208 thoughts on “PORTFOLIO CHANGE

  1. Dan

    Curious what percentage of their intended position or total PM portfolio everyone is invested at this point? Personally am in at about 70% right now, all leveraged ETFs, no options yet.

  2. fubsy_cooter

    I was watching that too, Gary. It will be very positive if the miners can turn upward after tagging their 10dma, especially if gold can complete a bull flag.

    I added a small DGP position this morning..8%, and will add again on a reversal off a correction in gold, or as market conditions allow other low risk opptys.

    Currently at
    18% GDX
    13% GDXJ
    8% DGP


  3. TZ(8155)

    PS: as I’ve now discussed in the past I will continue to NOT play any miners. As a whole they continue to underperform a simple aggregate of 50/50 gold/silver. If (and UNTIL) that changes I will stick to ‘straight metal’.

    Good luck, but I’m not going to hold gdx, gdxj, etc.

  4. Ryan

    Ok, I was watching all morning and wanted more of a pullback and then the big pop just now. I couldn’t take it anymore so bought DGP from the miners I should yesterday. Ok I made the sacrifice so now we can finally get our pullback πŸ™‚

  5. Poly

    “Fed Minutes Show Policy Makers Discussed Possibility of Third Round of Stimulus”

    Wham bam thank you ma’am.

    Let the chasing begin.

  6. Poly

    A generational bull market in its 11th year, which just confirmed a new IT cycle with no doubt, on the eve of a massive sovereign debt crises.

    Mmmmmm, should i buy?

  7. Rebecca


    My faith in your cycle analysis helped me hold on to my positions yesterday. Added SLW this morning. Comfortable with what I have now.

    You are simply great!

  8. Dan

    Just added a little more. Looks like QE3 is happening afterall. I think were gonna keep rallying into the close after this news.

  9. Ryan

    I was 40% a couple of days ago with GLD and miners but I kind of freaked yesterday so I sold my miners. I bought back in DGP from my miners so now in 36%. I would really like to go back to 100% and just old turkey but I have a feeling for me to get to 100% I’m going to have to chase it.

  10. Michael

    Call option ownership could pay off well here if you get the price direction half right – GVZ CBOE gold volatility levels at just 17, move into 20s easy on breakout, possibly into 30s toward blow-off phase.

  11. Mitchell

    do i wait for some weakness before initiating the rest of my position (about 35% left)??

    or just go all in, and wait for gary’s top call??

  12. traderlady

    RYAN, I have been going in close to FUBSY except I also had GLD. Now, DGP.
    I shall add at 10MA, gaps, bull flags and other opportunities. I feel more comfortable that way. I like to sleep:)

  13. abc

    I decided to wait till market close, but after such a rally I don’t know if adding to positions will be a good idea. Gold is extremely stretched above 10DMA. Do you think that any pullback on gold will push down miners or they just did their duty (tagged 10DMA) and ignore that pullback?

  14. MrMiyagi

    William “today I am” Wallace,
    I agree to some of that thought. The markets pooped on “any good news” but are now thinking “what the f?”.

    We shall see.

  15. grimweasel

    I guess now we know why markets turned on a dime with no main levels today (equities, crude, Euro etc). Someone must have leaked the Feds agenda or notes and caused the huge turnaround – the smart money obviously got wind and bid up risk assets. So much for efficient and regulated markets!!

  16. Gary

    The minutes from the last Fed meeting were published and QE3 was discussed as a possibility at that last meeting.

    I think the markets and most of us to here realize that these idiots will continue to make the same mistake over and over and over.

    They can’t seem to get it through their heads that it’s not the dose that’s the problem it’s the medicine.

  17. catbird

    Well I added right at GLD $153 today which is why things have cooled off in the last few minutes…. ; )

    But seriously, I am going to go all-in when GLD touches its 10 DMA.

    I’ve decided to stick to GLD and only GLD but use margin from my broker (IB has a really cheap margin rate).

    For me to lose money the yellow metal has to go down, period, end of story. Trying to keep it simple.

  18. MrMiyagi

    William “who am I today”,
    They are 90% 1/2″ 12×4 panels.
    75lbs each, Gary, you have competition. Except I do it in 30 trips…

  19. ND

    Hi Gary and others,

    Looking for entry on spotgold, all of you seem to invest in etf’s, when would you advise to buy. At tag of 10MA and when swing confirmed another buy? or is this bull just gonna run wild for now??

