to add to my oil shorts as well.
DG,
Nice add on EUO. I was tempted too around 16.91, just waiting to see if we get a small pull back after first hour… also short oil now too via puts on USO… good luck…
William, it’s not a clear-cut science, D-waves with moving averages, but I’d suggest going back and reading the May 28th weekend report for ideas on where this could bottom.
Michael: bear moves are quick and violent. If you hesitate you tend to miss them then chase, then get caught in a sharp advances (the rallies can be stunning and scary if you are short). Pick a target to add when nothing is going on, then mentally prepare to pull the trigger no matter what your gut says. I said i’d add at 17.00 and so closed my eyes and did. I’d rather be early than miss it and the euro drop has just started.
Plenty of confirmation in this action.
Like Gary said, many waited for that oversold bounce and got 9 big S&P points!
DG,
The financial have fallen quite a bit over the last few weeks ($BKX) and is about 8% under the 200DMA while the SPX is still above the 200 day. Do you think that the financials have a lot more room to fall, on a percentage basis, compared to the S&P?
I would caution against trying to short financials. The powers that be have made it very clear the banks will be protected at all costs.
I still remember vividly the day when the SEC outlawed shorting on banks in 08. Traders woke up to a monster rally that morning.
Best to just leave the financials alone.
Is anyone looking at DUST for the few weeks until gold bottoms?
Thanks
Gary’s point is fair, but we are nowhere near panic levels that would warrant federal action yet. I do not plan to stay short them once I can sniff fear in the air. Oil and EUO are my major positions right now. They have been acting so badly I couldn’t resist 🙂
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Agree on financial, I took a bath I will never forget the day that short ban was announced.
BTW, little doubt Gold is now finding it’s way down towards a cycle low. $US now confirming the new cycle.
Focus on the IT trends now, they are relatively clear, riding them will take you downstream effortlessly.
Thanks DG, Poly, Gary.
Speaking of Kitco:
http://www.zerohedge.com/article/kitco-charged-massive-tax-fraud-scheme-business-viability-question
Where are al the RALLY guys from yesterday??
Eatin Silver,
Thanks for that report, appreciate it, I will check that out.
My brother, a 44 year old with a graduate level degree,who works for one of the largest financial institutions in the world, and I were just talking. He was asking me about options in his 401k and I explained why I thought the market was due for a correction. In doing so, I mentioned the end of QE2. He asked me what that was.
This is not a dumb guy. I just think 90% of Americans don’t know anything other than if the Dow is up or down.
Wow!
Thanks Gary for your warning on the miners yesterday. I didn’t see what you were seeing as a warning, however had made some profit on a few days hold and with your warning I jumped out (NUGT, GDX, GDXJ yesterday! THANK YOU!!!
CMT,
I hear you, have a similar situation, where I am told you can’t just trade in and out, you have to hold for the long term anything else is gambling.
DG,
yes, good points regarding pulling the trigger… sure happened that way this morning.. have a good core position in EUO and UUP, so not feeling left behind just yet… thanks for the advice..
Gold the new world currency? Doesn’t seem to care that the dollar is going up.
I agree with DG, the Euro is toast. Trichet said he would raise rates in July, yet it easy to say that he will not. The Spanish debt is up for review in July if Im not mistaken, it wont be pretty.
Good work, david kafrick
Think everyone is selling euro, sterling and stocks and putting their dollars straight into gold. Looks like it will be tough for gold to move down significantly in that environment.
Turning Japanese,
What makes you say that?
William,
Just a general observation based on the correlations during market hours the last couple of days. It very well could be temporary, but treasuries haven’t really taken off, so definitely looks like more people might seek gold during this next deflation event, keeping it afloat.
I still generally think gold is heading down, like Gary does, but how far and how quickly will depend a lot on where people put their dollars when they exit everything else.
This isn’t even a rout yet too! This is broad sustained selling. Sentiment and “over-sold” levels mean zero.
Like I’ve said, the commotion coming from the exits is getting louder, those still unaware are going to get crushed.
If the markets starts to fear deflation, everything will collapse, just look at 2008.
The fund that I worked for in 2008 was massively short the financials and we got our heads ripped off when the short ban was implemented.
I agree with Gary that the banks will be protected, but with that said, I’ve been shorting the financials (via FAZ) since early May. We will not see a replay of the bear raids (buying the CDS and shorting the stocks) in 2008 when the banks were vulnerable due to overleveraged balance sheets, deteriorating asset values, and an inability to access short-term financing due to the seizing of the credit markets. I do, however, expect some downside to the stocks now more as a result of deteriorating fundamentals, lack of revenue opportunities and continuing margin pressures.
Gold tried to resist last year too but in the end the intermediate correction came just like it always does.
Yeah, you’re right, Gary, and this probably is just temporary, probably based on the naive reactions of the initial herd that has been hearing in the background about gold and it’s safe-haven status, but that don’t realize it will get sold with everything else once the margin calls begin.
Hmm I wonder, how many would be buying PM’s right now, if it weren’t for Gary’s cycles. Cycles have really added a valuable element to investing/trading! You really value Gary’s work in PM’s at moments like these.
I think we are heading towards a black hole decline still, where everything goes down, but I don’t think it will be as bad as 08/09.
Alright time to enjoy the sunshine…to those abroad enjoy the trip! The only thing cheap in Switzerland is beer, so drink up!
Interesting article about US lying about it’s Fort Knox gold hoard….
http://www.eutimes.net/2011/05/russia-says-imf-chief-jailed-for-discovering-all-us-gold-is-gone/
NEW POST
Keys,
I agree, its pretty amazing how cycles playout. I cant wait until I have a complete understanding of them like gary does.
60 Min SLV Chart :
http://screencast.com/t/YiXg9fzOh