  20. Silverhound


    I hope you are still with us and I hope you are still holding strong to your positions (and I suspect you are). Congratulations on your call so far. You got a great entry back in May and were staunch and held strong when most said gold was falling.


    I believe you owe jh an apology…………

  21. ND

    I for sure would like take a position now, but contracts are a bit big and hard to get a nice entry atm as i see it??

  22. GoldWhisperer

    grim, do you have any opinion on the USD/JPY closing at 83 by yearend 2011? EUR/USD between 1.43 and no weaker than 1.50?

    I am trying to wrap my head around the U.S. dollar and thus the currencies. The article I was reading on Bloomberg left me almost completely conused. The USD/JPY seems to me to be the clear-cut play. Clear as mud?

    They seem to be saying that the Japanese economy will continue to suffer as they recover from the earthquake damage. I am just guessing though. The only other thing I can think of is a recession in China afecting the Yen as the East’s dominate currency.


  23. 86d4life

    Slick Willy,
    You really are a Heathen, man. LOL.

    Mr M,
    I spent 6 mo. on a project once where all the rock was 5/8 12`, 122 lbs. a sheet. Some 14` too. Nice stuff.

  24. Silverhound


    No secret, 6 hours sleep every 24hours whenever you can fit it in

    and no day job πŸ™‚

    I just seem to wake up in the wee hours so I watch the markets.

  25. jhnewman


    THANKS for the nice note.

    Actually, I’ve been whipsawed a bit over the last 3 weeks.

    The big “oil drop” in gold following the last Fed meeting knocked me out of my long positions. I got out on a bounce about 3 days later. That long trade I held for so long netted me only about +.5% for my portfolio.

    Then, since it looked like we had a failed daily cycle (left-translated) and about another 2 weeks of drop ahead of us, I flipped my whole portfolio into ZSL. Had one day of glory, and then, early last week, it went against me and I got out. -5% to portfolio.

    Then I flipped everything long, and am now “all in” with a lot of leverage in EXK, AG & NG, and am very close to making back that -5% already.

    I’m forced to take chances on my trading because I’m using the money to fund the documentary I’m making — and it’s a money pit. Otherwise, I wouldn’t be “as extreme” in my approach.

    I plan to hold these longs for the coming Intermediate Cycle ride, probably selling a portion at possible daily cycle tops *later in the Intermediate Cycle*, with hopes of buying them back cheaper at the daily cycle low.

    Best of luck to you and everyone else here.

    Gotta run!

  26. wmp


    Since you arent adding to gld would you still expect a pullback..maybe a bounce off the previous high..before adding to that?

  27. Vonda

    Nice story, JHNewman . . . thanks for sharing it (and thanks for inviting it, Silverhound.)

    What’s your documentary about — can you say?

  28. jhnewman


    We “reporter types” guard our story ideas like a junkyard dog standing over his last bone.

    But just to characterize it: it’s 2 adventure stories linked together, one taking place in Scotland, the other in India. And both of the stories have “a spiritual significance”.

    If all works out as planned, it will end up in movie theaters, next year or even the year after.

  29. Silverhound


    I suspect were it not for your money pit you’d have held. We all have to roll with the punches but thats trading hey. Stick with it.

    G’day Vonda, hope you are well.

  30. DG

    Hey TZ! Where you been? I was worried about you (seriously…I just posted a few days ago asking if anyone knew what was up with you). Glad to have you back.

    All: I have been out all day and unable to post. GLD seems stretched to me. I have a good slug (DGP) so can wait now. Bought more DGP this morning at 49.76. DBC showed up on my sell screen (GLD will on one more sharp up day) so I shorted it figuring it’s a decent hedge against my DGP. Then DGP rallied and DBC dropped a little. Nice luck! I am unlikely to buy miners this run, but you can get 4 X leverage just with DGP so that’s more than enough for me. I expect a dip in GLD this week.

  31. Vonda

    Top of the morn’ (Middle of the night) to you, Silvherhound,

    Very well, thanks.
    Good to see you ’round!
    Hope all is well on your end of the world too.

    Wish I had something PM relevant to say: Am long a bucket list of goldish type vehicles and feeling very queasy about the whole thing, so I guess that’s about right, eh?

    (And I just couldn’t resist a small position in that old monster, AGQ. Small.)

  32. fubsy_cooter

    I’m 40% invested with a little leverage via DGP. My plan is to go to 60% invested on a tag and reversal off of the 10dma or thereabouts in Gold. I believe a corrective move is imminent. Whether it occurs before or after gold becomes rt translated remains to be seen, and will be interesting to watch. I’m hoping it comes sooner rather than later to keep sentiment mild.

    At that point I’ll be 33% into DGP so there will be a good amount of leverage.

    At the next DCL, I’ll add the rest. My allocation between miners and metal will depend on their relative performance during the duration of this daily cycle.


  33. Aaron

    Vonda, Im with you on silver. Im long Spet. calls, in addition to my gold. Silver may not make new highs, but low to mid 40s would be more than enough, and very possible if gold does ‘blow off’.
    April, Silver was leading, with gold following, now the roles are reversed.

  34. Silverhound

    lol Vonda

    The sun has peeked over the horizon and the smell of my favourite, fresh ground Barcelona three bean espresso blend has filled the kitchen so I’ll gladly accept your mornin’ salutation.

    This PM game is easy hey πŸ˜‰

  35. Poly

    We are indeed stretched, finally. If I had to guess, judging by the amount of sudden believers (capitulation) in gold today that we will get our half cycle low move right here or at an attempt tomorrow to take at that all time high.
    The capitulation (or panic buy) points normally marks a reversal, temporary in this case. So as long as you don’t whipsaw yourself on any temporary weakness, it will be roaring to $1,600 before this daily is out.

    Nothing like a stealth $90 rally to get the interest of those speculative longs.

  36. Vonda

    Ooh that smells good, Silverhound.

    Just finished off a pot of Sulawesi myself . . . It seems traders/investors cycles start to mesh, despite geographical differences?

    Thanks Aaron for the silver-nod and to know I’m not alone. I welcome hitting the low 40’s mark!

    Ugh. Yeah, easy-peasy.

    I’ve got my own money pit. “It’s” twelve years old and staring me down for a handball match.
    Best put on my trainers and gulp a final swallow of caffeine!

  37. Cory

    Gold did an amazing job of putting ugly candles on the chart, wandering around like a drunken sailor for the last two months, defying the dollar, and diverting from miners to get to this point.

    Standing ovation for the gold bull on this one. Perfectly executed no matter what happens next few days.

  38. sophia

    Hi everybody ,

    i am currently on my phone as I am travelling.
    Could anybody tell me when is thé 10dma sitting at the moment? Thanks! and great call Gary

  39. ND

    Knowing most of you are trading only gold and silver. What are your thoughts about sp500.. am sitting on quite a big short pos which is coming down to breakeven. My system is still in sell (though not a 100 percent), but would like to hear your thought.. are we gonna se a higher high before going further down?

  40. Charles

    Perhaps it’s already been mentioned but GDX has pulled back from the 200 day MA today. GDX closed $57.37; 200day $57.646

  41. Poly


    I avoid having to ask myself that question by buying that first foundation stake immediately, see smoke in the timing band, you buy.

    If you don’t have a stake, buy it now no matter what. Who care if or when we do fall back to the 10dma, be happy and buy your 2nd lot.
    No money made watching a bull market, you got to run with them.

  42. Cory

    The danger is not in buying right now, but chasing in a few days if it goes higher and losing your position when it backtests, only to have it take off from there. Get a small position to start getting strong hand status, because if we are less than 10 days into a 20-25 week cycle, your risk is small but getting bigger by the day. Worst case scenario we stop out at Gary’s stops, but that is starting to get further away by the day. This train leaves fast.

  43. DG

    ND: I covered my shorts a week ago. It is extremely dangerous to short so soon after historically high levels of bearishness. Many studies from June pointed to 1-3 month long rallies.

    For example: (from sentimentrader.com)

    Active Studies:
    06/22: A 90% up volume day off a low
    06/20: Cluster of 90% down volume days Positive
    06/17: Put/call > 1.0 for 2 straight days Positive
    06/16: VIX crosses 20% first time in 50 days Positive
    06/10: Stocks drop but VIX doesn’t
    06/09: AAII bulls low while stocks high
    06/01: Consumer confidence low, stocks high Positive
    05/19: Newsletter bulls drop, market rises Positive
    05/11: A new all-time high in breadth
    03/31: Rapid whipsaw in 10-day Up Issues Positive

    You won’t find me shorting for more than a trade in the face of all that!

  44. Ryan

    You mentioned you can get 4X leverage with DGP. Do you mean 2X or you mean going on margin and buying DGP therefore increasing your leverage?

  45. Matt


    As with all market traders, I must remain humble and recognize when credit is due.


    If I offended, I do apologize. I am also sorry to hear about your recent whipsaw action but it sounds like you a poised for a rebound. My daughter is a documentary filmmaker as well. Good luck with the project!

  46. Poly

    “Intermediate cycles last 20-25 weeks…old turkey until October/November for me :)”


    I’ve found that the IT cycle technically tops at around week 12-15. Any further gains or nominal new high’s are typically just marginal and choppy/volatile.

    Meaning the meat and relatively risk-less gains are in weeks 1-12, the scavengers fight over the carcass in weeks 16-24.

  47. ND


    I actually shorted the markets before the extreme bearish sentiment, then got into another 2nd and 3 pos on the rebound up, only to find that the rebound was way stronger than i’d ever expect. took me by storm..
    got SL at 1360 atm, still don’t think we should go higher but like gary mentioned earlier; fighting the big guys is dangerous.. so sitting here wondering if it’s time to get out while losses are at minimum or stay with original strategy and hope that we don’t se 1360 reached.. thanks for sentiment stuff!

  48. ND

    DG – my systems are based on more classic TA´s rather than cycles, but been subscribing to SMT now and thinki’m starting to get an idea about it.. my other dilemma is to get some sort of entry in spotgold…though i really don’t like buying on strength..hmm

  49. DG

    Ryan: I meant that in a $25,000 account you can buy $50,000 of DGP which is like buying $100,000 of gold itself. If gold rallies 25% your account doubles.

  50. Ryan

    Gotcha, I’m plenty happy with 2X. Here’s hoping if we do get that pullback it’ll be fast and furious and I’ll gauge it, if my hands tremble, I’ll click buy!

  51. jhnewman


    THANK YOU for the very gracious apology.

    But, to tell you the truth, I don’t know what you’re apologizing for. I drop in to “Gary’s” when I can, but miss many, many comments. So I never saw your remarks.

    Don’t worry about it. We’re all in this together, and all trying to figure out how to best trade this PM bull.

    On my trading: I’ve made back all of my ZSL portfolio loss and then some with today’s action. So I’m good to go again, leveraged big long for this Intermediate Cycle.

    And on my recent trades, I’ve learned some valuable lessons, such as: when the situation is murky, trade in legs. I had very nice profits on my DGP/NUGT twice, and let them slip away, because I was holding for a longer, higher swing-trade. I won’t make that mistake twice.

    The best of luck to you and your daughter.

  52. SF Giants Fan

    Life is good for former Santa Clara police chief Steve Lodge — or specifically, public life has been good to Lodge.

    This is a follow up discussion from this weekend about police pensions out of control.

    After 30 years on the force, at age 52 he collects a $200,000 annual pension, and is set to cash in even more as chief of security at the new 49ers stadium, where he’ll collect $100 an hour on the public dime, according to the San Jose Mercury News.

    The arrangement is fishy to some — especially opponents of the stadium plan — because Lodge was a vocal supporter of the stadium plan that voters approved last year, without which he wouldn’t be able to “double-dip”: collect a hefty pension while returning to work for the city.

  53. MrMiyagi

    Can someone here explain to Mr Miyagi’s Canadian brain what this debt ceiling vote thingy is about?
    hat results are expected and what would that entail to markets and commodities.

    Also, markets did poop after popping today so I guess my keyboard had a premonition.

  54. Gary

    I think twitter is down. I just had my webmaster check and the site is still set to automatically tweet whenever a post is made.

  55. MrMiyagi

    GDX has the 100 & 200 DMA at the same spot today, is this of any significance? Once you break through, it will be both and there’s nothing above it.

  56. Brian

    Not sure if this was said but stockcharts.com has OHLC charts back up for Gold and Dollar. Not sure if this is permanent though.

  57. Felix

    DG & Poly – thanks for all your posts, invaluable augmentations of G’s analysis, esp. at critical moments. And the helpful posts of so many more.

    I’m going DG’s route so far for this move.

  58. Dan

    NUGT vs. DGP – PM shares outperforming gold since the bottom, as they have been since the start of this bull market. If one is looking for leverage, it may still be best to atleast by some PM share ETFs along with DGP.

  59. Veronica

    Wow, beautiful day in gold:) My weekly system went to a buy today and excluding 2008 it is 100% winners since 2001. The pivot system also went to a buy, and I’m still on the hunt to add more:( Will we ever have a down day, LOL!

  60. SF Giants Fan

    Mr M

    And they say there’s no inflation. I was at the store and saw a 1.5 liter soda bottle for .99. I guess the 2 liter bottles will be going away. It won’t be long before the milk containers start shrinking…

  61. NJ


    Thanks for the addition of the last % in the portfolio in GLD.

    Quick question: In the past you have mentioned that Big money drives prices above or below a key level before reversing. What are the odds that such a scenario will play out in Gold, especially given the $$$ RT cycle?


  62. Phil

    how come you hardly ever mention your thoughts on crude oil in your nightly reports . just was wondering? my take is you dont feel its worth mentioning . jake

  63. Veronica

    An interesting note on the weekly buy; the last 5 signals(winning trades) have corrected $45,40,40 10,13 from the buy point with the $13 being the latest long trade from earlier this year.So we can probably expect at least a correction down to 1550 where I will be adding at.

  64. basil


    couldn’t reply any earlier, but want to add something in regards to ‘silver at $21’ exchange from yesterday…

    The second chart at this link…


    …shows the corrections in silver from 2002 to 2011.

    I don’t see the type of parabola that you’re seeing. What I do see is that what occurred in April/May 2011 seems to be normal action, the type that happens practically every other year.
    There seems to be nothing implying that silver could or should go to $21. On the contrary, if silver will be doing what it’s done before and what I am counting on, it should crawl back up to between $40 and $50, then bounce around, and then go much, much higher. Also, I don’t see why silver should be doing 2, 3 years of ‘nothing’.

  65. Gary

    I traded energy during the last bull market. I knew it wasn’t going to do much during this bull market. The has-beens never do.

    The only reason I even watch oil is because it is a big part of the CRB and I’m tracking the move down into the three-year cycle low.

  66. basil

    As for your cycles, I thought you were expecting a D wave? If what we just had wasn’t the D wave that you expected, then when would you expect it to take place now, and where do you see it take gold and silver?

    In terms of manipulation in the market, I don’t see why there should be manipulation in one market and not in another. I agree that precious metals are a market of much less importance, but precious metals can also be manipulated more easily. Isn’t the plunge protection team just another urban legend?

    In any case, I don’t think moves in the markets, which you or anyone else didn’t expect, should be explained by a manipulation story, one way or another.

  67. Gary

    Nothing that has come before was even close to what just happened in silver.

    From the bottom of the D wave in 08 to the top silver gained over 500%. No other run gained much more than 100%.

    What we saw in silver this past year was like a four Sigma event. This was similar to the final run in oil.

    The only thing that kept silver from completing the parabolic collapse was the fact that gold entered a consolidation instead of a more normal intermediate decline.

    There will be big money to be had in silver puts once this intermediate cycle tops.

    That parabolic collapse is not finished.

  68. basil


    if there is a recession in 2012 and with it another leg down in the secular bear, you do expect precious metals to still be the front runner in the next cyclical bull, even though they were the front runners in this cyclical bull just energy was the leader in the last cyclical bull and is no longer today?

  69. Gary

    The Fed threw $76 billion at the market in that final week of June.

    Bernanke has clearly stated his intentions to inflate the stock market. I’m going to take him at his word.

    I’ll say this again, D-wave is a severe regression to the mean profit-taking event. In order for that to happen gold has to stretch far above the 200 day moving average.

    You can’t get a D wave without first getting an extreme stretch. We just have not had that yet. Until we do I suspect we will just continue to see these mild intermediate corrections. But eventually sentiment will become wildly bullish and buyers will push gold to extremes and that will trigger a true D-wave decline.

  70. Gary

    Whether or not precious metals continue to lead will depend on the fundamentals of the next bull market. If the next bull is driven by another massive debasement of the currency, then yes precious metals will lead again.

  71. MrMiyagi

    Heck, I’ll just repost my 2 questions.
    I will cry all night if no one cares…

    Can someone here explain to Mr Miyagi’s Canadian brain what this debt ceiling vote thingy is about?
    What results are expected and what would that entail to markets and commodities.

    GDX has the 100 & 200 DMA at the same spot today, is this of any significance? Once you break through, it will be both and there’s nothing above it.

  72. Γ‰amonn

    MrMiyagi, as far as I am aware, if the debt ceiling is raised the US dollar will strengthen. Don’t know by how much or for how long though. If the debt ceiling is not raised and the US Government defaults on its debt obligations I imagine things will get turbulent in the stock market pretty pronto

  73. Gary

    Ignore the debt ceiling show. It’s nothing more than political grandstanding. Everyone knows a deal will be made, the debt ceiling will be raised, and Ben’s printing press will get back to work.

    It’s irrelevant to commodities although it may spark a rally in stocks. Especially if we get another move down that looks like a true intermediate bottom in that expected early August time frame.

  74. Veronica

    R41,you’re welcome.I do have to say I keep posting here because it seems to make my trading better,so maybe it’s for selfish reasons:)I hope my signals are helping/confirming traders convictions with Gary’s calls.

  75. Rob L


    I don’t post that often but I have to compliment you on your latest call on gold – it was great.

    A question – if the S&P does begin a significant correction why won’t it significantly affect the miner’s ascent?

    I know the miner’s didn’t participate that much in the last intermediate cycle so they could lead the metal on this cycle but there still has to be a correlation between the S&P and the miner’s.

  76. Mike


    Thanks for your posting. I’ve really got a lot from it. I’m a relative newcomer, still learning, and still own a substantial amount of silver (that I bought around $17). Would now be a good time to sell or do you expect it to go up in the next couple of months (even a few dollars would be nice)?

    You talk of it as a broken a parabola, is it best to divest yourself of it as soon as possible?



  77. Farm Girl

    Rob L – the miners have a very low beta, and often a negative beta (they go up when the market goes down) for a period of years. The GDX beta for the last 3 years is only 0.28, and the r2 is 0, which means the market has not had anything to do with fluctuations in the ETF.

    I’m 130% in NUGT, which is 2X the gold miners index, so 260% exposed. NUGT up 6.2% today. Will hold until Gary calls a top.

  78. Haggerty

    Putting in market order for 50% today on GDXJ and NUGT….does it concern anyone that Gold is right near it’s top and Miners are not even close to the top?

  79. Farm Girl

    From http://bit.ly/rlgsVz
    Steve Sjuggerud quoting Jason Goepfert:

    Right now – right this moment – is an incredibly good time to buy gold. It’s the best time to buy since late 2008.

    Investors are more apathetic about gold than they’ve been in years (based on excellent research by my friend Jason Goepfert of SentimenTrader).

    Jason’s proprietary measure of investor sentiment about gold is now at its lowest levels since November 2008. (That’s good. You want to buy when investor sentiment is bad – that’s when your upside potential is the biggest.)

    The last time gold sentiment was this low, gold soared nearly $500 an ounce in one year. It’s true… Gold bottomed in November 2008 near $700 an ounce. One year later, it nearly hit $1,200 an ounce.

    I was surprised to hear Jason report that investors are so apathetic about gold today… particularly since gold hasn’t fallen all that much in the last two months.

    Jason explains why he thinks this happened: “Sometimes when a market has been strong for a long time, people are so afraid that every little hiccup is the bursting of a bubble that they become very pessimistic very quickly… The metal has held up very well, yet many of the measures we track are at or near two-year lows in optimism.”

    I think this is a bullish sign for gold. The price of gold has held up very well as investors have given up a bit on it. So… gold is in a clear uptrend… yet investors are apathetic. This is what I like to see!

  80. Greggy_M


    Looking to see if I’m on the same page.

    Are you expecting this gold intermediate cycle to be right translated? Bottoming around the end of the year?

    Then followed possibly by a left translated intermediate cycle creating a regression to the mean(if necessary) that may bottom around June 2012? Or do left translated IT cycles come only during the 8 year cycle low?

    I’m trying to find my cycles hat but am afraid I still have much to learn.


  81. Gary

    Rob L,
    I think it is a mistake believe that the miners have to be correlated with the S&P. Miners sell gold. Their profit margins increase as the price of gold increases. If gold is rising in the stock of miners becomes more valuable.

  82. Power Corrupts

    @Farm Girl I think what makes that sentiment reading even more compelling is the overall lack of participation in this pm secular bull. Low sentiment and low participation in a secular bull market = more (and big) gains probably still ahead. Until the gold/DJIA ratio approaches 1:1 I will remain long the pm’s.

  83. Gary

    I did my best to get everybody in at the lowest risk entry where the stops were reasonably close.

    I suggested several times that if you weren’t going to take that entry to make a plan for when you would enter.

    I suggest you follow your plan.

  84. DP

    GLD short-term gains are taxed at 50%, as I recall.

    Is there any other better ETF in terms of tax implications?

  85. Gary

    Unless I’m mistaken GLD will be taxed, short term, at whatever your earned income rate is.

    Long-term rates are taxed as a collectible at 28%.

  86. WalterW

    It strikes me as odd that while in your daily comments you acknowledge that the Fed/Govt/Banks are rigging the stock market to the point of it being ridiculous, you would -still, I presume- find it normal and no sign of rigging whatsoever by the Fed/Govt/Banks that when gold breaks out of its all-time high by almost 2 dollar, it then gets bombed back below that high literally the next minute. Come on, this is not how $2 breakouts would normally play out in a free market!
    (Yeah, I know about false breakouts – but not like this one. If this isn’t just as ridiculous as the stocks being rigged, than what would be?)
    Regardless, the bombing will not succeed in keeping gold below 1577.

  87. Gary

    That’s just normal market behavior. Traders that rode this all the way from 1477 will naturally take profits on any move to new highs.

    Just because you want a move to new highs to hold and it doesn’t isn’t a sign of manipulation. The simple fact is that most breakouts initially fail as profit takers sell into the breakout.

    Usually it takes more than one attempt for a breakout to succeed.

  88. WalterW


    > That’s just normal market behavior.
    > Traders that rode this all the way from 1477 will
    > naturally take profits on any move to new highs.

    Sure, and they would do so +all+ of them together at +exactly+ one minute after the breakout, wouldn’t they.

    My main point, though, was not that this bombing was or was not conclusive proof, but that I find it odd how you can maintain that the stocks are rigged and gold is not. So, again: if stocks are being rigged, why would any other market NOT be rigged, if the Fed/Govt/Banks would consider it to fit their purposes to do so?

  89. Christian

    it is a very small percentage of the people out there who actually follow the gold spot price, whereas the S&P500, DJ index or your local index etc. gets broadcasted out all the time on the news. If this were to tank hard it is apparent that all is not well with the world (who knew?) but so long as the stock indices are still propped up the mirage is still there.

    The problem for all of us who follow gold and other PM’s are myopia; I cannot understand that so few actually see what is happening in front of their eyes.

  90. Gary

    okay I’ll ask the question again. The one that nobody seems to be able to answer.

    What possible reason does the government or the Fed have for trying to manipulate the price of gold? Why would they throw away billions and billions of dollars trying to hold back a secular bull market?

    The simple fact is gold is just doing what bull markets do.

    How anyone, after seeing that run in silver, can with a straight face,will still claim manipulation is beyond me.

  91. Christian

    “The problem for all of us who follow gold and other PM’s are myopia; I cannot understand that so few actually see what is happening in front of their eyes.”

    Got interrupted,
    what I meant was that this is the reason why gold (most likely) isn’t manipulated, because very few actually follow the gold spot price development at this stage. Even fewer connects the dots as to why it is at all time high, I can tell you.

  92. MBS

    17 days into the SPX cycle, is that too early to expect a mid-cycle low? Seems they usually come around in the 20-25 day range.


  93. flaunt

    Gary, I don’t know if there’s manipulation on the part of the government, but how can you look at the silver collapse that took place on the back of 5 consecutive margin increases in the span of a week and not think something’s fishy? Personally I don’t believe it was a conspiracy, it was just profit motive. Take huge short positions and then crush the price at a spot where everyone expected huge resistance. No shadowy government conspiracy necessary.

    You can say the parabola would have collapsed anyway, and it probably would have at some point, but without the intervention by the CME I think you would have been right and it would have pushed through 50.

  94. PST

    Excellent observation on manipulation:

    “Most commodities are not cheaply storable over long periods, so actors get forced into the few that do: gold, silver, etc. There is a problem here, stemming from dumb money. When dumb money shows up for purchase of generic “commodities” distortions follow: backwardation, large storage demand, and warped market incentives.

    Eventually overproduction catches up, but the volatility when it breaks can be huge and self-reinforcing, with c0unterparties raising margin to protect themselves. Extreme volatility causes exchanges to raise margin requirements substantially, which reveals which side of the trade is inadequately financed, which typically is the side that was winning, which leads to a reversal in price action. The dumb money is revealed.

    Now after a washout, the dumb money often assumes that powerful entrenched interests colluded against them to deny them their long-deserved free ride to prosperity through speculation. The exchanges are in cahoots with the other side. Well, no, the exchanges have two interests, which are solvency and transaction volume, which drives their profits. Solvency is a more primary goal for an exchange, because the second goal can’t exist without it, and exchanges are not thickly capitalized.”

  95. WalterW


    >okay I’ll ask the question again. The one that
    >nobody seems to be able to answer.
    >What possible reason does the government or
    >the Fed have for trying to manipulate the price
    >of gold?

    I think there are good reasons for them to do so, and plenty of people have answered that question. I also have no doubts that you apparently don’t find any of those answers convincing. However, that is very different from there not being any valid answers.

    Also, that you don’t find those answers convincing doesn’t mean the Fed/Govt/Banks would find them unconvincing too. They may see a validity where you don’t. And if they do -regardless of whether they’re right or wrong in seeing it- why wouldn’t they act on it?

  96. DP


    “…if the Fed/Govt/Banks would consider it to fit their purposes to do so?”

    Isn’t Fed=Banks, since it’s private organization?

  97. SF Giants Fan


    My “its a trap”comment a few days ago was aimed at the manipulation, running the stops and other games that big money play. The Good news is I added minutes after the update and before the “Gary pop”. I figured I would beat the rush. Glad i did.


  98. Gary

    You do realize that that collapse was going to happen no matter what right?

    Yes the margin increases probably condensed the decline to five days instead of five weeks but it was still going to happen.

    The simple fact is that parabolic moves are not sustainable.

  99. Shalom Bernanke

    Silver shorts will get their heads handed to them, even if it underperforms gold. Waiting for $20 silver is a mistake, this is not 2008.

    Miners remain the place to be, IMO.

  100. WalterW


    >Isn’t Fed=Banks, since it’s private organization?

    As far as I know, formally the Fed is owned by the large banks. However, I’d say that +for all practical purposes+ the Fed is ultimately government controlled.
    I don’t think that discussion is very relevant, though.
    Far more important is the more-encompassing phenomena of regulatory capture, of which the Fed=Banks? issue is just a spin-off.

  101. Movax2

    RE:Gold price manipulation. The Fed wants a higher gold price. If gold doesn’t go higher, investors will question if there really is any devaluation of the dollar (inflation) and hold on to cash since there are so many obvious problems with the economy. The higher gold price is a clear sign the dollar is being hit and that cash is a bad idea, so people buy stuff.. presumably making the economy stronger.. of course it backfires at this stage in the game.

  102. traderlady

    SB, Hi! I always appreciate your comments. I wish I started collected the miners earlier:(

    Do you see waiting for a pullback to add to miners?

  103. Aaron

    SB, right on! Being short silver here is just silly while expecting gold to go parabolic. Silver will do quite well in my opinion, broken parabola or not.

  104. ALEX



    If you re still there, I think we had a consolidation….then a bottom in June

    and then the 1st move off the bottom,

    last week was the pullback ,

    yesterday started next run. I was trading in and out, but went in 100% yesterday.

    we COULD get a pullback at lunchtime to fill some gaps, but I believe this will be the strongest move now through the fall. I would at least buy ‘something’ if you have ‘nothing’.

  105. Benjamin

    If gold is manipulated by an evil cartel that pushes prices down, then how can it be so overbought (looking at macd) on the weekly charts? It’s been overbought for 2 years.. Crazy

  106. 86d4life

    Why would I manipulate the price of PMs lower if I could; To buy more `on the cheap`. I think that`s pretty simple and straightforward. Anybody in the know has a good idea where it`s headed in the long run.

Comments are closed.